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February 16, 2006

The power-law theory of homelessness

homeless2.jpgMalcolm Gladwell, he of Tipping Point fame, has authored this fascinating New Yorker article on homelessness, which includes a particularly interesting discussion of the health care costs for the chronically homeless. One example that Gladwell uses is the story of a Reno, Nevada homeless man nicknamed "Million Dollar Murray," who -- when all his health care and substance-abuse treatment costs were calculated for the ten years that he had been on the streets -- probably ran up a medical bill as large as anyone in the state of Nevada. As one sage Reno cop observed: “It cost us one million dollars not to do something about Murray.”

The entire article is a must read, and here is a snippet to give you a flavor for it:

In the nineteen-eighties, when homelessness first surfaced as a national issue, the assumption was that the problem fit a normal distribution: that the vast majority of the homeless were in the same state of semi-permanent distress. It was an assumption that bred despair: if there were so many homeless, with so many problems, what could be done to help them? Then, fifteen years ago, a young Boston College graduate student named Dennis Culhane lived in a shelter in Philadelphia for seven weeks as part of the research for his dissertation. A few months later he went back, and was surprised to discover that he couldn’t find any of the people he had recently spent so much time with. “It made me realize that most of these people were getting on with their own lives,” he said.

Culhane then put together a database—the first of its kind—to track who was coming in and out of the shelter system. What he discovered profoundly changed the way homelessness is understood. Homelessness doesn’t have a normal distribution, it turned out. It has a power-law distribution. “We found that eighty per cent of the homeless were in and out really quickly,” he said. "In Philadelphia, the most common length of time that someone is homeless is one day. And the second most common length is two days. And they never come back. Anyone who ever has to stay in a shelter involuntarily knows that all you think about is how to make sure you never come back."

The next ten per cent were what Culhane calls episodic users. They would come for three weeks at a time, and return periodically, particularly in the winter. They were quite young, and they were often heavy drug users. It was the last ten per cent—the group at the farthest edge of the curve—that interested Culhane the most. They were the chronically homeless, who lived in the shelters, sometimes for years at a time. They were older. Many were mentally ill or physically disabled, and when we think about homelessness as a social problem—the people sleeping on the sidewalk, aggressively panhandling, lying drunk in doorways, huddled on subway grates and under bridges—it’s this group that we have in mind. In the early nineteen-nineties, Culhane’s database suggested that New York City had a quarter of a million people who were homeless at some point in the previous half decade —which was a surprisingly high number. But only about twenty-five hundred were chronically homeless.

It turns out, furthermore, that this group costs the health-care and social-services systems far more than anyone had ever anticipated. Culhane estimates that in New York at least sixty-two million dollars was being spent annually to shelter just those twenty-five hundred hard-core homeless. “It costs twenty-four thousand dollars a year for one of these shelter beds,” Culhane said. “We’re talking about a cot eighteen inches away from the next cot.” Boston Health Care for the Homeless Program, a leading service group for the homeless in Boston, recently tracked the medical expenses of a hundred and nineteen chronically homeless people. In the course of five years, thirty-three people died and seven more were sent to nursing homes, and the group still accounted for 18,834 emergency-room visits—at a minimum cost of a thousand dollars a visit. The University of California, San Diego Medical Center followed fifteen chronically homeless inebriates and found that over eighteen months those fifteen people were treated at the hospital’s emergency room four hundred and seventeen times, and ran up bills that averaged a hundred thousand dollars each. One person—San Diego’s counterpart to Murray Barr—came to the emergency room eighty-seven times.

Hat tip to Tom Mayo for the link to Gladwell's article.

Posted by Tom at February 16, 2006 6:21 AM |


I wonder how the ridiculous health costs that are cited here jibe with Gladwell's stated preference for single payer (i.e. gov't) health care for all? And what exactly can be done with the hardcore homeless who cost the systems so much money? A bus ticket to Canada?

Posted by: Don Mynack at February 16, 2006 10:42 AM

The bottom line to the question of who pays for the health care for homeless folks like this's us.

Under a single payor system, it would be us - the taxpayers.

Under the current system, it is us - the financially-intact persons with health insurance.
When you pay (or your insurance pays) $10 for two Tylenol when you are in the hospital, you are paying for your medication.....and also for the medication which has been given to those who don't or won't pay. This is a different kind of tax, specifically directed to the decreasing cohort of patients with traditional insurance.

Most of us are unaware that this degree of cost-shifting is going on. Growth in the use of Health Savings Accounts could re-engage the health care consumer back into the market. That is the only potential solution I see that would prevent an ultimate transition to 100% federally-sponsored health care funding.

The current debacle that is the new Medicare prescription drug plan is just a glimpse into what a comprehensive governmental program for health care would be like. As a former Secretary of HHS once said," If you want to see what a Government-sponsored health care program would be like, imagine a bureaucracy with the efficiency of the postal service and the compassion of the IRS".....

Posted by: jim bob baker at February 16, 2006 12:05 PM

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