California Taps Medicaid To Train and Recruit Behavioral Health Workers

Despite recent efforts to bolster California’s behavioral health workforce, the state is operating with only about two-thirds of the psychiatrists and therapists it needs. The problem is so severe it’s making it hard to backfill retiring practitioners, particularly in the state’s rural areas.

“It feels helpless, because there is more than you can fix. There’s more people than you can help that need it,” said Nick Zepponi, a social worker at the Hill Country Community Clinic CARE Center in Redding in Northern California. The county’s suicide rate is more than double the state average and during the covid-19 pandemic overdose deaths increased more than threefold.

For years, experts have warned of California’s severe shortages of psychologists, psychiatrists, and other professionals in the mental health and substance use fields, exacerbated by many providers’ nearing retirement. Demand has also skyrocketed, due in part to the pandemic.

Roughly 11 million Californians live in mental health professional shortage areas, the most after Texas, according to KFF, a health information nonprofit that includes KFF Health News. Democratic Gov. Gavin Newsom’s quest to make mental health and homelessness two of his signature issues have brought additional resources into California’s behavioral health system.

State legislators have dedicated more than $1 billion for recruitment and training and California is now tapping $1.9 billion in Medicaid funds to attract and retain behavioral health workers, enticing them with scholarships and loan repayments, and helping schools fund new residencies and fellowships.

But the Medicaid-backed initiative took effect only in January, and proponents are unsure whether the Trump administration will maintain such investments. In a statement, U.S. Department of Health and Human Services spokesperson Emily Hilliard said the Centers for Medicare & Medicaid Services has made clear that approved waivers remain in effect.

“That said, states should not rely on temporary demonstration funding as a substitute for sustained, direct investment in their healthcare workforce,” Hilliard added, saying the agency would continue to evaluate California’s experiment, which sunsets at the end of 2029.

One of California’s biggest bottlenecks is its acute shortage of psychiatrists — licensed medical doctors who can prescribe antidepressants and antipsychotic drugs. While the state has opened more training slots in recent years, they can cost as much as $250,000 a year and require 12 years of postsecondary education.

Only a tenth of the target for expanded psychiatry residencies has been met, according to the California Health Care Foundation.

As a result, existing personnel are buckling under the workload while patients without quick access to help during a crisis are turning to costly emergency care. In 2022, patients with mental health or substance use disorders accounted for 1 in 3 inpatient hospitalizations and 1 in 6 emergency room visits, state data shows. In ERs, doctors can often do little more than temporarily stabilize these patients, since long-term treatment beds are nearly impossible to find.