Making Housing Pay

The prevalence of housing instability is up—that is the conclusion of the recent report, The 2024 Annual Homelessness Assessment Report (AHAR) To Congress. In 2024, 23 of every 10,000 people in the U.S.—experienced homelessness in an emergency shelter, safe haven, transitional housing program, or in unsheltered locations across the country—the highest ever documented. The report attributed this increase to a number of factors including the national affordable housing crisis, rising inflation, and stagnating wages among middle- and lower-income households.

Between January 2023 and January 2024, there was an 18.1% increase in homelessness—making the total number of unhoused people close to 800,000. And 33.1% of that 800,000 were unsheltered individuals—and 2.4% were unsheltered families, 31.2% were sheltered individuals, and 33.2% were sheltered families. The incidence of unsheltered individuals and families increased by 6.9%, and the incidence of individuals and families in shelters increased by 25.4%.

The statistics for the chronically homeless—which includes people with a physical disability, a mental disability, or emotional impairment—was a record 152,585 individuals, an increase of 6.6%. The one area of improvement was homelessness among veterans, which dropped nearly 8%, from 35,574 in 2023 to 32,882 in 2024. Among unsheltered veterans, the number dropped nearly 11% in 2024.

The question for health and human service executives is how best to address the needs of the housing-insecure population—and how to develop a financially sustainable approach to delivering these services. These questions were the focus of the recent OPEN MINDS Executive Roundtable, Integrated Stabilization, Recovery & Housing: The VOA Eastern WA Case Study, featuring Fawn Schott, President and Chief Executive Officer of Volunteers of America Eastern Washington (VOA Eastern WA), and Stephanie Jordan Brown, VOASPOKANE Partner.

VOA Eastern WA’s housing support model is a Housing-First Health Home operated by a Certified Community Behavioral Health Clinic (CCBHC) program in partnership with a Federally Qualified Health Center (FQHC) for primary care. The model now provides integrated clinical and wrap-around support services in permanent supportive housing (PSH) and transitional housing (TH) programs that support teens, young adults, women, veterans, and the chronically homeless.

The program began with a grant-funded counselor for substance use disorders (SUDs) being placed in a shelter for teens. It then turned into an integrated care design project with a Substance Abuse and Mental Health Services Administration (SAMHSA) CCBHC grant and a SAMHSA Treatment for Individuals Experienced Homelessness (TIEH) grant. As Washington State 1115 Medicaid waiver funding has made coverage of respite services and housing support available, the goal now is to migrate funding to a Medicaid reimbursement.

While this approach is a classic method for launching a new service—grant funding to get the services off the ground and productive—the “funding problem” at the center of this is that grant funding is time-limited. Ms. Brown said, “We are not getting great reimbursement from Medicaid for the service side, and we really rely on grant funding. That is just not sustainable. We needed to be able to influence and have a discussion with our payers around what the true cost of this population is—what it costs to deliver these interventions within the different settings of shelter and housing.”

To remain sustainable, the VOA Eastern WA team plans to maximize Medicaid reimbursement through Washington State’s 1115 waiver. This could include reimbursement for up to 90 days of recuperative care (behavioral health respite); up to six months of short-term post-hospitalization housing; rent or temporary housing for up to six months; housing transition navigation and tenancy-sustaining services; and a CCBHC daily encounter payment. VOA Eastern WA is also seeking an alternative payment arrangement with managed care.

“The kind of alternative payment model we are seeking is a cost-based all-inclusive global payment for the array of services involved in the model, excepting the medical care provided by our FQHC partner, which is billed separately by the FQHC,” said Ms. Brown. “In the 24-hour setting, we envision this as a per diem rate, and in the housing setting, we see it as a global encounter or daily encounter rate.”

Right now, their team is meeting with health plans and government payers, while Washington State pushes ahead with the planning phase for its CCBHC demonstration. Ms. Schott noted that they had done the financial modeling and that when the state is ready to move ahead, they have rate requests that are on par with state and national benchmarks for respite care and the CCBHC encounter payment.

For organizations hoping to be successful in developing programs for the housing insecure population, these executives have some advice. The first is to plan for “whole person” care approaches and make sure systems and staff are ready for integrated care. This includes streamlined assessments, expanded care planning, and new triage models.  

The second was to be creative in optimizing existing funds to cover the cost of services—leveraging grants from any source and working with health plans. They emphasized the importance of knowing the business model and costs for any innovative program. “When positioning something new, it’s important that it not be underpriced out of the gate,” said Ms. Schott. “Leadership should make sure that the unit cost economics of providing services are understood and can be communicated to stakeholders. Wherever new services present an opportunity to sustain the model, we are advocating for rate adequacy together with other providers who share our interests.”