When veterans get financial assistance for housing, health care costs go down

May 3, 2021

Even small amounts of financial help can keep veterans from becoming homeless and improve their health outlook. (AP Photo/Jae C. Hong)

Financial assistance, even short term, can improve the health of homeless or near-homeless veterans — a finding that suggests more money and earlier intervention could save health care costs while keeping people housed.

The study, published May 3 in Health Affairs, examined the health care costs of veterans for two years before and after they enrolled in a U.S. Department of Veterans Affairs program for people who are newly homeless or about to become homeless. About 70% of the enrollees during the study period received an average of $6,000 in financial assistance, most commonly spent on rent or security deposits. 

The vets who received money to help pay their bills through the Supportive Services for Veteran Families program saw their VA health care costs decrease by $352 each quarter, on average, for a total savings of $2,816 over a two-year period, compared with people who did not receive financial assistance. 

"A veteran's engagement with the program lasts an average of about three months," said Richard Nelson, the lead author of the study and a research associate professor at the University of Utah School of Medicine. "We were able to show that there was a decrease in health care cost over the subsequent two years. Small but meaningful interventions at times of financial crisis can have important ripple effects on an individual's health and well-being trajectory."

Evaluations of the economic effects of homelessness interventions tend to focus on permanent supportive housing, Nelson and his colleagues wrote; the current study appears to be the first to evaluate how short-term rental subsidies affect health care costs for people with unstable housing. Notably, the study looked at medical costs only within the VA.

Supportive Services for Veteran Families works on both rapid rehousing for newly homeless people and homelessness prevention for people at risk of losing housing by providing grants to nonprofit organizations. By the end of the 2018 fiscal year, 308 grantees across the country had spent $333 million from the program, serving 83,343 households that year.

The researchers didn't find evidence supporting or refuting whether the program "pays for itself," but, as Nelson told The Academic Times, evaluations of homelessness programs should consider "not just whether it leads to a net decrease in cost," but also the "individual and societal benefits."

The researchers looked at everyone whose time in the program was between the fiscal years 2016 and 2018, tracking each person's VA health care costs for eight quarters — or two years — before and after they enrolled. The study captured a total of 41,969 veterans, including 26,683 who needed rapid rehousing and 13,186 who needed homelessness-prevention services.

Financial assistance seemed to have a greater effect on the people who had already lost their permanent housing: Veterans in the rapid rehousing program had costs decrease $457 per quarter, while people who had not yet lost their housing had costs decrease $219 per quarter. Rental assistance seemed to have a greater impact on outpatient costs.

Across all veterans, the researchers saw that health care costs spiked in the four quarters before they enrolled in the program, a finding that Nelson and his co-authors said is supported by other research. 

The spike, Nelson said, "hints at a bidirectional relationship between housing and health: Poor health may be a precursor to losing one's housing, and being homeless certainly has negative effects on both physical and mental health."

Nelson and several of his collaborators are affiliated with the VA; the study was undertaken to understand how the program was working. 

But the findings go beyond veterans: "This unique program in the VA, which helps to pay for rent or other housing-related expenses for a short period of time, can be a model for other agencies and organizations to help people affected by the economic recession caused by the COVID-19 pandemic," Nelson said. "Targeted help at crucial times in a person's life could prevent a vicious cycle from which a person may never recover."

The paper, "Temporary financial assistance decreased health care costs for veterans experiencing housing instability," published May 3 in Health Affairs, was authored by Richard E. Nelson, Veterans Affairs and University of Utah; Ann Elizabeth Montgomery and Stefan G. Kertesz, Birmingham VA Medical Center and University of Alabama at Birmingham; Ying Suo, James Cook, Warren Pettey, Adi Gundlapalli and Tom Greene, University of Utah; William Evans, University of Notre Dame; Lillian Gelberg, VA Greater Los Angeles Healthcare System and University of California, Los Angeles; Jack Tsai, National Center on Homelessness Among Veterans and University of Texas Health Sciences Center; and Thomas H. Byrne, Bedford VA Medical Center and Boston University.

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