Cost-Effectiveness of Housing First With Assertive Community Treatment: Results From the Canadian At Home/Chez Soi Trial

The cost-effectiveness analysis conformed to the published protocol of the At Home/Chez Soi study (4) and followed the Consolidated Health Economics Evaluation Reporting Standards (CHEERS) reporting guideline (11). The analysis began in 2013 and ended in 2019. The trial was conducted in Vancouver, Winnipeg, Toronto, Montreal, and Moncton. Ethics approval was obtained from the local ethics review board at each data collection site and from the Centre for Addiction and Mental Health, where the coordinating center was based (4). Participants provided written informed consent after the screening interview. The methods used were the same as those used for the cost-effectiveness analysis of Housing First with intensive case management compared with treatment as usual (9).

A total of 950 individuals were originally randomly assigned: males, N=649, 68%; females, N=291, 31%; and other, N=10, 1%; ages 30–49, N=555, 58%. Of these 950, a total of 917 (97%) provided useable data for this analysis. (A chart showing participant flow into and through the trial is included in an online supplement to this article.)

Table 1 provides descriptive statistics for the sample at baseline. Participants’ longest single period of homelessness was 33.8±50.2 months. Values for other variables not used in this analysis have been reported elsewhere (7).

Table 2 shows costs at baseline and for the first year and second year, by type of cost, for the Housing First and treatment-as-usual groups. During the 2-year follow-up period, meaningful cost offsets (mean reductions in costs attributable to the intervention) were observed for shelters (–$1,943), supportive housing (–$1,793), ambulatory visits (–$4,759), and incarcerations (–$1,485). For other cost categories, the 95% CIs for offsets included zero, or the point estimate was less than $1,000. Excluding the intervention cost, the total mean cost offset was –$14,056. However, after including the mean cost of the intervention ($20,367, calculated from Table 2), the mean total per person cost for Housing First participants exceeded that for treatment-as-usual participants by $6,311. Thus 69% of the cost of the intervention was offset, reducing its net cost to $6,311. For most services, as well as in total, the cost difference was less favorable to Housing First in the second year than in the first.

Table 3 disaggregates costs by site rather than by cost category. The magnitude of the mean net cost, including the cost of the intervention, ranged from –$4,386 in Toronto to $14,815 in Moncton. Toronto was the only site where the point estimate was negative, indicating that the intervention resulted in reductions in costs in other categories that exceeded the cost of the intervention itself. All confidence intervals except that for Moncton included 0.

Days with stable housing were higher by 151.30 days (95% CI=137.67–166.86) in the Housing First group, compared with the treatment-as-usual group, with a cost difference of $6,310.93 (95% CI=$309.31–$12,349.65). Thus the ICER was $41.73 per additional day of stable housing (95% CI=$1.96–$83.70).

A figure in the online supplement shows 500 bootstrap replicates of mean incremental cost and the corresponding mean incremental number of days of stable housing. All but a few points fell into the upper right-hand quadrant, with the others in the lower right-hand quadrant, indicating that taking all sites together, the intervention unambiguously increased days stably housed and almost certainly increased costs as well.

The cost-effectiveness acceptability curve shown in Figure 1 indicates that if, for instance, the decision maker is willing to pay up to $60 per night stably housed, there is a more than 80% chance that Housing First is cost-effective, compared with treatment as usual. If the decision maker is willing to pay up to nearly $100 per day of stable housing, then the probability that the intervention is cost-effective increases to 100%.

A table in the online supplement shows the results of net benefit regressions that do not include interactions. As the decision maker’s willingness to pay for an additional day of stable housing (represented by λ) rises from 0 to $100, the adjusted net benefit of receiving Housing First is initially negative (net benefit of –$6,147 per person per year) but increases quickly, so that at $100 the net benefit is positive, reaching $8,975. Adjusted net benefit was lower in Vancouver, Toronto, and Montreal, compared with Moncton, the more so the greater the value assigned to a day of stable housing. The cost of usual services was less in Moncton to begin with (15), so there was less potential to offset costs in that city. Thus the net cost of the intervention per additional day of stable housing was greater in Moncton. Net benefit was also lower for those who had two or more psychiatric hospitalizations in 1 year over the 5 years before baseline, by about $10,000 regardless of λ; the cost for these individuals was about that much more than for the others, on average, per year over the 2-year follow-up period of the study. Similarly, a longer previous period of homelessness over the person's lifetime was associated with greater costs. The coefficient indicates an increase of about $120 per additional month of homelessness. This amount also hardly varied according to λ. Neither age, sex, nor alcohol and drug abuse or dependence were associated with net benefit, regardless of λ, after adjustment for site and the other factors.

