Medicaid and Permanent Supportive Housing for Chronically Homeless Individuals: Emerging Practices From the Field. 7.5. Housing for Health


The Los Angeles County Department of Health Services is responsible for running the county's seven hospitals and associated clinics and contracting with and supervising scores of other health care providers that are part of its health services safety net.

The availability of federal funding for health care services covered through Healthy Way LA under the terms of California's Medicaid waiver (described in Chapter 3) has freed up some of the county funding that was paying for uncompensated care in county hospitals and clinics. This has created opportunities for the Department of Health Services to invest in innovative programs to better respond to the health needs of some of the county's most vulnerable residents, including people experiencing chronic homelessness. The department's director came to Los Angeles after serving as the director of the San Francisco Department of Public Health, where he had provided leadership in creating the Housing and Urban Health Section and the Direct Access to Housing (DAH) permanent supportive housing program. That program uses a housing-first approach to provide PSH to more than 1,000 people who were previously homeless. The San Francisco experience demonstrated the potential for using housing to reduce avoidable hospitalizations and improve health for vulnerable people experiencing homelessness.

7.5.1. Care Coordination and Housing Stabilization

The Los Angeles Department of Health Services is working to create thousands of housing and other residential options through Housing for Health, including but not limited to PSH, for people who are homeless and who receive care through department hospitals, clinics, and community partners. The team believes that the system needs both permanent housing and temporary housing options with varying levels of support, including medical respite or recuperative care, PSH that incorporates a housing-first approach, interim housing where people can stay while completing the application process for permanent housing, temporary housing for people experiencing a short-term crisis, and licensed residential care for those who need more-intensive care and supervision.

The team has been exploring many options for acquiring housing for the people to whom the department gives priority status. The team is talking with nonprofit housing developers and others who may have an appropriate housing or residential option for people experiencing homelessness served by the county's health care system. In exchange for access to housing opportunities, the department commits to attaching appropriate supportive services to each unit. This offer is very attractive to PSH developers and operators, who often find it difficult to get the flexible, ongoing funding needed to deliver supportive services to their tenants.

Funding from the Department of Health Services budget will be used to establish contracts for both property management and supportive services (Housing for Health will not pay for the cost of housing itself). The department used a Request for Qualifications process to select and prequalify vendors with the capacity to deliver one or both types of services, and established master contracts with eight companies for property management services and about 20 service provider organizations with experience working with people in supportive housing. Once housing becomes available and the Department of Health Services places its priority people into it, the department adds specifics to those master contracts, entering into agreements for the number of people to receive supportive services or the number of units to receive property management services.

This just-in-time approach to putting property management and supportive services in place contrasts with the usual time frame for real estate transactions, which can be slow and unpredictable.

The first Housing for Health PSH units were created by attaching department-funded service teams to tenant-based Housing Choice Vouchers designated for chronically homeless persons. The city and county public housing authorities have allocated Housing Choice Vouchers to Department of Health Services use, and the department also partnered with the city's housing department to acquire and renovate about a dozen small apartment buildings or houses that were in foreclosure, containing a total of 56 units. People experiencing homelessness and prioritized by the department will occupy these units, with supportive services provided by one of the agencies under a contract with the department.

Other short-term and permanent housing options, including several PSH projects, are in development or on the drawing board. The Department of Health Services hoped to have about 1,000 units of housing available by the end of 2013. The department has also negotiated with the city housing department to include provisions in its funding competitions for PSH projects to require developers to set aside housing units for people experiencing homelessness who are referred by the department, the Los Angeles County Department of Mental Health, or the Department of Public Health's substance abuse treatment system. These housing units will become available starting in 2014.

When the local public housing authorities had to stop issuing new housing vouchers because of federal funding reductions (due to sequestration) in early 2013, this slowed progress in expanding the Housing for Health program. Working in collaboration with other government partners, including the Los Angeles County Board of Supervisors and the Conrad N. Hilton Foundation, in February 2014 the Department of Health Services launched a new $18 million Flexible Housing Subsidy Pool to provide housing subsidies lined with wraparound intensive case management services for at least 2,400 persons.92

To identify residents for referral to the Housing for Health program, the department is working with a group of Designated Referral Entities, including four of the county's hospitals, the county's large ambulatory care centers, and designated county clinics and recuperative care programs. As more units of housing become available, Community Partner clinics that serve people experiencing homelessness will also become referral entities. The program's primary target population is people experiencing homelessness who are extremely vulnerable because of their health conditions or who are frequent users of county hospital emergency rooms or inpatient care.

