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Last week, I was working with Project 25 directors to get up-to-date numbers on the program’s intensive services for vulnerable homeless people. Something didn’t add up.
The data showed that 35 people in the program used $4.2 million in public services in 2010, before the project started — bills incurred from ambulance rides, emergency room visits, police and sheriff interactions and jail time. Project 25 compared that baseline with what the same 35 people incurred in 2012: about $2 million. Take away the cost of providing housing and supportive services, and it appears the program saved about $1.4 million in 2012.
But that 2010 baseline for what the people cost without the program looked a lot different than the numbers used in last year’s press conferences and announcements about the first year of Project 25. Back then, Project 25 supporters sounded the alarm that the same 35 people racked up $11 million in public services.
So which is it: $4.2 million, or $11 million? I asked Kris Kuntz, Project 25’s data analyst.
“We originally were using hospital charges or bills and have since decided to use hospital costs,” he wrote me.
Using the actual costs — the amount it takes the hospitals to perform the service — rather than the figure at the end of the hospital bill, reflects a huge change in how much the project saves. That was the short version, Kuntz said, and I used the newer $4.2 million figure in the story. But this week I wanted to dive a little deeper. Collecting numbers on the program is a central goal of the program’s three-year pilot period. And other programs are eyeing the collaboration Project 25 has built, hoping to apply it elsewhere.
It’s also a timely distinction. Steven Brill’s recent article for Time magazine exposed complicated, often irrational practices for billing patients within the United States health care system.
When Kuntz began collecting data on the project, he looked at other frequent-user studies. Those reports used hospital charges. But the vast majority of patients don’t ever pay that much, because government programs like Medicare and Medicaid and private insurance companies negotiate to pay a much lower charge.
That can muddy things pretty significantly for a project trying to calculate what one person “costs.”
Think about it this way. If I got picked up in 2010 and taken to jail, the county wouldn’t send me a bill for my night there. So if Project 25 is calculating how much I “cost” in public services, they would use the straight cost to the jail, a straight cost from any ambulance rides I’ve taken. But what about my hospital bill? Should the bill I ran up in 2010 count at full strength, even though someone with insurance or Medicare would never pay anywhere near that number? Or should Project 25 include what it actually cost the hospital to provide the service?
Kuntz bounced this off of the economists at Point Loma Nazarene University, who are advising and will independently evaluate the project’s findings. Kuntz decided to ask for costs every quarter when he calls the 22 participating hospitals now.
“Costs are going to hold up better in research,” Kuntz said. “It puts everything else on a level playing field.”
That’s a change from a widely respected local study from the 1990s. City medical director Jim Dunford found that the same 15 people, chronically drunk, had run up bills of $1.5 million in two local emergency rooms and ambulances over 18 months. Malcolm Gladwell cited that study in his 2006 New Yorker article about the cost of doing nothing with a city’s frequent users.
Dunford’s study uses charges, not costs. I asked Dunford about it. He said simply getting the hospitals to participate was a victory.
“I was the most naïve guy in the world,” he said. “I thought, ‘If that’s what they charge, that’s what it cost.’”
But more than 15 years later, he agrees it’s better to track costs.
“Whatever it is, let’s just talk in the same currency,” he said. “I think people are more willing to talk about these things now.”
I’m Kelly Bennett, reporter for Voice of San Diego. You can reach me directly at firstname.lastname@example.org or 619.325.0531.