Table 4 shows the results of adding interactions between group assignment and the variables selected by using the procedure described above. The results suggest that Housing First may have been more cost-effective in Toronto, the only site where the intervention actually reduced overall costs. The results also suggest that the intervention may have been more cost-effective for people ages 30–49 than for younger participants. None of the other interaction terms meaningfully altered cost-effectiveness at any value of λ.

Sensitivity analyses (shown in a table in the online supplement) indicated that our results were robust to changes in the discount rate and only somewhat sensitive to the adjustment for baseline differences, or a combination of both. Changes in the discount rate had a minimal effect. Adjusting for baseline differences decreased the ICER from $41.73 to $33.86. The largest change was obtained by adjusting for baseline differences, without altering the discount rate: the ICER became $33.85 (95% CI=cost-saving, $68.42).

Across five Canadian sites, 69% of the cost of scattered-site Housing First with ACT for persons with severe mental illness and high needs ($20,367 per person per year) was offset by cost reductions. Net program cost was $6,311 per person per year. An additional day of stable housing cost about $41.73. Cost-effectiveness seemed to be about the same regardless of participant characteristics, although it may have been higher for participants ages 30–49 than for those who were younger.

In previous reports of the At Home/Chez Soi study, the intervention cost was reported as Can$22,257 per participant annually (in 2011 dollars), and the mean net cost offset was 96% of the cost of the intervention (7, 10). The numerical estimates presented herein differ from the earlier ones for several reasons. Most important, we did not adjust here for baseline differences in costs (27), whereas the earlier reports used a relatively simple difference-in-differences method, applied to mean costs per person per site. Second, we allocated the cost of the intervention to individual study participants. Third, we refined several unit cost calculations, compared with the earlier report.

The cost-effectiveness analysis of Housing First with intensive case management from At Home/Chez Soi reported that the intervention cost $14,496 per participant per year, or about 71% of the cost of Housing First with ACT (9). Despite the higher cost of Housing First with ACT, the cost per additional day of stable housing in this study was $41.73, instead of $56.08 for Housing First with intensive case management (26% less). In part, this is probably a result of the intervention’s—Housing First with intensive case management—being no more effective: the mean annual increase in days of stable housing was 140.34 for Housing First with intensive case management, compared with 151.30 days for Housing First with ACT. The reason for the greater cost-effectiveness of Housing First with ACT was mainly the large cost offset of $14,056 per person per year, compared with $6,629 for Housing First with intensive case management. Baseline costs among high-need participants were about 50% higher, compared with costs for those with moderate needs: $74,910 versus $50,708 (9). This provided greater opportunity to achieve large cost offsets. Indeed, in each of the four cities where both Housing First with ACT and Housing First with intensive case management were tested, the cost offset was greater with the former than with the latter. Further research is needed to determine the ideal mix between the two, considering, on one hand, the higher need of high-need participants but, on the other, the possibility that offering Housing First with intensive case management to moderate-need participants may prevent the conditions of some from deteriorating to the point of their needing more intensive services.

The magnitude of the cost offsets exceeded that of the cost of the intervention in one city—Toronto. This may well have been the result of chance, given that the 95% CI for the difference in costs included 0. To the extent that cost offsets were actually greater in Toronto, this may be due to the fact that the usual costs of shelters and ambulatory visits were all especially high in that city (15); the intervention substituted directly for these costs. The costs of contacts with the police were also unusually high in Toronto, but as shown in Table 2, we found no evidence that Housing First resulted in a significant reduction in police costs.

The results of this study may appear disappointing in that the intervention did not generate cost offsets greater than its own cost, except in Toronto —in other words, it did not “pay for itself.” This is consistent with the results of a recent literature review, which found that randomized trials, which are not subject to bias caused by regression to the mean, are much less likely to report net cost savings from Housing First, compared with studies following a before-and-after design (3).

