Be Informed: Hospital Abuse of Taxpayer Funds

Published September 20, 2021

Hospitals across Texas are leading the way to a whole new form of fraud, waste and abuse of taxpayer money with their self-inflicted medical personnel shortage.

As summer draws to a close and the Delta variant of the COVID-19 cases, including many vaccinated, increase across the state, hospitals once again find themselves in need of additional staffing resources. Recent news articles are reporting conflicting accounts of whether the state will continue to offer relief staff to local hospitals or whether local entities will be asked to help with staffing.

This hospital medical personnel shortage, has been caused in part by hospitals demanding that all nurses and other medical professionals be vaccinated or fired. Thus, many nurses and other medical personnel have chosen to quit or be fired rather than take the risk of an experimental vaccine that already has broken all records for adverse reactions and deaths.

This has created a nursing shortage which, in turn, has prompted hospitals to seek financial help from the government to help pay for a problem that they themselves created and continue to exasperate.

What We Know
Federal relief funds to the state have already paid $5.36 billion for staffing relief for nurses and other health care personnel in hospitals that were being overwhelmed with COVID-19 cases. The staffing was essential for services and the process took the pressure off the hospitals for hiring personnel. The facility told the state how many staffers they needed, and the workers showed up.

Hospitals, through local officials, are once again appealing to the state for financial help. This time the State initially told local entities it was not going to restart the state-supported nursing program, but instead, local cities and counties should use the $10.5 billion in coronavirus recovery funds allocated to them by Congress to use it where they most needed it, including with medical staffing agencies and to replace the nurses who were fired or quit because of the vaccine mandated by hospitals.

Then, in an about face on August 11, Governor Abbott announced that the state would fully fund (at exorbitant rates) a surge of 2,500 medical personnel through September 30.

Behind the Scenes
What changed behind the scenes to make the state want to push the hiring procedures to the local level? The cost of doing business. In any market supply and demand will dictate the cost of a product. Low supply generally increases the cost. But a high supply of available funding (think college tuition loans) will raise the cost of the product without a corresponding increase in value. In this case, the hospitals continued a shrinkage of the nursing personnel pool by demanding “be vaccinated or be fired”.

The number of medical personnel did not increase with the $5.36 billion influx of funds, but the opportunity for staffing agencies did. In reported instances, staffing companies recruited workers at hospitals and offered them higher salaries than they were currently making. The state then paid the higher rate for the same employee, plus the overhead costs of the staffing agencies to place them back in the same position they had before. That meant that a lot of opportunities were used to squander available taxpayer dollars when the money could have been used to fund even more additional staffing.

You cannot fault a worker for making the decision to get a raise, but it is a losing proposition for the taxpayer. One thought is that it might be more difficult to incentivize the bait and switch if all the negotiations are done at the local level. Local staffing agencies may have more difficulty poaching workers in the community.

Creating an economic opportunity for third parties was not the intended outcome for the federal funding of additional medical staffing. But all government programs have unintended consequences. The consequence off the hospitals “be vaxxed or be fired” is costing Texas taxpayers a lot of money.

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