Writings and observations

Cost savings among the homeless

In business, you sometimes hear the expression, “You have spend money to make money.” Sometimes, you have to spend it to save it, too. Consider the case of the homeless.

Consider a study in the current Journal of the American Medical Association. It was an intensive study – there are 11 co-authors – and here’s the local tie: “95 housed participants (with drinking permitted) with 39 wait-list control participants enrolled between November 2005 and March 2007 in Seattle, Washington.”

From the abstract:

Results Housing First participants had total costs of $8 175 922 in the year prior to the study, or median costs of $4066 per person per month (interquartile range [IQR], $2067-$8264). Median monthly costs decreased to $1492 (IQR, $337-$5709) and $958 (IQR, $98-$3200) after 6 and 12 months in housing, respectively. Poisson generalized estimating equation regressions using propensity score adjustments showed total cost rate reduction of 53% for housed participants relative to wait-list controls (rate ratio, 0.47; 95% confidence interval, 0.25-0.88) over the first 6 months. Total cost offsets for Housing First participants relative to controls averaged $2449 per person per month after accounting for housing program costs.

Conclusions In this population of chronically homeless individuals with high service use and costs, a Housing First program was associated with a relative decrease in costs after 6 months. These benefits increased to the extent that participants were retained in housing longer.

Put another way: You save a lot of money by helping these people and getting them off the street, as opposed to leaving them there until major health or safety problems result.

The full text is behind a pay wall, but a well-written summary at the Seattle Post-Intelligencer web site is well worth reading.

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