To Address the Homeless Crisis, We Need to Adopt a Systems-Level Approach Centered on Outcomes
By Catherine Stapleton, Director, Quantified Ventures, and Julia Dobbins, Director, National Institute for Medical Respite Care
A Coordinated Approach to Payments and Partnerships Can Sustainably Finance a Continuum of Care for Individuals Experiencing Homelessness
The statistics are startling. On any given day in the United States, 580,000 individuals experience homelessness. For scale, that’s more than the population of Atlanta or Albuquerque.
As the pandemic has brought into stark relief, health absent housing is impossible to achieve or maintain. Yet, both our housing and healthcare systems feature a systemic lack of coordination that is particularly harmful to our most vulnerable.
More than a decade ago, a Housing and Urban Development study found that communities with “a strong central organization focused on improving the access of homeless households to mainstream services” were most effective. In 2012, the U.S. Government Accountability Office (GAO) issued a report that called for better coordination among the numerous federal agencies managing programs for those experiencing homelessness.
Fast forward to 2021 and the GAO still highlights the need for greater role clarity and collaboration among federal, state, and local government programs. The lack of cohesive infrastructure, consistent definitions, and aligned financial structures presents significant challenges to the community-based organizations (CBOs) that provide on the ground services to individuals experiencing homelessness and which rely on government support to keep their doors open.
The question remains: How can we create and sustainably fund a structure that provides an integrated continuum of services to effectively support individuals experiencing homeless and housing insecurity?
The answer is to develop a systems-level approach – to both finance and deliver services like medical respite, legal aid, eviction diversion, shelter diversion, housing navigation, and wraparound services.
To get there, policy change must be coupled with innovative payment mechanisms that incentivize coordinated approaches to homeless services. While recent legislation provides a near-term influx of funding, the long-term payment mechanisms are not in place to drive the bigger changes we want and need. Scaling a strategic, coordinated system of services to meet the wide range of needs among homeless individuals and families is challenging, yet there are bottom line incentives to a systems-level approach.
Figure 1: an example of a coordinated continuum of care for homeless individuals
One example of progress is the Homeless Trust (HT), Miami-Dade County’s organizing structure. The HT is funded by a county tax on food and beverages served in many restaurants and bars as well as by public resources devoted to addressing homelessness. The HT created two Homeless Assistance Centers that provide a central hub for individuals to receive direct services and assistance in accessing benefits; it also funded three outreach teams that coordinate to extend benefits and services coverage to the whole county.
Nevertheless, it is less expensive and more effective for society to provide upstream services that help individuals avoid homelessness, as opposed to trying to return someone to housing after they experience the trauma that comes with homelessness. While the recent American Rescue Plan Act provides more than $27 billion for emergency rental assistance, as a country we still spend far more dealing with the consequences of homelessness than on preventative efforts.
According to the Center on Budget and Policy Priorities, because of funding limitations 75% of households eligible for federal rental assistance do not receive aid. Upstream interventions, like eviction diversion, are cost-effective and proven in their ability to prevent an individual from experiencing an episode of homelessness.
For those already experiencing homelessness, programs like medical respite bridge the gap between hospital and home - providing hospitals a reliable discharge option and offering clients a safe haven to rest, recuperate, address chronic health issues, and work toward housing stability. Affordable housing, particularly permanent supportive housing interventions, are evidence-based models that offer wraparound health and social services to improve stable housing, reduce justice system involvement, mitigate unnecessary acute care, and bolster community connections to mental and physical health services for residents.
Eviction diversion, medical respite, and affordable housing all require integration of medical services, behavioral health care, and wraparound services including job training, peer-counseling, educational programs, and legal services. The coordination required to offer and effectively implement these comprehensive programs necessitates the presence of strong and integrated CBO partners. To build capacity among CBOs to establish such continuums of care for homeless services, payment models should be structured to incentivize integration in service delivery and to improve outcomes.
In most geographies, Medicaid Managed Care Organizations (MCOs) and CBOs have aligned interests that represent an opportunity to jointly pursue efforts to build, implement, and finance programs that prevent homelessness and help to re-house those already affected. Incentivized by the potential for cost savings and improved member health outcomes, Medicaid MCOs have become increasingly involved in funding programs and services focused on housing and homelessness.
