Academic journal article Cityscape

A Research Note: Long-Term Cost Effectiveness of Placing Homeless Seniors in Permanent Supportive Housing

Academic journal article Cityscape

A Research Note: Long-Term Cost Effectiveness of Placing Homeless Seniors in Permanent Supportive Housing

Article excerpt


Past research has found that housing chronically homeless adults can not only reduce homelessness but also may improve health outcomes and reduce healthcare costs (Holtgräve et al., 2013; Larimer et al., 2009; Sadowski et al., 2009). The New York State Medicaid program has proposed to budget more than $100 million in fiscal year 2014/2015 to pay for supportive housing that targets chronically homeless adults with the goal of reducing the overall state healthcare expenditures (Doran, Misa, and Shah, 2013).

Some past studies indicate that supportive housing may reduce costs for homeless adults who are frequent users of the healthcare system, but little attention has been given to how supportive housing might serve homeless adults as they approach the end of life. Gulcur et al. (2003) report that public health expenditures on homeless people before and after placement in permanent housing have fallen significantly (Gulcur et ah, 2003). Few studies reported on the long-term effect on health and healthcare use following placement, however (Stefancic and Tsemberis, 2007). In addition, most studies assessed resource use after housing homeless people from the streets or shelters, whereas permanent supportive housing can also serve as a high-quality and cost-effective option for placing homeless people who have had extended stays in skilled nursing facilities (SNFs).

In 1999, the San Francisco Department of Public Health-through its Direct Access to Housing (DAH) program-began offering locally funded Housing First permanent supportive housing to homeless adults The Housing First strategy was adopted as an alternative to the Continuum of Care model that prevented people who continue to use illicit substances and/or alcohol or people with poorly controlled mental illness from qualifying for housing. A core belief underlying the Housing First strategy is that many people who live on the street, in shelters, or in institutions are unlikely to make progress in their substance abuse or mental health condition until they achieve stable housing. In May 2006, Mercy Housing opened Mission Creek Apartments a new affordable housing development. The residential component of the development provides housing and onsite services for 139 seniors (age 61 or older), with 51 units reserved to serve homeless seniors through the DAH program. The facility provides studio and one-bedroom apartments that overlook San Francisco Bay and are adjacent to the city's professional baseball stadium (AT&T Park). Preliminary reports indicate a significant reduction in healthcare use for the DAH tenants in the first year of placement at Mission Creek.

In this article, we present data on the healthcare use of these 51 seniors during the past 7 years since the building opened. In addition, we report on the housing outcomes and healthcare use and costs for the subset of seniors placed directly from the city-operated skilled nursing facility (SNF)-many of whom were approaching the end of life. We then compare these outcomes with those for homeless seniors placed in the facility from the general community. In this relatively small, initial study, we describe a new model of enriched supportive housing that not only improves the quality of life of seniors but also can provide a return on investment that reduces healthcare expenditures.

Program Description

As with other Housing First programs, tenants do not need to prove sobriety or compliance with treatment to qualify for access to permanent supportive housing. To be eligible for the DAH program, applicants must be homeless at the time of referral to the program or must have been homeless before entering an institution. A precondition to signing the lease includes that the tenant agree to pay rent through a third-party rent payee. The rent amount is fixed at $377 per month. Tenants who have an income of less than $754 (double the rent) are ineligible for this facility (although they are eligible for other DAH buildings). …

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