Temporary Financial Assistance Proves Effective in Reducing Veteran Homelessness

The US government is working to end veteran homelessness through housing programs administered by the Department of Veterans Affairs (VA).¹ A recent study identified temporary financial assistance (TFA), part of the Supportive Services for Veteran Families (SSVF) program, as a cost-effective strategy for securing housing for veterans experiencing homelessness.²

Temporary financial assistance (TFA) through the Supportive Services for Veteran Families (SSVF) program is associated with positive health effects and lower health care costs. | Image Credit: MISHELLA - stock.adobe.com

Key Veteran Homelessness Trends

The 2023 Point-in-Time (PIT) Count, the annual effort by the Department of Housing and Urban Development (HUD) to estimate the number of Americans without permanent housing, discovered that 35,574 veterans experienced homelessness in the US on a single night in January 2023.³ This indicated a 7.4% increase in Veterans experiencing homelessness since 2022.

Among these veterans, 20,067 experienced sheltered homelessness, an increase of 502 (2.6%) from 2022. Also, 15,507 veterans experienced unsheltered homelessness, an increase of 1943 (14.3%) from 2022. Therefore, unsheltered veterans represented almost 80% of the overall increase.

Additionally, 87.8% of veterans experiencing homelessness were men (n = 31,231), while 11.2% were women (n = 3980).⁴ Most (98%) experienced homelessness as individuals, with some of these veterans (30%) experiencing chronic patterns of homelessness.

Unlike civilians, veterans must navigate economic hardship and the lack of affordable housing on top of additional challenges introduced by multiple and extended deployments; these combined factors create a population that can often struggle with housing stability.

Past research found that those who served in the late Vietnam and post-Vietnam eras are at the greatest risk of experiencing homelessness, but those from more recent wars and conflicts are also affected. Veterans returning from deployments in Iraq and Afghanistan often face invisible wounds of war, like post-traumatic stress disorder and traumatic brain injury, both of which correlate with homelessness.

Despite last year’s increase in veterans experiencing homelessness, there is still an overall downward trend, with the estimated number declining by 52.0% since 2010.³ Over the last 3 years, there has been around a 4% overall reduction, with the VA recently announcing that it housed 43,116 veterans experiencing homelessness between October 2023 and August 2024; it surpassed its 2024 goal of housing 41,000 veterans.⁵

VA Housing Programs and Supportive Services for Veterans

This reduction was aided by various VA housing programs for at-risk veterans and their families, like the US Department of Housing and Urban Development-VA Supportive Housing (HUD-VASH).¹ This collaborative program between HUD and VA combines HUD housing vouchers with VA supportive services to help veterans and their families experiencing homelessness find and sustain permanent housing. As of Winter 2023, HUD has allocated almost 112,000 vouchers nationwide.

These vouchers provide rental assistance for veterans experiencing homelessness who are eligible for VA health care. VA case managers link veterans to supportive services, including health care, mental health, and substance use counseling, to aid their recovery and housing stability.

Additionally, through the Homeless Providers Grant and Per Diem (GPD) Program, state, local, and tribal governments and nonprofits receive per diem payments and capital grants to develop and operate transitional housing and/or service centers for veterans experiencing homelessness.

Lastly, Supportive Services for Veteran Families (SSVF) provides case management and supportive services for very low-income veterans to prevent the imminent loss of their home or identify a new, more suitable housing situation. If necessary, SSVF rapidly re-houses veterans and their families experiencing homelessness who may remain homeless without assistance.

Cost-Effectiveness of TFA for Veterans Experiencing Homelessness

TFA, a component of SSVF, is a cost-effective strategy for providing housing support to veterans experiencing homelessness or who were at risk of becoming homeless, according to a recent study published in JAMA Network Open.²

The researchers noted that there has recently been a growing recognition of how social determinants of health (SDOHs) influence patient health outcomes. Consequently, high-profile governing bodies have called on health care professionals and payers to address these, ultimately helping improve health equity and control health care costs.

Many health systems have answered these calls, implementing programs to improve SDOHs. During fiscal year 2023, the federal government spent $8.7 billion on targeted housing assistance programs for those experiencing homelessness, including long-term and short-term housing programs.

