Comparative costs and benefits of permanent supportive housing before and after chronic homelessness

The provision of housing and supportive care to individuals experiencing chronic homelessness remains an ongoing challenge to many communities. The purpose of this study was to measure the effect of permanent supportive housing (PSH) on the cost and frequency of services used by a sample of the chronically homeless population in Knox County, Tennessee. Using data drawn from healthcare and mental health providers, the local homeless management information system, and law enforcement agencies; we compared 1) service utilization one year prior to entering PSH to the first year in PSH and 2) costs associated with services pre and post PSH. Forty-one individuals over the age of 18 consented to participate in the study. Service utilization rates decreased post-PSH in nearly half of measured domains. We found a 56% decrease the cost of community services compared to one year before PSH. Mental health services costs decreased by 23% from pre to post PSH. Healthcare costs increased 30% or $3,198 per capita after PSH placement. However, 7% of medically ill subjects accounted for 90% of the post-housing inpatient charges and outpatient hospital costs 72% of those costs post-housing. Removing this small group of healthcare cost outliers from the analysis, we examined the total per capita community costs (community services, mental health services, and healthcare). In this outliers removed analysis, we found a 12% decrease in total per capita community costs post PSH. This study points to the potential for broad community costs savings resulting from placing chronically homeless individuals in PSH.