3
Health Care Delivery and Financing

The U.S. health care system stands alone among advanced industrial countries in lacking a national program to ensure universal or nearly universal health insurance coverage. The various public and private insurance plans and delivery systems (such as the Veterans Administration health system) reflect what John Iglehart (1992:962) characterizes as ''society's profound ambivalence about whether medical care for all is a social good, of which the costs should be borne by society, or a benefit that employers should purchase for employees and their dependents, with government insurance for people outside the work force." This ambivalence, and the resulting lack of any political consensus on how to finance and deliver health services, has resulted in an odd assortment of programs that does provide health insurance to about 85 percent of the population, but leaves some 36 million people uninsured. The uninsured are primarily full-time workers and their dependents who are employed in small firms at a low or the minimum wage. In addition, as health insurance premiums have escalated by 20 percent or more annually in recent years, employers have sought to contain costs by either reducing the value of the insurance coverage offered employees or by reducing the coverage provided for dependents. At the same time, insurance firms increasingly act unilaterally to avoid high (or "catastrophic") claims by dropping or limiting coverage for groups or individuals who are at high risk for serious illness. Thus, the security of health insurance even for the workers and their dependents who have coverage has deteriorated over the last decade.



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The Social Impact of Aids in the United States 3 Health Care Delivery and Financing The U.S. health care system stands alone among advanced industrial countries in lacking a national program to ensure universal or nearly universal health insurance coverage. The various public and private insurance plans and delivery systems (such as the Veterans Administration health system) reflect what John Iglehart (1992:962) characterizes as ''society's profound ambivalence about whether medical care for all is a social good, of which the costs should be borne by society, or a benefit that employers should purchase for employees and their dependents, with government insurance for people outside the work force." This ambivalence, and the resulting lack of any political consensus on how to finance and deliver health services, has resulted in an odd assortment of programs that does provide health insurance to about 85 percent of the population, but leaves some 36 million people uninsured. The uninsured are primarily full-time workers and their dependents who are employed in small firms at a low or the minimum wage. In addition, as health insurance premiums have escalated by 20 percent or more annually in recent years, employers have sought to contain costs by either reducing the value of the insurance coverage offered employees or by reducing the coverage provided for dependents. At the same time, insurance firms increasingly act unilaterally to avoid high (or "catastrophic") claims by dropping or limiting coverage for groups or individuals who are at high risk for serious illness. Thus, the security of health insurance even for the workers and their dependents who have coverage has deteriorated over the last decade.

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The Social Impact of Aids in the United States Government spending on health services has increased continuously since the 1960s. The increases in spending have resulted primarily from inflation, technology changes, and increases in the volume of services that providers deliver; extensions of coverage to new population groups or improvements in benefits have accounted for a relatively minor proportion of the increase. In the last decade alone, federal health expenditures increased from 12 percent of the federal budget in 1980 to 15 percent in 1990. The increasing cost of Medicaid has resulted in severe problems for states and has occasioned difficult searches at the state level for means of containing (or shifting to the federal level) expenditures for health services. The providers of health services—physicians, hospitals, other institutional and individual professions—are in a period of transition. The funds easily available for health care in the 1960s and 1970s, as Medicare, Medicaid, and private health insurance coverage paid charges as billed with few controls over services or rates, are now more constrained. Limits on Medicare and Medicaid reimbursement rates, the increasing reliance of private insurance plans on various types of managed care and administrative constraints on physician practice decisions, and new attention to areas such as medical devices and equipment are fundamentally changing the practice of medicine. Physicians are almost uniformly frustrated and angry over the loss of control they once exercised. The nation's 7,000 hospitals are similarly facing painful transitions, both as a result of Medicare rate limits and the explosion of new types of competitive delivery systems, such as ambulatory surgical centers and hospices. The growth in for-profit hospital chains in the 1970s and 1980s has deprived community hospitals of many privately insured, middle-class patients and further concentrated uninsured, multiproblem patients in public or inner-city voluntary hospitals. The state of the U.S. health care system as it enters the 1990s has been described as a "paradox of excess and deprivation" (Enthoven and Kronick, 1989:29). As is discussed below and in the New York study (Chapter 9), the impact of the AIDS epidemic on the confederation of health care providers and insurers has been as varied as the system itself. Major portions of the financing and delivery systems have been largely untouched by the epidemic, others have made marginal changes, and those institutions that serve the populations at highest risk have been profoundly affected. To simplify its task of describing the impact of the HIV/AIDS epidemic on the nation's health care system and the response of that system to the epidemic, the panel adopted four descriptive categories of the system: a provider of services, an employer of professional and other personnel, a marketplace for goods and services, and a major financial sector of the economy. Clearly, the health care system is far more complex and subtle than these gross categories suggest, but they provide a means of organizing and delimiting our analysis.

