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Housing for Homeless Patients Could Cut Inappropriate ER Use, Readmissions

‘Housing First’ proponents call for hospital support

Hospitals should prioritize housing for homeless patients to prevent inappropriate emergency care and unnecessary readmissions, according to a Health Affairs blog post.

Compared with individuals who are stably housed, people who are homeless are more likely to visit the emergency room, to have a longer stay if admitted to the hospital, and to be readmitted within 30 days, according to writers Kathy Moses and Rachel Davis. “Housing First” proponents suggest that in order for homeless individuals to effectively manage their health and mental health conditions, they must first be housed. More and more evidence shows that housing homeless individuals leads to reductions in health care utilization and costs, according to the authors.

However, a number of critical barriers to these efforts exist, including:

Restrictions on Using Medicaid Dollars to Fund Housing

The Centers for Medicare & Medicaid Services prohibits states from using Medicaid dollars to pay for housing, including capital development projects and rental subsidies. As a result, state and local officials generally look to other funding sources to provide housing resources.

Inadequate Incentives for Managed Care Organizations to Invest in Housing Services

Current approaches to managed care rate-setting generally give credit only for Medicaid-reimbursable expenditures. As a result, health plans that invest in housing may incur future rate- setting “penalties” for the cost-savings they achieve.

Limited Availability of Affordable Housing and Supportive Services

Because of factors ranging from cuts to federal assistance programs to rising occupancy rates and the cost of living in urban areas, opportunities to create affordable housing units —either through capital construction or voucher designation — are often limited. In addition, many individuals who need supportive housing, particularly those with mental health diagnoses and disabilities, require additional services to ensure their stability.

Despite these challenges, there is growing momentum among local, state, and federal policymakers to develop housing options for homeless individuals with complex health care needs, the authors write. Areas of interest include:

Expanding Medicaid Coverage for Supportive Housing Services

While federal Medicaid dollars cannot cover housing costs, many of the supportive services that are critical to effective housing interventions, such as care management and service coordination, may be financed by Medicaid. Relevant Medicaid coverage options for these services include health homes; federally qualified health centers, which provide services to newly eligible Medicaid enrollees; Medicaid state plan options of rehabilitative services; targeted case management; and 1915(i) home and community-based waiver services.

Further Quantifying the Medicaid Return on Investment

Although there is a body of literature supporting the business case for providing housing to high-cost, chronically ill homeless individuals, more can be done to solidify the financial impact that housing can be expected to have on Medicaid health care costs, the authors say. Such information may better position state and federal government partners to make investments in housing-related services. One possible outcome could be shared-savings agreements between the state and Medicaid health plans to further drive the investment in housing-related services.

Forging New Partnerships with Philanthropy and Private Capital Investment

There is growing interest in “social impact investment,” which typically uses Pay for Success contracts (also called social impact bonds) to leverage philanthropic and private investment to fill the gaps in what Medicaid cannot pay for. Under this approach, investors expect to see returns generated from the downstream health care savings that result from housing intervention. These arrangements emphasize accountability and results — if the intervention is not successful and savings are not achieved, no government funds are expended.

Is housing health care? Perhaps a more important question is whether investing in housing for the homeless improves health outcomes while saving taxpayer dollars, the authors write.

Source: Health Affairs; July 22, 2015.

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