AIDS home- and community-based waivers: effects on use of services, expenditures, and survival.

• Author: Anderson, Kathryn
• Position: Antiretroviral drug therapies

1. Introduction

   The prognosis, survival, and quality of life for persons living with HIV/AIDS (PLWHAs) improved dramatically in recent years due to the development of highly active antiretroviral drug therapies (Hogg et al. 1998; Palella et al. 1998). Concomitantly, advances in medical treatment enabled the majority of PLWHAs to obtain care on an outpatient basis or in their home. Currently, state Medicaid programs are the primary payers of medical care services for PLWHAs. To illustrate, Medicaid spending on care for PLWHAs amounted to about $3.3 billion in 1997, compared to $1.3 billion by Medicare and around $1.2 billion under the Ryan White Comprehensive AIDS Relief Emergency (CARE) Act (Sambamoorthi et al. 1999). In an effort to control increasing Medicaid expenditures yet simultaneously provide high-quality care, a number of state Medicaid programs implemented home- and community-based waiver initiatives for persons with AIDS (PWAs) during the early 1990s. Currently, 13 states provide waiver services for PWAs; these states are identified in Table 1. Enrollment in the program by PWAs in these state Medicaid programs ranges from a low of 17 enrollees in Iowa to a high of 6700 in Florida. Initially authorized under section 2176 of Omnibus Reconciliation Act (OBRA) 1985, the Medicaid 1915c waiver enables states to expand the array of home- and community-based services that are available to Medicaid beneficiaries with AIDS. Waiver services are regarded as an add-on, that is, an additional bundle of up to 24 services that include case management, nursing care, meals-on-wheels, personal care services, and homemaker services that are not available to beneficiaries under the traditional Medicaid program. The services provided under the waiver are summarized in Table 2 for the 13 states currently participating in the program.

   The presumption behind this initiative is that if home- and community-based waiver services are used in lieu of inpatient services, then waiver participants should incur lower expenditures than non-waiver participants, and state Medicaid programs should realize cost savings. This presumption is questionable for at least two reasons. First, empirical evidence from evaluations of home-care waiver programs for elderly Medicare beneficiaries suggests that home- and community-based care tends to complement rather than substitute for inpatient services and, thus, results in higher costs per beneficiary (Lindsey, Jacobson, and Pascal 1990). Second, although AIDS-specific waivers are currently functioning in 16 states, only a few published studies evaluated the impact of waiver enrollment on use of services, monthly patient expenditures, and outcomes (Merzel et al. 1992; Anderson and Mitchell 1997; Crystal, Sambamoorthi, and LoSasso 1998; Mitchell and Anderson 2000). These studies found that monthly expenditures and use of inpatient services are lower for waiver participants than for either a control group of non-waiver participants or the entire population of PWAs. Nonetheless, with the exception of the recent study by Mitchell and Anderson (2000), these studies are based on data that predate the development of highly effective antiretroviral therapies for the treatment of HIV/AIDS. Thus, it is unclear whether home- and community-based waiver initiatives for PWAs are able to generate cost savings in this era of highly effective but expensive drug treatment regimens.

   In this study, we analyze Florida Medicaid eligibility and claims data for PWAs spanning the years 1996 through 1997 to evaluate how participation in the Medicaid waiver program for PWAs affects the types of services received by patients, monthly patient expenditures, and health. Importantly, antiretroviral combination therapies were available to Medicaid recipients with AIDS throughout the time period. First, we examine whether persons who choose to participate in the waiver program in Florida are more or less likely to receive antiretroviral combination drug therapies and inpatient care. Second, we also examine whether waiver enrollment has any impact on monthly patient expenditures and survival. Considering that the waiver offers a bundle of home- and community-based services that are not readily available to other Medicaid beneficiaries with AIDS, we expect to find significant differences in the types of services used by waiver participants in comparison to those not enrolled in the waiver. These services may be viable alternatives to costly inpatient care. We do not know, however, whether waiver patients are more or less likely to receive recent combination drug therapies and whether the overall treatment packages differentially affect survival and/or monthly patient expenditures.