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The Social Impact of Aids in the United States In each of its capacities, the health care system has been affected to a large or small extent by the HIV/AIDS epidemic. How lasting the impacts will be is not clear. For the health care system, as for any of the social areas and institutions discussed in this report, it is difficult to sort out the impact of HIV disease from a web of associated concerns. The connections between HIV disease and homosexuality, intravenous drug use, poverty, and racial or ethnic minority status contribute to this difficulty. For example, if physicians are disinclined to care for AIDS patients, is it because they fear AIDS? Or, even in the absence of HIV, would they be uncomfortable with patients who are gay or use intravenous drugs, daunted by the complexity of care or unwilling to render services in a context in which reimbursement may not even cover their costs? This chapter makes no claim to being exhaustive or even comprehensive on these issues; rather, it touches on a wide array of possible impacts on the health care in its functions as service provider, employer, economic market, and financing mechanism and suggests key aspects to be followed as the epidemic unfolds. THE HEALTH CARE SYSTEM AS A SERVICE PROVIDER Challenges for Traditional Health Care Delivery AIDS presents a major challenge to hospitals, nursing homes, physicians, nurses, and other direct providers of health care services. The clinical characteristics of HIV/AIDS account for its difficulty in management. The disease is, first of all, a new one. Most medical knowledge is accumulated over decades, if not generations. Yet with HIV disease, the health care system is faced with the task of caring for approximately 1 million people in the United States who have a disease that has only been recognized for a few years and whose course, treated or untreated, is still only partly understood. In total numbers, there are probably tens of thousands of persons with clinical manifestations of HIV disease; however, only a fraction of them require intensive medical care at any one time. The impact on the health care system must be measured by the volume of patients in particular locales and in light of the preexisting health care system. That large number of patients (combined with the crack cocaine epidemic, homelesseness, and other problems) has resulted in a serious strain on an already high hospital occupancy rate. In other cities, the capacity of hospitals to absorb AIDS inpatients is not as pressing a concern as are the stigma and inadequate reimbursement associated with AIDS care. Although more HIV-positive individuals will become ill in the next several years and most of them will require hospitalization, it is difficult to predict the magnitude of hospital-based and other services that will be required,

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The Social Impact of Aids in the United States largely because modes and standards of care change relatively quickly. Prediction of (and therefore planning for) specific quantities and types of clinical services and facilities can be extraordinarily difficult because of the rapidly changing nature of HIV clinical care. One example of the evolution of HIV care is the changing need for inpatient hospital beds. Consider cryptococcal meningitis, a fungal infection of the central nervous system, which eventually attacks 10 to 15 percent of AIDS patients (non-HIV-infected people also occasionally contract the disease). Until recently, HIV-infected people with cryptococcal meningitis required several weeks of intravenous therapy with a relatively toxic drug, amphotericin B, followed by twice-weekly amphotericin B maintenance therapy for the rest of their lives. They constituted a substantial fraction of AIDS patients requiring hospital or nursing-home beds or intensive at-home therapy. Then, in the winter of 1990, a new oral antifungal drug, fluconazole, was licensed. It is equal to amphotericin B, at least for maintenance therapy; many patients who would formerly have required elaborate intravenous therapy (often in an institution) now take one pill a day at home. Another challenge for the provision of direct services is the complexity of the disease. HIV disease attacks virtually every organ system of the body. The U.S. health care system has long been criticized for its failure to provide comprehensive, coordinated primary care and for too great a reliance on specialists and subspecialists. It is precisely such comprehensive, primary care that is necessary to cope with a disease that is chronic and disabling and that stubbornly refuses to be limited to any single organ system. In many ways, then, the calls for adequate ongoing medical care for HIV-infected persons reflect and reinforce other current demands for an overall reordering of staffing and reimbursement priorities in American health care. The transmissibility of HIV poses another challenge to health care providers. Not only does the fear of acquiring HIV infection imperil recruitment and retention of health care professionals to work with HIV-infected patients, it also has the potential to drive a wedge between providers and their patients. Organization of HIV/AIDS Care A recurring question in the delivery of health care for people with HIV disease and AIDS involves how care ought to be organized and in what setting it might best be delivered. Various goals—increased survival, patient satisfaction, efficiency, economy, or quality care—may call for differing arrangements for delivering care. Optimal care for HIV disease may be difficult to accommodate within the extant organizational and reimbursement

