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Permanent Housing for the Homeless Lowers Health Care Costs

Better Health Through Housing is a supportive housing program designed to reduce healthcare costs by moving homeless people from emergency rooms into stable housing.

The University of Illinois Hospital decided to participate in this program as part of its health equity mission. Its staff later discovered that besides providing housing, the program improved health and reduced the frequency of expensive emergency room visits.

Video Spotlight: Ted Talk: Housing Is Health

This post is based on a 90.9 WBUR report, To Reduce Chronic Homelessness, a Chicago Hospital Is Treating It as A Medical Condition, by J. Hobson, February 21, 2019; and the YouTube video, Health Equity: Housing is Health | Steve Brown | TEDxRushU, by Tedx, January 16, 2019. Image source: Ingram Publishing

Discussion Questions:

1. Is homelessness an operations issue?

Guidance: The homeless are “customers” of multiple processes performed by many organizations: hospitals, prisons, soup kitchens, homeless shelters, police departments, Medicaid, etc. As a result, they directly influence the operations of these organizations. Very interestingly, the article mentions that to achieve better solutions to the problems experienced or caused by the homeless, it’s better to coordinate processes and resources than to work in silos.

2. How does providing permanent shelter to the homeless contribute to lowering healthcare costs?

Guidance: The homeless may present to the ER because they seek shelter. They may also go to the ER to seek treatment because homelessness exacerbates chronic illnesses and increases the opportunities for injuries. The average cost of an ER visit is about $1,200.

Permanent housing eliminates that cost for shelter seekers, but when combined with support for disease management and substance abuse, it also contributes to improving health, thereby decreasing the demand for costly ER care.

3. When hospitals expend efforts to house the homeless, do they run the risk of losing their strategic focus on healthcare?

Guidance: One argument against the program is that emergency departments in which capacity is already stretched thin will have to devote resources to this program. Unless additional resources can be secured through financial subsidies, hospitals could theoretically find it more challenging to deliver value (quality/cost) which is part of their strategy.

The counter-argument is that a substantial reduction in ER visits by homeless people would free up capacity for other patients which, in turn, would improve patient satisfaction (lower wait times) and improve health outcomes for the general population (fewer patients leaving without being seen; better discharge process).


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