A paper published in Housing Policy Debate, “Exchanging Housing Dollars for Health Care Savings: The Impact of Housing First on Health Care Costs,” examines whether Housing First leads to health care cost savings. Using administrative data on chronically homeless Medicaid enrollees in Massachusetts, the study finds that chronically homeless enrollees who received support from Housing First experienced greater reductions in health care service utilization and incurred significantly lower health care costs than otherwise similar chronically homeless Medicaid enrollees who did not receive support from Housing First. The study concludes that the cost of providing Housing First is significantly offset by the associated health care cost savings.
Most prior studies of health care costs and Housing First have struggled to address a potential “regression to the mean” that might explain the health care cost savings attributed to Housing First. In other words, the health care cost savings observed in many studies of Housing First could be explained by individuals being enrolled in Housing First programs at a point when their health is so poor it only has room to stabilize, regardless of whether they receive Housing First. Their health care utilization and costs could have declined regardless of having received Housing First. Most studies to date have not ruled out this possibility. The authors of the new study accounted for the possibility of a “regression to the mean” by comparing chronically homeless Medicaid enrollees who either did (treatment group) or did not (control group) receive Housing First but were otherwise similar. More specifically, the authors compared utilization of and claims for emergency room visits, inpatient hospitalizations, mental health encounters, medication, and other health care related costs over time for otherwise similar individuals across each group.
While both the Housing First and control groups experienced reductions in health care service utilization and costs, the reductions were significantly greater for the Housing First group, indicating that the health care savings attributed to Housing First are not simply explained by a “regression to the mean.” Compared to the control group, individuals who received Housing First had, on average, two fewer emergency room visits, five fewer mental health encounters, and used other health services five fewer times per year. There was no significant difference in in-patient hospitalizations between the groups, though the authors still observed significantly higher cost reductions for in-patient hospitalization among Housing First recipients compared to the control group. Overall health care costs declined by an average of $10,470 more per person per year among chronically homeless individuals receiving Housing First compared to otherwise similar chronically homeless individuals who did not receive Housing First.
The authors conclude that Housing First generates significant health care cost savings. They further argue that these cost savings substantially offset the cost of providing Housing First. The authors also identify the need for further research that accounts for jail, prison, and shelter utilization to develop a more comprehensive cost-benefit analysis.
Read the article at: https://bit.ly/3tQUw2C