Cost-effectiveness of supported housing for homeless persons with mental illness

Background: Supported housing, integrating clinical and housing services, is a widely advocated intervention for homeless people with mental illness. In 1992, the US Department of Housing and Urban Development (HUD) and the US Department of Veterans Affairs (VA) established the HUD-VA Supported Housing (HUD-VASH) program.

Methods: Homeless veterans with psychiatric and/or substance abuse disorders or both (N = 460) were randomly assigned to 1 of 3 groups: (1) HUD-VASH, with Section 8 vouchers (rent subsidies) and intensive case management (n = 182); (2) case management only, without special access to Section 8 vouchers (n = 90); and (3) standard VA care (n = 188) Primary outcomes were days housed and days homeless. Secondary outcomes were mental health status, community adjustment, and costs from 4 perspectives.

Results: During a 3-year follow-up, HUD-VASH veterans had 16% more days housed than the case management-only group and 25% more days housed than the standard care group (P.001 for both). The case management-only group had only 7% more days housed than the standard care group (P =.29). The HUD-VASH group also experienced 35% and 36% fewer days homeless than each of the control groups (P.005 for both). There were no significant differences on any measures of psychiatric or substance abuse status or community adjustment, although HUD-VASH clients had larger social networks. From the societal perspective, HUD-VASH was 6200 US dollars (15%) more costly than standard care. Incremental cost-effectiveness ratios suggest that HUD-VASH cost 45 US dollars more than standard care for each additional day housed (95% confidence interval, -19 US dollars to 108 US dollars).

Conclusions: Supported housing for homeless people with mental illness results in superior housing outcomes than intensive case management alone or standard care and modestly increases societal costs.