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Central Health Board Votes to Invest in Project That Will Provide Housing for Homeless, Reducing Costly Emergency Room Visits and Hospital Use

Central Health Board Votes to Invest in Project That Will Provide Housing for Homeless, Reducing Costly Emergency Room Visits and Hospital Use

(Austin) – The Central Health Board of Managers voted Wednesday, March 28 to commit $400,000 to participate in a new program expected to reduce the hospital utilization of up to 250 persons experiencing homelessness who are frequent users of the most expensive types of care.

The Ending Community Homelessness Coalition’s (ECHO) Pay-for-Success project will provide housing units and support services through the Assertive Community Treatment (ACT) model, an evidence-based practice for people with severe mental illness who are most at risk of homelessness and poor health outcomes. The project will identify uninsured and underinsured persons, including Central Health Medical Access Program (MAP) enrollees, who interact frequently with the health care and criminal justice systems and move them into this permanent supportive housing program.

By a 6-2 vote, the Central Health Board of Managers gave Central Health staff the go-ahead to enter into negotiations with the intent of bringing a contract back for board approval before the end of the fiscal year Sept. 30, 2018.

“We cannot build a health care delivery system that can outweigh the negative health impacts of homelessness,” said Dr. Mark Hernandez, Chief Medical Officer, the Community Care Collaborative. “If we don’t get them into housing, we’ll continue to see hyper utilization of hospital stays and increased expenses.”

Dr. Hernandez told Central Health Board Members that through the taxpayer-funded Medical Access Program, health care for a person experiencing homelessness is about twice as expensive as for someone who is not homeless. “For a person with two or more chronic conditions like diabetes or high blood pressure, it costs the MAP program around $15,000 a year if a person is homeless compared to $7,200 if someone is in housing.”

Other Funding
The ECHO-sponsored project has received financial commitments from the City of Austin and Travis County in their Fiscal Year 2018 budgets. The City earmarked $1.2 million, while Travis County Commissioners’ Court unanimously approved reserving $600,000. Funding for the Pay-for-Success project operations will be provided by private investors, who in turn will be paid back by end-payers like the City, County and Central Health, but only after key outcomes – like reduced emergency department utilization – are achieved. Central Health is not obligated to pay for any unachieved metrics, and Central Health funds will not pay for housing. A similar model has been used in Salt Lake City, Utah and Santa Clara, California.

“This evidence-based housing intervention combines affordable housing assistance with wrap-around supportive services for people experiencing homelessness,” said Central Health Board Chair Dr. Guadalupe Zamora. “Ultimately, the goal for this pay for success program is to reduce the cost of care for Travis County’s most vulnerable population.”