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The Social Impact of Aids in the United States schemes of the health care delivery system. The newness, complexity, and transmissibility of AIDS, together with other problems associated with it, have tested traditional delivery mechanisms and forced the creation of new ones. Hospital Care The hospital is an essential source of care for people with AIDS, most of whom need to be hospitalized for diagnosis or treatment more than once as their disease progresses. The care of AIDS patients has been highly concentrated in inner-city public hospitals, which have also had to cope with inadequate reimbursements, staff shortages, lack of referral facilities, and the use of emergency rooms as sources of primary care (Andrulis, 1989). Although the characteristics of the patient population with HIV disease and the resources to meet their needs vary from city to city, many health administrators and planners have looked to San Francisco's experience with the epidemic and its delivery of care as an exemplary model. The San Francisco model of care is distinguished by its reliance on extensive outpatient services and volunteer social support provided by a well-established gay community. Nevertheless, as Benjamin (1988:420) notes, "the fact remains that where life-threatening illness is concerned, for surprisingly large numbers of people in times of illness, be it ever so expensive there is no place like the hospital." Hence, even the San Francisco model includes a significant hospital component. San Francisco General Hospital, a municipal facility, created the nation's first dedicated inpatient hospital unit for AIDS care in 1983. Since then, care for patients with AIDS, the overwhelming majority of whom have been gay men, has been provided by multidisciplinary teams of physicians, nurses, psychologists, and social workers, supplemented by volunteers. In cities in which the patient mix tends to include more intravenous drug users, AIDS-dedicated hospital wards have also been established. These wards have come to be accepted by physicians and patients alike, despite some initial misgivings that such centralization of care could further stigmatize patients, scare away health care workers, reinforce apprehensions about HIV transmission in a health care setting, and isolate the ward from the rest of the hospital. Disease-specific wards are not unprecedented. They are currently common in cancer treatment, and they have been prominent in treating diabetes, tuberculosis, and polio. Clinics dedicated to the care of HIV disease are also now common components of urban hospitals (Makadon, Delbanco, and Delbanco, 1990a; Turner, 1990). The establishment of AIDS-specific hospitals was once contemplated in several cities, but it now seems unlikely. A New York City task force recommended against the creation of single-disease hospitals, in part because

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The Social Impact of Aids in the United States of the historical lessons provided by tuberculosis sanatariums and state mental hospitals. The task force concluded (Rothman, Tynan, and New York City Task Force on Single-Disease Hospitals, 1990:766) "[that] the creation of HIV-only hospitals would promote negative stereotyping … interfere with [patients'] freedom of choice [and] engender an unacceptably low quality of care." A proposal in San Francisco to create an AIDS-dedicated institution never came to fruition (levine, 1990). The only AIDS-specific hospital actually established was in Houston. A joint venture of the University of Texas and American Medical International (the Institute for Immunological Disorders), the hospital was closed after losing $8 million in a little more than a year. Too few AIDS patients had enough private insurance coverage to support such a venture—two-thirds of the patients were indigent. In addition, some AIDS patients with insurance shunned the hospital, knowing that the name of the hospital merely appearing on their bills would alert their employers and insurers to the nature of their problem. The hospital may have also been a victim of its own success: it managed to provide treatment for many of its patients on a less costly and thus less lucrative outpatient basis. The degree to which AIDS care should be rendered in centralized or specialized settings continues to be a matter of some debate. Hospitals that are experienced in providing AIDS care may be able to produce better outcomes. A study of 257 AIDS patients at 15 California hospitals, for example, found a significantly lower in-hospital mortality rate for Pneumocystis carinii pneumonia at the hospitals with more experience treating the disease (Bennett et al., 1989). The authors of the California study suggested three possible options: creating regional centers, promoting rapid but carefully monitored increases in the experience of low-volume hospitals, or providing focused educational efforts for facilities with little experience with AIDS. The implications of this study continue to be debated as the number of AIDS cases continues to grow and be geographically dispersed (Cotton, 1989; Greene, Leigh, and Passman, 1989). Out-of-Hospital Care AIDS has also had an impact on health care outside of hospitals. For example, AIDS has prompted a reexamination of the philosophy underlying hospice care. Hospice care, in the home and in specialized centers, emerged as an alternative to high-technology hospital care at the end of life. It involves palliative interventions and aggressive pain relief, and patients forgo any intrusive or curative procedures or experimental approaches. Hospice patients would rarely, for example, be readmitted to a hospital. They are typically cancer sufferers, whose disease has fairly well-defined stages and for whom the length of life remaining can be predicted with some certainty.

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The Social Impact of Aids in the United States People with AIDS may not fit easily into the hospice scheme. The course of disease progression for AIDS is much less predictable than for many cancers. In the context of AIDS, hospice organizations have had to redefine palliative care to accommodate more therapeutic interventions for the continued use of zidovudine (AZT), the need for treatment of anemia (a frequent side effect of AZT), and the administration of intravenous therapies, such as gancyclovir, to treat cytomegalovirus retinitis, a sight-threatening condition. In addition, people with AIDS may wish to seek readmission to a hospital or undergo therapies (such as ventilator assistance) that are unavailable in traditional hospice settings. One hospice administrator (quoted in Wallace, 1990:13) noted: "For the person with AIDS, hospice is less a gift from God and more the grim reaper … persons with AIDS, reacting to the prejudices against them can initially mistrust the motivations and altruism of hospice programs." In some cities, such as Boston, San Francisco, Seattle, and New York, hospices have been established exclusively for people with AIDS, which obviates some of the concerns about how traditional hospice services meet the needs of people with AIDS. The hospice dilemma illustrates many of the tensions inherent in the shifting conceptualization of HIV disease from a terminal to a chronic illness. Other sources of tension arise in providing a context for decisions about forgoing life-sustaining care. In recent years, advocacy of "death with dignity" has increased with the growth of high-technology care. But advocating decisions about forgoing high-technology care may seem irrelevant to poor people who have tremendous difficulties in gaining access to any care at all. Other out-of-hospital settings are also important to people with HIV disease, although traditional sources of long-term care have not always served them well. As people with HIV disease live longer, more are developing symptoms of dementia and neurological deficits, as well as the physical deterioration that requires supportive care. Many nursing homes have been reluctant to care for AIDS patients, citing the fears of other clients, inexperience with managing infectious disease, and lack of adequate reimbursement. Administrators of long-term care facilities have been reluctant to admit gay or intravenous-drug-using patients, who are typically younger than the rest of their patients. In skilled nursing facilities, the levels of intensity of services and the care available generally do not address the needs of people with HIV disease because of fluctuations between periods of acute illness and wellness (Benjamin, 1988). HIV care has helped lead the way in the performance of lumbar punctures, transfusions, chemotherapy, and intravenous hydration in clinics rather than as formerly, during a hospital stay. Diminishing lengths of hospital stays for people with HIV disease are likely to be matched by increases in

