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Not only is it the right thing to do for the health of New Yorkers, but a new analysis demonstrates that it is also cost-effective

By Ginny Shubert, Housing Works; and Mark Harrington

In June 2014, New York Governor Andrew Cuomo made history by committing New York State to end AIDS as an epidemic by the year 2020. The goal is ambitious, but grounded in reality. NYS has always been a center of innovation in the fight against AIDS and has reduced the number of annual new HIV infections by 40 percent over the last decade while the rest of the nation saw no decline. Deaths from HIV-related conditions have also continued to drop dramatically. With expanded health care coverage and highly effective antiretroviral therapy, taken as treatment or prevention, we now have the means to end the HIV epidemic, even without a cure, by stopping new HIV infections and eliminating AIDS deaths.

To advance his plan, Governor Cuomo appointed an Ending the Epidemic (ETE) task force of HIV/AIDS experts from the public and private sectors and health and community-based organizations. The task force developed recommendations to be incorporated by the NYS AIDS Institute into a gubernatorial blueprint to not only meet the governor’s mandate to reduce annual new infections from 3,200 in 2013 to below 750 in 2020, but to exceed that mission with proposals to “get to zero” new infections and HIV-related deaths. With the political will and funding necessary to implement the ETE blueprint, NYS can be the first jurisdiction anywhere to end AIDS, saving the lives of thousands of New Yorkers and providing a model for the rest of the nation and the world.

Ending AIDS as an epidemic is not just the right thing to do for the health of New Yorkers—it’s also cost-effective. We simply can’t afford a status-quo approach to HIV. According to a recent analysis by Bruce Schackman of Weill Cornell Medical College and colleagues, every new HIV infection costs $443,904 in health spending alone (the discounted present value of $798,300 in lifetime HIV treatment and care costs). ETE implementation would improve the health of New Yorkers living with HIV and prevent 10,850 new primary HIV infections between now and 2020 as well as thousands of secondary downstream infections.

The highlights of fiscal analyses conducted by Housing Works and TAG and detailed here focus primarily on costs and savings to the NYS Medicaid program that covers 50 percent of people with HIV in the state. (Editor’s note: The unabridged analyses, including additional saving expected in Medicare, ADAP, and other public health programs, is available at:

Impact of ETE ARV Treatment Expansion on NYS Health Care Spending

ETE implementation requires doubling the number of people with HIV in NYS who are retained in continuous antiretroviral (ARV) therapy that results in viral suppression—from 68,000 people with HIV (44% of all people with HIV in NYS) virally suppressed in 2012 to at least 136,000 (88%) virally suppressed as soon as possible. An HIV-positive person successfully and sustainably treated can maintain optimal health and is virtually unable to transmit HIV to others.

Successful ETE testing, treatment, and prevention expansion that reduces new HIV infections statewide from 3,200 in 2013 to 750 or less in 2020 will reduce Medicaid spending by at least $3.93 billion for the 50 percent of New Yorkers with HIV who rely on Medicaid. This is calculated as the difference between an investment of $2.25 billion in Medicaid spending for incremental treatment costs and $6.18 billion in offsetting Medicaid savings from improved HIV health outcomes ($1.43 billion) and averted HIV infections ($4.75 billion in avoided costs for prevented primary and secondary HIV infections).

$2.25 billion in incremental ARV costs between now and 2020:

  • With community support, the state has negotiated volume-based discounts with pharmaceutical companies that represent more than 70 percent of the ARV market, which will significantly reduce new ARV costs to the NYS Medicaid program.

  • Annual incremental costs to Medicaid of doubling the number of HIV-positive beneficiaries on ARV medications are estimated at $375 million/year (with total estimated ARV treatment costs to Medicaid of $1.125 billion/year instead of $1.5 billion without discounts).

  • Total incremental Medicaid ARV medication costs from successful ETE implementation would therefore be $375 million/year for six years (2015–2020), or a total of $2.25 billion.

$1.43 billion from improved health for people with HIV:

  • 34,000 people with HIV will receive effective ARV treatment from NYS Medicaid (50% of the 68,000 people with HIV newly on ARV treatment).

  • People with HIV on ARV treatment incur costs as much as $7,000 less per year than those not on ARVs, according to an analysis published by Angela Hutchinson and colleagues in 2006, due to reductions in avoidable medical costs and longer life expectancies associated with effective ARV treatment.

  • Savings in avoidable Medicaid spending would therefore be $238 million/year (34,000 people with HIV at $7,000/year) for six years (2015–2020), or a total of $1.43 billion.

$2.41 billion from prevented primary HIV infections:

  • 10,851 new primary HIV infections will be prevented between now and 2020 if NYS implements the ETE plan and reduces annual new infections to 750 or less in 2020.

  • Each infection prevented saves $443,904 in lifetime HIV treatment and care costs, generating $4.816 billion in total health care savings, including a $4.07 billion reduction in public sector health spending that breaks down as follows:

    • Medicaid: $2.41 billion (50% of people with HIV in NYS);

    • Medicare: $795 million (16.5% of people with HIV in NYS); and

    • AIDS Drug Assistance Program: $867 million (18% of people with HIV in NYS).