The Department of Health Services also participated with community-based housing and service providers in a pilot coordinated entry initiative for Skid Row. One of the goals of the coordinated entry pilot was to align multiple systems for prioritizing vulnerable people and develop a strategy for linking them to the housing option that best matches their needs, taking into consideration applicable eligibility criteria. With support from the United Way and a network of public and private funders and other agencies involved in the countywide Home for Good campaign, efforts to implement a Coordinated Entry System were later expanded beyond Skid Row in late 2013. In early 2014, the Home for Good Funder Collaborative provided funding to expand the Coordinated Entry System to all areas of Los Angeles County. Some funders, including the Housing Authority of the City of Los Angeles, are beginning to require that new PSH units or vacancies be filled with people who are referred for housing from the local Coordinated Entry System.93

The Department of Health Services is now working to align or balance several strategies for prioritizing people for housing opportunities in the Housing for Health Program, including those who are prioritized by the emerging Coordinated Entry System, those who have been identified by the Designated Referral Entities, and those who are being served by a program that is identifying and engaging the most frequent users of hospital care and other high-cost services.94 With time, experience, and an expanded supply of housing options, the hope is that trusted partners will be able to work out a shared approach to finding the best fit between homeless people with the greatest needs and the available housing options.

In the short term, department leadership is committed to the idea that some of the resources in the county's large system of hospitals and clinics can be better used to finance some of the costs associated with PSH for people who would otherwise have frequent and avoidable emergency room visits, inpatient hospitalizations, and stays in other high-cost settings, including jails and nursing homes. The future financing strategy for this approach is still uncertain, in part because it is not yet clear how Medicaid managed care plans (discussed in Chapter 6) or capitations the department receives from the managed care plans can contribute to paying for the services in PSH.

7.5.2. How the Finances Work

The Department of Health Services uses departmental (county) resources to pay for property management attached to the buildings where its dedicated units are located and for supportive services, including intensive case management for each tenant it places in one of its dedicated units and some nursing services. While keeping the same budget of about $4 billion a year for its hospital and clinic system, the department leadership team is working to improve the whole system's efficiency and effectiveness, make more appropriate use of hospitals, and make the funding go farther, provide better care, and achieve better patient outcomes. The new director was able to obtain a favorable approval structure from the county Board of Supervisors, including the authority to negotiate master contracts and make other arrangements for service delivery. Thus the department can do what it feels is needed for several years, without returning to the Board for approval for specific items or strategies.

Most of the resources being used for Housing for Health were already in the departmental budget, where they were covering the costs of care delivered in the department's health service facilities that were not reimbursed through insurance.

The advent of Healthy Way LA and its federal Medicaid match for the costs of care, freed up some of those local resources, making them available for the department to cover the cost of the supportive services that it expects will contribute to major reductions in spending for emergency department use, hospitalizations, and rehospitalizations because a person's homelessness interfered with getting appropriate follow-up care after an inpatient episode.

7.5.3. Information Technology and Data Sharing

The Department of Health Services is committed to incorporating two data technology tools into its operations. The first was well on its way during the study--an Electronic Medical Records system and patient registry that was being rolled out to all primary care clinics. This is an electronic tool that tracks everything a provider might want to know about a patient. It is used to prepare for each patient visit wherever the patient might receive care, to review case history, and to let anyone dealing with the patient know what is happening in all aspects of the patient's care.

The electronic medical records system will be used for quality assurance, and to establish the baseline for outcomes. In addition, it can help to make the case for how housing and other practices are stabilizing clients, and rationalizing the system of care. The system will finally bring all Department of Health Services components into one unified system that uses the same data fields and data definitions and can share information across components. This will be a vast improvement over the historic reality of the department's seven different computer systems that did not talk to each other, used the same data fields but not the same coding categories within fields, and had important information in nonelectronic notes.

The second electronic tool is the e-consult, which the department had already begun to roll out at the time of our last site visit in January 2013. The department's own primary care clinics and the jail were using it, and some partner agencies were using it as well. Staff like e-consult because it gives a primary care physician almost immediate access to a specialist. The primary care doctor sends the specialist all the case information, the specialist evaluates it and either sends back recommendations for care or decides that the situation is urgent and that the patient should see the specialist immediately. If the latter, there is no long wait for an appointment and the specialist has immediate access to all the relevant information. The specialist can order tests to be done before the consult, or could suggest another specialist if appropriate.

Departmental staff said they did not know how well e-consults will work with people who are homeless because it is not certain they would return for further treatment, but even the information gained during the initial meeting should be of value to the patient as it would give the primary care physician a better sense of what to do for the patient.

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