How Hospitals Can Save Millions Helping Homeless

The 22-bed Reno Motel seems an unlikely way for hospitals to avoid $1,000 fines for "dumping" discharged homeless patients onto LA's Skid Row, in violation of a 2008 city ordinance.

But on a small scale, this tiny mid-city housing project is a solution. About 33 hospitals are embracing it, and at the same time improving care for thousands of homeless people. In fact, the recuperative care projects in Southern California are saving hospitals millions—on average $2,279 per patient day— that they'd otherwise incur keeping these repeating patients in acute care beds when appropriate housing to discharge them to isn't available.  

When a homeless patient is ready for discharge, the hospital refers him to the non-profit National Health Foundation.  It runs two programs, and pays $200 per day for about 11 days of recuperative care, including meals, medical care and social services that patients would otherwise go without.

"This way, they have medical oversight while they're recuperating," says Eugene Grigsby, NHF president and CEO. "If they didn't have this, they'd be back on the street," and much more likely to be readmitted, or turn up with an avoidable visit to the ED, he says.

"We've made the business case that this kind of program can work," says Jim Lott, executive vice president of the Hospital Association of Southern California, an advocacy group for 165 hospitals in six counties, including 93 in Los Angeles.

"I think it's absolutely something that should be replicated throughout the country in areas with high rates of homelessness," he says.

Kelly Bruno, NHF's vice president for programs, says that in the 14 months since the Reno Motel project started, it has admitted more than 309 discharged patients referred by Los Angeles hospitals, saving them at least $2.1 million.

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