What drives the high health care costs of the homeless?

Abstract

Existing research demonstrates that mean health care costs incurred by those experiencing homelessness are high. However, high mean health care costs mask the fact that a sizeable number of people experiencing homelessness incur low costs and that very high costs are driven by a minority of the homeless population. This paper examines health care costs estimated from two Australian surveys of those experiencing homelessness undertaken by the authors. It demonstrates three important findings. First, higher health care costs are most strongly associated with diagnosed mental health disorders, followed by long-term physical health conditions. Second, having a current drug or alcohol dependency, but no diagnosed mental health disorder or long-term physical health issue, is not associated with higher level health care costs. Finally, higher health care costs are incurred by those with long periods of rough sleeping. The findings of this research provide a significant economic argument for government intervention to break the cycle of homelessness as they reveal significant potential savings to effective interventions for homeless people with diagnosed mental health disorders and long-term rough sleeping.

Keywords:

• Homelessness
• housing economics
• housing need
• health care costs
• mental health
• alcohol and drug dependence

Acknowledgments

This work was supported with funding by the Australian Housing and Urban Research Institute (AHURI) Ltd, which gratefully acknowledges the financial and other support it has received from the Australian, state and territory governments and member Australian universities; and, by Mission Australia, who in turn received funding support from a philanthropic donor. The authors are solely responsible for the accuracy of the statements and interpretations contained in the publication.

Notes

1. The Michael Project received Murdoch University Human Research Ethics Committee outright approval on 22 August 2008 (No. 2008/165), while the Cost of Homelessness study received Murdoch University Human Research Ethics Committee outright approval on 6 August 2010 (No. 2010/138). The lead chief investigators of the two studies, Paul Flatau and Kaylene Zaretzky, were at Murdoch University when the studies commenced, but subsequently moved to the University of Western Australia and received follow-up ratification of ethics approval at the University of Western Australia.

2. For further discussion of how the Severity of Dependence Scale was applied in the studies see Spicer et al. (2015).

3. All dollar figures quoted for the studies are 2008–2009 Australian dollars.