Originally posted at California Health Report.
By Marty Graham.

Advocates for the homeless have long argued that the “housing first” model for moving homeless people into shelter and services without demanding that they change their behavior was not only more humane but also more likely to help people rebuild their lives, with the potential to improve their health and save taxpayer dollars in the long run.

Now there’s new data to back up that claim.

A three-year study of 28 chronically homeless people in San Diego who were given housing and services shows that the program saved nearly a million dollars a year in reduced emergency room visits and criminal justice costs.

A second, very personal analysis by one of the newly housed people found other important outcomes.   “It saved my life. I’m drinking less and getting help for my bones and my heart,” said Tommie Faccio. “Having a home saved my life.”

Faccio and 27 other ‘hardcore’ homeless people were recruited to participate in Project 25 (originally aimed at the 25 most costly but it grew to include 36). The pilot project was designed to test the cost-effectiveness of the emerging housing first model.

“Data has always been a problem in these studies,” said economist Lynn Reaser, of the Fermanian Business & Economics Institute at Point Loma Nazarene University, who wrote the independent analysis. “This was the first study with very good data – it was meticulously designed to have accurate, consistent data.”

“There is some resistance to the housing first approach, which turns the current model of services for the homeless on its head,” she added. “It’s very important to have solid research and conclusions that are reached from unimpeachable data.”

The data used for the analysis was that of the 28 participants where they were involved for the whole program, and data was thorough and accurate. Much of the data came from hospitals and ambulance services, since nearly all of the costs involved getting to and staying in hospitals.

The conclusion: even with the costs of intense case management, the rent, the investment in medical care, putting people in homes reduced costs to local government by $1.6 million the first year and $2.1 million the second year.

Almost 94 percent of the 2010 costs of $3.5 million were connected to medical care; 64 percent went for hospital care, another 22 percent for ER visits; and 8 percent for ambulance trips to the hospital. The remaining six percent went for jail time and police services.

By 2012, the first full year of tracking, those costs had dropped to $1.5 million and by 2013, costs were down to $1.1 million. Arrests and ER visits were down 78 percent; the length of hospital stays fell by more than 2/3, and costs per person had dropped from 2010’s $111,000 per person to $11,717.

Typical was the experience of one client known as “Hutch.” In 2010, he used public services cosing more than $168,000, including 48 ER visits and 64 days of inpatient care. In 2012 and 2013, given a place to live, those numbers dropped dramatically. He spent one day in the emergency room each year, no nights in the hospital and no ambulance trips. He died in July 2014 of natural causes after 11 months of sobriety.

“Almost all were eligible for services and financial assistance, like social security disability payments and food subsidies and MediCal that they couldn’t access and maintain without an address,” Reaser said. “As they became more stable, they became less expensive.”

Project 25 began in 2011 when the United Way of San Diego brought $1.5 million to the table as seed money for the project – and the collection of data to see if it was effective. St. Vincent de Paul Village provided services for 16 clients and coordinated the rest with San Diego County.

With apartment rental vouchers provided by the San Diego Housing Commission, and a contract with a medical provider to create a ‘medical home,’ St. Vincent de Paul social worker Marc Stevenson began approaching the people they’d identified as the greatest consumers of services.

“These individuals were the last to have a chance to receive housing,” Reaser said. “None them can be sent back to work. Almost all have mental health issues. Most have significant substance abuse issues. Many have significant health challenges.”

They were savvy about living on the street – they knew the cops, where the services are, that you can shelter in an emergency room lobby for a long time, who had a motel room and a bus pass. And they were wary of the program at the beginning.

“Many of our folks have significant relationships with other homeless people, and they worried that having a home would disconnect them from their community,” Stevenson said. “They didn’t trust us very much and it took time and commitment to form relationships.”

It also took time and commitment to find landlords willing to accept them as tenants – especially in an area with a very low apartment vacancy rate and a low number of Section VIII rental units.

The medical ‘home’ – or as Stevenson says, one white coat – was critical to the program success. The combination of having a relationship with one doctor and medical team, and having a home proved critical to the sustained health improvements that clients saw – which, in turn, reduced the trips to and days in the hospital.

“People with health issues want a relationship with someone they can trust, and they will work with that trusted care-giver to improve their health and the quality of their lives,” Stevenson said. “We were surprised by how much our peoples’ physical and mental health improved and how that lead to less substance abuse and even choosing sobriety because they didn’t need to self-medicate.”

But even with the success of the pilot project and its ironclad data, no one has taken the lead to implement a housing first approach.

“It was an incredible success that demonstrates we can achieve deep, deep cost savings,” says Jennifer LeSar, a Housing First advocate. “But it requires that we have coordination and collaboration between public agencies – someone has to take the lead and be the homelessness czar to move this great pilot to scale at a regional level.”

Since most of the savings was in medical costs – much of which is borne by insurance companies in the post-Affordable Care Act world, LeSar says that insurance companies are the key beneficiaries.

“They should be motivated to commit to managing costs for this medically fragile population,” she said. “We hope to see insurance companies become partners in the housing first approach since they benefit so much.”