Leaving Mentally ll People to Live on the Streets Costs $22,372 Per Person Per Year

A recently published study reported that the average cost for public services for such mentally ill homeless individuals is $22,372 per person per year, and that amount includes only some of their costs. Making sure that such people receive proper psychiatric treatment would not only be humane, it would also be cost effective.

The study was done in Philadelphia by Dr. Stephen Poulin and his colleagues at the University of Pennsylvania. They identified 2,703 persons who met federal criteria for chronic homelessness (one year of continuing homelessness or four episodes of homelessness within three years). They then accessed cost data for these individuals for outreach and public shelter services, psychiatric inpatient and outpatient care, and jail costs. They found that a subgroup of 20 percent of these individuals accounted for 60 percent of the costs of the total group. Among the 20 percent of the high-users, 81 percent had a diagnosis of schizophrenia or major affective disorders.

Translated into dollars, this means that 438 seriously mentally ill individuals who were chronically homeless cost on average $22,372 per person per year in service costs. Together, these individuals cost the city of Philadelphia almost $9.8 million per year. And this was only a partial cost; the researchers indicated that “the study did not include the costs associated with police, courts, emergency medical services, and health care not associated with behavioral health.” The true cost, therefore, was much higher than $22,372 per person; for this kind of money, one can provide excellent psychiatric services if they are organized correctly.

The authors of the study concluded that “chronic homelessness is costly to society.” Most of such costs, the study noted, are associated with individuals with serious psychiatric disorders, the majority of whom also have a substance abuse problem. The obvious answer is to make sure such individuals are receiving treatment for their mental illness. This is not happening in Pennsylvania, or indeed in any other state. In fact, the Pennsylvania legislature in the most recent session failed to implement legislation that would have improved treatment for individuals such as those included in this study. If existing treatment laws and resources were properly organized and used, such individuals could be receiving excellent care for the same costs that are now being wasted on a badly broken mental illness treatment system.

“Service use and costs for person experiencing chronic homelessness in Philadelphia: a population-based study” by Poulin et al., Psychiatric Services 2010;61:1093–1098.