Cover: Health Service Utilization and Costs at the Outset of a Permanent Supportive Housing Program

Health Service Utilization and Costs at the Outset of a Permanent Supportive Housing Program

Baseline Evaluation Report

Published Aug 10, 2020

by Ryan K. McBain, Sarah B. Hunter, Adam Scherling, Alina I. Palimaru, Matthew Cefalu, William Mcconnell, Priya Batra

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Research Questions

  1. How do permanent supportive housing (PSH) programs help health systems address the social determinants of health and generate potential cost-savings?
  2. What methods do PSH programs use for recruitment?
  3. What were the characteristics of the initial cohort of participants with regard to their demographics, service utilization, and health care costs generated in the year before program enrollment?

Homelessness is a pervasive public health problem in the United States—affecting more than half a million individuals on any given night. Recently, state Medicaid expansion and movement away from fee-for-service payment models have fostered an increased interest in supportive housing programs implemented by health plans, hospitals, and large health systems to address homelessness and high health care service utilization. In this report, the authors assess the baseline implementation of a permanent supportive housing (PSH) program administered by a large not-for-profit Medicaid and Medicare managed care plan in Southern California—describing program operations; participant demographic, clinical, health service utilization characteristics; and medical costs. This effort drew from electronic medical records and programmatic data tracking systems. The program enrolled 164 adult health plan beneficiaries with self-reported homelessness and multimorbid medical or behavioral health conditions from April 2018 through October 2019. Program participants were predominantly male, middle-aged, and racially/ethnically diverse, with complex, multimorbid health conditions. The median number of past-year health conditions recorded was 17, generating an average health care expenditure of $70,447 per patient-year (i.e., year of patient enrollment). This compared with an average of three health conditions and an expenditure of $3,898 per patient-year for the typical managed care plan beneficiary. The most commonly reported health conditions among participants included type 2 diabetes, skin and bacterial infections, and septicemia. Baseline findings from this PSH program indicate its success in identifying and enrolling high-need individuals. Hospitals and health systems considering PSH programs may look to these results for guidance on implementation.

Key Findings

The managed care plan was successful in identifying and enrolling a cohort of high-need beneficiaries into its PSH program

  • Program participants were predominantly male (71 percent), middle-aged (63 percent aged 50–64), and racially/ethnically diverse, with complex, multimorbid health conditions.
  • Recruitment efforts captured a diverse group of individuals with respect to race/ethnicity, with roughly half of participants identifying as African American (25 percent) and Hispanic (23 percent); 44 percent self-identified as white, compared with an estimated 49 percent of homeless adults at the national level.
  • Participants received care for an average of 17 health conditions in the year prior to enrollment, representing more than 100 patient events per participant. This compared with an average of three health conditions for the typical health plan beneficiary.
  • The conditions treated among individuals varied significantly, with the top ten most common conditions encompassing skin infections, diabetes, septicemia, and heart failure. Many patients (44 percent) received recuperative care as a result of their homelessness status.
  • The average health expenditure per participant was substantial: greater than $70,000 per patient in the year prior to program enrollment, compared with $4,000 for the average health plan beneficiary over the same period.

The analysis did have its limitations

  • The available diagnostic and billing categories constrained the representation of health conditions as reflected in service utilization and expenditures.
  • The authors were unable to document care received by participants outside the scope of the health system.


  • The data in the analysis demonstrate the complex physical and behavioral health needs of the population served by the PSH program, including high utilization of emergency services and hospitalizations that resulted in significant health expenditures.
  • The data also demonstrate the ability of the health care plan to efficiently identify patients who meet the criteria for significant health and housing needs and enroll them in a PSH program.
  • Future efforts should examine whether and to what extent health care utilization and expenditures evolve in the 12 months subsequent to enrollment, relative to a comparable cohort of individuals who were not enrolled in a PSH program.

Research conducted by

This research was funded by the Inland Empire Health Plan and conducted in the Community Health and Environmental Policy Program within RAND Social and Economic Well-Being.

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