Housing alone will not solve the problems of people experiencing homelessness.

Los Angeles is home to more than 65,000 individuals experiencing homelessness. 

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How you define a problem determines how you solve a problem.

Take homelessness, for example. If you see it fundamentally as a housing problem, then your solution will be to build more housing.

If you see it as an economic problem, then your solution will be to create more and better-paying jobs.

And if you see it as a quality of life problem, in that the encampments that have taken over streets and public parks, for example, diminish housed residents’ ability to enjoy their communities, then your solution will be to clean up the tents and move their inhabitants into shelters.

I see homelessness as a healthcare problem (in part). And while none of the above approaches is wrong per se, they are all stunted by a kind of myopia that prevents their prescribed solutions from tackling the challenge of homelessness in the sort of broad manner that has been demonstrated not just to improve life for the homeless, but speed the process of getting them housed as well. Building affordable housing, for example, would certainly put a roof over the head of the unhoused, but would likely do little to help someone struggling with a substance use disorder.

On the other hand, the solutions I envision entail providing more and better healthcare, as well as an array of related care services, to people experiencing homelessness. What’s more, I’m convinced that, in Medicare Advantage, we have a financial model of care whose incentives are aligned with the needs of homeless people—and the funding to make meaningful strides in addressing the manifold challenges they face every day.

Defining the problem

America’s homeless population is larger than that of any other advanced economy. On any given night, more than half a million people experience homelessness. One-third of them are in just one state—California.

When homeless people are asked how they became homeless, they frequently say their troubles began when they lost their jobs. Which might lead one to conclude that unemployment is the root cause of homelessness. Yet, what many homeless people often omit when asked this question is that they lost their job due to illness. As Seiji Hay­ashi writes, “Sickness and injuries make holding a job difficult, which leads to income declining and homelessness for those without a safety net.” Hayashi also notes that in a country where most people get health coverage through their employer, “no job means no health insurance.”

Once one understands these dynamics, it becomes all too clear that homeless people don’t just lack housing. They’re also, quite often, sick. Diabetes. Hypertension. Heart Disease. Hepatitis C. HIV. These diseases are rampant among the homeless population. In fact, if the connection between homelessness and poor health weren’t clear enough, then consider that researchers have found that being homeless takes 20 years off a person’s lifespan.

And that was before COVID-19. Nationally, homeless people who contracted COVID-19 in the last year were 30% more likely to die than those in the general population. In Los Angeles County, homeless COVID-19 patients were 50% more likely to die.

Treatment Patterns

Once they become unhoused, homeless people frequently find themselves on a collision course with America’s complex, unequal and often insufficient healthcare system. Healthcare for homeless individuals is often provided in hospital emergency departments. In fact, nearly one-third of emergency department visits are made by people struggling with chronic homelessness. Unfortunately, ED’s are expensive places to receive care. In one study of how homeless people use the healthcare system in Boston, a research team found that it cost Massachusetts $16 million per year to care for 6,500 homeless people in the state’s emergency rooms.

Who pays for that care? Research shows that about 40% of homeless individuals are insured under Medicare and Medicaid. The remaining 60% have no insurance, though many are eligible for Medicare or Medicaid due to their age or disability status. This second group is poised to grow considerably; a well-regarded study has shown that the number of elderly experiencing homelessness will triple in the next ten years. Likewise, the same study finds that the cost of sheltering and providing healthcare to homeless seniors in Los Angeles County will reach $540 million by 2026, an 80% increase since 2011.

One might be tempted to suggest we just stay the course—that the current system, however costly, succeeds in providing care for people who find a way to get themselves to a local emergency room. And for those who don’t, various mobile clinics fill in the gaps.

Not only does this argument ignore the fundamental economics of healthcare and who pays for it, it ignores the fact that most of the care homeless people receive in emergency and mobile settings is inadequate for their health needs. That’s because most homeless people don’t have a single ailment that can be treated in an emergency setting. They have complex behavioral and physical health needs, and the mere state of their being homeless compounds and exacerbates those needs.

The truth is that if we are going to keep homeless people healthy and forestall further health declines and their adjacent problems, then we must boldly envision what a better system would accomplish. Here are three pillars to start with:

1.   Outbound care. Instead of waiting for homeless people to seek out care (usually in the most costly environments), we have to bring care to them. Street medicine teams, mobile medical clinics, community workers and other outreach teams have effectively demonstrated that they can build trust and deep relationships with people experiencing homelessness and treat many of their needs without having to admit them to hospitals.

2.   Coordinated care. Homeless people are twice as likely as housed people to have unmet medical care needs. Additionally, by some estimates at least 30 percent of unhoused people suffer from serious mental illness 50 percent or more are active substance abusers; many have comorbid mental illness and substance abuse issues. Our siloed health system, which is difficult for most of us to navigate under the best of circumstances, can’t begin to address the complexities of caring for these patients—much less the underlying issues that led them to become homeless. For that, highly coordinated teams need to work in partnership with each other as well as other organizations in order to broadly address the wide array of challenges homeless people face.

3.   Specialty care. Homeless people have unique needs that Medicare and Medicaid often can’t address, such as complex behavioral health services, transitional or recuperative care. But some needs are more mundane; Medicare and some Medicaid plans don’t cover eyeglasses and vision care, hearing aids or dental care.

Anyone with even a vague knowledge of the American healthcare system knows that it is mostly incompatible with the approach outlined above, largely because it relies on a fee-for-service (FFS) payment model. Under fee-for-service, providers—physicians and hospitals, usually—are reimbursed for each treatment they provide. But that model doesn’t work for homeless people. Fee-for-service typically only reimburses providers for inbound care, which isn’t practical for people who lack access to transportation or even identification. What’s more, it is extremely difficult to separate all the various treatments and activities that go into care coordination into discrete, billable units to be reimbursed under fee-for-service.

