By How Housing Matters, July 17, 2019.
Nearly 50 percent of Medicaid costs are driven by only about 4 percent of Medicaid enrollees, primarily adults who are elderly, living in unstable housing, or have a mental illness, chronic medical condition, or substance use disorder. In response to rapidly rising Medicaid expenditures, there has been an increased focus on identifying strategies to better meet the needs and reduce the health care costs of this high-use population. Permanent supportive housing, which pairs housing with services such as substance treatment is one such strategy and is thought to lead to improved health care access and decreased likelihood of high-cost medical expenses, such as emergency department visits. This study explores the association between participation in a New York City supportive housing program and Medicaid expenses among people with mental illness and chronic homelessness or with diagnoses of both mental illness and substance use.
The study used matched data from administrative records for 2,827 people and sequence analysis to trace Medicaid expenditure patterns over two years among people placed in supportive housing and people eligible for, but not placed in, supportive housing. Researchers tracked the expenditure patterns for two years before the baseline, defined as the point at which applicants were placed in supportive housing or were deemed eligible but not placed. To analyze the data, researchers grouped people into six categories based on their expenditure patterns: those who were only covered by Medicaid for the final months of the two-year period and incurred low Medicaid expenditures once covered (very low coverage); those who incurred sharp increases in Medicaid expenditures after a short period without coverage (emerging user); and those with consistent coverage but varying levels of Medicaid expenditures (low, middle, high, and very high users). The authors then used propensity score matching to determine the impact of the program on Medicaid costs for the two-year period after the baseline. The majority of the sample was non-Hispanic* Black or Hispanic (82 percent), 70 percent were male, 64 percent were ages 35 to 54 years at the time of application, and 52 percent of the applicants were diagnosed with substance abuse disorders.