COST SAVINGS OF HOUSING FIRST IN A NONEXPERIMENTAL

COST SAVINGS OF HOUSING FIRST IN A NON-EXPERIMENTAL SETTING By Ali Jadidzadeh, Nick Falvo and Dan Dutton Annual Conference of the Canadian Economics Association June 1, 2019 www. nickfalvo. ca 587 -892 -7855

Disclaimer This body of research is the property of Calgary Homeless Foundation, and is used with permission. www. nickfalvo. ca 587 -892 -7855

Overview • Housing First • Data • Method • Results • Discussion www. nickfalvo. ca 587 -892 -7855

Housing First (HF) • No requirement of housing readiness • Various supports provided • Strong support from RCTs. • Existing research suggestions important reduction in use of health and justice systems. www. nickfalvo. ca 587 -892 -7855

Housing First (HF) www. nickfalvo. ca 587 -892 -7855

This study • In this paper, we investigate the impact of HF programs on public service utilization for people experiencing homelessness in Calgary. • Specifically, we look at single adults without dependants. www. nickfalvo. ca 587 -892 -7855

This study (cont’d) • Our objective is to study the impacts of HF programs where a large central homeless-serving organization (i. e. , a ‘system planner’) provides program oversight. • We use longitudinal individual-level data on health and justice system utilization to observe costs to public systems before and after joining HF and cost data from the HF program to estimate cost offsets or savings associated with HF. www. nickfalvo. ca 587 -892 -7855

Research questions 1. Does the delivery of HF reduce utilization of the health and legal systems? 2. If so, by how much and over what period? www. nickfalvo. ca 587 -892 -7855

Data • Individuals were triaged to HF based largely on their level of homelessness acuity (as determined by the Service Prioritization Decision Assessment Tool). • Data for the present study was shared with us by the Calgary Homeless Foundation. • Move-in data + follow-up assessments every 3 months. • Includes data on health and justice use. www. nickfalvo. ca 587 -892 -7855

Data (cont’d) • There are 2, 222 individuals in our dataset. • Years: 2012 -2017 • Administrative (i. e. , observational) data. • To our knowledge, this is the first such Canadian study (using observational data). www. nickfalvo. ca 587 -892 -7855

Variables • Variables used to represent health and justice system utilization (our outcome variables) are: # of hospital visits, # of ER visits, and # of interactions w police. • All variables are self-reported by the participant, but recorded by a case manager who typically has some familiarity with the participant. www. nickfalvo. ca 587 -892 -7855

Method • We estimate two different models of utilization over time in HF programs. 1. Fixed effect OLS models. These estimate average changes in utilization but are not specific to count data. 2. Fixed effect negative binomial models. These estimate changes in the incidence rate of utilization and are specifically designed for count data. www. nickfalvo. ca 587 -892 -7855

Estimating health costs www. nickfalvo. ca 587 -892 -7855

Estimating health costs (cont’d) • We imputed the actual cost of hospital and ER use w costing data provided by the provincial govt (specifically, Alberta Health). • Alberta Health publishes reports on the cost of providing hospital and ER services for people experiencing homelessness (which are higher for each visit than for the general pop. ). www. nickfalvo. ca 587 -892 -7855

Estimating justice costs (cont’d) www. nickfalvo. ca 587 -892 -7855

Estimating justice costs (cont’d) • We use the estimated cost of the warrant cycle as the average cost of an interaction with police. • Issuing a ticket in Calgary costs $139. • Arresting an individual who has not paid their tickets costs an additional $135. • Resultant court appearance ranges between $222 and $253. www. nickfalvo. ca 587 -892 -7855

Estimating justice costs (cont’d) • If an individual is convicted in Calgary, then one day in jail costs $220. • Each warrant cycle in Calgary is estimated to cost a total of $1, 376, which we use as the unit cost for a single interaction with police. • Annual costs for a client in HF can range from $14 K to $31 K depending on specific program type. www. nickfalvo. ca 587 -892 -7855

Results • $1 spent on HF is associated with more than $2 of savings to the public system. • Ergo: the $42 M budgeted by Calgary Homeless Foundation for HF for fiscal year 2018 -19 could result in savings of more than $84 M in terms of hospital visits, ER visits, and justice services. www. nickfalvo. ca 587 -892 -7855

Results (cont’d) • We don’t include homeless shelter utilization as a cost saving because we couldn’t reliably estimate how many shelter stays participants would have used had they not been in HF. • However, each year of shelter use avoided represents an additional $12 K in savings. www. nickfalvo. ca 587 -892 -7855

Discussion • Results shows that the triage process developed in Calgary result in large returns to investment. • Future research would benefit from tracking the costs and types of service utilization through linked data. www. nickfalvo. ca 587 -892 -7855

Discussion (cont’d) • Cuts to social spending programs like HF will result in greater health spending to fund the consequent increase in hospital and ER utilization. www. nickfalvo. ca 587 -892 -7855

Who saves? • In the Calgary context, the systems-level savings estimated here will accrue mostly to the province, which funds the health system and courts, and the municipal government that funds the police services. www. nickfalvo. ca 587 -892 -7855

Caveats • HF is not one program, nor are estimates of the benefits of HF generalizable to all cities, so it follows that cost savings estimates at a systemslevel are also city-specific. • This particular study is focused exclusively on single adults without dependants. www. nickfalvo. ca 587 -892 -7855

Caveats (cont’d) • We make no effort in this particular study to estimate the benefits to individuals enrolled in HF, for whom the benefits to successful addiction and mental health management are enormous, and who might experience quality of life improvements in the future such as sustained employment. www. nickfalvo. ca 587 -892 -7855

Thank You • This manuscript is currently under consideration by a journal. www. nickfalvo. ca 587 -892 -7855