Vital Signs Blog

Blog: Affordable housing provides health benefits and savings

Affordable-housing advocates are urging federal and state governments to be flexible in the way Medicaid dollars are spent to address homelessness.They say it could reduce healthcare costs and improve patient outcomes.

A report released Thursday tracked the Medicaid data of more than 1,600 residents living in 145 affordable housing properties in Portland, Ore., between January 2011 and July 2015. It found Medicaid spending for those residents dropped annually by 12% after they moved into the housing, resulting in $936,000 in annual cost savings.

“We believe that this shows very strongly that affordable housing helps to reduce healthcare costs and improve health outcomes,” said Amanda Saul, senior program director for the advocacy group Enterprise Community Partners.The organization partnered with the Center for Outcome Research and Education to conduct the study.

The report found residents' use of the emergency department fell by 18%, while outpatient primary-care utilization increased by 20% during the study period.

A key driver of those results was the presence of on-site health services or staff, which saved an average of $78 per resident.

Saul said the results showed the potential economic and health benefits of allowing Medicaid funding to be used toward providing affordable housing. It's a concept that has gotten more attention after the CMS sent a letter to state Medicaid agencies last June. It clarified that program dollars could be spent toward housing assistance for homeless individuals “with disabilities, older adults needing long-term services and supports (LTSS), and those experiencing chronic homelessness."

The report findings will serve as the basis for a pilot project underway in Portland. Enterprise plans to use philanthropic funds toward rental assistance, eviction prevention, housing re-placement, transportation and service coordination in the city.

The goal, Saul said, is to demonstrate how the program would work if it were to receive funding from Oregon's 1115 waiver. That allows the state's Medicaid managed-care organizations to use money toward medical or non-medical initiatives that serve beneficiaries and lower costs.

Saul said such funding could make significant strides in reducing homelessness but also presents one of the most daunting challenges in convincing managed-care organizations of its benefits.

“There's a shortage of flexible funding, funding that could be used to meet the needs of a specific situation,” Saul said. “I think those are the most difficult resources to come by, and I think sometimes those resources can have the largest impact.”


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