The fact that Housing First with ACT did not prove both more effective and less costly does not mean that it should not be implemented. Most health and social interventions do not pay for themselves. Rather, they yield benefits judged sufficient to merit their cost. The cost of the intervention itself, which was about $56 per participant per day in the program, is well within the range of the costs of many currently funded forms of emergency shelter and supportive housing with on-site supports (15). Moreover, these forms of shelter do not provide the kind of individualized and intensive support that ACT does.

In this trial, careful attention was paid to implementation fidelity, with the New York City Pathways model serving as reference (28). Fidelity was rated as fair to excellent across sites (14). Other work has reported an association between higher fidelity and improvements in housing stability, quality of life, and community functioning (29), as well as other positive outcomes (30, 31). Not all Housing First implementations are as careful to follow the Pathways model as were those of the At Home/Chez Soi trial; for instance, caseloads may be increased or rent supplements reduced. Although such changes may reduce the cost of the intervention, the magnitude of the cost offsets observed here may not remain the same. It is also possible that the intervention could be rendered most cost-effective by either adjusting the clinical supports or the amount of the rent supplement, or both (32). Further research is needed to address this issue.

Strengths of this study included a carefully defined and implemented intervention, a large and well-defined sample, multiple trial sites, and high retention rates, with low differential attrition. Service use was measured in a more comprehensive way than is typical in cost-effectiveness studies. Unit costs were carefully estimated.

Limitations included a reliance on participant self-reports. Although these are subject to recall biases, the most costly components of costs were gathered at 3-month intervals, increasing their validity (33). The validity of self-reports in the At Home/Chez Soi study has also been corroborated directly (34, 35). The At Home/Chez Soi trial considered any form of housing where a participant could remain 6 months or more as stable housing. This allowed certain forms of transitional housing that participants especially in the treatment-as-usual group accessed to be counted as stable housing. Had a stricter criterion for stable housing been applied, cost-effectiveness would have been even greater. The cost of medications was not included, because of the difficulty of obtaining this information by questionnaire and restrictions on sharing of participant-level administrative data across provinces. Given that ACT teams typically seek to increase adherence to medications, having included medications in the analysis would likely have increased the cost per day of stable housing. Still, even a 15% increase in the cost of the intervention—about $3,000 per participant per year—would not change the results materially.

The follow-up period was 2 years, and we do not know how cost-effectiveness may change over a longer period. The use of days of stable housing as an outcome measure did not allow comparison of cost-effectiveness with that of other health care interventions; however, as argued elsewhere (9), Housing First is a social care as well as a health care intervention, and thus evaluation of its effectiveness by using quality-adjusted life years would be inappropriate. The study was not designed to test which of the rent supplement or the clinical supports most contributed to cost-effectiveness, as has been done previously (32). Further research is needed to address this issue. Furthermore, our study did not try to capture costs with a more subjective value, such as the empathic distress that many individuals experience when they see people living on the street. Had it done so, the cost-effectiveness of Housing First would likely have increased. Finally, we did not take into account the administrative costs of transfer payments (17); however, because most participants in both groups received social assistance payments, doing so would have had little impact.

In this multisite trial of Housing First, reductions in the costs of several services offset about two-thirds of the cost of a Housing First intervention. The cost of the intervention per person and the net cost were modest in relation to current expenditures on individuals who are homeless. Furthermore, we found no evidence that cost-effectiveness varied according to participant characteristics, with the possible exception of age. Comparing our results with those from a similar analysis of homeless individuals with moderate needs who were served by an intensive case management team (9), cost offsets were greater for high-need participants, and the net cost per additional day stably housed was similar. The optimal mix between the two interventions remains to be determined and needs to consider both the higher need of high-need individuals and the risk that without help the conditions of moderate-need individuals may deteriorate and these individuals may themselves become high need.

The authors thank Jayne Barker, Ph.D. (2008–2011), Cameron Keller (2011–2012), and Catharine Hume (2012–2013), who served as the Mental Health Commission of Canada At Home/Chez Soi National project leads; the National Research Team; the five site research teams; the site coordinators; the numerous service and housing providers; and the persons with lived experience who contributed to this project and the research.