Executive Summary

This paper provides tools for identifying homeless individuals with acute needs, the highest public costs when homeless, and the greatest reduction in public costs when housed.

An analysis of 10,193 homeless, destitute single adults in Los Angeles County – 1,007 of whom exited homelessness by entering supportive housing – was carried out in collaboration with the Los Angeles County Chief Executive Office, which linked records for these individuals across multiple public agencies, providing crucial information about their characteristics and the public costs for health, mental health, justice system, and welfare services they used. Supportive housing is permanent, affordable housing with on-site case management and additional on-site, or readily available, services such as health, mental health and substance abuse rehabilitation.

When we rank the overall population of homeless single adults by their public costs and break them into ten groups of equal size (deciles), we find that most have comparatively low public costs. However, the most expensive ten percent:

• Have average public costs of $8,083 per month, compared to $710 for the other 90 percent, because of extensive use of hospitals and medical and mental health jails;
• Account for 56 percent of all public costs for homeless single adults; and
• Have average cost reductions of $5,731 per month, or 71 percent, when in supportive housing – a decline in costs that is far greater than for the other nine deciles, both as an absolute dollar amount and as a percent of total costs when homeless.

When information about a person’s recent history is available, it is possible to combine multiple characteristics of a homeless adult to estimate his or her likelihood of being in the highest decile. No single characteristic defines the tenth cost decile, but by using combinations of key characteristics it is possible to identify these individuals with reasonable certainty.

This data is most likely to be available in settings where intake information is obtained and case records are maintained. Hospitals and jails are particularly well positioned to identify homeless individuals who should be given high priority for housing and services because they have contact with many high-need, high-cost homeless adults and they are likely to have many pieces of information that identify high-need individuals.

Two tools have been developed for combining multiple characteristics to identify high need individuals. The first is a look-up table that shows results from profiling groups within the study population based on seven characteristics and determining the proportion of each group that is in the tenth cost decile, as well as in the combined ninth and tenth deciles. The second is a calculating tool derived from statistical analysis that uses sixteen pieces of information to determine the probability that an individual is in the highest cost decile.

The strength of using actual population profiles is that they are identifiable subgroups of the homeless population and provide historically observed data. A limitation, however, is that even with a population as large as in this study, there are only a limited number of subgroups with 30 or more people (the minimum for statistical reliability) that can be formed. The strengths of the calculating tool are that it captures more of the population-wide effects of a larger number of characteristics and it can produce probabilities for cases that are not found frequently enough in the study population to produce reliable data based on population profiles.

The critical trade-off in using this information to identify homeless individuals who should be given highest priority for housing and supportive services is between on the one hand setting too low a standard and mistakenly including individuals who are not in the highest cost decile, and on the other hand setting too high a standard and mistakenly excluding individuals who are in the highest cost decile. The factor of erroneous inclusion is known as “burden,” and the factor of erroneous exclusion is known as “shortfall.”

We recommend using a 0.40 cut-off point for the minimum proportion of targeted individuals estimated to be in the tenth cost decile. With this minimum cut-off level, only 4 people outside the ninth and tenth deciles will be selected for every ten people inside those deciles, meaning that the non-target population that is selected will be only 29 percent of the total number of people who are selected.

The findings from this analysis of high-cost, high-need homeless residents support seven major conclusions and action recommendations.

1. Identify homeless residents who are likely to have high levels of need and high public costs and give them high priority for admission to supportive housing. Private hospitals should be full partners along with public hospitals and jails in implementing referral protocols in each sub-region of the county.
2. Build face-to-face assessment and intensive housing placement services into the referral system to ensure that housing referrals are correctly matched to homeless individuals’ level of need and that high-need individuals are assisted in obtaining supportive housing.
3. Provide bridge housing for high-need individuals while their applications for supportive housing are going through the review and approval process.
4. Change the administrative plans of the Los Angeles city and county housing authorities to allow set-asides of supportive housing units for the highest need individuals rather than requiring applications to be considered solely on a first-come, first-served or lottery basis.
5. Change the policies of the Los Angeles city and county housing authorities that prevent Section 8 housing subsidies from going to homeless individuals with drug convictions. Roughly half of the tenth decile population may be prevented from receiving Section 8 housing support because of their substance abuse arrest records. It is contrary to the public interest in stabilizing these individuals to block their access to housing.
6. Support the outcomes achieved by supportive housing by assigning staff of the county departments of Health Services, Mental Health and Public Health or the staff of their contracted agencies to provide much needed on-site services for supportive housing residents.
7. Provide additional, intensive on-site services for unstable residents that are at high risk of leaving housing.