Centerfield

Seriously Reducing U.S. Homelessness?

Welcome to everybody here for the convention, and to everybody else who's been hanging out here of late. I'm a software designer and Internet entrepreneur, in Austin. This was my baby during the .com boom. This post is the first in my series of postings on suggestions on the kinds of systemic DLC-like reforms, like welfare reform was for Clinton, that I think Kerry and other Democratic leaders should be focusing on as more of a constructive positive agenda to use to reach out and add to the ABB coalition, and to widen the real scope of hope offered by the party.

It's about how to cut down on homelessness and improve mental health care. Unfortunately, the sad fact is that we don't really know how to end homelessness constructively without a high cost. The Soviets may well have ended it in their system, at the cost of housing some people in gulags and killing even more people. Many countries keep people with mental health problem in mental hospitals, kept under perpetual medicated "control"; the US moved away from that in the sixties. The UK, and probably several other Western European countries provide basic housing to people in the biggest categories that cause either chronic (mental illness), or acute need (floods, pregnancy, being a minor, etc.). The official UK homeless count is 1200 (20 per million), a number I can believe after being in Britain a week and only seeing one homeless person, a young woman apparently rather in shock at newly finding herself so, which suggests that most cases are dealt with quickly.

Given the junction between housing and free mental care, the status quo seems to me that homelessness is one area where the more socialistic economies rule. Arguably, the US has chosen a better life for the majority (arguably even most poor) through capitalistic housing and health care at the expense of the homeless. On the other hand, it seems to me that there should be a way to extend the full advantages of capitalism to the homeless, possibly allowing an even better result for the homeless than countries that treat their homeless as the UK does.

The most important measure I'm suggesting is to encourage private insurance carriers to offer and advertise homelessness insurance, a service that would provide fairly minimal shelter if you need it. U.S. Government homelessness figures say:

In 1996, an estimated 637,000 adults were homeless in a given week. In the same year, an estimated 2.1 million adults were homeless over the course of a year. These numbers increase dramatically when children are included, to 842,000 and 3.5 million, respectively.

Most - about 80% - exit from homelessness within about 2-3 weeks. They often have more personal, social, and economic resources to draw on than people who are homeless for longer periods of time.

About 10% are homeless for up to two months, with housing availability and affordability adding to the time they are homeless.

Another group of about 10% is homeless on a chronic, protracted basis - as long as 7-8 months in a two-year period. Disabilities associated with mental illnesses and substance use are common. On any given night, this group can account for up to 50% of those seeking emergency shelter.

The 842,000 number isn't directly comparable with the British 1200 figure, since that's probably an instantaneous estimate, but it is .2% of the 281M population reported in the 2000 census. If we could directly compare (which we can't), the two figures, it would be ten times as bad, an estimate that doesn't seem out of line with using eyeballs both in US cities and on my UK trip. Notice that, in theory, from the above figures, that just offering homelessness insurance - a place to stay when things go bad - could potentially cut our level down to the UK level, except without the economic distortions and dependency problems. Though some work would be needed to get a high insured rate - strong portability after a year of payments or something like that, or perhaps a prepayment arrangement of some sort. Strong portability would also allow people to move away from companies that treat them poorly. And certainly, insurance companies shouldn't be allowed to turn away the mentally unhealthy. Some experience would be needed to figure out practical rules to get best results.

Given a shelter cost, including overhead, of $250/wk (seems conservative to me), the average cost per episode of homelessness would be $1000 ($400 for the 2-week 80%, $200 for the 2-month 10%, and $430 for the 1/3-homeless chronic remaining 10%). The average insurance company cost / person/year would be (using the 3.5M / year out of a 281M total) a little over $12/yr, or just over $1 a month. Dunno about you, but if I thought I could avoid living on the street for a buck a month, I'd sign up in a second!

