The Few Who Cost The Most

news1-1180/180 campaign aims to address the price of homelessness

Of an estimated 2,700 homeless people living on the streets of Santa Cruz County, just 10 to 15 percent of them—the “medically vulnerable”—account for 70 percent of the costs incurred by countywide services.

The newly implemented 180/180 campaign aims to save lives and money by permanently housing that population.

The medically vulnerable homeless are a subset identified within the “chronically homeless” population, which accounts for about 33 percent of all the homeless people in the county. The chronically homeless are identified as having been homeless for a year or more or having four or more episodes of homelessness in three years.

In May, 180/180 volunteers surveyed 325 homeless people in Santa Cruz County and identified 155 of them as medically vulnerable or as being at risk of premature death, says Philip Kramer, the campaign’s project manager.

Thirty-seven of those medically vulnerable homeless individuals—those who suffer from at least one serious physical, mental or substance abuse problem—had a combined total of 67 hospital admissions in the past year, Kramer says. The average hospital admission cost is $8,500. Multiplying that figure by 67 and then dividing the total by 37, shows that each of those chronically homeless people cost the county $15,392 in hospital bills alone.

By providing the 180 most vulnerable homeless people with housing, the campaign plans to help those who are the most at risk of death, as well as minimize the expenses incurred by the county in responding to their emergencies.

“It’s a win-win,” Kramer says. “If this appeals to your sense of compassion, then great. But these are also the people who need to go to the hospital the most, who are getting picked up by the police and using emergency services, so it makes good fiscal sense. They’re not only the hardest cases, they’re also the most expensive.”

The 180/180 campaign is one of 136 similar programs being conducted across the country. Helping to facilitate all of the campaigns is the parent organization, 100,000 Homes, whose goal is to house 100,000 chronically homeless Americans by July 2014.

Kramer says there have been more than 60 studies done nationwide over the years that evaluate the cost effectiveness of permanent supportive housing relative to general relief emergency services.

In a 180/180 study based on 2008 figures, the average monthly public costs for chronically homeless people in supportive housing is $605. The study found that the monthly cost for those people when left on the streets is $2,897.

The last figure factors in a homeless person’s dependence on paramedics, ambulance rides, shelter beds and food stamps as well as their inevitable contacts with police, nights in jail and getting processed through the court system.

The average cost for an ambulance response and transport is $2,400, according to Christine Sippl, of the Homeless Persons Health Project. The cost of a county jail booking is $119 plus $98 per bed night.

She says the average cost per admission at a hospital in the Western United States is $8,500, but can be significantly higher for medically vulnerable people who suffer from complex illnesses that require expensive treatments and longer-term stays.

Jake Maguire, communications director for 100,000 Homes, refers to Los Angeles County’s homeless housing campaign, Project 50, which has been active for five years.

According to a June 8 Los Angeles Times article, Project 50 ultimately housed 133 chronically homeless people, 85 percent of whom are still in their housing. Those housed soon stopped requiring as many visits to the ER, stopped being arrested and began seeking treatment for addiction, Maguire says.

Medical costs for the Project 50 participants in L.A. fell 68 percent in the first year, according to the Los Angeles Times article.

Between 2008 and 2010, the program cost the county $3.045 million but generated $3.284 million in estimated savings, yielding a net savings of $238,700.

“One chronically homeless person can cost [a] county $40,000 to $50,000 over the course of a year,” Maguire says.

Housing them and providing supportive services to prevent emergencies is a more systematic way to manage health, he says.

“What happens is they [the homeless] end up getting services for preventive care instead of going to the ER, and that’s a much cheaper way to manage a person’s heath,” Maguire says. “Help them routinely rather than wait for a crisis to flare up.”

Monica Martinez, the director of the Homeless Services Center in Santa Cruz, says this is “counter intuitive to what many people think should be done for the homeless.”

“We’re investing money in these people no matter what,” she says. “We’re either going to invest in smart solutions that help them live a higher quality and hopefully longer life, or we’re going to, by default, invest in our emergency resources to act as the social safety net for this population.”

The next stage for 180/180 is to initiate the housing process, Kramer says.

The first wave of homeless people the campaign plans to house is veterans, 24 of whom were contacted during the survey week. Veterans are at the top of the list because they are eligible for a special type of veterans’ housing voucher, called VASH, that is currently available through the U.S. Department of Veterans Affairs (VA), Kramer says.

For non-veterans in the second wave, the campaign will use Section 8 housing vouchers, which supplement housing costs for low-income individuals and families.

There are 4,200 Section 8 housing vouchers available in Santa Cruz County through the Housing Authority, but they have only about a 1 percent turnover rate, making about 40 available each month, Kramer says.

The 180/180 campaign requested three weeks ago that the Housing Authority set a preference for chronically homeless individuals, arguing that they have less opportunity to access the vouchers due to their circumstances, he says. They hope to have two or three set aside each month.

180/180 appealed to the County Board of Supervisors, who sent a letter to the Housing Authority supporting the priority list of Section 8 housing vouchers, Kramer says.

Kramer says they made a similar request to the VA for priority VASH vouchers.

The first group of 180/180 participants will be housed in apartments scattered throughout the county, Martinez says. Part of the campaign’s work will be to reach out to landlords who accept Section 8 vouchers as well as contact landlords who may not have considered it in the past.

Kramer hopes that sharing the financial results will cause many people to view solutions to the homeless problem in a new light.

“We’re showing that it makes more sense for a community to pick someone who’s really sick up off the streets and get them out of the emergency room, out of the ambulance, and put them in an apartment and give them supportive services,” he says.

Ardella Davies knows firsthand how housing can turn a person’s life around. Davies lived on the streets for nine years while struggling with diabetes and a methamphetamine addiction. In September 2011, she was given an apartment at the Nuevo Sol complex in Santa Cruz. She received the housing through Project Home Base, which is managed by the Santa Cruz County Homeless Persons’ Health Project in collaboration with County Mental Health and Substance Abuse Services. Since moving in, she says her health has improved greatly. She says being able to cook proper food in her kitchen and having a bed has changed her life.

“You have a place to put your head,” Davies says. “You have facilities to cook. You have your basic needs. Everyone needs housing.” 

Photo caption: Ardella Davies was homeless for nine years, during which time she was coping with diabetes and an addiction to methamphetamine. Since moving into the Nuevo Sol apartment complex in Santa Cruz last September, she says her health has improved greatly.

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