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The Social Impact of Aids in the United States the acuity of illness among patients seen in clinics. A survey of 67 members of the National Association of Public Hospital with data on AIDS patients from 1985 to 1988 revealed a significant decrease in average length of stay. The average number of days per patient per year also declined, but that was offset by a slight increase in annual admissions per AIDS patients. In 1988 "the typical AIDS patient spent 29.1 days in the hospital but had 1.6 admissions" (Gage et al., 1991:42). The advent of HIV disease has coincided with numerous initiatives to control the cost of health care. Because hospital care constitutes such a large percentage of total health care costs, many of the initiatives were designed to reduce inpatient stays: prospective payment, preadmission screening, and same-day surgery are the best-known examples. Thus, the fiscal environment and the desire of AIDS patients to remain outside the hospital have converged to favor greater use of nonhospital facilities. Another beneficiary of more aggressive nonhospital care has been the growth of high-technology home care. Scores of small companies now provide equipment for intravenous, intramuscular, and aerosolized home therapies. Intravenous pumps, which once were complicated even for a nurse to operate, now work at the flip of a switch, allowing nurses to visit patients once a week at home rather than several times a day in the hospital (Manges, 1989; Podger, 1990). Industry analysts have predicted that home health care, which generates an estimated $15 billion of sales annually, will be the "fastest growing business segment from the mid-1990s until well into the next century" (Feder, 1991:C1). The AIDS market is a significant fraction of a fiercely competitive enterprise. Many private insurers and government regulators are subjecting home health care bills to careful scrutiny because of the newness of administering complicated regimens in the home and the proliferation of equipment that can be used at home. Many start-up companies are facing difficulties in collecting bills; Selz (1990:B2) notes: "reimbursements [depend] heavily on compliance with numbingly complex and constantly changing government policy and procedure." As these difficulties are resolved, AIDS care may pave the way for the routine reimbursement of complex home-based treatments. Connections with Community-Based Services One striking development in the health care system is the close relationship that has evolved between medical providers and institutions, on one hand, and community-based agencies, on the other (see also Chapter 6). Some fields of medicine, such as oncology and diabetology, have long relied heavily on volunteers for services, ranging from hospice care to educational camps for juvenile diabetics. With HIV disease, however, the amount

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The Social Impact of Aids in the United States of community involvement in (and substitution for) medical services has been remarkable in both human and economic terms (Arno, 1986; Smith, 1989). One activity of community-based agencies that has been widely advocated as a measure for containing the costs of HIV medical care and enhancing patient satisfaction and access to services is "case management" (Jellinke, 1988). Case-management programs tend to include at least the following elements: outreach, standardized eligibility screening, comprehensive assessment, initial care planning, service arrangements, ongoing monitoring, and periodic reassessments. To perform these wide-ranging tasks, a case manager may serve simultaneously as gatekeeper, advocate, educator, diagnostician, broker, and caregiver. First instituted in the United States in the 1940s through workmen's compensation and physical disability services, case management has more recently been refined in caring for elderly and mentally ill patients. Case management has two major forms: a medical and a social service advocacy model. Under the medical model, case management is often hospital based and takes place primarily in the context of planning a patient's discharge. In the social service model, case management is oriented more toward providing social work and coordinating services to patient/clients. Under this model, the case manager may follow clients both in and out of hospitals. Traditionally, all case management programs try to centralize the responsibility for advocacy in one individual. Although such systems have been widely encouraged because they are believed to improve the quality of care and reduce costs, evidence of their cost-effectiveness is lacking. In addition, experience with the advocacy model of case management among the elderly suggests that it may actually increase costs by increasing utilization of appropriate services by previously underserved clients (Benjamin, 1988). A number of states now reimburse providers specifically for case-management services. Case management has been financed through enhanced service reimbursement and AIDS-specific waivers of standard rules for public financing (see below) or through special funding under Health Resources and Services Administration (HRSA) or private foundation grants. Most private insurers have some form of case management by which policy holders with high-cost illnesses are assigned to an individual (usually a nurse) who can investigate the patient's needs and authorize services that are cost-effective, even if they are not technically covered in the policy. In the Ryan White Comprehensive AIDS Resources Emergency Act of 1990, case management was recognized as a primary service under Titles I and II and an optional service for early intervention under Title III. Even with this strong encouragement, the concept of case management remains somewhat unclear, and its benefits remain, in large part, unevaluated. In

