Health Affairs^ has a good article this month on the cost savings Medicaid saw when a group of people who were homeless were able to move into a housing community:
TLDR: People in the study used more preventative care (which is cheap) and less acute care (which is expensive) after moving off the streets and into housing.
In the year before moving into supportive housing, the average Medicaid-covered participant in our sample had total costs of $1,626 per month of coverage (Exhibit 2). This was more than 3.5 times higher than the $454 average per month expenditure for adult Medicaid beneficiaries in our data set (Exhibit 3). The data set included all beneficiaries enrolled in the local Medicaid coordinated care organization (340,000 covered lives)….
Between the year before and the year after the move-in date, we saw a significant reduction in per member per month of coverage costs, from $1,626 to $899. This equates to $8,724 per person per year in lower costs, or $505,992 in total averted expenditures for the fifty-eight residents with Medicaid. Expenditures in the second year after the move-in date ($995) were also lower than the period before the move.
A closer look at expenditure patterns by service type suggests that overall changes in costs were driven primarily by reductions in ED use, inpatient care, outpatient lab testing, and outpatient specialty care (Exhibit 3). Expenditures for outpatient primary care and outpatient behavioral health visits were stable, which suggests that cost reductions were not a result of reduced access to health care services in general.
The actual visit counts for residents with Medicaid confirm these findings: The average number of primary care visits went up slightly after the move to supportive housing (4.5 visits per person in the year before the move-in date, and 4.8 in the year after), as did the number of outpatient behavioral health visits (26.2 visits per person before the move and 27.8 visits after) (data not shown). Meanwhile, average ED visits per year fell from 2.8 in the year before the move to 1.6 in the year after, and average inpatient stays fell from 4.8 to 3.7.
This is interesting in and of itself, but also because the Feds are funding a demonstration project that allocates Medicare and Medicaid money for non-medical social service needs:
The federal government has announced a $157 million project to help hospitals and doctors link Medicare and Medicaid patients to needed social services that sometimes have a bigger impact on their health than medical interventions.
Public health experts have known for decades that even with medical care easily available, patients are often limited in their ability to get better or maintain good health if they lack stable housing, access to healthy food, or the ability to get to and from medical appointments….
For the sickest and most expensive patients, things like helping them get to and from medical appointments and helping pay utility bills so they don’t have to choose between that and buying medication can produce savings “probably pretty fast,” she said. But for patients whose social service needs are purely preventive, “it’s hard to reap those (medical) savings quickly enough” to reimburse the social service providers.
^ Actual citation : Bill J. Wright, Keri B. Vartanian, Hsin-Fang Li, Natalie Royal and Jennifer K. Matson; Formerly Homeless People Had Lower Overall Health Care Expenditures After Moving Into Supportive Housing; Health Affairs, 35, no.1 (2016):20-27