Effects of case management and new drugs on medicaid AIDS spending

This study evaluates the effects of Florida's participation in the Medicaid acquired immunodeficiency syndrome (AIDS) home and community-based waiver and the use of recently developed AIDS drugs on spending per Medicaid benef iciary. We find that monthly Medicaid spending for waiver nonparticipants w as significantly higher than was spending for waiver nonparticipants. The m ajor reason for the cost difference is that nonwaiver enrollees incurred si gnificantly higher inpatient costs than did those enrolled in the waiver. A lthough waiver enrollees had higher drug spending, these represent only a f raction of the higher inpatient costs incurred by nonwaiver enrollees. Thus , it appears that adherence to appropriate medications reduces the need for inpatient care. The case management approach of the AIDS waiver may have s imilar effects for persons with other chronic diseases.