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Study Finds Permanent Supportive Housing Reduces MassHealth Costs For People Who Were Homeless

Ed Alger stands in the doorway of the building he moved into recently, which is operated by Father Bill's & MainSpring. The six previously homeless men living in the Brockton property will get on-site support services. (Jesse Costa/WBUR)
Ed Alger stands in the doorway of the building he moved into recently, which is operated by Father Bill's & MainSpring. The six previously homeless men living in the Brockton property will get on-site support services. (Jesse Costa/WBUR)

Providing permanent housing with support services to people who've been chronically homeless reduces health care costs in the first year, according to a new study released Tuesday.

Expenditures by MassHealth, the Medicaid program administered by the state, were 11.2% lower for people in the first year they were housed ($13,294 per patient on average) than for the control group living in shelters and on the streets ($14,781), according to the Blue Cross Blue Shield of Massachusetts Foundation report.

Joe Finn heads the Massachusetts Housing and Shelter Alliance, which administers the so-called "Housing First" programs the study looked at.

"What we witnessed was a shift away from emergency room visits ... a reduction in acute hospital stays ... and more utilization of primary care, which is what we want," Finn said.

People living in permanent supportive housing have case managers from social service agencies who help them stay on track with needs including medical care, addiction treatment, job training and budgeting.

MassHealth spent 35% more on mental health care for people who had experienced chronic homelessness in the first year they were housed, the study found. Study sponsors say that suggests those patients were getting needed help that they had been missing previously.

"By getting people behavioral health services, it really serves as sort of a preventive intervention and can have an impact of lowering overall costs," said Audrey Shelto, Blue Cross Blue Shield of Massachusetts Foundation president.

"My hope is that, given the terrible crisis we've had this year with the pandemic and the impact of some of that on people's health, and the financial challenges facing the commonwealth — as well as individuals — that this study can can serve as hopefully the catalyst [to bring permanent supportive housing to scale]," Shelto added. "We now know that when we weave these services together, we improve people's health at lower cost."

The study looked at MassHealth claims between 2004 and 2017 of almost 700 people placed in permanent supportive housing. That data was compared to a control group of the same number of people who were still experiencing homelessness and had similar demographic and medical characteristics as the "treatment" cohort.

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Lynn Jolicoeur Twitter Producer/Reporter
Lynn Jolicoeur is the field producer for WBUR's All Things Considered. She also reports for the station's various local news broadcasts.

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