The VA partners with nonprofit organizations nationwide to provide TFA to vulnerable veterans through the SSVF program. TFA is a short-term monetary benefit that can be used to pay security deposits, rent, utility payments, and other housing-related expenses. The goal of TFA is to prevent homelessness or quickly house those who have become homeless. Previous studies found that TFA is associated with lower health care costs, mortality rates, and suicide ideation, along with higher rates of stable housing.

The researchers explained that cost-effectiveness analyses can play a “key role” in social services evaluations as they allow for quantifying the tradeoff between the benefits recipients would receive and the resources required to produce those benefits. However, only a few cost-effectiveness analyses of homelessness interventions have been performed. Consequently, they conducted an economic evaluation of TFA through the SSVF program to compare the costs associated with the program and the benefits received by the veterans.

This study used a Markov simulation model to compare the costs and benefits of receiving TFA vs not receiving it during an SSVF episode. It modeled veterans' transition between stable housing, unstable housing, and death, assessing effectiveness through days of stable housing and quality-adjusted life years (QALYs). The study used a 2-year time horizon and analyzed from the VA's perspective, with costs adjusted for 2022 inflation. Additionally, probabilistic sensitivity analyses were performed using 10,000 Monte Carlo simulations to explore the impact of varying parameters.

In the base case analyses, the TFA strategy was associated with greater costs ($35,814 vs $32,562), QALYs (1.541 vs 1.398), and days in stable housing (447.0 vs 356.4) compared with the no TFA strategy among all SSVF program enrollees. Therefore, the TFA strategy resulted in incremental cost-effectiveness ratios (ICERs) of $22,676 per QALY and $35.91 per day of stable housing.

Additionally, for the subgroup of veterans enrolled in the rapid rehousing component, the incremental cost was slightly lower than those enrolled in the homelessness prevention component ($2733 vs $4291). For the rapid rehousing component, the resulting ICERs were $19,114 per QALY and $30.21 per day of stable housing. Conversely, for the homelessness prevention component, the resulting ICERs were $29,751 per QALY and $47.31 per day of stable housing.

Lastly, at a willingness-to-pay threshold of $150,000 per QALY, the probabilistic sensitivity analyses showed that TFA was cost-effective in 8972 of the 10,000 Monte Carlo simulations for rapid rehousing (89.7%) and 8796 of those for homelessness prevention only (88.0%).

The researchers acknowledged their limitations, one being that they evaluated an intervention specific to the VA health care system. Therefore, it is only available to US veterans facing housing instability, and their results may not be directly generalizable to a non-VA audience. Despite their limitations, they suggested areas for further research based on their findings.

"Future research could examine the cost-effectiveness of large, nationwide housing interventions, such as this one among subpopulations of veterans, such as those with certain comorbidities, including severe mental illness or substance use disorders, those with chronic diseases, or those experiencing long-term housing instability vs acute loss of housing,” the authors concluded.

References

1. VA homeless programs. VA. Updated November 17, 2023. Accessed November 8, 2024. https://www.va.gov/homeless/for_at_risk_veterans.asp
2. Nelson RE, Chapman A, Byrne T, et al. Cost-effectiveness of temporary financial assistance for veterans experiencing housing instability. JAMA Netw Open. 2024;7(11):e2443396. doi:10.1001/jamanetworkopen.2024.43396
3. Diaz M. Veteran homelessness increased by 7.4% in 2023. VA News. December 15, 2023. Accessed November 8, 2024. https://news.va.gov/126913/veteran-homelessness-increased-by-7-4-in-2023/
4. Veterans. National Alliance to End Homelessness. Updated December 2023. Accessed November 8, 2024. https://endhomelessness.org/homelessness-in-america/who-experiences-homelessness/veterans/
5. VA has housed more than 43,000 veterans experiencing homelessness this fiscal year. News release. VA; September 24, 2024. Accessed November 9, 2024. https://news.va.gov/press-room/va-has-housed-more-than-43000-veterans-experiencing-homelessness-this-fiscal-year/#:~:text=WASHINGTON%20%E2%80%94%20Today%2C%20the%20U.S.%20Department,end%20of%20the%20fiscal%20year