What Is The Cost Of Doing Nothing?

Submitted by tonyplant on April 12, 2006 - 16:52.

Malcolm Gladwell has an extraordinary piece entitled Million Dollar Murray: Why problems like homelessness may be easier to solve than to manage. In a lengthy and fascinating read he effectively challenges some of my previous thinking about homelessness as a wicked problem causing honest paralysis over difficult issues. Wicked problems arose in the area of public policy and are described as "a set of problems that cannot be resolved with traditional analytical approaches". It is the nature of wicked problems that unanswered questions and chronic issues can take years to work out or never be satisfactorily resolved.

Two police officers in L.A. made an informal calculation as to the costs of managing "chronically homeless inebriates" like Murray Barr whom they had cared for over many years.

...Johns and O'Bryan realized that if you totted up all his hospital bills for the ten years that he had been on the streets—as well as substance-abuse-treatment costs, doctors' fees, and other expenses—Murray Barr probably ran up a medical bill as large as anyone in the state of Nevada.
"It cost us one million dollars not to do something about Murray," O'Bryan said.

Gladwell discusses the research into homelessness by Dennis Culhane.

What he discovered profoundly changed the way homelessness is understood. Homelessness doesn't have a normal distribution, it turned out. It has a power-law distribution. "We found that eighty per cent of the homeless were in and out really quickly," he said. "In Philadelphia, the most common length of time that someone is homeless is one day. And the second most common length is two days. And they never come back...
...The next ten per cent were what Culhane calls episodic users. They would come for three weeks at a time, and return periodically, particularly in the winter. They were quite young, and they were often heavy drug users. It was the last ten per cent—the group at the farthest edge of the curve—that interested Culhane the most. They were the chronically homeless, who lived in the shelters, sometimes for years at a time. They were older. Many were mentally ill or physically disabled, and when we think about homelessness as a social problem—the people sleeping on the sidewalk, aggressively panhandling, lying drunk in doorways, huddled on subway grates and under bridges—it's this group that we have in mind.

Culhane discovered that about despite the size of the homeless population in New York, there are 'only' 2500 who are chronically homeless. Culhane's most startling finding was that New York spent sixty-two million dollars p.a. to shelter just those 2500 hard-core homeless. Studies in both Boston and San Diego reported extraordinary levels of medical and social care spending on similar high-need populations that confirmed the calculations made by Johns and O'Bryan in L.A..

Culhane saw that the kind of money it would take to solve the homeless problem could well be less than the kind of money it took to ignore it. Murray Barr used more health-care dollars, after all, than almost anyone in the state of Nevada. It would probably have been cheaper to give him a full-time nurse and his own apartment.

Gladwell discusses a programme that provides housing and intense supervision for these "chronically homeless inebriates". The programme implementation can literally involve approaching homeless people with the keys to an apartment and a behaviour contract. Nick Genes of Blogborygmi discusses a report from the Serial Inebriate Program in San Diego. Although the San Diego Program relies on the courts rather than a social care policy, Genes says that it looks like the programmes will be cost-effective.

Gladwell does not duck the issue that whereas we might accept the economic and intellectual logic of such an approach there may be a feeling that it is contrary to our feeling of fairness.

From an economic perspective the approach makes perfect sense. But from a moral perspective it doesn't seem fair. Thousands of people in the Denver area no doubt live day to day, work two or three jobs, and are eminently deserving of a helping hand—and no one offers them the key to a new apartment. Yet that's just what the guy screaming obscenities and swigging Dr. Tich gets. When the welfare mom's time on public assistance runs out, we cut her off. Yet when the homeless man trashes his apartment we give him another. Social benefits are supposed to have some kind of moral justification. We give them to widows and disabled veterans and poor mothers with small children. Giving the homeless guy passed out on the sidewalk an apartment has a different rationale. It's simply about efficiency.
Our usual moral intuitions are little use, then, when it comes to a few hard cases. Power-law problems leave us with an unpleasant choice. We can be true to our principles or we can fix the problem. We cannot do both.

Carers UK has frequently argued that carers save the UK economy up to £57 billion per year. Carers UK recently questioned whether carers' human rights are respected within the UK. Society and the national economy benefits because of people's desire to 'do the right thing' by caring for others, albeit at considerable cost to themselves. Despite this, there are considerable shortcomings in our care for the elderly, some of which were discussed by Tony Robinson in his recent programme.

I would be interested to learn what the power-law solution to the carers' dilemma would be. Despite the flaws and injustices that were given so much exposure by Tony Robinson it may prove that continuing to do nothing is the expedient short-term political solution. Demographics mean that it isn't a long-term solution, but that would involve some very difficult discussions about political will, funding/rationing health care or social care...

Some carers contrast their own treatment with that of others and express resentment at the comparative generosity of allowances and social care packages that are available to others. It may be cheaper and more effective to implement the power-law solution to homelessness. I have to rely on the economists' judgment for this. I have no idea what the power-law solution for carers would be. I think that some of them would be very angry and resentful. Is caring a different paradigm because of the very different numbers of people who need care, as distinct from the numbers of "chronically homeless inebriates"?

Gladwell claims that:

[s]olving problems that have power-law distributions doesn't just violate our moral intuitions; it violates our political intuitions as well...Power-law solutions have little appeal to the right, because they involve special treatment for people who do not deserve special treatment; and they have little appeal to the left, because their emphasis on efficiency over fairness suggests the cold number-crunching of Chicago-school cost-benefit analysis.

Gladwell's "moral intuitions" and "political intuitions" sound as if they are primers for what is known as the fallacy of fairness in cognitive-behavioural therapy. One definition is

You feel resentful because you think you know what's fair, but other people won't agree with you...It is tempting to make assumptions about how things would change if people were only fair or really valued you.

What would be the consequences of policies that made carers angry and resentful on a large scale?

The cost of doing comparatively little for carers saves the UK economy an estimated £57 billion a year. I wonder if the problem of providing appropriate care is easier to ignore than to solve or to manage. Surprisingly, is caring more of a wicked problem than homelessness?

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