Will cash heal the homeless?

If you read the earlier post Cash as Medicine?, you know that I think giving the poor more say in how we help them is potentially one of the most important things we could do for them:

Whether you think we spend too much or too little on our social safety net, which is overwhelmingly health insurance through Medicaid, we should all be asking what value Medicaid recipients themselves place on the coverage they receive. Is health insurance coverage the best way to help them?

Unfortunately the answer is no. The best research on this question finds that Medicaid beneficiaries value their Medicaid coverage at between 20 and 40 cents (or even less) per $1 of cost to taxpayers. This is a tragedy, because it means there are millions of Americans for whom we could provide a more robust safety net, at lower cost to taxpayers.

The good news is that people are recognizing these basic facts about our safety net, and are designing rigorous experiments to find better anti-poverty strategies. See, for instance the Health Currency project, an $8 million endeavor recently launched at Stanford University:

The project, Health Currency, is in partnership with Abode Services, a Fremont-based organization that has been working to help unhoused people in the Bay Area since 1989. They will randomly give 1,100 households 12 monthly, unconditional payments on reloadable, no-fee debit cards. The payments will total $13,000 for individuals and $16,000 for households with children over the same 12-month window. Families will receive on average $1,333 a month. A large innovation of Health Currency is that it targets individuals exiting Abode’s Rapid Rehousing Program, giving individuals cash when they face a housing cliff.

Adrienne Sabety, an assistant professor of health policy at Stanford, is leading the experiment. “At the individual level, we anticipate increased access to primary and behavioral health care, improvements in mental health and reduced hospitalizations and emergency services,” she says.

In light of existing evidence on the benefits of cash transfers (as opposed to in-kind benefits like Medicaid and SNAP), I’m happy to see more attention being paid to this approach in social policy.

I will be sure to report on the experiment again as the results come in. I expect mental health to improve, but that wouldn’t be all that surprising. If, however, cash to the homeless were to reduce hospitalizations and ER visits that would be both surprising and important.