Department of Health and Human Services 

OFFICE OF 

INSPECTOR GENEML 

THE RYAN WHITE CARE ACT:


FUNDING FORMULAS 

JUNE GIBBS BROWN 

Inspector General 

APRIL 1994 

0EI-05-93-O0330 
OFFICE OF INSPE~OR GENERAL 

The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 

amendq is to protect the integrity of the Department of Health and Human Semites’ (HHS) 

programs as well as the health and welfare of beneficiaries served by those programs. This 

statutory mission is carried out through a nationwide network of audits, investigations, and 

inspections conducted by three OIG operating components: the Offke of Audit Semites, the 

Office of Investigations, and the Offke of Evaluation and Inspections. The OIG also informs 

the Secretary of HHS of program and management problems and recommends courses to 

correct them. 

OFFICE OF AUDIT SERVICES 

The OIGS Office of Audit Services (OAS) provides all auditing services for HHS, either by 

conducting audits with its own audit resources or by overseeing audit work done by others. 

Audits examine the performance of HHS programs and/or its grantees and contractors in 

carrying out their respective responsibilities and are intended to provide independent 

assessments of HHS programs and operations in order to reduce waste, abuse, and 

mismanagement and to promote economy and efficiency throughout the Department. 

OFFICE OF INVESTIGATIONS 

The OIGS Office of Investigations (01) conducts criminal, civil, and administrative 

investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of 

unjust enrichment by providers. The investigative efforts of 01 lead to criminal convictions, 

administrative sanctions, or civil money penalties. The 01 also oversees State Medicaid fraud 

control units which investigate and prosecute fraud and patient abuse in the Medicaid program. 

OFFICE OF EVALUATION AND INSPECTIONS 

The OIGS Office of Evaluation and Inspections (OEI) conducts short-term management and 

program evaluations (called inspections) that focus on issues of concern to the Department, 

the Congress, and the public. The findings and recommendations contained in these inspection 

reports generate rapid, accurate, and up-to-date information on the efficiency, vulnerability, 

and effectiveness of departmental programs. 

This report was prepared under the direction of William Moran, the Retional Insmector 

Genera, and Na_talieCoen, Deputy Regional Inspector General, for the”Offke of!Evaluat ion 

and Inspections, Region V. Participating in this project were the following people 

Re~ion V Headquarters 

Barbara Butq Project Leader Alan S. Levine


Jemifer Antico


Heather Robertson


For a copy of this report, please call (312) 353-4124.

Depatiment of Health and Human Services 

OFFICE OF 

INSPECTOR GENEUL 

THE RYAN WHITE CARE ACT:


FUNDING FORMUWS 

JUNE GIBBS BROWN 

Inspector General 

ApRIL 1994 

OEI-05-93-00330 
EXECUTIVE SUMMARY 

PURPOSE 

To examine the current Ryan White CARE Act funding formulas, propose options for 

changing the formulas, and examine their potential impact on the distribution of funds in 

Fiscal Year 1995. 

BACKGROUND 

On August 18, 1990, Congress passed Public Law 101-381 entitled The Ryan White 

Comprehensive AIDS Resources Emergency (CARE) Act of 1990 (the Act). The 

purpose of the Act was to provide “emergency assistance to localities ... 

disproportionately affected by the Human Immunodeficiency Virus (HIV) epidemic and 

to make financial assistance available to States and other public or private nonprofit 

entities to provide for the development, organization, coordination and operation of 

more effective and cost efficient systems for the delivery of essential services to 

individuals and families with HIV disease.” 

The Act was created to establish services for patients with Acquired Immune Deficiency 

Syndrome (AIDS) or HIV who would otherwise have no access to health care. It was 

also meant to provide emergency relief funding to communities with the highest number 

of reported AIDS cases. Congress funded the Act at $221 million for Fiscal Year (FY) 

1991, $276 million for N 1992, $348 million for FY 1993, and $579.4 for N 1994. The 

President’s FY 1994 budget proposes funding at $672 million. 

