The Business Case for Ending Homelessness: Having a Home Improves Health, Reduces Healthcare Utilization and Costs

In June 2008, my wife and I moved to downtown Asheville, NC, with our dog, Max. Max and I were out for a walk early every morning and late every evening. When I first started taking Max for walks, I would occasionally notice people who appeared homeless, and I became curious about the causes of homelessness and its solutions.

Now, in 2012, I rarely see a homeless person downtown. What has changed? One major change is that Asheville has instituted a viable 10-year plan to end chronic homelessness, and a group of more than 40 agencies are working together in the Asheville Homeless Coalition. I got involved initially by attending the 2008 annual Homeless Initiative Stakeholders meeting in Asheville and the meetings of Asheville Homeless Coalition, because I wanted to be a part of the solution.

As current President of the Board of Homeward Bound of Asheville, I have learned that housing ends homelessness. It is that simple. And housing provides the stability that people need to address unemployment, addiction, mental illness, and physical health. If we pair housing with supportive case management, people will be able to stabilize their lives, increase their self-sufficiency, and remain in housing. As of November 2011, Homeward Bound has housed 338 people, reporting an 89% housing retention rate.

I have also learned that by housing people, we are saving our community hundreds of thousands of dollars each year in unpaid healthcare costs. In a 2006 article in The New Yorker, Malcolm Gladwell wrote of “Million-Dollar Murray,” relating how one person (Murray Barr) living on the streets in Reno, NV, cost that state $1 million in unpaid emergency department and medical costs.1 This $1 million could have been saved if Murray Barr had been supported by housing.1

I have learned that homelessness is a problem that can be solved, that housing is the answer, and that moving people from homelessness into housing results in significant improvements in health and access to healthcare. Ending homelessness is not only beneficial to the people who have moved into housing. It is beneficial to the community and to the healthcare system as well.

Healthcare Costs, Utilization
As people become stabilized in housing, their dependence on emergency services drops, and their health outcomes improve significantly. Consider the following facts on the cost of healthcare for the homeless:

  • The majority of homeless people lack health insurance, a public provision for healthcare, or a primary care physician2,3
  • Almost 33% of all visits to the emergency department are made by chronically homeless people. Emergency departments are not equipped to meet the psychosocial needs of homeless patients and do not have the capacity to assist them with housing, substance abuse treatment, or mental healthcare2,3
  • Homeless people visit the emergency department an average of 5 times annually, and the most frequent users visit them weekly. Each visit costs $3700, amounting to $18,500 spent annually for the average user and up to $44,400 for the most frequent users2,3
  • On average, homeless people spend 3 nights per visit in the hospital, which can cost more than $90002
  • According to Margot Kushel, MD, Associate Professor of Medicine, University of California, San Francisco, “Homeless people have higher rates of chronic health problems than the general or poverty population. This takes the form of higher rates of illnesses such as high blood pressure, heart disease, diabetes, lung diseases like asthma and chronic bronchitis, and HIV disease”4
  • As many as 80% of emergency department visits made by people struggling with homelessness are for illnesses that could have been addressed through preventive care.2

The answer to reducing healthcare costs for people who are homeless is supportive housing5:

  • The provision of housing to homeless residents decreases by nearly 61% the number of visits they make to emergency departments
  • Providing permanent supportive housing to the homeless community saves the taxpayer money:
    1. Healthcare costs are reduced by 59%
    2. Emergency depatment costs are decreased by 61%
    3. The number of general inpatient hospitalizations is decreased by 77%
  • For members of the community who need assistance resolving their medical and/or psychosocial problems, permanent supportive housing is often the only successful approach to ending homelessness
  • Safe and permanent housing can give residents the stability they need to organize their lives and maintain their health.