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(New York, NY) –As New York faces looming Medicaid cuts and mounting pressure on hospital systems, a new report from nonprofits Institute for Community Living (ICL) and Comunilife highlights how the medical respite model delivers both fiscal savings and improved health outcomes. The report also uncovers challenges to scaling the model, which has a 2.5:1 ROI for hospital systems.
The report, Medical Respite: Insights from the Institute for Community Living (ICL) and Comunilife, shows that expanding medical respite programs by adding 75 additional beds could save New York hospitals up to $15.02 million annually and enable hospitals to admit nearly 1200 more patients.
“Medical respite presents a unique way to do more by spending less. It has a decades-long track record of reducing hospital costs and improving patient outcomes. New York can and should scale the model, especially now as we face significant funding cuts,” said Jody Rudin, CEO, ICL. Because people in medical respite experience a more complete recovery post hospitalization, they are also less likely to be readmitted to a hospital, further reducing hospital costs.
“Launching New York City’s first medical respite programs has shown that when community-based organizations partner deeply with hospitals, we can deliver better recovery outcomes for unhoused patients while saving the health system millions. Together, Comunilife and ICL have demonstrated that medical respite is not only compassionate—it’s a smart, scalable solution for a strained healthcare system,” said Blance Ramirez, president and CEO, Comunilife.
Medical respite offers post-acute, short-term residential care for individuals who no longer need inpatient hospital care, but who lack a safe place to recover. By combining clinical support like medication management, basic services like meals, and housing navigation services, medical respite programs help stabilize people’s health. Additionally, for those who are unhoused, medical respite often connects them to permanent housing, breaking the revolving door of shelter-to-hospital returns.
The first medical respite facilities were launched in Boston and Washington, D.C. in the 1980s, and a federally funded pilot in 2000 demonstrated its value. Today, there are more than 160 programs across 40 states and territories.
New York lags far behind: only four medical respite programs operate statewide, with two in New York City, one started and operated by Comunilife since 2011 and the other run by ICL since 2020.
A critical factor in both ICL and Comunilife’s successful medical respite programs is their deep partnership with NYC Health + Hospitals (H+H), which has been instrumental in the development and growth of medical respite in New York City. H&H provides dedicated financial support for respite and ensures hospital staff are engaged with respite teams from the moment of referral through discharge. This close collaboration enables smoother transitions, reduces hospital lengths of stay, and ensures patients receive continuity of care across settings.
Medical respite programs help reduce hospital costs because hospitals are reimbursed through episodes of care and their financial sustainability generally depends on being able to discharge patients who no longer require inpatient levels of care and using those beds for newly admitted patients. Without a stable housing option, patients often remain in hospital beds even after they no longer require acute care. This disrupts patient flow, increases hospital inefficiencies, and limits the hospital’s ability to admit patients and generate additional revenue.
The report urges strategic investment and targeted regulatory reform to scale medical respites, including:
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- New York State Department of Health (DOH) submission of a State Plan Amendment for coverage of medical respite as a Medicaid benefit post-waiver, or approving Medicaid Managed Care Organizations (MCOs) to voluntarily support medical respite as an in-lieu services or as part of value-based arrangements.
- DOH establishing a waiver process for physical plant flexibility if the provider can ensure that the program meets the core needs of its patients.
- State directing Social Care Networks to prioritize infrastructure support for medical respite programs.
- State assurance that neither its regulatory framework nor any future guidance restricts providers from braiding funding for the program with maximal flexibility thereby enabling programs to serve a wider range of individuals.
- Hospital and payer investment, with shared ROI.
- DOH not restricting a provider from caring for individuals who are not unhoused, as there are populations who have permanent housing that may not be appropriate for post-hospitalization recovery due to accessibility or other issues.
It costs about $80,000 a year to fund one respite bed. Each respite bed can serve, on average, five patients who would have otherwise languished in a hospital bed. In turn, hospitals can admit additional and generate an additional $280,000 in revenue from all payers. This nets hospitals an additional income of $200,000 per respite bed, or $15.05M for 75 beds. Data suggests there is demand in New York City for these additional beds, adding to the 100+ beds currently run by ICL and Comunilife in partnership with H&H.
