Statement of Need and Recommendations

Recommendation 1:
Increase the operational budget to support hospital employees 

The new ASH construction will be completed regardless of any other recommendations from this report being implemented. The previous two reports requested funding to plan, design, and build the hospital; and Texas will have a hospital of world-class design and function to support modern mental health care. The next required step is to right size the salaries of hospital employees at all employment levels to be market competitive with Austin. 

All Phase III ASH Redesign Work Groups agreed that the most pressing priority is to create market competitive salary scales (throughout the state hospital system) in order to retain the current staff at ASH and replace vacancies. Each work group report specifies this requirement for improvements (appendices 5 - 9). The Academic Work Group’s recommendation 2 (Appendix 5) completed a more in-depth review on the need for improvements in compensation. The Health and Specialty Care System implemented an initial market rate adjustment for hospital staff in Spring 2022. The salary increase brought physicians and nurse practitioners, rehab, peer specialists and administrative staff a 10% increase to their base salary; 7% base salary increase for social workers, psychologists, speech, and physical therapists; and a 5% base salary increase to physicians and leadership. A second market rate increase for psychiatric nurse assistants (PNA) occurred in September 2022. 

The increase in salary represents improvement, but leaves many of these individual’s salaries below the Austin market. The median cost to purchase a home in Austin is roughly $500,000, which is an increase of 11% over the past year (Gates & Rahman, 2022). Rent costs have increased almost three times that of home purchasing, up 35% to an average of $2,245 in January of 2022 – second only to Portland, Oregon at 39% year over year increase (Livengood, 2022). It is estimated that to comfortably live in Austin, an individual needs to make a minimum of roughly $98,000 per year (following the 50/30/20 rule of finance), a gap of more than $30,000 at the highest pay range for mental health care workers (Lundine & Anderson, 2019). 

ASH’s budget does not stand alone. The budget dedicated to ASH is a portion of a larger HHSC budget within the central administrative office of the Health and Specialty Care System. As a reminder, this department of HHSC manages both state hospitals and state supported living centers (SSLCs). Therefore, to ensure state hospitals and SSLCs are not competing against one another, often the salary is similar for both facilities. Similar salaries are also true for both rural and urban areas. The similarities then hurt facilities, such as ASH, that are competing against other better paying facilities. If competitive wages are not provided to all hospital staff, ASH and other state hospitals will continue to suffer from worker shortages, which in turn widens shortfalls in an already insufficient mental health care system. 

To address an operational increase to the ASH budget the Academic and Area Experts Work Group, supported by the Steering Committee, recommend rider language and budget support to permit HHSC to adjust state hospital salaries to compete with local markets. By doing so, the rider will eliminate the blanket salary rates across the state hospital system and SSLCs. Adjustments to ASH’s operating budget needs a solution in the 88th Legislative Session to ensure the new hospital can open at full capacity.