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The Social Impact of Aids in the United States 1988 the Sierra Health Foundation of Northern California undertook a 3-year program of support for a regional case-management system. As this funding drew to a close, the foundation convened a group of national experts in case management to examine the concept and evaluate the efficacy of this service. While agreeing that case management seems to mean different things to different people, the conference participants reaffirmed the central concept of making available to clients assistance in maneuvering through the complex service system, advocating for patients, and enhancing preventive strategies. They suggested areas of research to clarify methods and outcomes. At the same time, they noted (Sierra Health Foundation, 1992:24): "case management is only as good as the services available for referral and that if services are not available for referral in the community, then case management can simply not access them." THE HEALTH CARE SYSTEM AS EMPLOYER Health care is the third largest industry in the United States. It employs 8 million people in a wide range of capacities. In many communities, the local hospital or medical school is one of the area's largest employers, particularly for highly paid professional staff and entry-level workers in clerical and janitorial positions. Recruiting and Training Providers Physicians The term "AIDS physicians" refers to doctors who engage in a wide range of activities. In university facilities they are involved in basic, epidemiologic, and clinical research on the disease. In local communities they are the physicians who have seen a few patients with HIV disease and are willing to see more of them. Any physician identified as an AIDS care provider is likely to be involved not only in providing demanding patient care, but also in developing institutional policies, planning for care needs, and responding to media inquiries. Among the challenges confronted in planning for the care of people with HIV disease is deciding what training is necessary to provide such care. There is no single subspeciality (with attendant prerequisites, board examinations, and certification) for AIDS care: no single medical discipline encompasses all the skills and training necessary to treat the wide spectrum of clinical manifestations of HIV disease (Bartlett, 1988; Cotton, 1988). The American Board of Internal Medicine entertained—and rejected—the notion of creating a new specialty for HIV care. AIDS was originally thought to be a disease largely within the province

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The Social Impact of Aids in the United States of infectious disease experts. Indeed, a major impact of AIDS has been on the practice of infectious disease medicine. Infections disease is a relatively new medical subspeciality and was for many years mainly hospital based; its practitioners provided consultation to other physicians and rendered relatively little ongoing primary care. The chronic nature of HIV disease has meant a radical change in the practice of many infectious disease specialists, who now often serve as primary care physicians for patients with HIV disease. In the years just prior to the HIV epidemic, there were concerns about a projected oversupply of physicians in most medical specialties, including infectious disease.1 In the late 1970s the president of the Infectious Disease Society of America said (Petersdorf, quoted in Bartlett, 1988:10): ''Even with my great loyalty to infectious diseases, I cannot conceive of the need for 309 more infectious disease experts [the number taking the boards that year] unless they spend time culturing each other." By the end of the 1980s and after almost a decade of experience with AIDS, however, the situation had changed. In fact, according to a 1990 report in the Annals of Internal Medicine , infectious disease was the only medical specialty that needed more physicians. General internists, family medicine specialists, and pediatricians are also potentially well suited to deliver primary care to people with HIV disease. They are dispersed geographically and experienced in primary care. A number of commentators (e.g., Northfelt, Hayward, and Shapiro, 1988; Smith, 1991) have proposed a range of AIDS-related services that primary caregivers might be expected to provide, including counseling about HIV transmission and prevention strategies, administering and integrating diagnostic tests, monitoring patient care during early HIV disease, and recognizing complications that require consultation or referral to a specialist. AIDS arrived on the American health care scene when the preference of newly graduated physicians was shifting away from primary care specialties and toward such specialties as radiology, orthopedics, and otolaryngology. In particular, internal medicine, the specialty most likely to feel the impact of providing ongoing care for HIV-infected patients, had been undergoing a decline in interest for several years (McCarty, 1987). Some of the reasons for this trend include the technological focus of medical school training and the higher compensation in specialty fields. Specialties in which talking to and examining patients constitute the bulk of physicians' activities are not as highly remunerated as those involving diagnostic, therapeutic, and surgical procedures (although efforts are under way to redress these imbalances through changes in Medicare and other reimbursement schemes). Many physicians also begin medical practice encumbered by large educational debts, a further reason to avoid lower paying specialties. Concern is growing that the burden of the epidemic may further dissuade

