Kansas committee orders study of alternatives to expensive contract nursing at state hospitals

A legislative interim committee on state hospitals on Thursday pressed state officials for concrete options to reduce soaring contract‑nursing spending and to shore up staffing at Kansas’ state psychiatric hospitals.

KDADS deputy secretary Scott Brunner told the committee the agency used FY2025 actual expenditures as a baseline and projected combined salary, wage and contract nursing costs across Larned, Osawatomie and the South Central Regional hospital at about $160 million in 2025, rising toward roughly $200 million by 2030 under the agency’s assumptions. Brunner said the agency modeled 2.5% annual wage growth and targeted a 2% year‑over‑year reduction in contract nursing costs as a feasible path to lower reliance on contractors. "If I don't have to use contract labor, I won't," Brunner said, describing the projection assumptions.

Why it matters: committee members emphasized that sustained high contract spending reduces budget flexibility and offered little long‑term workforce stability. Representative Bueller asked KDADS to produce a tangible roadmap showing how many state hospital beds could be converted or supported differently (25‑bed increments were proposed) and to identify alternatives for preserving bed capacity while reducing contract costs by late 2026 or early 2027.

What officials described

- KDADS described the system’s continuum of care and the role of state institutional alternatives (SIAs), crisis stabilization units and community partners in diverting admissions. Brunner said SIAs and CSUs have reduced wait times and that the SIA program has served about 3,200 adults and roughly 1,600 youth since 2021, with roughly 40 SIA patients per day on average.

- The agency explained pay and schedule flexibilities limited by state rules: employees can work 72 hours in a pay period and keep health insurance, and PRN/"999" positions exist but do not include health benefits. Brunner said there is no routine state practice of paying higher wages to part‑time employees who decline insurance under current rules.

- On short‑term incentives, KDADS identified vacancy‑related differentials (example: a $2.50/hr vacancy incentive when vacancy rates exceed thresholds) and noted some location‑based pay increases for safety and security staff at specific campuses.

Committee action and short‑term items

The committee unanimously directed KDADS and partner organizations to: compile a comprehensive statewide inventory of behavioral health providers and programs; develop cost‑effective alternatives to current patient/staffing configurations (with emphasis on Larned); and return with implementation options by late 2026/early 2027. Lawmakers also asked KDADS to explore near‑term operational fixes including: establishing a PRN/higher‑pay-as‑needed hiring option for state hospitals (working with Department of Administration), and to support ongoing efforts that could reduce admissions to the highest‑acuity beds (SIAs, CSUs, mobile crisis and clubhouse services).

Budget context and tradeoffs

Brunner’s five‑year projection used FY2025 as a base and included the planned South Central Regional hospital coming online in 2027; KDADS reported 2025 combined expenditures for the three campuses of about $160 million and projected growth toward $200 million by 2030 under the stated assumptions. KDADS explained those costs include both permanent staff and agency/contract labor and showed the all‑in hourly cost for an RN at Larned (salary plus benefits) and the higher average contractor rates the state pays (agency nurse rates cited in testimony).

Next steps

KDADS agreed to lead a multi‑stakeholder project (agency plus hospital association, research partners and community mental health organizations) to produce alternatives and cost estimates. The committee also asked staff to collect more granular nursing‑program data (enrollment, faculty shortages) and to evaluate short‑term incentives to recruit instructors and expand training pipeline capacity.

Ending note: the agency repeatedly framed this as a multi‑part effort — short‑term operational fixes to give breathing room while the committee pursues medium‑term structural changes to reduce dependence on costly contractors and preserve capacity for high‑acuity patients.