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Increasing public assistance for HIV-infected patients could lower hospital costs and increase work productivity

In 1996, the average cost of treating an HIV-infected patient was about $20,000 a year, with medications accounting for a large part of the costs. More generous State policies toward HIV-positive patients could improve the economic outcomes associated with HIV, according to a recent study that was supported in part by the Agency for Healthcare Research and Quality (HS08578). For example, some State Medicaid programs have made advanced antiretroviral medications more accessible to HIV patients through medically needy programs. These programs allow people to spend down to Medicaid eligibility by deducting medical-related expenses from reported income. While in the spend-down process, individuals must rely on other sources for health care and prescription drugs such as State-supplemented Federal AIDS Drug Assistance Programs (ADAP).

Each State determines financial and medical eligibility criteria, drugs covered, and other key aspects of the programs, with some States covering as few as 20 HIV-related drugs and others covering more than 100. If States offered more instead of less generous ADAP benefits—for example, few or no limits for drug prescriptions—per patient total monthly costs would fall a significant 30 percent from $1,501 to $1,057. Much of the decline in costs could be attributed to a reduction in average hospitalization costs from $750 to $395.

On the other hand, if all States expanded their ADAP income eligibility threshold to $8,000 instead of $4,000, total costs would be 36 percent higher. However, these costs would be offset from a societal perspective by potential for increased work productivity. Although patient monthly costs increased $241 when ADAP expanded income eligibility, earnings increased by $246 (32 percent), or about the same amount, and the probability of full-time employment grew from 23 to 33 percent.

These findings are based on an analysis of data from AHRQ's HIV Cost and Services Utilization Study (HCSUS), a nationally representative sample of HIV-infected patients. The researchers used the HCSUS data to assess how differences across States in Medicaid and ADAP affected medical expenditures, employment, and earnings of HIV-infected patients.

See "The impact of state policy on the costs of HIV infection," by Dana P. Goldman, Ph.D., Jayanta Bhattacharya, Arleen A. Leibowitz, Ph.D., and others, in the March 2001 Medical Care Research and Review 58(1), pp. 31-53.

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