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The Social Impact of Aids in the United States with AIDS. Since 1985, data from other studies have yielded a more complete picture of the direct and indirect costs of AIDS and have shifted the focus of concern. First, the per-patient costs for AIDS-related medical care have been dropping. Most estimates now place direct lifetime medical costs between $40,000 and $50,000.10 The reduction is attributable to several developments: greater medical familiarity with the disease; more aggressive outpatient management of traditionally inpatient procedures, such as transfusions and lumbar punctures; effective outpatient regimens for such diseases as Pneumocystis carinii pneumonia and cryptococcal meningitis; and the availability of largely volunteer-based social service supports that allow management of sick patients at home and in less costly institutions than hospitals (Arno, 1986; see also Chapter 6). The direct medical cost of caring for persons with AIDS consumes only a small fraction of national health expenditures—less than 2 percent. For this reason, AIDS has been described as a financing rather than a cost problem. It is rapidly becoming a burden for local governments in cities with a high prevalence of HIV disease (National Commission on AIDS, 1991). AIDS care is also increasingly the province of public health care financing mechanisms; the burden is shifting more to Medicaid (Green and Arno, 1990). This is true in large part because the epidemic is increasingly manifested among intravenous drug users and poor people, who are unlikely to have private insurance. In addition, patients who may initially have had private insurance through the workplace lose their coverage after they become unable to work (Yelin et al., 1991) and turn to Medicaid and other public programs for indigent care. Furthermore, since a record of a positive HIV test renders someone virtually ineligible for individually underwritten private insurance—or may be considered a "preexisting condition," precluding claims for non-HIV illnesses—there are an unknown number of people whose employment or economic situation would ordinarily be sufficient to obtain insurance, but who now cannot do so. Although the overall effect of AIDS on Medicaid expenditures is not overwhelming, its impact is considerable in those states with large numbers of cases. The AIDS epidemic also arose when Medicaid was becoming the fastest-growing segment of many state budgets—roughly 15 percent of expenditures in 1992, compared with 7 percent 10 years ago. Medicaid is thus facing cutbacks in many states, and the increasing demand for AIDS care competes with the need to provide other health services. In the world of private insurance, AIDS has mainly had the effect of adding another screening test to the 15 percent of the insurance market that is medically underwritten: that is, individual medical exams are required as proof of "insurability." (Most insurance is provided though the workplace

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The Social Impact of Aids in the United States and does not require individual health assessments.) Several states, including California and Massachusetts and the District of Columbia, initially banned the use of HIV antibody testing for private insurance purposes. All have now, amidst considerable controversy, reversed that stand (Intergovernmental Health Policy Project, 1990). Despite the considerable per-patient cost of direct medical care of HIV disease, especially to the public sector, there have been few major structural changes in the health care financing system in response. Indeed, the response to AIDS has been described as "incrementalist." Adjustments have been made here and there in existing financing mechanisms, but no largescale changes have been made. Providers, including hospitals, nursing homes, and physicians, have claimed that AIDS patients are more costly than others. Regulators and rate setters have thus been forced to examine the structure of their reimbursement systems to incorporate this "exception." In New Jersey, for example, this examination has contributed to a major effort to provide more flexibility in determining rates for all diseases. Various proposals have been put forward for HIV-specific funding of care. Among them are the inclusion of HIV as a categorical disease covered by Medicare, similar to end-stage renal disease (ESRD) (Makadon et al., 1990b) and designation of HIV disease as a Medicaid-eligible condition, at least for outpatient care and prescription drugs. Such structural reforms have generally been rejected by the executive and legislative branches of state governments on two major grounds: concerns over the equity of HIV-specific funding streams (Roper and Winkenwerder, 1988) and the potentially large impact on already strained entitlement programs, much as the Medicare ESRD program has grown far larger than was expected at its inception. One federal development has been the creation of the Public Health Service's AIDS Drug Reimbursement Program, a pool of money earmarked for assisting patients who are neither insured nor affluent enough to pay for expensive HIV-related drugs, now including AZT, pentamidine, and gancyclovir. This fund, initiated soon after the licensing of AZT, was created from funds already earmarked for AIDS research and care in agencies of the Public Health Service (P.L. 100-71; P.L. 100-471; P.L. 100-116; S. 2240; Merlis, 1990). What structural financing innovations have been initiated have largely been at the state level. They have included enhanced Medicaid reimbursement for AIDS care, in New Jersey and New York (Rango et al., 1990); creation of AIDS centers with core funding in New Jersey, New York, and California (Williams et al., 1990); and regional centers for people with HIV disease in Maryland and Massachusetts (Smith et al., 1990); and, a number of states have obtained waivers of Medicaid regulations from the Health Care Financing Administration, allowing them to provide medical and other services not usually covered by Medicaid.

