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Detroit’s comprehensive medical respite program for homeless secures multi-sector investment

Detroit, Social Investment Practice

Neighborhood Service Organization medical respite program connects investor results directly to health and housing outcomes for individuals experiencing homelessness through value-based care financing

Neighborhood Service Organization (NSO) announced Wednesday that it has secured outcomes-based investments to launch Detroit’s most comprehensive medical respite program focused on improving the health of individuals experiencing homelessness. Partners from multiple sectors — Molina Healthcare of Michigan, Quantified Ventures, Rocket Community Fund and The Kresge Foundation — worked with NSO to structure funding to open this best-in-class program and align each organization’s incentives around better health outcomes.

Medical respite, also called recuperative care, is an evidence-based care program designed to help people experiencing homelessness break the cycle of hospitalization, shelter visits and return to the streets – thus enabling better long-term health and housing outcomes.

The exterior of the Detroit Healthy Housing Center, a red brick building with white rectangular archesThe NSO medical respite program will be located in the recently completed Detroit Healthy Housing Center on the city’s east side, which pairs emergency shelter with wraparound health care and support services.

The NSO program is scheduled to open its doors to clients later this year and plans to serve 165 individuals annually, with an anticipated average length of stay of 30 days to provide services and support to clients on their path to stable housing.

This high-impact approach to engage people experiencing homelessness is projected to produce $1.2 million in health care savings annually through stable housing and reduced avoidable hospital visits.

Nationwide, people experiencing homelessness have five times the risk of hospitalization of the housed population. The medical respite program and the 22,000-square-foot Detroit Healthy Housing Center are critical to efforts to end chronic homelessness in southeast Michigan, and the co-location of related services will help achieve better medical respite program outcomes.

The five partners developed interconnected agreements designed to ensure stable revenue for the medical respite program and to unlock financing that NSO can access for program expansion. Discussions with more health plans and hospital partners are underway to ensure greater access to the program and provide additional revenue.

The Quantified Ventures team structured this value-based care financing, which includes a contract between Molina Healthcare of Michigan and NSO that aligns both parties around achievement of better Medicaid member health and housing outcomes. This innovative, replicable performance-based approach ties a significant portion of the Molina payments to NSO to positive housing outcomes and reduced avoidable hospital utilization among program participants.

Investments from Kresge and the Rocket Community Fund will jumpstart medical respite program operations and the first phase of the program’s growth. Revenue from the Molina–NSO contract, and other future contracts between NSO and Medicaid Managed Care Organizations, will drive investment returns.

Support from Rocket Community Fund, Aetna and the city of Detroit played a critical role in launching this initiative and provided resources for Quantified Ventures to develop sustainable financing for a medical respite solution for southeast Michigan.

“We are thankful for this investment with our multi-sector partners, as well as support from local and state government, including Governor Whitmer adding an allocation for medical respite in the 2024 state budget,” said Linda Little, president and CEO of Neighborhood Service Organization. “Medical respite is a major component to our healthy housing approach that will help to meet the complex medical needs of the homeless population that we serve at NSO and also decompress challenges on the healthcare delivery system. We’re optimistic that legislators will see the value in offering this critical service to Michiganders and approve this budget allocation.”

“Molina is proud to support this innovative and comprehensive approach to bring stability to the lives of those we serve,” said Terrisca Des Jardins, plan president for Molina Healthcare of Michigan. “This creative partnership demonstrates a commitment to developing more effective strategies addressing social determinants of health. It is scalable and financially sustainable for all partners and holds promise to serve as a model for other communities.”

“This is a prime example of how motivated, purpose-driven collaborators can leverage outcomes-based financing to align their operations in a way that improves health outcomes, addresses health disparities, and lowers costs,” said Alison Rein, vice president for health and human services at Quantified Ventures. “We are thrilled to see pioneering healthcare organizations and community-based service providers do the hard work needed to launch this critical new community asset for southeast Michigan and finance it in a sustainable and replicable manner.”

“Safe and stable housing is one of the strongest determinants of health, and that is never truer than when someone is recovering from a health challenge,” said Laura Grannemann, executive director of the Rocket Community Fund. “Combating homelessness requires collaboration and an all-of-the-above strategy, and we are proud to support NSO as they launch a new and innovative medical respite facility.”

“Addressing homelessness requires bold solutions. This effort reflects an important shift away from seeing homelessness as an abstract problem to be managed and toward holistically intervening in the lives of unhoused individuals and bringing them to a point of housing stability,” said Kresge Detroit Program Managing Director Wendy Lewis Jackson. “We are proud to work with partners who aren’t afraid to approach the problem boldly, creatively, and comprehensively.”

“We are proud to be one of many partners who have come together to improve the health and housing outcomes of residents experiencing homelessness in our city,” said Julie Schneider, director of the City Housing and Revitalization Department. The department provided $4.1 million in Community Development Block Grants to support the development of the Detroit Healthy Housing Campus. “We thank NSO for their leadership and commitment to holistic care for our most vulnerable residents.”