There is a growing evidence base of action spurring Medicaid MCOs to take on this expanded role. One study found that Medicaid members who moved into affordable housing had 12% lower total medical expenditures, increased primary care use by 20%, and reduced emergency department visits by 18%.
Albeit a more temporary solution, medical respite similarly has been shown to reduce acute care utilization and cost. A study found that every dollar invested in medical respite would result in $1.81 in healthcare cost savings by reducing the length of hospital stays by two days, subsequent emergency department visits by 45%, and subsequent inpatient admissions by 35%. Building on this evidence and local analysis, AmeriHealth Caritas DC, Volunteers of America Chesapeake and Carolinas, and Quantified Ventures collaborated to design, implement, and finance a significant expansion of medical respite capacity in Washington, DC. Though the District still has high rates of homelessness, the new medical respite program (Hope Has a Home) has helped to fill a critical care gap - particularly for individuals with substance use disorders.
Gregory Mitchell, a client of the Hope Has A Home medical respite program, shares his story.
Another important driver is the ever-increasing pressure states are exerting on Medicaid MCOs through Medicaid RFPs and contracts. Standard clinical provider networks and clinical services are no longer sufficient, and MCOs are expected to reduce Medicaid program costs, improve healthcare quality, and coordinate and integrate services. While MCOs create networks, benefit offerings, and partnerships to achieve their goals, many of the services they need to offer fall outside of their traditional purview. Organizations embedded in and trusted by the community have the experience and expertise in working on the ground with those at highest risk for homelessness and housing insecurity.
The current Medicaid reimbursement system clearly inhibits progress. We need to re-think what, how, and how much we pay, and increase the focus on value-based care and services that drive health outcomes. In the absence of formal benefits for certain medical respite and wraparound services for individuals experiencing homelessness, MCOs are increasingly open to innovative financing approaches to build systems-level capacity in the markets they serve, recognizing that everyone benefits from a strong and coordinated contingent of CBOs.
As MCOs take on an increasing role in payment for homelessness services, it would be wise to apply a structure familiar to MCOs. We propose a delegated model in which insurers entrust certain responsibilities, such as chronic disease management, to a group of providers who are best suited to managing those conditions. This model enables MCOs to pay for members to receive tailored solutions, through value-based purchasing or capitated arrangements, rather than having to choose a one size fits all approach.
Instead of funding a fragmented plan initiative or benefit strategy, MCOs can fund community-wide capacity to address a related set of social needs. In addition, when MCOs play a role in funding programs, they are able to help collaborate on program design and receive data that provide a more complete picture of the member experience.
Community-based organizations who are familiar with deploying grant funding to provide services – which involves delegated risk, effective cost management, and measurement of outcomes – can relatively easily adjust to a delegated model. Some well-established homeless services organizations are able to tackle the holistic needs of an individual in the same way a multi-specialty practice would; they are simply providing a blend of medical, behavioral health, and wraparound services to individuals experiencing homelessness instead of exclusively providing clinical care.
To prepare for this approach, CBOs in a market can leverage their existing partnerships and referral pathways to structure themselves in a hub and spoke model that further integrate their services. A well-established hub organization works with the MCO to coordinate and integrate services while the individual service organization “spokes” provide the services at which they excel, and more efficiently refer individuals to other “spokes” best equipped to serve specific needs.
To enable this structure, CBOs must have a broad understanding of the need in their community, a desire to scale, and an understanding of the gaps in the continuum of care. In this model, guaranteed revenue from values-based contracts with health plans can reduce the CBO reliance on grant and donation revenue, as well as enable additional investments in internal infrastructure.
Whether this is the single model that works best in each market is up for debate. Quantified Ventures and the National Institute for Medical Respite Care continue to advance the financing options available to enhance the delivery and scale of upstream services and look forward to learning with and from the MCO and CBO partners on the journey with us.
Figure 2: The Path to Finance + Deliver a Systems-Level Approach to Homelessness
| Stakeholder Group | Recommended Steps to Enable a Systems-Level Approach | Projected Outcomes / Benefits |
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| Policy Makers + Social Impact Funders |
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| Community Based Organizations providing services |
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| Medicaid Managed Care Organizations |
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