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The Social Impact of Aids in the United States The current costs for care of AIDS patients has thus a noticeable, but not overwhelming impact on health care financing, except in those places where a heavy caseload must be supported by an already stressed system. However, it might be asked what the impact will be over the next decade, as those who are infected but not yet symptomatic begin to require more extensive health care. This question cannot be readily answered. It is extraordinarily difficult to project beyond a year or two the costs of AIDS care or the needs for health personnel, because of rapidly changing standards of care. The past few years have seen some developments that have lowered costs and others that have increased them. In the diagnosis of Pneumocystis carinii pneumonia, for instance, a new technique to induce sputum for laboratory analysis has lowered the number of costly bronchoscopies. Introduction of that technique has also required readjustments of the projections of pulmonary specialists needed to perform those bronchoscopies. Similarly, future development in drug therapy, success in orally administered outpatient treatment for conditions that currently require hospitalization, and therapeutic and preventative advances make accurate predictions of future costs and personnel virtually impossible. CONCLUSIONS The impact of AIDS on the health care system, with all its complexities, is not easily summarized. In part this is because of the greatly disparate geographic impact of the epidemic and differences in preexisting local configurations of health care. In some areas, such as New York City, growing numbers of HIV and AIDS patients have put severe strains on already beleaguered public and university teaching hospitals. Other local health care systems, with fewer cases and smaller inpatient hospital censuses, have been better able to absorb the influx of people with HIV disease or AIDS. Although many more people will be diagnosed with AIDS in coming years, prediction and planning for specific quantities and types of health care services are made difficult by the rapidly changing nature of HIV-related clinical care. AIDS does seem to be having an impact on certain ways in which health care is delivered. The HIV epidemic may have increased the trend to deliver care beyond the inpatient hospital setting, either in clinics or in patients' homes. Many procedures for people with AIDS that formerly required hospitalization (e.g., transfusions, chemotherapy, and intravenous hydration) are now being done in clinics, and intravenous, intramuscular, and aerosolized therapies are increasingly being delivered at home. And AIDS is helping pave the way for the routine reimbursement of quite complex treatments that are critical not only for HIV-related care, but also for other chronic and terminal illnesses.

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The Social Impact of Aids in the United States The trend toward out-of-hospital care, whether in clinics, hospices, or patients' homes, is being driven by cost concerns and the desire of many ill people to remain in comfortable and familiar surroundings with loved ones. With the AIDS epidemic, these trends are also accompanied by concerns about how to ensure continuity of care and bring rationality to a fragmented health care system. Although many people with HIV disease face daunting problems in gaining access to and being able to pay for needed care—problems that are only likely to increase as the epidemic becomes more widespread among intravenous drug users and their sexual partners and poor residents of inner cities—AIDS has not been a catalyst for large-scale reform of health care financing. The chorus of voices calling for reform of the health care system has been growing louder in the early 1990s, but it seems to have less to do with AIDS and more to do with the realization that many of the working poor and middle class (nearly 40 million Americans) find private health insurance beyond their reach and public programs inadequate. Early concerns about the ability of the private health care system to pay for AIDS care now seem somewhat alarmist. The direct medical costs of caring for persons with AIDS consumes 2 percent or less of national health expenditures. As noted above, AIDS has thus been described as a financing rather than a cost problem. This characterization, however, should not detract from the realization of the tremendous burden HIV disease poses for those who are afflicted with it, as well as for providers and governments in areas with high prevalences of HIV disease. The multifaceted impact of AIDS has meant that any financing reforms in response to the epidemic have tended to be of a piecemeal, tinkering-around-the-edges nature, rather than wholesale or systemic. The HIV epidemic may also be having an impact on the training and recruitment of physicians and other health care workers, but the number of confounding variables makes it difficult to sort out the impact of HIV disease on the attitudes and behaviors of health care professionals. Some caregivers may be attracted by the challenges AIDS care poses; others may find the same challenges daunting. Some physicians may be wary of establishing practices among certain populations or in certain areas hard hit by AIDS, although in many instances those areas are where the most prestigious medical institutions and teaching centers are located. Further study will be necessary to determine the impact of HIV on the decisions of physicians and other caregivers about specialties and practice locations. Perhaps the most profound impact of AIDS on health care has been a renewed appreciation of, and heightened attention to, the risk of bloodborne pathogens. These include, but are not limited to, HIV. Many health care workers who were trained in an era of scientific derring-do and medical hubris are coming to realize that medicine has always posed dangers for

