Aids Home and Community-Based Waivers: Effects on Use of Services, Expeditures and Survival

State Medicaid home and community-based waiver programs for persons with AIDS (PWAs) were implemented with the expectation that PWAs would use home and community-based services in lieu of more expensive hospital-based care. If so, then Medicaid spending per PWA should decline and this in turn should generate program cost savings. While some published research indicates that waiver participants incur lower expenditures than non-participants, this evidence is based on data which pre-dates the development of highly effective but expensive antiretroviral combination therapies. In this study, we analyzed Florida Medicaid claims data for PWAs from December 1995 through December 1997 to determine how participation in the home and community-based waiver affects the use of inpatient services, the receipt of antiretroviral combination therapies, monthly expenditures and survival of PWAs. Importantly, antiretroviral combination therapies were available to Medicaid recipients with AIDS throughout this time period. Four important findings are obtained. 1) the waiver program offers a different form of care to PWAs; waiver participants are more likely to receive combination therapies, but are less likely to use hospital-based care relative to non-participants. 2)The waiver is not randomly selected by PWAs; white men and sicker patients are much more likely to join the waiver program than other eligible PWAs. 3) After controlling for the non-random selection of the waiver and other patient characteristics, monthly expenditures for waiver participants are 49% lower than non-participants. 4) Waiver participation does not significantly affect survival.