Many health initiatives have been funded by American Rescue Plan Act (ARPA) dollars in Michigan, and stakeholders there are working to ensure those services continue as that funding nears depletion.
ARPA provided Michigan with $6.5 billion in state fiscal recovery funds, and funding has been spread out over the past three years since the act was signed into law in 2021. Recipients must obligate funds by Dec. 31, and spend them by Dec. 31, 2026.
Stakeholders discussed ARPA funding at the 2024 Michigan State of Reform Health Policy Conference. Alvarez & Marsal Director Kyle Jen noted that counties, cities, and townships received a total of $4.3 billion, putting Michigan’s total ARPA allocation at $11 billion across all government units in the state.
“Despite the fact that these funds have been available for a fairly short period, it’s been a long and evolving process in terms of federal guidance impacting how state and local governments can spend the money,” Jen said. “The key thing is you could use the funds to replace lost public sector revenue. The initial thought when the act was enacted at the onset of COVID was state and local governments were experiencing substantial revenue losses.”
State revenue actually increased, however, due to the addition of federal funding, Jen said.
“So federal guidance has allowed some flexibility in how you can calculate how much revenue you have. And you can spend that lost revenue in a more flexible manner. Dollars could be expended for any service your government normally provides. That can include your base payroll.”
— Jen
Adam Carlson, senior vice president of advocacy at Michigan Health & Hospital Association, said a significant amount of ARPA funding went to healthcare.
“We still have significant issues with the healthcare workforce, but it was pretty dire back then,” Carlson said. “So they invested a significant amount of money towards healthcare recruitment, retention, and training. That went towards all sorts of projects whether it was retention bonuses for existing staff, or trying to grow that pipeline. We have hospitals in Michigan that created new programs of scholarships and partnerships with higher education to try and get individuals into the talent pipeline.”
Many of those programs remain in place, and have seen great success, Carlson said. Several include commitments for workers to remain with their employer for a certain number of years after earning their degree. About 70,000 healthcare workforce employees acquired funding through ARPA, he said.
As of March 2023, there were 27,000 job openings in Michigan hospitals, with 8,500 of those being nursing positions, Carlson said.
“We think it’s improved a little bit over the last 12 months, but we know we still have a significant number of job openings out there. Those funds allowed (hospitals) to create new programs they probably wouldn’t have thought about or been able to do before. A lot of hospitals have been continuing those with their own funding.”
— Carlson
Robert Widigan, chief deputy financial officer for Wayne County, said the county received $339 million in ARPA funds, and $159 million of that supported projects and partnerships throughout the county.
“The other half ($179 million) essentially turned into Wayne County general fund dollars,” Widigan said. “With those, we’re getting heavy into our health initiatives. We’re starting a program of narcan vending machines to provide free narcan to anyone who wants to keep it in their car or person. Wayne County ranks (eighth) nationally in medical debt, so we’re trying to help alleviate that.
Given the fires Canada faced, we’ve implemented JustAir, which is an air monitoring system throughout the county. In Flint, for workforce development, we really focused on the public safety need. We did police and fire hiring bonuses. You can get creative with health initiatives.”
As ARPA funds near depletion, one of the biggest risks is how that will impact local public health, Carlson said.
“We ran into a lot of problems with coordination from a healthcare standpoint,” Carlson said. “Public health was more or less siloed to individual counties. And a lot of our resources had to move between counties as well. So that coordination ramped up during the pandemic, and it would be terrible if that goes away, in terms of our ability to respond to the next health issues.”