Biden admin invests $100 million on health care labor shortage

The Biden administration announced Thursday that it will direct $100 million to the National Health Service Corps to help address the health care worker shortage.

Pulled from funding in the American Rescue Plan, the $100 million represents one of the nation’s biggest investments in a program that helps place primary care doctors in communities that have difficulty recruiting and retaining them. It’s a five-fold increase from previous years, the Department of Health and Human Services said.

The National Health Service Corps offers loan repayments and scholarships to clinicians in exchange for multiple years of service in areas that have a health care provider shortage.

“Whether you’re in rural America, or in a low income part of America, that shouldn’t be a reason why you can’t access good quality health care,” Health Secretary Xavier Becerra said in a phone interview. “And so we want to help states that are going to try to do what they can to keep that public health workforce in those rural communities, those low-income communities, they’re where people need them.”

The announcement comes after the United States lost 17,500 health care employees in September, according to the Bureau of Labor Statistics. With the industry’s employment figures now sitting at just under 16 million, the agency reported the country has lost 524,000 health care employees since the start of the pandemic. Job losses in nursing, hospitals and residential care saw the biggest drops in the industry last month.

Losing employees has in turn increased labor costs. Hospitals and other medical facilities have had to sharply increase spending on recruiting and retaining employees, according to a report published last week by Moody’s Investors Services. That has led to boosted benefit options and sign-on bonuses that can go well into five figures since the start of the pandemic.

“Covid has basically caused a laser focus on the glaring gaps and dysfunction across the American health care system,” said Tener Veenema, a scholar focused on workforce issues at Johns Hopkins University’s Center for Health Security. “Making investments to redistribute health care providers into rural areas, low-resourced areas, is so important because we know how much they are suffering from a lack of access to good health care.”

States will be able to apply for grants until April and the Department of Health and Human Services predicts it will make up to 50 awards as high as $1 million per year over the course of four years.

Participating states won’t have to match funds or share costs in any way to obtain the grants, and they can use 10 percent of the award for administrative costs.

“With these funds, states can design programs that optimize the selection of disciplines and service locations, and tailor the length of service commitments to address the areas of greatest need in their communities,” said Diana Espinosa, the acting administrator of the Health Resources and Services Administration, which oversees the program. “This investment will make a tremendous impact on access to primary care and addressing health disparities at a critical time.”

The project start date isn’t until September 2022, so it won’t have an immediate effect on the current labor shortage. It represents, however, the latest push by the Biden administration to address the issue that experts believe will only get worse over the next decade.

President Joe Biden pulled $100 million this year from the American Rescue Plan to support the Medical Reserve Corps, an all-volunteer army of doctors, nurses and medical support teams in hopes of accelerating the pace of Covid-19 vaccinations.

“A hundred-million dollars isn’t going to take care of everybody,” Becerra admitted. “But it’s certainly going to go a long way in helping our state partners get resources to those local communities, so they can keep that health care worker there, keep them trained, ready and prepared to keep them healthy.”

CORRECTION (Oct. 14, 2021, 3:26 p.m. ET): A previous version of this article misstated when states will be able to apply for grants. They can apply until April, not beginning in April.


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