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Health Care Costs and Financing

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More expensive drugs, fewer deaths, and steady HIV infection rates mean costs of AIDS care continue to rise

There are now 11 antiretroviral drugs approved to treat people with human immunodeficiency virus (HIV) disease. Today, people with HIV disease typically are treated with a combination of three drugs, resulting in a dramatic drop in AIDS deaths in recent years. For instance, during the first 6 months of 1997, the death rate from AIDS was 44 percent lower than it was during the first 6 months of 1996 (12,040 deaths vs. 21,460 deaths, respectively). However, the rate of new HIV infections continues unabated; between 40,000 and 80,000 people become infected with HIV each year. These three factors—better treatments, fewer deaths, and a steady infection rate—have affected the costs of caring for people with HIV disease, according to a recent review of the topic by Fred J. Hellinger, Ph.D., of the Agency for Health Care Policy and Research.

Two cost trends have emerged: the proportion of costs for hospitalizing AIDS patients is falling, while the proportion of costs for drug therapy is increasing. For instance, in New York State, hospital costs accounted for 88 percent of the monthly cost of treating a person with AIDS in 1990 but only 67 percent in 1994. At the same time, the cost of drug therapy rose from 6 percent of costs per month in 1990 to 16 percent in 1994. The monthly costs of combination therapy and viral load testing generally have been estimated as $1,000 to $1,500. The total cost of new combination drug therapies and associated services may run as high as $20,000 a year, notes Dr. Hellinger

AIDS care costs are bound to increase, since a growing number of people with HIV disease come from groups that are more likely to have public insurance (e.g., minorities, illicit drug users). Even privately insured people with HIV disease have plans that offer little or not coverage for outpatient drugs. As many State Medicaid programs compel people with HIV disease to join managed care plans, Dr. Hellinger believes it is essential that Medicaid plans establish special rates for people with HIV disease so that they are not discriminated against by the plans.

For more information, see "Cost and financing of care for persons with HIV disease: An overview," by Dr. Hellinger, in the Spring 1998 Health Care Financing Review 19(3), pp. 1-14.

Editor's Note: This journal issue is dated Spring 1998, however, it did not become available until December 1998. Reprints of Dr. Hellinger's article (AHCPR Publication No. 99-R028) are available from the AHCPR Publications Clearinghouse.

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