Larned State Hospital officials tell committee contract nursing, vacancies drive $32.7 million shortfall

LARNED, Kan. — At a Committee on Social Services Budget hearing, fiscal analysts and Larned State Hospital leaders told members that nursing vacancies and expanded use of contract staff are the primary drivers of a multi‑million‑dollar budget shortfall for the hospital that serves the western two-thirds of Kansas.

Dayton Lamondian, senior fiscal analyst with the Legislative Division of Post Audit/Research, told members the hospital’s agency request for fiscal 2025 included an increase of $32.7 million to cover a projected shortfall for agency nursing staff. Lamondian said the hospital’s approved 2025 amount was about $82.2 million and the agency requested $128.6 million — an overall increase the analyst described as concentrated in salaries and contractual services and funded mainly from the state general fund.

Why it matters: Larned is one of two state psychiatric hospitals and treats civilly committed patients, individuals referred by district courts for the state security program and persons committed as sexually violent predators. The hospital’s staffing and contract‑labor expenses affect its ability to serve those populations and influence the state budget request that the Appropriations Committee will review.

What hospital leaders said

Lindsay Dinkel, superintendent at Larned State Hospital, said the psychiatric services program (PSP), the state security program (SSP) and the sexually violent predator treatment program (SVPTP) face distinct staffing and capacity issues. Dinkel provided the hospital’s bed totals: 520 budgeted beds overall — 90 for PSP, 140 for SSP and 274 for the SVPTP, plus 16 reintegration beds for the SVPTP — and said the PSP currently operates at a lower census (about 74) because of staffing constraints.

Dinkel told the committee that nursing vacancy rates are high: RNs had reported vacancies in the 60–66% range and other licensed nursing staff were higher — figures she said the hospital is managing by supplementing with contract staff. Dayton Lamondian confirmed the budget shows the hospital carried about $11.6 million in base budget contractual staff previously but projects total contractual expenditures much higher; the agency’s estimate for contract nursing exceeded $40 million in recent years.

Recruitment and retention steps

Dinkel described steps Larned took to improve staffing: sign‑on, referral and retention bonuses; pickup‑shift pay ($50 for half‑shifts, $100 for full extra shifts) and a one‑time retention bonus for employees employed six months without formal discipline (a $1,000 payout in the prior December). She said these measures brought an improvement in overall vacancy rates at the hospital (from roughly 45% in June to about 35% by December in her presentation), and that more bonuses will phase in over time as employees meet retention requirements.

The hospital also reported expanded use of a mobile competency program to provide outpatient evaluations and restoration: Dinkel said mobile competency evaluations rose from 13 in 2023 to 54 the next year, which she said helped reduce the SSP wait list.

Other budget items discussed

- Fire services: Larned requested $275,000 (one‑time) and a $75,000 ongoing amount to fund a memorandum of agreement in which the city of Larned provides fire response and training for the hospital and nearby KDOC campus. Lamondian said the Legislative Budget Committee deleted that enhancement but the governor recommended funding it.

- Competency unit: The agency requested funding to reopen an additional competency unit (roughly $2.4 million and 1 FTE) for the state security program; the Legislative Budget Committee and the governor deleted that request.

- 24/7 shift differential (the “247 pay plan”): The revised estimate includes $6.8 million in state general fund to continue shift differentials that were made permanent in last year’s appropriations act; Lamondian said this amount was transferred from KDADS/KDABS and will now be part of the hospital’s base budget.

Committee questions and context

Members asked for detail about whether the $32.7 million referred only to nurses; Lamondian said the category is specific to agency nursing staff, separate from other contractual services. Representatives pressed whether partial funding or phased funding could help; hospital leaders warned that the level of contract staff is essential to safely operate the hospital and that insufficient funding would force reductions to operations.

Officials noted the upcoming new state psychiatric hospital in Wichita (expected to admit patients in 2027) and emphasized that staffing, retention and community behavioral health investments across the state affect hospital census and flow.

Ending

Hospital leaders and behavioral‑health partners who testified urged continued funding for retention steps and for the hospital’s contractual needs to avoid unsafe staffing levels and service reductions. The committee will consider the budget recommendations as they are presented to the House Committee on Appropriations.