$2.34 billion from prevented secondary HIV infections:

  • Averting 10,851 new primary HIV infections would also prevent an estimated 10,525 downstream secondary infections, as the average HIV-infected person is expected to transmit HIV to 0.97 HIV-uninfected persons over his or her lifetime, according to Schackman’s analysis.

  • Preventing secondary infections will generate $4.672 billion in savings in lifetime HIV treatment costs (10,525 prevented secondary infections at $443,904/infection), including $2.34 billion in savings to Medicaid (50% of people with HIV in NYS).

Impact of ETE Housing Expansion on Public Costs and Spending

Successful ETE implementation will require increased public investments in housing resources for the 10,000 to 12,000 low-income people with HIV in NYS who are currently homeless or unstably housed. Housing status is among the strongest predictors of access to HIV care, viral load, health outcomes/spending, and ongoing risk of HIV transmission.

Funding safe, stable housing for homeless and unstably housed New Yorkers with HIV will produce net savings of at least $1 billion in public spending between now and 2020. This is calculated as the difference between public investments of up to $720 million for new housing supports and $1.72 billion in offsetting public savings in Medicaid spending from improved HIV health outcomes ($1.08 billion), averted HIV infections ($520 million), and public spending on inappropriate homeless shelters ($120–180 million).

$600 to $720 million in new public spending on housing between now and 2020:

  • An estimated 6,000 people with HIV in NYC and 4,000 to 6,000 people with HIV in the balance of the state have a current unmet housing need and are financially eligible for public housing supports.

  • The public costs of required rental subsidies and related supports for the 10,000 to 12,000 homeless/unstably housed people with HIV statewide is estimated at $100 million to $120 million per year—based on estimated fair-market housing costs, minus tenant contributions of 30 percent of disability benefits or other income—or between $600 million and $720 million total over the six years between now and 2020.

$1.08 billion in Medicaid savings from improved health outcomes:

  • The 10,000 to 12,000 extremely low-income people with HIV who are homeless or unstably housed are eligible for and should be enrolled in Medicaid or other publicly funded program(s) for health coverage.

  • Improved housing status for people with HIV is strongly linked to reduced viral load and better health outcomes and has been found to reduce avoidable health care spending on emergency and inpatient care by an average of $15,000 per year for each person with HIV who moves from homelessness to stable housing.

  • Savings from improved housing status for 12,000 homeless and unstably housed people with HIV in NYS are therefore estimated at $180 million per year ($15,000/person/year in avoided emergency, inpatient, and other crisis health care costs), for a total savings over six years of $1.08 billion in avoidable health spending.

$520 million in Medicaid savings from prevented primary infections (not included in this analysis is an additional $495 million in Medicaid savings for lifetime treatment and care costs attributable to prevented secondary HIV infections):

  • Improved housing status is also independently linked to reduced risk of ongoing HIV transmission.

  • Housing 12,000 currently homeless/unstably housed people with HIV in NYS can be expected to prevent at least 1,173 new HIV infections between now and 2020, saving the NYS Medicaid program approximately $520 million in lifetime HIV treatment costs ($443,904 in avoided lifetime treatment costs per prevented HIV infection).

  • Put another way, continued failure to meet the housing needs of 12,000 people with HIV in NYS can be expected to result in 1,173 new HIV transmissions between now and 2020, undermining the ETE goals described in the ARV Treatment Expansion section above and costing the Medicaid program $520 million in lifetime treatment costs.

$120 to $180 million in savings from reduced use of inappropriate homeless shelters:

  • Analysis of NYC administrative data indicates that 700 to 1,000 people with HIV are forced to use Department of Homeless Services (DHS) shelters each night, at a cost of $78/night for single adults and $102/night for families.

  • Assuming that 80 percent of sheltered people with HIV are singles and 20 percent have families (according to the current NYC HIV/AIDS Services Administration caseload), the total public cost of shelter for people with HIV in NYC is $21 million to $30 million each year.

  • Housing 700 to 1,000 New Yorkers with HIV who use DHS shelters each night would therefore produce savings of $20 million to $30 million annually, or $120 million to $180 million over the six years between now and 2020—funds that could be better spent to provide safe, stable, long-term non-shelter housing.

After 30 years, we know all too well the human toll of AIDS on New York State’s individuals, families, and communities—but the ongoing NYS HIV epidemic also costs the state billions in avoidable public spending. Implementing the Ending the Epidemic blueprint will translate into substantial savings in avoided health care and services spending. The ETE plan is expected to generate over $6.8 billion in total Medicaid savings, reducing Medicaid spending by a net $4.5 billion after factoring in the impact of ETE ARV treatment and housing expansions, along with $2.3 billion for incremental treatment costs. The expansion of essential housing services called for in the ETE plan will alone produce net public savings of at least $1 billion through increased stability and improved health outcomes for New Yorkers with HIV who are currently homeless or unstably housed. An AIDS-free New York stands to gain much—in both human and fiscal terms.•

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