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By Monica E. Oss

The issue of housing and its relationship to health care services is a simple issue in practice, and a complex issue in policy. In my briefing yesterday, Are Medicaid Managed Care Plans Ready For The Justice-Involved Consumer?), housing looms large as a key to providing stable health services and preventing recidivism.  And, with 600,000 homeless Americans (see The State of Homelessness In America 2014) – 30% of whom have mental health disorders and 50% have a co-occurring addictive disorder (see Current Statistics On The Prevalence And Characteristics Of People Experiencing Homelessness In The United States) – the issue is not insignificant in scale.

The statistics showing the relationship of housing status and health are pretty clear. For example, data show that mortality rates for the homeless are three time greater than the general population. And when a consumer who is high utilizer of health care services gains supportive housing, average hospital cost savings are $3,022 per person per month, or 86% of prior costs (see Crisis Indicator: Triage Tool for Identifying Homeless Adults in Crisis).

The case for housing as an integral part of health care was laid out very eloquently last year by then New York State Health Commissioner, Dr. Nirav Shah, in a The New England Journal of Medicine article, Housing As Health Care — New York’s Boundary-Crossing Experiment):

Placing people who are homeless in supportive housing — affordable housing paired with supportive services such as on-site case management and referrals to community-based services — can lead to improved health, reduced hospital use, and decreased health care costs, especially when frequent users of health services are targeted…. 

Interestingly he makes the case that New York Medicaid already pays for housing in the form of nursing homes and that “New York Medicaid payments for nursing-facility stays are $217 per day, as compared with costs of $50 to $70 per day for supportive housing”, meaning that preventing inpatient hospitalizations, at $2,219 per day, could lead to a lot of supportive housing.

Those arguments aside, Medicaid (or any other payer) does not pay for housing costs (see Medicaid Financing For Services In Supportive Housing For Chronically Homeless People: Current Practices and Opportunities), but rather pays for coordination and delivery of  integrated health, mental health, and substance use services combined with housing for chronically homeless people. In an interview with NPR (see New York Debates Whether Housing Counts As Health Care), Bruce Vladeck, President Clinton’s head of Medicaid and Medicare summed up the view succinctly. He said that federal Medicaid dollars can’t and shouldn’t be used to pay for housing.  “It’s not cost-effective….Medicaid is supposed to be health insurance, and not every problem somebody has is a health care problem.”

He doesn’t disagree, however, that housing support is needed – rather that housing programs should be paid by housing agencies. “As a society, both in the private sector and the public sector, we are really cheap and niggling and resentful about paying for social services, and we are much more generous when it comes to paying for health services….”

With more pressure for health plans and provider organizations to reduce spending, the policy debate about the many social determinants of health – including housing – will become more acute. For more on the housing issue and its effect on service delivery for consumers with complex chronic conditions, check out these resources in the OPEN MINDS Industry Library:

  1. Medicaid-Financed Services in Supportive Housing for High-Need Homeless Beneficiaries: The Business Case
  2. FrontLine Service & Cuyahoga County Launching $5 Million Family Homelessness & Child Welfare Pay-For-Success Project
  3. I Never Would Have Thought…
  4. The Applicability Of Housing First Models To Homeless Persons With Serious Mental Illness
  5. New York Awards $40 Million In Supportive Housing Funding
  6. New York Medicaid Partnership Plan Waiver Extension Application, May 15, 2014
  7. Medicaid & Permanent Supportive Housing For Chronically Homeless Individuals: Emerging Practices From The Field
  8. New York Medicaid Redesign Team Supportive Housing Allocation Plan 2014-15 & 2015-16
  9. VA Announces New Grants To Help End Veteran Homelessness

And for a cutting edge perspective on how health plans are addressing housing and social determinants of health in population health management, join me in at the 2015 OPEN MINDS Performance Management Institute for the opening keynote address, A New Future For Behavioral Health: Using Public Health Models To Manage Population Health, by Arthur C. Evans, Ph.D., Commissioner, Philadelphia Department of Behavioral Health & Intellectual disAbility Services.

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