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The Social Impact of Aids in the United States practitioners. AIDS is prompting an extensive reassessment, not only of the scientific and technical aspects of those risks and how to quantify them, but of how conscience, codes of ethics, moral obligations, and legal duties affect practitioners' duties to treat patients who pose risks of potentially lethal infections. NOTES 1.   The Graduate Medical Education National Advisory Committee report (U.S. Department of Health and Human Services, 1981) predicted a physician oversupply of 70,000 by 1990. 2.   Sir William Osler's (1906) injunction to "know syphilis in all its manifestations and relations and all other things clinical will be added unto you" could be recast for the modern practitioner. To "know AIDS" implies knowledge of the toll HIV disease takes on a variety of organ systems, as well as associated illnesses, such as tuberculosis, and other sexually transmitted diseases, including syphilis (Nunn et al., 1990; Quinn et al., 1990). 3.   Hepatitis B, a blood-borne infection transmitted by the same routes as HIV, is transmitted in occupational settings to as many as 5,900-7,400 health care workers each year—as many as 200 to 300 of whom will eventually die from hepatitis-related complications (U.S. Department of Labor, 1991). 4.   The CDC has documented 37 cases of health care workers with no other apparent risk factors who have seroconverted following occupational exposure to HIV; virtually all of the cases involved needlesticks or other deep punctures with instruments contaminated with HIV-infected blood. Health care workers have voiced considerable skepticism about whether the CDC-reported cases represent the full extent of occupationally acquired HIV infection (Rosenthal, 1990). 5.   The most commonly cited figure for risk of seroconversion following a single needlestick exposure is 1:250. This is an "average" estimate. A more accurate assessment of the probability involved in a particular case would depend on the clinical stage of HIV infection of the source patient and the quantity of the inoculate, which in turn is related to needle type and size, the depth of penetration, and the type of gloves worn. 6.   A substantial fraction of medical students, interns, and even practicing physicians are not vaccinated for highly infectious diseases that might pose a threat to patients. A 1990 survey of medical schools found that one-third do not require their medical students to be vaccinated. Up to 20 percent of medical students have not been immunized against measles and rubella, and anywhere from 40 to 90 percent have not been immunized against hepatitis B or influenza (Nazario, 1990; Poland and Nichol, 1990). 7.   Investigators have been unable to determine exactly how Dr. Acer's patients were infected; it was established that he and his staff followed standard sterilization procedures (Palca, 1992). 8.   Congress held hearings on the issue of HIV in health care settings, and in July 1991 the Senate voted 80-18 for an amendment that would have mandated prison terms of not less than 10 years or fines of up to $10,000 or both for HIV-infected health care workers who knew they were seropositive but failed to notify prospective patients before performing invasive procedures (Gautier, 1991). The amendment was ultimately rejected by a congressional conference committee, but its passage in the Senate by such a wide margin reflected the immediate impact of Kimberly Bergalis and the cluster of cases in Dr. Acer's dental office. It should be noted, however, that those cases are the only known cases involving HIV transmission to patients in a health care setting. 9.   The 1957 revised code reads: "A physician, shall, in the provision of appropriate

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The Social Impact of Aids in the United States     patient care, except in emergencies, be free to choose whom to serve." When AIDS appeared on the scene, the AMA's Judicial Council reaffirmed physicians' duties: "A physician may not ethically refuse to treat a patient whose condition is within the physician's current realm of competence solely because the patient is seropositive. … Neither those who have the disease [AIDS] nor those who have been infected with the virus should be subjected to discrimination based on fear or prejudice, least of all by members of the health care community" (American Medical Association, 1987:1360). Freedman (1988) has critiqued contemporary codes of professional ethics as they relate to obligations to care for HIV disease. 10.   There are other many prevalent chronic illnesses with high average costs per patient, such as end-stage renal disease. REFERENCES Altman, L.K. (1990) AIDS testing of doctors is crux of thorny debate. New York Times December 27:A1. Altman, L.K. (1991) Unexpected defiance greets AIDS guidelines. New York Times October 15:C-1. American Medical Association, Council on Ethical and Judicial Affairs (1987) Ethical issues involved in the growing AIDS crisis. Journal of the American Medical Association 259(9):1360-1361. Andrulis, D.P. (1989) Crisis at the Front Line: The Effects of AIDS on Public Hospitals. New York: Priority Press. Aoun, H. (1989) When a house officer gets AIDS. New England Journal of Medicine 321:693-696. Applebome, P. (1987) Doctor in Texas with AIDS virus closes his practice amid a furor. New York Times October 1:A16. Arno, P.S. (1986) The non-profit sector's response to the AIDS epidemic: community-based services in San Francisco. American Journal of Public Health 76:1325-1330. Arnow, P.M., L.A. Pottenger, C.B. Stocking, M. Siegler, and H.W. DeLeeuw (1989) Orthopedic surgeons' attitudes and practices concerning treatment of patients with HIV infection. Public Health Reports 104:121-129. Arras, J.D. (1988) The fragile web of responsibility: AIDS and the duty to treat. Hastings Center Report 18(Suppl.):10-20. Barnes, M., N.A. Rango, G.R. Burke, and L. Chiarello (1990) The HIV-infected health care professional: employment policies and public health. Law, Medicine & Health Care 18:311-330. Bartlett, J.G. (1988) Who will take care of patients with AIDS? Washington Post April 5 (Health Suppl.):10-11. Benjamin, A.E. (1988) Long-term care and AIDS: perspectives from experience with the elderly. Milbank Quarterly 66:415-443. Bennett, C.L., J.B. Garfinkle, S. Greenfield, D. Draper, W. Rogers, et al. (1989) The relation between hospital experience and in-hospital mortality for patients with AIDS-related PCP. Journal of the American Medical Association 261:2975-2979. Bosk, C.L., and J.E. Frader (1991) AIDS and its impact on medical work: the culture and politics of the shop floor. In D. Nelkin, D.P. Willis, and S.V. Parris, eds., A Disease of Society: Cultural and Institutional Responses to AIDS. New York: Cambridge University Press. Brennan, T.A. (1987) The acquired immunodeficiency syndrome (AIDS) as an occupational disease. Annals of Internal Medicine 107:581-583. Cadman, E.C. (1990) Physicians in training and HIV (letter). New England Journal of Medicine 322:1392-1393.

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