UnitedHealth Is Now Cutting Costs By Giving Apartments To Homeless People

Since 1986, laws have prevented emergency rooms from turning away patients that are unable to pay, regardless if they are uninsured, indigent, addicted to drugs, or mentally ill.

We have no such similar laws to protect the half a million homeless in the U.S. who have no place to sleep, and one doctor is now trying to change that, according to Bloomberg

Jeffrey Brenner is a doctor who, for 25 years, has worked with the poor and the homeless. He recently became an executive at UnitedHealth Group, the nation's largest insurer, and he is planning on using his position to give people places to live. 

Brenner is using a pair of apartment complexes in Phoenix as research and development for his proposed initiative. He's using UnitedHealth's money to pay for housing and support services for about 60 formerly homeless recipients of Medicaid. UnitedHealth's 6 million Medicaid members generated $43 billion in 2018, almost 20% of the insurer's total revenue. 

It's a profitable business overall but the patients in the most need, who offer a "complex blend of medical, mental health, and social challenges" go on to cost UnitedHealth far more than what it take in to care for them. 

Brenner said: “Can you imagine people living on the street with these disorders? Heart failure, COPD. They’re rolling around with oxygen tanks, crazy stuff. This is just sad. This is just stupid. Why do we let this go on?”

Instead, Brenner has been looking at data of patients for answers. One patient, named Steve, who is 54 with MS, cerebral palsy, heart disease and diabetes was homeless before UnitedHealth got him an apartment. While homeless for the year prior, he went to the ER 81 times and spent 17 days hospitalized and had medical costs of about $13,000 per month. Since a roof was put over his head, his average monthly medical costs have dropped more than 80% to about $2,000 per month. 

Patients like Steve wind up in the ER because they don't fit into the traditional ways that healthcare is delivered. The system is set up to "route billions of dollars to hospitals, clinics, pharmacies, and labs to diagnose and treat patients once they’re sick" and not care for vulnerable and homeless people.

The U.S. spends 18% of its GDP on healthcare, versus 8.6% in the other 35 countries in the Organization for Economic Cooperation and Development. The outsized spend on healthcare is converse with the country's undersized spending on social support, housing, food, cash assistance and care for children. Other nations spend about $2 for social services for every $1 they spend on healthcare. 

Brenner's program is called MyConnections and, after testing in areas like Phoenix, Milwaukee and Las Vegas, it is now expected to roll out to 30 markets by the year 2020. It comes at a time when Wall Street continues to press UnitedHealth about the performance of its Medicaid business, which was “not at our target margin range of 3% to 5%,” CEO Dave Wichmann said in January 2019. 

He was approached by UnitedHealth in 2017 after he had founded the "Camden Coalition of Healthcare Providers" in 2002, an organization that helped find hot spots of medical spending. At first, he had no interest in working with United. “I said no, and said no a couple of times,” he says. In 2017, he says, he was finally convinced that UnitedHealth's commitment was serious, and he finally agreed. 

He now manages a team of 65 and expects to house 350 homeless Medicaid patients by early next year. As of now, these patients cost more than $17 million in annual healthcare spending. Brenner's goal is to get them to "graduate" to paying their own rent within a year. 

Brenner studied neuroscience at Robert Wood Johnson Medical School in New Brunswick, NJ and formerly worked in family medicine, doing his residency in Seattle before moving to Camden NJ in 1998, which was - at the time - the poorest city in the country. There, he started a small practice with three exam rooms and eventually went on to practice solo. Almost all of his patients were on Medicaid. 

"He’d get up in the middle of the night to deliver babies," the article says. He also treated victims of violent crime and went to Camden's hospitals to try and get a picture of the city's spending on healthcare. It was there he realized the "gross imbalance" of the healthcare system: in Camden, just 1% of patients made up 30% of the costs.

 “Like, for 1% of the spending here, we could open up 10 primary-care offices all over the city,” Brenner realized. 

He commented: “The system had become so distorted that it felt like a microcosm of what was going on in America, which is if you don’t take good care of people, they’ll get sick. Then you’ll need more hospital beds and hospitals to take care of them.”

You can read Bloomberg's full longform piece on Brenner here