Changes in Medicaid Utilization and Spending Associated with Homeless Adults' Entry into Permanent Supportive Housing

Background There is growing interest in financing housing and supportive services for homeless individuals through Medicaid. Permanent Supportive Housing (PSH), which integrates non-time-limited housing with supportive services for people who are disabled and chronically homeless, has seen rapid growth in the last decade, but clear evidence on the long-term impacts of PSH, needed to guide state efforts to finance some PSH services through Medicaid, is lacking. Objective Assess changes in Medicaid expenditures and utilization associated with receiving PSH. Design Cohort study using a difference-in-differences approach. Participants A total of 1226 PA Medicaid enrollees who entered PSH 2011-2016 and remained in PSH for 180 days or more, and a matched comparison cohort of 970 enrollees experiencing housing instability who did not receive PSH. Main Measures Medicaid spending in aggregate, and on behavioral and physical health services; emergency department (ED) visits and inpatient hospital stays. Key Results Three years after PSH entry, spending decreased by an average of $145/month in the PSH cohort relative to changes in the comparison cohort (p = 0.046), with the greatest relative spending reductions occurring for residential behavioral health ($64, p < 0.001) and inpatient non-behavioral health services ($89, p = 0.001). We also found relative reductions in ED use (4.7 visits/100 person-months, p = 0.010) and inpatient hospital stays (1.6 visits/100 person-months, p < 0.001). Conclusions These results can inform emerging state efforts to finance PSH services through Medicaid. Additional state expenditures to expand financing for PSH services could be partially offset by reductions in Medicaid spending, in part by facilitating a shift in treatment to outpatient from acute care settings.