Thousands of the patients admitted to Los Angeles County hospitals each year are homeless. Once discharged, they have no place to recover and few ways to follow the doctor’s orders for rest, wound care, and medication. As a result, many require repeat hospitalization. After a 2008 city ordinance made it illegal for hospitals to discharge patients to downtown Los Angeles, many hospitals extended the stay of homeless patients longer than medically necessary, adding great expense to each visit.

J. Eugene Grigsby III of the National Health Foundation and Paul Leon of the Illumination Foundation have partnered to address this problem by opening recuperative care centers. The centers provide a safe, clean, cost-effective place for homeless people discharged from the hospital to restore their strength before they are placed in temporary or permanent housing.

Their centers today receive homeless patients from 63 hospitals in Los Angeles and Orange counties. While onsite, they receive professional nursing and a spectrum of social services. Formerly homeless onsite managers build trust and act as patient advocates.

Grigsby and Leon’s recuperative care centers are set up in motels so that they can be operational in less than a month and flex to meet changing demand. After startup costs of $1.5 million, the centers become self-sufficient. Care is covered by a $250 per day fee that the discharging hospitals pay instead of the $2,400 average daily cost of unnecessary in-hospital care. Since Grigsby and Leon opened the first full-fledged center in 2010, their approach has saved hospitals an estimated $12.5 million.

Out of the 1,500 patients served to date, only 10 percent have been readmitted to a hospital following recovery at a recuperative care center. More than 44 percent are placed in permanent or temporary housing following care; the rest return to family or shelters.

“Ill homeless people are a high-cost, high-intensity, and high-liability group for hospitals,” said Leon. “Our solution takes cost out of the entire system and is better for the well-being of our clients. The time is right, with growing interest in preventive care.” Five other sites in Pennsylvania, Oregon, and Colorado are replicating this model, which hospitals may employ as a viable strategy for addressing identified community health needs as required by the Affordable Care Act.

Grigsby and Leon support health care reforms that respond to the complexity of some of the costliest cases, including homeless people with chronic health conditions. “If we could have a bundled payment for recuperative care, housing, and social services, as a part of reducing overall cost of the health care system, it would be a tremendous benefit,” said Grigsby.

Ill homeless people are a high-cost, high-intensity and high-liability group for hospitals. Our solution takes cost out of the entire system and is better for the well-being of our clients.

Paul Leon

For pioneering a cost-saving model for hospitalized homeless people that leads to better care and fewer repeat hospital visits, J. Eugene Grigsby III and Paul Leon are recipients of a 2014 James Irvine Foundation Leadership Award.

Video by Talking Eyes Media