University of Texas at Austin: Austin-Area Residential Treatment Program Improves Mental Health, Saves Taxpayers Millions

An Austin-area residential mental health care facility is treating a large population experiencing homelessness while saving the local health care system millions annually, according to new peer-reviewed research from The University of Texas at Austin, published today in Psychiatric Services.

Researchers at the Lyndon B. Johnson School of Public Affairs and Dell Medical School compared the cost per mental health crisis episode at a psychiatric hospital ($6,382) or community hospital ($8,035) with the cost per episode at The Inn ($3,121), a 16-bed residential facility operated by Integral Care, Travis County’s mental health authority. Findings show that The Inn, which provides up to 7 days of support to adults recovering from a mental health crisis, saved the local health care system between $1.87 million and $2.82 million annually from 2017 to 2019 when compared with the same treatment and length of stay in a hospital setting. Services at The Inn include help regaining stability, medication, 24/7 nursing services, alcohol and drug use recovery support, and mental health support groups. Clients are also connected to other Integral Care programs and local resources for ongoing care and recovery support. Researchers say their findings suggest places such as The Inn, known as crisis residential treatment programs, can deliver improved patient outcomes while saving money for the health care sector.

“Even though The Inn saves the health system money while improving outcomes, health care is so fragmented that the provider, Integral Care, doesn’t benefit from the savings,” said co-author Stephen Strakowski, vice dean of research at Dell Med. “Consequently, this fragmentation disincentivizes more beneficial programs like this one from being created.”

The Inn provided care to 1,371 unique individuals and treated a total of 1,719 episodes during the three-year study period. Ninety percent of these patients lived below the federal poverty level, with more than half (54%) experiencing homelessness. If all the individuals treated at The Inn had instead been treated at a local psychiatric hospital, the total extra cost to the health care system would have been $5.61 million or $1.87 million annually. Similarly, if all the individuals treated at The Inn had instead been treated at a local community hospital, the total extra cost to the health care system would have been $8.45 million or $2.82 million annually.

“This was an inspiring study to do,” said Todd Olmstead, associate professor of public affairs at The University of Texas at Austin. “It’s always nice to see programs that both help people recover and save money at the same time. Compared to hospitals, Integral Care carries lower overhead – think ‘no CT or MRI machines or operating rooms’ – and has lower operating expenses. And many studies have consistently shown that, compared with hospitalization, programs like The Inn typically have similar clinical outcomes and greater patient satisfaction.”

Unlike most inpatient hospital settings, crisis residential treatment centers provide a less restrictive, home-like atmosphere. Federal agencies and advocates have identified residential programs as one of the core crises services in a best practice continuum of care for those experiencing mental health challenges. In fact, residential programs are part of an ongoing regional effort to redevelop Texas’ psychiatric hospital system. In the 38 counties in Austin State Hospital’s service area, unmet mental health needs were responsible for $93 million in emergency department costs; $85 million in jail costs; and an additional $9 million in costs for mental health court, probation, and law enforcement in one year from 2015 to 2016.

“Integral Care has been providing crisis services in Travis County for over 50 years. Our goal is to provide the least restrictive level of care in order to help people rebuild their health and well-being after a mental health crisis,” said Dr. Kathleen Casey, senior director of clinical innovation and development at Integral Care. “Our collaboration with The University of Texas at Austin allows us not only to highlight the cost effectiveness of this care model, but also its positive impact on the health of those we serve. Community-based residential treatment, like The Inn, facilitates an ongoing relationship with people to better connect them from crisis stabilization to ongoing services that support their health and recovery.”

Researchers say future work can use these findings to improve public spending and the efficiency and effectiveness of the mental health care system.

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