Osawatomie State Hospital cites vacancies and contract nurses as main budget drivers

Osawatomie State Hospital officials told a Human Services Subcommittee meeting that widespread vacancies are shifting pay toward contract nurses and driving significant budget requests for the coming fiscal year. "For fiscal year 2026, the agency's revised estimate is 72,400,000.0," the agency presenter said, and noted the major changes were contract staffing and therapist requests for FY27.

The presentation said Osawatomie has 116 beds in active use and one unused building that could add about 60 beds. Agency materials show 196 admissions and 196 discharges in 2025 with an average stay of 139 days; 43% of admissions were from jail settings. Committee members pressed whether the reported 122.8 FTE decrease in the fiscal book represented a funding cut. Agency staff said the reduction reflects positions the hospital cannot fill; the money associated with those vacant FTEs is being used to cover contract nursing expenses.

Deputy agency staff described recruitment efforts — student practicums, community-college outreach and sign-on bonuses — and a change in scheduling that increased the share of shifts covered by state RNs from about 25% to roughly 50%. Officials also said they negotiated a cap on agency nursing rates with procurement staff, lowering a prior $90-per-hour cap to about $85 an hour for registered nurses.

The governor’s recommendation included $7,000,000 SGF for contract nurses in FY26 and asked for $5,000,000 in FY27 to address the anticipated contract staffing gap. Committee members signaled interest in exploring alternatives to ongoing reliance on higher-cost agency labor, including targeted pay adjustments for state staff and new shift-posting incentives to reduce dependence on contractors. The committee did not take formal action; members requested follow-up data on hiring barriers and use of reappropriated funds.