Mental Health Management Housing Program Cuts Hospital Costs

A program that granted homeless individuals housing has reduced hospital health care spending and improved mental health outcomes, according to a recent report by the RAND Corporation.

Sarah B Hunter, PhD, senior behavioral and social scientist at the RAND Corporation, and colleagues explained that the program, Housing for Health, was developed by the Los Angeles County Department of Health Services to provide housing for homeless patients with complex medical needs and mental health issues. The goal of the program was to improve outcomes for homeless patients and reduce costs to the public health system incurred as a result of homelessness by providing safe housing for these mental health patients.

“Individuals experiencing homelessness are more likely to have serious and chronic health conditions than the general population,” Dr Hunter and colleagues wrote. “Studies also have shown that individuals living on the street utilize health and other social services at a significantly higher rate than similar individuals who are not experiencing homelessness.”

The researchers conducted a 3-year study of the Housing for Health program by measuring outcomes and costs related to the 890 complex mental health patients the program served during the first 2.5 years of the program.

Dr Hunter and colleagues found that the permanent housing program helped residents in the program improve mental health outcomes after 1 year in the program. The program also reduced ED visits by an average of 1.64 visits and decreased length of stay by 4 days.

“The health functioning survey found that participants’ mental health functioning improved after receiving housing, though physical health was largely unchanged,” they wrote. “At housing entry, participants reported significantly lower physical and mental health functioning than the general population norms, based on national data. One year after being housed, participants reported a significant improvement in mental health functioning.”

The researchers reported that the program reduced overall costs by 20%, after adjusting for the cost of the program. Additionally, they found that the costs for public health services decreased by close to 60%. Services costs were $38,146 1 year before initiating the program compared to $15,358. After 1 year of housing.

“Our findings suggest that Los Angeles County Department of Health Services succeeded in implementing the Housing for Health program,” Dr Hunter and colleagues concluded. “Hundreds of individuals who formerly experienced homelessness, many with complex chronic physical and mental health conditions, have been stably housed at least for one year. Los Angeles County data demonstrate a dramatic reduction in service use across the medical and mental health departments.”

—David Costill

For more articles like this, visit the Psychiatry Resource Center

For articles by First Report Managed Care, click here

To view the First Report Managed Care print issue, click here