Federal Reserve Bank of San Francisco

Community Development

Long-term Cost Effectiveness of Placing Homeless Seniors in Permanent Supportive Housing

Author(s):

July 2014

Community Development Working Papers

This paper demonstrates that the greatest reduction in health care costs after placement in supportive housing is seen among chronically homeless adults and seniors who are frequent users of the health care system. Employing data from Mission Creek Apartments, a senior affordable housing project in San Francisco with 51 units reserved for homeless seniors, the researchers estimated savings to Medicaid and Medicare from avoiding placing these seniors in a skilled nursing facility of $9.2 million over 7 years. Their findings support the conclusion that permanent supportive housing can be a highly cost-effective placement option for homeless seniors exiting skilled nursing facilities, particularly as they approach the end of life, and points to the importance of this housing option for managed care organizations that are increasingly taking on the financial responsibility for the health care of this population.

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