Growing Crisis in Paying for Care

How will the rapidly emerging new standard of care -- antiretroviral combinations usually including a protease inhibitor, and viral load tests to tell which combinations are working for a patient -- be paid for? This question is rapidly becoming perhaps the most critical AIDS issue in 1996 and beyond.

* The cost of standard anti-HIV therapy, including monitoring, is now rising from an estimated $3,000 to $5,000 per year, to an estimated $12,000 to $18,000. This increase is due to using more drugs simultaneously, and to the protease inhibitors, which are expected to cost more than drugs in the AZT class. A relatively small part of the cost will be due to viral load testing -- probably well under $1,000 per year, but there is no way to know for sure until testing kits are approved for commercial use. (Prices can drop substantially when the kits are used.)

Total antiretroviral costs will also rise as physicians use combination treatments earlier in HIV disease -- and as many patients who rejected AZT come to accept the new drugs. But other major costs, including hospitalization, should decline as improved treatment prevents HIV-related illnesses.

* Fewer than 29 percent of people with HIV were covered by private insurance in 1994, according to a February 1, 1996 press release of the AIDS Action Council and the AIDS Healthcare Foundation, and that proportion is rapidly decreasing (as private insurance finds more effective ways to dump expensive patients). And many of those who are covered have no prescription coverage, or have annual or lifetime caps.

* Half of people with AIDS are covered by Medicaid (Medi-Cal in California), according to the same press release. But "income cut-offs for Medicaid average $434 per month, and many states limit the number of prescriptions per month to three." Fifteen state Medicaid programs include no drug coverage for the "medically needy" -- people who qualified for Medicaid only after medical expenses were deducted from their incomes. "For the tens of thousands of uninsured or underinsured people with AIDS who exceed these limits, the only options are state AIDS Drug Assistance Programs (ADAP) funded under Title II of the Ryan White Care Act, or indigent programs operated by the pharmaceutical manufacturers."

Access to Medicaid is also threatened by proposals to turn the program into a block grant to states, with few Federal standards on how the money is spent. Under these plans, state legislatures could define eligibility, formulary, and other rules to largely exclude HIV treatment from Medicaid.

* Managed care systems (which will increasingly include public programs like Medicaid in many areas, as well as nonprofit organizations like Kaiser, and the for-profit megacorporations which are extracting billions of dollars from the healthcare system) are based on "capitated" payment, meaning that the managed care organization is paid so much for every patient covered; the organization provides treatment, then keeps whatever money is left over. This payment system creates a tremendous incentive to restrict care, and to make oneself unattractive to expensive patients. The capitated payment amount must be adjusted for people with chronic, costly diseases like AIDS and cancer; otherwise, inadequate treatment is all but guaranteed.

The move to force Medicaid and Medicare into managed care creates another problem. Some public-health systems have been able to survive on Medicaid money, and provide indigent care to those not in Medicaid. As money is squeezed out of the system, one of the last means of funding indigent care will be lost. (See article below on AB 9, another threat to indigent care in California.)

* ADAP (AIDS Drug Assistance Programs), relied on today by over 50,000 people, have a severe funding crisis even under the old standard of care. Part of the problem is political -- the Ryan White CARE Act has not passed because of divisive issues like mandatory testing and funding formulas.
Continuing resolutions have filled the gap so far, but they have frozen funding at last year's level.

According to a January 26 statement of the National Association of State and Territorial AIDS Directors, 21 states now have severe budget shortfalls in their ADAP programs. Eleven other states are reporting difficulties in meeting demands for combination therapies. Few have been able to add the new FDA-approved drugs 3TC and saquinavir to their programs. At least two states suspended providing drugs entirely in 1995, almost certainly leading to death or permanent harm to persons with no other way to pay for treatment; in February 1996, Washington D.C. shut down its program for a week. Other states have removed many important drugs, or restricted their programs in other ways.

What Can Be Done?

* Build coalitions including both AIDS service providers/activists, and pharmaceutical companies. A January 24 letter to Congress on Ryan White CARE Act funding was signed by activist organizations across the ideological spectrum from TAG to Log Cabin Republicans, by service organizations, and by Glaxo-Wellcome, Abbott Laboratories, Serono Laboratories, Merck & Co., Hoffmann-La Roche, and Bristol-Myers Squibb.

