A Cost Analysis of San Diego County’s REACH Program for Homeless Persons

Todd P. Gilmer, Ph.D., Willard G. Manning, Ph.D. and Susan L. Ettner, Ph.D.

April 2009

This study examined mental health service utilization and costs associated with the California Assembly Bill 2034 housing-first program for homeless persons in San Diego County: Reaching Out and Engaging to Achieve Consumer Health (REACH). Encounter data were used to identify REACH clients and a control group that was matched by propensity score. Mental health services costs for case management, outpatient services, inpatient and emergency services, criminal justice system services, and total services were summarized for two-year periods before and after clients initiated REACH. Incremental costs of the program were calculated as the difference in cost among clients in the REACH group, from pre- to postintervention, less the difference in cost among those in the control group from pre- to postintervention. A total of 177 REACH clients and 161 clients in a control group matched by propensity score were identified. Among REACH participants, case management costs increased by $6,403 (p<.001) from pre- to postintervention, inpatient plus emergency services costs declined by $6,103 (p=.034), and costs for mental health services provided by the criminal justice system declined by $570 (p=.020) compared with the control group. The standardized difference-in-difference estimate of the total costs between REACH clients and the control group was not significant. Participation in REACH was associated with substantial increases in outpatient services as well as cost offsets in inpatient and emergency services and criminal justice system services. The net cost of services, $417 over two years, was substantially lower than the total cost of services ($20,241).

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