Housing, Treatment for Homeless Mentally Ill Saves Emergency Care Costs

Providing housing and treatment for homeless individuals with mental illness costs taxpayers only "slightly more than leaving them to fend for themselves," the Wall Street Journal reports. A new five-year study conducted by researchers at the University of Pennsylvania Health System examined 10,000 mentally ill homeless people in New York City, half of whom were placed in government-funded housing with mental health assistance. The individuals who did not have access to housing or treatment cost taxpayers about $40,500 per year for services incurred in emergency rooms, psychiatric hospitals, shelters and prisons. However, the cost of providing the homeless with housing and treatment was only about $1,000 more than the expenses incurred by the homeless without these services. Researchers found that the difference in cost for the two groups was low because individuals with mental health assistance and housing used "far fewer emergency-type services" (Martinez, Wall Street Journal, 5/2). For example, the study revealed that each supportive-housing unit resulted in an $8,260 reduction in state psychiatric hospital costs, a $3,779 reduction in costs to city shelters, a $1,771 reduction in costs to the city's Health and Hospitals Corporation and a $3,787 decrease in inpatient Medicaid costs. Outpatient Medicaid costs, however, increased by a yearly average of $2,656 per supportive-housing unit in the two years after placement, although that total included the "high initial cost of stabilizing the health of homeless people who had long been living on the street," the New York Times reports.

Dennis Culhane, one of the researchers involved in the study, said that the report carries "important national policy implications" on how to solve the problem of homeless individuals with mental illness. He said, "Homelessness among the mentally ill is a finite problem, and we have an opportunity to solve it. This shows it won't cost us anything; we just have to move the dollars around." However, budgeting money for housing and treatment services for the homeless will not be easy, according to Carla Javits, president of the not-for-profit Corporation for Supportive Housing. Javits stated, "The savings clearly accrue to systems like health care, shelters and correctional systems, whereas the costs are incurred on the housing and mental health side of the ledger. Unfortunately there are different administrative agencies and even different legislative committees eventually responsible. It is crucial to have the interest of the chief executive -- mayor, governor or president -- to make it happen" (Bernstein, New York Times, 5/2).