Healthcare News & Insights

Unique approach to cut healthcare costs: Hospital pays for patient housing

Some hospitals are thinking outside the box to control healthcare costs in the emergency department, particularly for disadvantaged patients who count as “superutilizers” – patients who make multiple visits to the hospital each month for minor issues. One facility’s solution aims to improve patients’ health by improving their socioeconomic standing. 

An article in NPRThinkstockPhotos-468673318 describes the efforts of University of Illinois Hospital.

Headquartered in Chicago, the hospital’s ED saw its share of Medicaid patients who were homeless with chronic illnesses. Often, patients would exaggerate the scope of their illnesses just to have a safe place to sleep for the night.

Keeping these patients in the facility overnight was expensive. According to the NPR piece, the average cost of hospital care at the University of Illinois Hospital was $3,000 a day per patient.

To reduce these expenses, the hospital tried an innovative approach. Instead of paying for patient care, the facility decided to pay for permanent low-income housing for 15 homeless patients who were deemed superutilizers.

The hospital partnered with the Chicago Center for Housing and Health to help patients find homes as part of a pilot program to gauge the impact of permanent housing on healthcare costs. Compared to the $3,000 per day price tag for hospital care, this strategy only costs the hospital $1,000 a month per patient.

The hospital not only covered the cost of these patients’ housing, it also assigned a case manager to each person. Case managers helped patients schedule regular doctor’s appointments to address their illnesses so they wouldn’t have to go to the ED.

So far, the program’s been successful in reducing healthcare costs – the cost of caring for participating patients has decreased by 75%. Plus, it’s also been helpful for lowering hospital capacity. With more beds in the ED available for actual emergencies, the program has contributed to improved patient flow.

Thinking differently

Increasingly, hospitals are coming up with solutions to improve patients’ health that aren’t just limited to the care they receive within a facility. Whether it’s partnering with food banks to increase patients’ access to fresh produce or working with pharmacists to make sure patients are taking medications as directed, more effort is required to boost patients’ outcomes post-discharge.

While footing the bill for patient housing may seem like an implausible solution for some hospitals, if community resources are adequate, it may be more cost-effective than repeatedly treating homeless patients who aren’t able to properly control their chronic illnesses while living on the streets.

Time will tell whether the University of Illinois’ strategy is sustainable over the long term. Although the hospital would like to continue its pilot project, it’s set to run out of funding by next summer, per the NPR article. Those who’ve already received housing won’t lose it, but the program may not be able to help more patients get permanent homes.

Regardless of whether this project continues, however, arrangements such as these will likely become more common as hospitals look for more unique ways to provide value-based care and improve population health overall while lowering costs. Forward-thinking facilities may want to see if a similar program would be beneficial and feasible for their patient mix.

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