Also, FFS provides incentives for hospitalizations, which are expensive; we need to address homeless individuals’ health conditions before they worsen and require hospitalization and other expensive treatments. It’s hard to envision FFS providers, who are rewarded for expensive in-patient treatments, embracing a care model that seeks to obviate the need for their services.

Medicare Advantage

If fee-for-service is not the right financial model to use when addressing the health needs of homeless individuals, what is? Medicare Advantage plans differ from FFS plans in that they usually operate under a capitated model. They receive a fixed fee per member that’s adjusted according to the members’ expected needs, and which must be used to cover all healthcare services.

Likewise, clinicians serving Medicare Advantage members often receive a set fee per month that’s adjusted to cover the patient’s expected needs, or risk level. The more complex the needs of the patient, the higher the payments that are deployed toward their care. In this system, clinicians bear the risk for treating patients; set fees have to cover costly services like visits to emergency departments and hospitalizations, so it’s in the physician’s interest to get ahead of the kinds of chronic conditions that can lead to patients seeking care in those high-cost environments.

As a result of this model, the incentive structure of Medicare Advantage enables plans to offer a more extensive set of programs to their members and increase care coordination activities. This, in turn, leads to higher quality care, and reduces the overall cost of care. In a study of the largest chronic condition MA plan, for example, researchers found a much more extensive set of programs used to coordinate care, including in-home visits and managing referrals and communication across providers relative to fee-for-service counterparts. Likewise, a study of patients with end stage renal disease found reduced mortality rates and lower utilization for those under MA plans.

If the homeless were served under a Medicare Advantage model, clinicians would receive a per member fee appropriate to meet the complex needs of each individual. Needless to say, given the complex care needs of the homeless population, payments would be much higher for these patients than the average patient, equipping clinicians to serve this high-need population effectively.

With this capitated payment, clinicians would also have additional flexibility to invest in the wide variety of services required to stabilize and maintain the health of their patients, by allocating payments to “street medicine” and other models of outbound care, as well as a full range of health and social services.

Ideas in Practice

We often think of American healthcare as being monolithic, but several organizations have implemented programs in the last few decades that successfully demonstrate that a model of care to treat homeless individuals exists—and can be deployed effectively and efficiently.

In Seattle, the Safe, Healthy, Empowered (SHE) Clinic serves women experiencing homelessness on a walk-in basis. In a recent study, researchers found that women who accessed the clinic “had a reduction from 37 nonemergent ED visits in the 6 months before they used the clinic to 22 visits in the next 6 months. A similar reduction was not observed for 35 women who had not used the clinic.”

Meanwhile, in Indiana, Geriatric Resources for Assessment and Care of Elders (GRACE) Team Care, was developed by the Indiana University School of Medicine's Center for Aging Research to provide high-touch, in-home geriatric care management to low-income seniors with complex health needs. Under this program, a social worker and nurse practitioner conduct in-home visits and develop individualized care plans for their patients. The in-home team is supported by a broader interdisciplinary team led by a geriatrician, which includes a mental health provider, pharmacist, and program coordinator.

A peer-reviewed study demonstrated that high-risk senior citizens enrolled in GRACE had fewer hospitalizations, hospital readmissions, and emergency department visits, as well as reduced hospital costs. In fact, in years 2 and 3 of the study, GRACE patients cost the system $1,500 less each year compared to their peers receiving the standard of care.

A third model worth reviewing is HUD-VASH, a collaboration between the U.S. Department of Veterans Affairs (VA) and the U.S. Department of Housing and Urban Development (HUD) (disclosure: I am a practicing physician at the VA). This program for homeless veterans combines HUD housing vouchers with VA supportive services to help veterans who are homeless and their families find and sustain permanent housing. Critically, the veterans in the program don’t just receive a housing voucher. Instead, VA case managers connect them with support services such as healthcare, mental health treatment and substance use counseling to help them in their recovery process and with their ability to maintain housing in the community. HUD-VASH is largely credited with the ten-year decline in veteran homelessness.

What these examples tell us is that when you combine comprehensive health and social services with a funding model that can cover the full range of each patient’s unique needs, you unlock the power to make meaningful, long-term impact on entire communities.

With this in mind, SCAN Group, the organization I lead, is poised to launch, in the next few months, a new medical group dedicated to providing comprehensive care to homeless adults. We’ll do it by bringing together professionals to work on care teams providing homeless individuals with the physical, behavioral and social support that they need. We’ll fund this effort through Medicare Advantage, which gives us the flexibility to provide homeless individuals with a broad array of services while delegating the authority and accountability for their care to our clinical and social services teams.

This is, quite frankly, one of the more audacious projects I’ve ever worked on, and certainly the kind of endeavor that keeps me up at night. That’s because the risks are great—and I’m not talking about the investment SCAN will make in this new medical group. I’m talking about the lives we’ll be trying to improve. Homeless people are among the most vulnerable in our entire society and, somewhat obviously, the hardest to treat. Most have been betrayed in one way or another by our society. As such, they often harbor deep suspicions about the health system and a broader distrust of authority in general. We know that treating homeless people—in shelters, on sidewalks, in mobile treatment centers—will be a far cry from seeing the average patient in an office setting.

And yet, 580,000 people will not have homes to sleep in tonight. Each has a particular story to tell, but what unites them is that they collectively face a host of health conditions that will not be adequately addressed by our current mechanisms and will thus inevitably get worse. This is the crisis we face. It is—make no mistake—a health crisis. And it is too important and too severe for us not to leverage all of the tools, resources, and experience at our disposal in order to blaze a new path forward.