Prospective cost savings

The main reason for providing people who have enduring mental illnesses with secure, long‑term accommodation plus personal support is the prospect of benefit for them, and through them for their families and friends and the communities around them.

But it’s also worth knowing that adding to supported accommodation would offer on‑going savings to the ACT Government which could partly offset the cost of building and maintaining the MyHome accommodation and of providing a support service there.

Cost savings for governments have been identified in several recent studies of relevant Australian programs.

  • The housing research network AHURI published a study in 2016 which indicated that providing housing for over 3,000 homeless people in Western Australia in the period 2009‑12 had saved the health system $4,846 per person per year, mainly through their spending fewer days in hospitals and psychiatric care, while the program for a sub-group of 124 people with severe and persistent mental illnesses had saved the health system far more – $84,135 per person per year.
  • An earlier AHURI study indicated that supported accommodation programs for people experiencing homelessness had led to an average of $2,397 (in 2011 dollars) in reduced costs for the justice system.
  • Another Australian study in 2012 found that the NSW Housing and Accommodation Support Initiative (HASI), providing supported housing for people with a mental health diagnosis, was associated with a 24 per cent decrease in mental health inpatient hospital admissions, resulting in hospital costs avoided of $27,917 per person per year.
  • Analysis of a pilot project called MISHA, operated in NSW by Mission Australia and providing supported accommodation for a group of formerly homeless men, found it had led to cost savings in the health, justice and welfare systems together of just over $9,000 per person per year (in 2010 dollars, equivalent to over $10,000 in current dollars).

Research in other countries backs up this observation.  In an article published on The Conversation website in September 2020, Vivienne Skinner and Phillippa Carnemolla of University of Technology Sydney summarised their review of global research since 2009 about the value of providing secure, stable homes for formerly homeless people. This research described value in various forms: physical and mental health, emergency department use, substance use, well-being, community integration, mortality, criminal justice interaction, service use and cost-effectiveness. Skinner and Carnemolla summarised: “The overriding consensus among the 100 peer-reviewed studies and agency reports was that housing stability brought a raft of benefits to formerly homeless individuals. Reducing the cost of non-shelter services also saved the public money”.

Every program to help remedy homelessness is specific to its situation and client group: therefore, cost savings identified in programs which have been studied should be seen as suggesting, rather than reliably predicting, savings that might be obtained through programs in different situations.

It remains for the MyHome team to find out what relevant data exists for the ACT, and whether the data linkage which enabled fruitful analysis of programs in WA has been established, or could be established, here.

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