Economics and Aids

Economics of AIDS

Introduction

Economics is about resource generation, allocation, and use. A general goal is to maximize the value obtained from the interplay of these factors. Doing this requires some means of assessing value and of providing access to the resources necessary to tap that potential value. Among experienced HIV providers in the highly active antiretroviral therapy (HAART) era, this means, to a large extent, mobilizing resources to enable proper use of pharmaceuticals. Understanding the current situation with respect to these issues requires some understanding of the history of HIV economics, the relevant analytic tools, and recent findings obtained using those tools.

Early economics of HIV

Early in the epidemic, HIV was catastrophic for both patients and the healthcare system. Patients usually presented when hospitalized for AIDS-defining opportunistic infections, and survivors typically required 3 or more hospitalizations per year.[1] Early cost estimates were shocking at $147,000 per patient (in 1985 dollars) over an average life expectancy of only 13 months, with hospital costs dominating overall costs.[2] At the same time, a cycle of undercompensation was established: Patients were often uninsured, they tended to spend down to poverty levels, and those with private insurance lost it as they became more ill.[3]

The situation improved with the 1990 passage of the Ryan White CARE Act, which was designed to help alleviate the need for funding beyond that available from