Atlanta Hospital Gets into the Housing Business to Help Low-Income Patients

There are just over half a million homeless individuals living across the U.S. And a lack of stable housing is often linked to poor health. Many individuals without a place to live are force to rely on emergency rooms, but they often have nowhere to go once they are discharged. Mercy Care in Atlanta is in the process of building a new apartment complex to help homeless individuals recover once they leave the hospital.

“This is the construction site of the future McAuley Station. It will be 170 units of affordable housing located right on McAuley Park,” said Kathryn Lawler, CEO of Saint Joseph’s Health System and Mercy Care. The hospital plans to pay rent on at least 10 of the units for people on the waitlist for affordable housing. Lawler says there is no formal limit on how long individuals can stay, but she expects the average stay to be around 90 days.

“What makes people healthy starts first with the opportunities they have in their life and also with their ability to live in a safe, stable and affordable community,” she added.

Access to stable housing has long been a part of the concept known as the social determinants of health, which states that the food people eat, the air they breathe, and where they live can all affect their overall health. Experts believe the U.S. is currently facing a shortage of up to 4 million homes, which increase the cost of living for just about everyone.

“By doing this comprehensive approach to health, that’s really where we chip away at long-term inequities that have manifested themselves in many communities but certainly in Atlanta, as well,” Lawler stated.

Several major hospital systems across the country have started investing in affordable housing over the last ten years, including Boston Medical Center, which issued no-interest loans to help developers create more than 1,300 units of affordable housing in one of the most expensive cities in America.

Megan Sandel, the hospital’s place-based investment manager, says the program primarily serves unhoused individuals that can’t afford to pay rent.

“We have many patients that would keep coming back through the emergency department and hospital simply because they didn’t have a place to take their insulin or to plug in their CPAP machine at night,” Sandel explained.

Increasing access to affordable housing will likely improve patient outcomes while reducing costs. Unhoused individuals will be less likely to use ER services, which saves the hospital money.

UPMC Health Plan in Pittsburgh has also contributed loans to help developers create affordable housing in the city. Kevin Progar, a representative with UPMC, said the company compared the ER bills of patients before and after they were placed in affordable housing. The hospital was able to save anywhere from $5,000 to $10,000 a year per patient once the program went into effect.

UPMC and Boston Medical Center plan to step away from the apartment complexes once they are built, but Mercy Care in Atlanta plans to stay involved. It will raise funds through its network of donors to help pay rent for the units. But Jeffrey Brenner, a former UnitedHealthcare executive, warns that the hospital needs to use the program strategically to save money over time.

“If they don’t target the units to people who are coming in and out of the hospital all the time, then they’re not going to have an incentive to keep doing this,” he said.

The new McAuley Station apartment building is slated to open in early 2024.