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LA Housing Program Improves Mental Health, Cuts Hospital Costs

A population health management program aimed at aiding chronically homeless individuals has reduced healthcare spending and improved mental health scores.

Population health and mental health costs

Source: Thinkstock

By Jennifer Bresnick

- Providing stable housing for homeless residents of Los Angeles produced both financial and mental health improvements for the city and its homeless populations, a new report on the Housing for Health initiative found.

A three-year study of the permanent supportive housing (PSH) program found that the combination of reliable housing and case management helped more than 96 percent of chronically homeless participants remain in stable housing for more than a year. 

Eighty-eight percent of the 890 participants included in the study reported co-occurring mental health, clinical and/or substance abuse issues, says the RAND Corporation.  Participants that achieved housing stability reported better mental health functioning after one year than they had at baseline.

At the same time, participants averaged 1.64 fewer ED visits and decreased their hospital length-of-stay (LOS) by more than four days.

Costs for public services declined by nearly 60 percent across all service categories examined by RAND – the program as a whole produced a 20 percent net cost savings after factoring in the initiative’s expenses.

READ MORE: Developing Community Partners for Population Health Management

In Los Angeles County, which has the highest rate of un-sheltered homeless individuals in the country, the program represents a promising way to improve the quality of life for people negatively affected by homelessness, one of the most impactful social determinants of health that drives up spending and leads to poor outcomes.

“The federal definition of ‘chronic homelessness’ includes extensive experience of being homeless (i.e., continuously for at least one year or for at least four separate occasions, equaling one year, in the last three years) coupled with a diagnosed physical, mental, and/or substance use disability,” the report explains.

In January of 2017, LA officials found that the number of individuals experiencing homelessness in the county increased over the past year by 25 percent to 46,834 persons. 

These include unaccompanied youth and young adults, individuals attempting to escape domestic violence or unsafe home situations, and those recently exiting institutions like jails or prisons without a stable home to return to.

“Individuals who experience homelessness are much more likely to suffer from serious mental illness (e.g., schizophrenia), chronic medical conditions (e.g., HIV/AIDS), and substance use disorders than the general population,” the report notes.

READ MORE: How to Get Started with a Population Health Management Program

“Individuals experiencing homelessness are likely to experience prolonged gaps in health care access, which may result in unusually high rates of acute and intensive health care services, such as emergency room (ER) visits and hospitalizations.” 

Between 2014 and 2014, LA County spent $965 million on law enforcement, health services, and social services for these populations.  Spending from the Department of Mental Health accounted for just over 30 percent of this total, while the Department of Health Services (DHS) spent 26.5 percent of that amount.

In the sample included in the study, about seventy percent of individuals had been diagnosed with a serious mental illness, including schizophrenia, previous suicide attempts, or bipolar disorder. 

Twenty-three percent of the sample experienced alcohol or substance abuse disorders.  With an average age of just over 50 years, 17 percent had cardiovascular disease and about 10 percent had been diagnosed with cancer.

Three-quarters of the group were eligible for public insurance, including Medi-Cal, Medicare, or Medicaid.

READ MORE: Humana Pins Social Determinants of Health to Better Quality of Life

After experiencing access to secure housing for at least one year, utilization across the vast majority of public service and health service categories decreased.

“When assessing the raw changes in utilization, the largest declines in health service utilization occurred in inpatient medical services (76.7 percent), emergency medical services (67.5 percent), and crisis stabilization services (59.5 percent),” says the report.

“Overall, there was a roughly 60-percent reduction in utilization costs across six public services.”

The main exception was with incarceration costs: contrary to expectations, the amount of time participants spent incarcerated increased, as did spending on related services.

While mental health scores increased – though they stayed below averages from less socioeconomically challenged individuals – physical health scores from the participants did not measurably improve.

In general, however, the program was labeled a success, and may serve as a positive model for other public health departments and urban communities.

“Even after taking into account the supportive housing program costs, there was substantial cost savings, especially in respect to the health departments,” the report notes.

“These findings provide empirical support that housing coupled with intensive case management may reduce the use of emergency and inpatient health services among individuals that formerly experienced homelessness.”

RAND suggests that the program should continue, with close monitoring, to determine what longer-term benefits might accrue for homeless individuals and the county where they reside.  More in-depth studies with more participants, a separate comparison group, and more robust data may also be required to better understand the impacts and results of housing stability initiatives.

“Given that the HFH program has now provided over 3,400 housing placements and the FHSP serves other county departments and programs, future studies may be able to make better conclusions about how effective this housing model is for individuals with different characteristics and needs,” the research concluded.


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