   The remainder of this article is organized as follows. The second section provides a brief synopsis of the relevant literature. Section three describes the data, sample inclusion/exclusion criteria, and variable construction. Section four outlines the estimation strategy. In section five we report the results. A final section contains concluding remarks.

2. Literature Review

   Empirical evaluations of Medicare home- and community-based waiver initiatives for elderly persons suggest that home- and community-based services tend to complement rather than substitute for institutional care and, thus, result in higher costs per beneficiary (Lindsey, Jacobson, and Pascal 1990). However, this conclusion may not be applicable to home- and community-based waivers designed for PWAs for at least three reasons. First, previous research failed to account for the possible nonrandom selection of home- and community-based services in evaluating the impact of the waiver on costs. Second, the waiver initiatives for the elderly were designed to substitute home care for nursing home care, whereas the goal of the AIDS waivers was to substitute home care for more expensive inpatient hospital services. Finally, the elderly and AIDS populations differ with respect to demographic composition, services received, and disease duration. This suggests that findings based on elderly populations are probably not applicable to PWAs (Weissart, Cready, and Pawalek 1988).

   The limited research that evaluated the effects of enrollment in AIDS-specific home- and community-based waiver initiatives suggests that these programs yield cost savings. For example, Merzel et al. (1992) examined the New Jersey waiver experience and estimated average monthly treatment costs per Medicaid enrollee of $2400 in 1988; they concluded that the average costs for PWAs enrolled in the waiver were substantially lower than the $5000 monthly estimate suggested by previous studies. In a more recent unpublished study, Crystal, Sambamoorthi, and Lo Sasso (1998) also examined the impact of the New Jersey Medicaid home- and community-based waiver program on the costs of care, use of inpatient and outpatient services, and access to care. Their multivariate analyses based on Medicaid data for PWAs diagnosed between 1988 and 1992 show that New Jersey waiver participants used substantially fewer inpatient services and more outpatient services in comparison to those receiving traditional care, yet there was no difference in overall monthly costs of care between the two groups. Further, waiver participation appears to reduce socioeconomic differences in access to outpatient services. Using more recent data from the New Jersey AIDS waiver, Sambamoorthi et al. (1999) compared the use and costs of home care between waiver and non-waiver enrollees. Their findings suggest that waiver participation appears to reduce racial and risk group differences in the probability of using home care, although injection drug users were less likely to participate in the waiver. Irrespective of waiver enrollment, injection drug users incurred significantly lower monthly home-care expenditures.

   The only other evaluation of a Medicaid AIDS-specific waiver program compares participants and nonparticipants in Florida. Anderson and Mitchell (1997) found that, after controlling for program selection, PWAs enrolled in the home- and community-based waiver in Florida during its first two years of operation (1990-1991) incurred monthly Medicaid expenditures that were 22-27% lower than nonparticipants. Using more recent data for the years 1993 through 1997, Mitchell and Anderson (2000) evaluated the effects of waiver participation and recently developed antiretroviral drugs on monthly expenditures for Florida Medicaid recipients with AIDS. They found that, after controlling for gender and race/ethnicity, monthly Medicaid expenditures for waiver participants were significantly lower than for non-waiver enrollees. The major reason for the cost difference is that non-waiver enrollees incurred higher inpatient costs than PWAs enrolled in the waiver. Although waiver participants incurred higher drug expenditures, these drug costs represent only a fraction of the higher inpatient costs incurred by non-waiver enrollees. While their analyses are the first to evaluate the impact of the recently developed AIDS drags on patient costs, they provide only indirect estimates because they examined a time period that includes three years prior to and two years after the availability of combination therapies. To directly measure the impact of the new antiretroviral therapies on patient costs, one should focus solely on the time period during which these drug treatments were available. Furthermore, their more recent analysis is descriptive and, thus, does not control for nonrandom waiver selection and other confounding factors.

   Our study attempts to address the limitations of existing research by examining the effects of waiver participation on the use of services, monthly patient expenditures, and survival during a time period when the antiretroviral combination therapies were available to Medicaid recipients.

3. Data and Sample Construction

   The data for this...