Fourfold Increase in AIDS Medical Costs Is Expected by 1991

Within four years, the annual public and private cost of providing drugs, hospital care and physician services for AIDS patients in California will range between $255 million and $406 million, a fourfold increase over last year, the legislative analyst’s office said Wednesday.

And even this estimate “drastically understates the full cost of AIDS” because it does not include “supportive services, prevention and education or indirect costs,” the report said.

Cumulative indirect social costs associated with AIDS, representing lost wages of those too ill to work or future earnings lost to premature death, could range between $7.1 billion and $9 billion by 1991, according to a report contained in the review of the state budget by the staff of Legislative Analyst Elizabeth G. Hill.

Impact on Medi-Cal

Also, the cumulative costs of treating the disease under the state’s Medi-Cal program could reach $415 million within four years, the report said. It noted that county hospitals, which receive more than 50% of their support through Medi-Cal or other state financial aid programs, “have been the primary providers of care for AIDS patients.”

“The AIDS epidemic is a significant public policy problem for the Legislature” to deal with, Hill told reporters during a briefing in her office. “We are trying to give the Legislature an idea of the economic impact out there.”

Gov. George Deukmejian’s proposed budget for the next fiscal year contains $21.4 million for the Department of Health Services’ AIDS unit, a 1.1% increase over the current year. The money would be spent for treatment counseling, education and surveillance. An additional $9.6 million is earmarked for University of California research.

‘Changing Every Day’

Hill said the economic impact of the AIDS epidemic is difficult to get a handle on because “it’s a situation that is changing every day.”

The analyst’s report said the Legislature needs “more information to assist it in developing a more comprehensive, targeted and efficient approach to addressing the AIDS epidemic.”

The analyst’s projections on the costs associated with the deadly disease are based on California’s estimated 23% share of all acquired immune deficiency syndrome cases reported nationally since statistics on the epidemic began being collected in 1981.

As of this month, 30,396 cases of AIDS had been reported nationally, 6,917 in California. Those are conservative estimates. The state Department of Health Services believes 17% to 25% of the AIDS cases may not be reported.

The federal Centers for Disease Control expects the number of AIDS cases to quadruple by 1991, to between 182,000 and 289,000 nationally.

The legislative analyst’s report said 79% of the victims are white; 98% male.

In California, AIDS cases rose 120% between 1985 and 1986, according to state health officials.

The analyst’s staff based its report on information gleaned from a variety of sources, primarily the state Department of Health Services, federal Centers for Disease Control, researcher Anne Scitovsky of the Palo Alto Medical Foundation/Research Institute and Blue Cross of California.

Costs of treating individual AIDS cases, adjusted to 1984 dollars for purposes of comparable measurement, ranged from a $15,955 figure used by Scitovsky, based on charges used by San Francisco General Hospital, to $23,760 by the state Department of Health Services and $25,350 from Blue Cross, a figure based on claims data.

County hospitals “have been the primary providers of care for AIDS patients,” according to the report.

Report’s Recommendations

To combat the feared spread of AIDS by intravenous drug abusers, the analyst’s report recommended that the Department of Health Service’s AIDS unit and the Department of Alcohol and Drug Programs undertake a joint effort to come up with “a comprehensive strategy” to deal with the problem.

The report also recommended that the Health Services Department develop a second plan to combat the spread of AIDS among sexually active heterosexuals.

In addition, the analyst recommended that the California Medical Assistance Commission study ways to finance long-range AIDs treatment other than acute-care hospitalization.

The analyst also said the Department of Health Services should begin identifying and tracking individuals with AIDS and related disorders.