On the issue of paying for care, a shared interest and natural coalition exists between pharmaceutical companies on one hand, and AIDS patients, physicians, service organizations, and activists on the other. This coalition is potentially powerful, since the two major partners bring different and complementary strengths; for example, different members of Congress, different reporters, etc. will listen to one but not to the other. This strategy of focusing first on getting resources into the pipeline may require postponing or de-emphasizing issues like drug prices, which would divide the coalition.

* Build grassroots support to let Congress and the President hear from their constituents that services which save lives are a priority, and cannot be held hostage to unrelated political disputes.

* Even aside from the issue of payment, there is an urgent need for more research to tell doctors when and how to use the new drugs (and other treatment options) more effectively. The same research data will also help prioritize and support reimbursement for the most effective treatment strategies.

* Hopefully it will be possible to negotiate some compromise which could include better research for prioritization and justification of treatments, additional money from Congress and other payers, and price reductions by pharmaceutical companies.

Comment

The following also need attention:

* How are other major chronic illnesses paid for in the U.S.? There seem to be disease-specific arrangements for each different disease. Research is needed; if AIDS care is not exceptional in having disease-specific programs, the public and politicians must hear that.

* One possible strategy is to focus on better pharmaceutical company patient-assistance programs, more than on lower drug prices. The reason is that most people either can pay or they cannot; since there is little middle ground, a small price reduction is unlikely to make much difference in access.

There may be more leverage in asking companies to do their share by improving patient assistance-programs. Unless manufacturing cost is an issue (as with some protease inhibitors), these programs cost the companies little -- either in cash or in lost sales, since their clients are screened and have no way to buy the drug. Also, these programs would be easy for private organizations to monitor, since persons who fall through the cracks are likely to complain, and such cases can easily be brought to public attention.

* In discussion and analysis of why health care is so expensive, one major cause is almost never mentioned -- that only the most expensive treatments are researched. It is understandable that industry will only study high-priced proprietary products. But taxpayer-funded government research also serves the same corporate agenda, due to corporate influence over the funding and therefore careers of research professionals. Even community-based AIDS research organizations have only occasionally studied non-proprietary treatments. They seldom have independent funding to do so, because the big contributions usually follow the big researcher names, which usually follow the big companies.

What is needed are more activist groups to make sure that the public interests is represented. One organization we work with, ACT UP/Golden Gate, is doing this very well. But few cities have any comparable organization or vehicle for people to be involved in this effort.

* The vast majority of people with AIDS in the world will probably never have access to protease inhibitors (or even AZT-type drugs), due to economics. One thing that can be done about this -- especially now, when viral load is almost universally accepted for testing antiviral drugs -- is to screen low-cost options, such as herbal treatments or generic pharmaceuticals, which could be made widely available if they could be proven to lower viral load safely. Such research would help everywhere, even when expensive treatments are available, by providing new combination options which may lower viral load better than the standard drugs alone.

It would cost relatively little to screen available drugs for antiviral activity in small trials. The problem so far has been lack of political will and social organization.

* Much of the work needed will involve pressuring third-party payers and pharmaceutical companies. The latter are notoriously reluctant to combine drugs from different companies, to compare drugs from different companies head to head, or to provide drugs or even data to support AIDS research on non-AIDS drugs (out of concern that if a non-AIDS drug gets AIDS publicity, physicians will be reluctant to prescribe it, for fear that patients may think they are being secretly treated for AIDS, or that their family or friends might think so). And many companies strongly resist allowing compassionate use of their experimental drugs, even when doctors say it is someone's only hope.

Traditional grassroots pressure tactics may now need legal advice, however, since the new telecommunications law not only censors computer speech, but may restrict activism by phone and fax as well. It is now a felony, in interstate or foreign communications, if anyone "makes repeated telephone calls or repeatedly initiates communication with a telecommunications device, during which conversation or communication ensues, solely to harass any person at the called number who receives the communication." Does this make it illegal to repeatedly fax an ACT UP leaflet to an insurance or pharmaceutical company? That may depend on authorities' attitudes toward AIDS activists.

Alternative strategies could include organizing a phone bank to go through the telephone book, looking for allies -- who will each call only once to the company and to other appropriate parties. Or we can learn from the new labor union strategies, which bring unsafe or substandard products, facilities, and employers to wide public attention.

Ironically the target corporations would probably prefer the traditional zaps, because the protesting communications stayed in house. Single calls from one or a few individuals are ignored by companies and government agencies alike; zaps have provided a harmless way to get an organization's attention, putting an issue onto the table so that it can be addressed on its merits. But now Congress has spoken, requiring legal research to update activist tactics. It may now be necessary to involve a wider public from the start -- or to walk away from the issues and let people die.