Economic Consequences for Medicaid of Human Immunodeficiency Virus Infection

By Baily, Mary Ann; Bilheimer, Linda et al. | Health Care Financing Review, Annual 1990 | Go to article overview
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Economic Consequences for Medicaid of Human Immunodeficiency Virus Infection

Baily, Mary Ann, Bilheimer, Linda, Wooldridge, Judith, Langwell, Kathryn, Greenberg, Warren, Health Care Financing Review

Economic consequences for Medicaid of human immunodeficiency virus infection


Human immunodeficiency virus (HIV) attacks the body's immune system, causing progressive disability and death. Since the disease was first recognized in 1981, more than 139,000 cases of the most severe form of HIV infection, acquired immunodeficiency syndrome (AIDS), have been diagnosed in the United States and more than 85,000 people have died (Centers for Disease Control, July, 1990). (1) These numbers represent not only human tragedy but a significant new financial burden on a health care system in which rising expenditures are already a concern.

The Medicaid program is bearing a major share of this burden, and its share is likely to increase as the epidemic continues. In this article, Medicaid's current and future role in financing HIV-related health care are explored. The article focuses on the disease, associated health service use and cost, and sources of financing. Medicaid's coverage of HIV-infected patients is described, and the policy issues the epidemic raises for Medicaid are highlighted. Finally, a simple methodology for estimating HIV-related Medicaid costs under alternative assumptions about the course of the epidemic, treatment patterns, and the structure of Medicaid, is described.

Disease overview

Certain features of the virus and its clinical manifestations are particularly important because of their impact on the financing of HIV-related care. First, the disease in infectious. Transmission of the virus occurs through sexual contact, through contact with contaminated blood and blood products (e.g., through blood transfusions or sharing of needles in intravenous drug use), and perinatally, from an infected mother to her infant.

Shortly after initial infection, there is often a brief flu-like illness. An asymptomatic period follows, lasting for years (the median time from infection to serious illness is currently estimated at 7 to 10 years) (Moss and Bacchetti, 1989). During this period, a sequence of simple blood tests can usually establish that infection has occurred. Although information on the natural history of the disease is not complete, the expectation is that all of those infected will eventually become seriously ill and die as a result of their infection.

Once symptoms begin, the spectrum of clinical manifestations is very broad. In the early years of the epidemic, two "opportunistic" illnesses (conditions seldom seen in people with normal immune systems) were especially common--pneumocystis carinii pneumonia (PCP) and Kaposi's Sarcoma (KS). However, many others occur as well, and many patients experience multiple illnesses.

The spectrum of care required is equally broad (Bilheimer, 1989a). During the asymptomatic period, psychological counseling and monitoring of immune system functioning may be indicated. Treatment with drugs such as azidothymidine (AZT) (the first drug to demonstrate effectiveness against the HIV virus) may help to delay the onset of symptoms. As the disease progresses, a typical patient needs care spanning the entire range of medical, dental, personal and psychological services. Moreover, the patient's needs can fluctuate widely from one week to the next. Many people with AIDS (PWAs) do not simply decline steadily until death, but experience periods of acute illness and periods of chronic disability, interspersed with periods of relative well-being during which they may even be able to work.

The length of time from onset of symptoms until death varies with clinical manifestations, but patients generally have not lived more than a year or two after a diagnosis of AIDS. Life expectancy seems to be increasing, however, with the introduction of AZT and improvements in the clinical management of opportunistic infections, especially PCP.

Because of the modes of transmission, the disease has so far been concentrated among homosexual and bisexual males, users of intravenous drugs who share needles, and recipients of infected blood products.

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Economic Consequences for Medicaid of Human Immunodeficiency Virus Infection


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