A second measure I feel is important is to continue improving mental health insurance. Remember that mental illness plays a big part in the chronically homeless figures, and even beyond that 10% estimated chronic homeless - there is no question that mental illness vastly raises one's chances of going homeless (unsurprising if you think about it). San Diego County says:

Studies on the prevalence of mental illness among the homeless vary depending on sampling site, methodology, population definition, and other factors. A review of recent literature (Fisher, 1991) estimates 25 to 60 percent of the national homeless population to be mentally ill. The median of these studies suggests that about a third of homeless adults have severe mental health problems. The National Institute of Mental Health and the Federal Task Force on the Homeless also estimate that roughly one-third of the homeless suffer from mental illness (1992).

How many incidences of people going homeless situations could be avoided (and have their lives vastly improved) if robust mental health care was offered as part of most health insurance packages? Here is an article suggesting that recent measures to boost parity have backfired. Pressure to improve mental health care should be maintained.

The third measure is to make cheap housing more available. Popular disgust has raised fairly high the expense of the minimum socially acceptable and/or legal dwelling, But that same disgust, even though usually sympathetic in nature to the inhabitants, fails to put oneself in the shoes of somebody who can't afford anything better. One problem we are having is that we are expecting the poorest of poor to live up to middle-class standards. The following attitude, found here, though understandable, is IMHO naive and part of the problem:

When housing is affordable, it is also unsafe, in disrepair, or located far from services or public transportation.

Personally, I'd rather live mile from anywhere, in a run-down shack, than be homeless, and I note that at least one homeless guy votes the same way with his feet, and, despite making it clear that it's no spa, wishes there were more such places. We aren't real good at allowing that choice, though. I'm not suggesting new low-cost housing so much as allowing old housing to stay on the market after decaying somewhat. That seems rather likelier to work than expecting real estate companies to lose money on new construction, a tactic that has only yielded limited results. It would be better if everybody could live in good housing, but we don't know how to do that.

A related measure, I think already in place in some places, is to subsidize people to move elsewhere. Although hard-hearted in some ways, this allows people to move from expensive real-estate markets to cheap ones, often with better job situations, too.

So why would people sign up for homelessness and mental health care in addition to the thick insurance packets that the insured already face? Well, probably most Americans have seen homeless people and thought, "I could be in that spot." Insurance company ad campaigns emphasizing that point in conjunction with the link between mental health and homelessness, I think, could produce good coverage in the long term.

How about the politics of this kind of change? Well, it would sure be easier than moving the US to a UK-style economy. What are the benefits, and what jobs change? Well, premium-payers win through peace-of-mind. Insurance companies win by getting more insurance payments and new markets to expand into. It's better for beneficiaries because, well, they're alot less likely to become homeless. Homelessness-related government and nonprofit jobs would shift from rather hopeless administration of care to more hopeful regulatory and observation roles. And the homeless would not only get basic shelter, but, assuming that changing insurer is possible, also the kind of good service that competition brings.

The people who inhabit the Web are utterly amazing. I can find out what it's like in Baghdad - before or after Saddam fell - and other cities in Iraq. At least as extraordinary is the view into homelessness provided by the homeless guy. Personally, I think it's pretty miraculous that he can and does blog this much. I hope he finds it a comfort, and reading him rather motivates my post. In fact, he says he has the kind of mental troubles that so many homeless have; they may be within the range of contemporary medication to deal with. Allow me to spin a sweet what-if dream if both the necessary drug technology and mental health insurance had been available to his family. His family could have (if it was willing to admit to his problems) gotten treatment for him, which probably would have been effective. He probably would at most see a short time on homelessness benefits, and would have the kind of solid social support network that keeps most of us off the street. He'd probably have a job and some savings (possibly a good one - the social anxieties are rather suggestive of a geek here), and maybe even a girlfriend. Getting out the ledger and looking at the cost of indefinite medication, I find it paid, in this dreamish fashion, by insurance payments either from his earnings or paid by his employer. The insurance companies make money, the drug companies make money, and best of all, his life is alot more fun.

UPDATE: On the terms described here alone, Homeless Insurance has the potential to be a $5Bish/yr industry. I'd be pretty surprised if the insurance industry couldn't find ways to get that still higher, by raising the value of the product offered.