A Cautionary Tale: HIV/AIDS Financing Success

1. A Cautionary Tale: HIV/AIDS Financing Success Ruth Finkelstein, ScD Division of Health Policy The New York Academy of Medicine

2. Goal of presentation Think about how to serve the disabled by drawing on lessons from the relationship between state Medicaid programs and resource allocations in the Ryan White CARE Act (RWCA).

3. Problem Access to critical services for people with HIV/AIDS varies greatly from state to state -- despite the addition of $2 billion annually in federal RWCA funding, which should ameliorate the state to state differences in Medicaid. • State Medicaid programs vary enormously • RWCA funding tends to magnify, rather than compensate for, these differences

4. Background RWCA is a disease-specific, federal, categorical funding program originally passed in 1990 and reauthorized every five years since. • Its purpose is to fund unmet health and social service needs of people living with HIV/AIDS (PLWH/A)

5. Background, cont. Some of the assumptions on which the RWCA was based were not true then: • A meaningful number of PLWH/A would retain private health insurance • Medicaid is an effective “safety net” for health care needs of the poor • Inpatient and long term care financing and capacity is adequate • Primary unmet needs are for social services Others have changed: • Development of effective (and expensive) drugs • Increased longevity (including prior to disability/Medicaid eligibility) • Need for outpatient/ambulatory care greatly expanded

6. Background, cont. Despite these major changes in need, resource allocations for different services (especially those controlled in the 54 Title I Eligible Metropolitan Areas -EMAs) have remained remarkably unchanged since the early 1990’s (with the exception of the AIDS Drug Assistance Program (ADAP) earmark). Young S, Conviser R, Marconi KM, Wieland M. Trends and Responsiveness in National Resource Allocation for Needed HIV Services: A Five Year (1996-2000) Analysis. Journal of Health and Social Policy. 2003;17(4):1-14. Finkelstein, R. Ryan White CARE Act Reauthorization 2005: Title I and Title II Health Services Expenditures Patterns (2000-2002). In: Examination of Fiscal Management and the Allocation of CARE Act Resources. 1-6 U.S. Department of Health & Human Services. May 2005.

7. Background, cont. • Strong desire from the Administration that RWCA be used to meet the medical care needs of PLWH/A • Advocates argue that: • Social services enhance access to medical services • Level of RWCA health care expenditures needed depends on existing healthcare environment

8. Case Study The following case study investigates the latter explanation • Are the differences in RW medical care expenditures between jurisdictions explained by other HIV care financing (largely Medicaid)? • Hypothesize an inverse relationship between health care environment adequacy and RWCA health care expenditures

9. Methods: Approach • Identified key HIV health care State and local EMA environmental, programmatic and financing elements • Calculated the proportion of Title I and II expenditures allocated by states and EMAs for health care services • Constructed, tested and validated a typology to measure the healthcare environment at the State and EMA level • Assessed the relationship between State and EMA RWCA proportional health care service allocations and their healthcare environment typology score

10. Medicaid adequacy: data elements • Average expenditure per SSI beneficiary • Presence/absence of a medically needy program and % of FPL required for eligibility • Presence/absence of Medicaid programs covering PLWH/A • targeted case management • TWWIIA • home-based care waiver • prescription carve out • differential rates (including FFS, capitated, & risk adjusted) (Data sources = IDSA and Kaiser)

11. Other health financing: data elements • ADAP adequacy(composite variable; Data sources = Kaiser/HRSA) • Health care expenditure amount from other RW Titles • % of HIV-related hospitalizations covered by private insurance(Data source = HCUP) • % of HIV-related hospitalizations covered by Medicare(Data source = HCUP) • % of PLWA receiving care through VA facilities(Data source = VA) • Number of AIDS-related NIH grants received(Data source = NIH) • Characterization of the HIV/AIDS epidemic • Number of PLWA (Data source = CDC) • % of MSM PLWA (Data source = CDC) • % of population living in poverty (Data source = U.S. Census) • Federal Financial Participation (FFP) in Medicaid (Data source = IDSA)

12. Findings: Title I(54 eligible metropolitan entities) • None of the individual variables we used to characterize the health care financing environment or the epidemic had a patterned association with Title I healthcare expenditures • The overall HIV health care financing environment had no patterned relationship with Title I health care expenditures

13. Title I Health Care Expenditures

14. Findings: Title II (States & Territories) Looking at the individual variables in the model, we found the following patterned associations with Title II health care expenditures: • Having a greater number of special HIV Medicaid programs was associated with lower proportional Title II health care expenditures • States with higher income thresholds for medically needy Medicaid eligibility spent proportionately more of Title II on health care

15. Findings: Title II cont. However, Title II health care expenditures were not related to their overall health care environment scores as measured using our typology

16. Title II Health Care Expenditures.

17. Significance This analysis suggests that Title II medical care expenditures are more sensitive to Medicaid program characteristics than Title I • This makes sense because, in many states, both are administered by the same agency; some use the same data sources and analyses; and decisions are made at the same level of government.

18. Alternate policy implications Interpretation by this Administration -- as indicated by RWCA Reauthorization principles (7/05) -- focused on the first finding (i.e., no relationship between healthcare environment and RW spending): • RW distribution formula should take existing healthcare funding into account • Reduce allocations in jurisdictions with better financed systems • Mandate that 75% of all RW funding is spent on healthcare services

19. Effect of Administration's proposal • Punishes states, like NY, that have invested in their Medicaid systems • May force NY to de-Medicaid services to shift costs from Medicaid to RW • Incentivizes a “race to the bottom” for States making investments in HIV/AIDS

20. Alternate policy implication A focus on finding 2 (i.e., Title II somewhat responsive to Medicaid) leads to different implications: • Need to re-examine healthcare financing planning process at the state level • Need to put Medicaid at the center of planning and look to RW and other categorical funding to supplement that system -- ineligible but needy individuals, services and settings (As the AIDS Institute does in NY State) • If the Medicaid entitlement continues to erode (e.g., FL and others), consider advocating greater flexibility for blending funds

21. What lessons for Medicaid for the disabled? • Re-invent community planning to start with Medicaid; use categorical funding to fill gaps • Experiment with incorporating portions of state and federal Medicaid expenditures into blended funding approaches for populations, like PLWH/A, served by multiple agencies and systems • Programming or service needs drive funding – rather than having the funding drive the program • Aim to reduce fragmentation and confusion for consumers; create greater flexibility; avoid duplication and redundancy, and provide better/more customized services • Attempt to monitor program success through the use of outcome, rather than process, measures

22. Lessons cont. • Ideally, such systems lead to improved clinical outcomes, cost savings because they reduce duplication of services and administrative costs • A further outcome is the development and use of unified, client-level data whose paucity is a major barrier to effective planning

23. Conclusion Lack of a relationship between Medicaid funding and allocation of discretionary money to fill gaps in Medicaid is not solved by reducing funding available but by increasing integrated planning, financing, and service delivery.