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Hospitals Save Money with Homeless Outreach

Two studies, one in Chicago and the other in Seattle, prove we can save health care dollars by housing and helping the homeless.

Dr. Laura Sadowski knows how homeless people can be treated by hospitals. She's seen the occasional taxicabs from another hospital drop off homeless patients at the door to the nearby teaching hospital where she works.

While never as dramatic as the homeless patient "dumping" by Kaiser Permanente and others in Los Angeles, as an internal medicine physician at Stroger Hospital in Chicago, Sadowski had enough of an idea to know that hospitals in her area could probably do more to help the homeless.

When The Chicago Continuum of Care, a nonprofit advocacy group, asked Sadowski and a group of colleagues to verify the results of a program it started in 2002, the subject was near and dear to her heart.

Their findings, published in the May 6 issue of the Journal of the American Medical Association, found that hospitals saved hundreds of thousands of dollars by helping to provide transitional housing and case management services together with local advocacy groups.

The study looked at 600 chronically ill homeless people who attended Stroger and one other Chicago hospital, with 200 of them receiving case management and housing. The group included people living on the street from 30 days to 30 years, in many ways mirroring the 3.5 million Americans (and growing) who face homelessness at some point during the year.

Researchers also selected those with chronic health conditions other than mental health or substance abuse, although participants with these and other conditions were not excluded.

"We wanted, in part, to show whether or not this model works, but we also wanted the literature to broaden and not portray the homeless as severely mentally ill or alcohol dependent or drug abusers because that's just a small portion of the homeless," Sadowski said.

After 18 months, the group of 200 patients with housing — the intervention group — each made at least one trip to the hospital, but overall they reduced their hospitalizations on average by 2.7 days per person per year, which translates into hundreds of thousands of dollars, far more than the costs of providing the services.

"After adjusting for various factors, compared with the usual care group, the intervention group had a relative reduction of 29 percent in hospitalizations, 29 percent in hospital days and 24 percent in emergency department visits," the authors wrote.

"I'm hoping hospitals find our findings provocative," Sadowski told "Hospitals change procedures just to save a single hospital day a year, our study shows you can save 2.7 hospital days a year, which is a lot of money for hospitals to take care of the homeless."

The Chicago study comes on the heels of another study validating a far more radical homeless housing program in Seattle, part of a larger movement that Miller-McCune has hailed as the possible answer to ending homelessness. That Seattle study looked at a program by Seattle's Downtown Emergency Service Center, which provides housing to alcoholics and allows them to continue drinking.

The average cost per person to publicly funded health and criminal justice systems before intervention was $4,066 per year. After six months with housing, the cost fell to $1492, and after 12 months to $958. Professor Mary Larimer at the University of Washington and colleagues published their findings in the March issue of JAMA.

"We're trying to inform the public debate on issues related alcohol, tobacco and drugs," said Prabhu Ponkshe, communications director for the Substance Abuse Policy Research Program, which funded the Seattle study through a Robert Wood Johnson grant. "What should we do in terms of evidence-based policies related to these people is of deep interest."

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