Hospitals, nursing homes and assisted living facilities have faced financial headwinds and severe staffing shortages in the wake of the COVID-19 pandemic.

This year, Gov. Kathy Hochul wants to hike the Medicaid reimbursement rate for those facilities by 5%. But the need, lawmakers and health care sector officials argue, may be even greater. 

"It's a good start, but it's not going to be enough," said state Assemblyman John McDonald. "They've had so many factors facing them."

An exodus of the health care workforce in New York has strained hospitals and nursing homes over the last several years. Nursing staffing agencies have been an expensive option for many hospitals, with some charging as much as $300 an hour. 

Hochul's budget includes measures meant to reduce the costs of stop-gap staffing. But at the same time, officials want to boost the number of workers now in order to provide a high level of care for patients and residents. 

"This isn't like an optional need for hospitals or nursing homes," McDonald said. "People don't go there because they want to go there, they go there because they need to go there."

The cost of health care in New York is typically higher than most states, and New York spends the most in its budget on health care. The Medicaid program has grown over the last several years. 

The proposed state budget, due March 31, also includes $1 billion for health care infrastructures hospitals have said is also desperately needed. 

Jim Clyne of the non-profit nursing home group Leading Age New York says the health care system is essentially clogged between hospitals and nursing homes. 

"This is a problem right now. Practically every metropolitan area upstate has had hospitals on diversion, meaning they can't ambulances, because they don't have room," he said. "One of the major reasons for that is because they can't discharge people to nursing homes because we don't have the money to staff them."

Hochul wants to grow New York's health care workforce by 20% over the next five years and her administration has sought to expand nursing programs at public colleges and universities. 

"Investing in nursing and scholarships -- great ideas," Clyne said. "But it's not going to impact the problem right now."