Cost-effectiveness of Supported Housing for Homeless Persons With Mental Illness

 Reprinted from JAMA Psychiatry

Background  Supported housing, integrating clinical and housing services, is a widely advocated intervention for homeless people with mental illness. In 1992, the US Department of Housing and Urban Development (HUD) and the US Department of Veterans Affairs (VA) established the HUD-VA Supported Housing (HUD-VASH) program.

Methods  Homeless veterans with psychiatric and/or substance abuse disorders or both (N = 460) were randomly assigned to 1 of 3 groups: (1) HUD-VASH, with Section 8 vouchers (rent subsidies) and intensive case management (n = 182);(2) case management only, without special access to Section 8 vouchers (n= 90); and (3) standard VA care (n = 188) Primary outcomes were days housed and days homeless. Secondary outcomes were mental health status, community adjustment, and costs from 4 perspectives.

Results  During a 3-year follow-up, HUD-VASH veterans had 16% more days housed than the case management– only group and 25% more days housed than the standard care group (P<.001 for both). The case management– only group had only 7% more days housed than the standard care group (P = .29). The HUD-VASH group also experienced 35% and 36% fewer days homeless than each of the control groups (P<.005 for both). There were no significant differences on any measures of psychiatric or substance abuse status or community adjustment, although HUD-VASH clients had larger social networks. From the societal perspective, HUD-VASH was $6200 (15%) more costly than standard care. Incremental cost-effectiveness ratios suggest that HUD-VASH cost $45 more than standard care for each additional day housed (95% confidence interval, $−19 to $108).

Conclusions  Supported housing for homeless people with mental illness results in superior housing outcomes than intensive case management alone or standard care and modestly increases societal costs.

DELIVERY OF effective services to homeless people with serious psychiatric or addictive disorders or both has been difficult, in part, because of their need for assistance from diverse agencies and the difficulty of integrating services at the interorganizational level.1 A recent 18-site demonstration project2 found that extensive and well-funded efforts to promote integration of service delivery across dozens of agencies by implementing global, systemwide integration strategies did not result in improved access to services or better client outcomes. In contrast, a more focused, agency-specific approach, in which pairs of agencies map out specific ways of coordinating their efforts, increased access of homeless veterans to social security benefits3 and improved their quality of life.4

Clinical services for this population have included (1) community outreach,5 (2) case management,6– 8 and(3) housing assistance involving either time-limited halfway house treatment9,10 or longer-term mainstream community housing with support.11,12 Recently, experimental studies6– 14 have demonstrated superior outcomes for diverse interventions, typically described as supported housing programs in which case management and housing resources are combined, with benefits more often demonstrated for housing outcomes than for clinical status.15 Although no paradigmatic standards for this approach have emerged, it received a strong endorsement from the congressionally appointed Bipartisan Millennial Housing Commission.16(p49)

An important unanswered question is whether setting aside housing resources is either necessary or sufficient for facilitating exit from homelessness in this population. On the one hand, provision of intensive clinical services may result in receipt of sufficient access to health care, income support, or rehabilitation services to facilitate exit from homelessness without formal linkage to housing subsidies. On the other hand, even when given priority access to housing subsidies, people with serious behavioral disorders may not be able to take advantage of them.

Only one experimental study12,17 has attempted to disentangle the effect of housing subsidies and intensive case management for this population. That study used a 2 × 2 study design, crossing rent subsidies with intensive case management, and reported that clients who received rent subsidies were more likely to be independently housed after 18 months but that intensive case management was not associated with greater improvement than standard case management in any outcome domain. However, these findings are ambiguous because (1) receipt of housing subsidies did not reduce nights of homelessness and (2) the intensive case management intervention as actually delivered was not dissimilar from the standard care intervention. Access to housing subsidies did not reduce homelessness.

Supported housing services can be costly.18 However, a recent study19 that assessed the costs for clients placed in the New York–New York (NY/NY) supported housing initiative and a matched control group found substantially greater reductions in hospital use among NY/NY clients than controls, offsetting almost the entire $19 000 annual program cost. In the absence of random assignment, however, it is possible that these savings reflected unmeasured (and unmatched) client characteristics rather than placement in NY/NY housing.

To evaluate the cost-effectiveness of an agency-specific approach to the integration of clinical and housing services, we conducted an experimental evaluation of a joint program of the US Department of Housing and Urban Development (HUD) and the US Department of Veterans Affairs (VA)—the HUD-VA Supported Housing (HUD-VASH) program—in which HUD Section 8 housing vouchers were paired with intensive case management services provided by VA clinicians.

In a 3-year prospective experimental study, we compared outcomes and societal costs among clients randomly assigned to (1) HUD-VASH, (2) intensive case management without special access to Section 8 vouchers, or (3) standard VA homeless services.17 We hypothesized that case management combined with housing subsidies in HUD-VASH would result in better housing, mental health, and social adjustment outcomes than either control condition and that intensive case management, in turn, would result in better outcomes than standard care. We further hypothesized that HUD-VASH would generate sufficient savings in hospital, halfway house, criminal justice, and emergency shelter costs to offset the additional costs of intensive case management services but that case management alone would be almost as expensive as HUD-VASH but less effective.