The Act has four titles. The bulk of the funds fall under Titles I and II. Title I provides 

emergency relief grants to cities disproportionately affected by the HIV epidemic. Title 

11provides formula grants to States and territories to improve the quality, availability, 

and organization of health care and support services for individuals and families with 

HIV disease. Formulas govern the distribution of half of the Title I funds (the other half 

is distributed competitively), and all Title II funds. 

SCOPE AND METHODOLOGY 

The Ryan White Act will be reauthorized in FY 1996. This is the first in a series of 

studies which will provide information for the discussion surrounding reauthorization, 

Other studies examine the distribution of FY 1992 Ryan White funding by type of service 

and Title II consortia activities. A future study will survey grantees concerning several 

general aspects of the implementation of the program. 

Concerns about the funding formulas were raised by many people we talked to as we 

designed the study: congressional staffers, representatives of national organizations, 

experts, grantee staff, and Federal officials. We expect the formulas to be an important 

focus for discussions during reauthorization. In this study, we analyze how Title I and 

i 
Title II funds have been targeted during the 3 years of the program and how changes in 

the formulas might affect targeting in the future. 

FINDINGS 

As the number of high indence cities increases, the proprtion of lltle Ijimd going to 

cities with the iaqyxt caseti k likely to decrease. 

The number of high incidence cities eligible for Ryan White funding increased from 16 in 

FY 1991 to 25 in FY 1993 and 34 in FY 1994; HRSA expects an increase by as many as 

4 to 7 in FY 1995. With all of these eligible metropolitan areas, or EMAs, receiving 

funding, the proportion of funds going to those with by far the greatest number of cases 

(i.e. New York, San Francisco, Los Angeles) can be expected to decline in the future, 

even in the face of increases in total dollars. Some respondents were concerned that 

such dilution of funding for cities with the most cases may conflict with Congressional 

intent to target funds to cities experiencing the greatest burden of the epidemic. 

The cummt fomauhs have &d to inequities hzjiuuiing between grantees on a per-new-case 

bask We found this to be especial& true for I?tle J and less so for l%le IL 

The cumulative case counts in the Title I formula have produced significant inequities in 

funding between EMAs on a per-new-case basis. For example, between FY 1991 and 

1993, on average, San Francisco received $4,354 per new case reported and Chicago, 

$1,673. Also during that period, 12 of the 16 EMAs received less than the average 

amount per new case of $2,639. 

The Title 11formula produces considerably more equity in funding levels. Two-thirds of 

the grantees received close to the average amount per case in that 3 year period. 

ALTERNATIVE FUNDING OPTIONS 

We present four basic options for formulas that could be used to address the inequities 

described and target funds to greatest need. These options are not mutually exclusive; 

we realize that it could be valuable to combine various ideas to develop an effective 

formula. We also recognize that factors other than the ones we have used could be 

incorporated into the formulas. Our purpose is to present some general ideas that might 

be helpful in constructing a final allocation methodology. 

Readers might ask why we propose changing the Title 11 formula, since it produces more 

equitable funding than the Title I formula. We believe that while the new-case count in 

the current Title 11formula does significantly reduce inequity, the options we propose 

more purposefully ensure equitable funding. 

We examined each option against five criteria. These criteria are: 

ii 
Equity: The amount of funding should be the same per case to minimize inequities 

between and across geographical areas. Some readers may disagree with this criterion, 

believing that formulas should include variables to deliberately target different amounts 

of funding to grantees based on their varying circumstances and need. However, we 

believe that reliable data to establish such variables is lacking. It is also difficult to know 

which of many potential variables are most important, and to what extent they should be 

built into national formulas. Therefore we have chosen “equity” as a starting point for 

national formulas, which Congress could then modi$ as it sees the need. 

Ta~eting: Funds should be targeted to areas with the greatest concentration of cases, 

and in amounts sufficient for grantees to develop the mandated continuum of care. 

Flexibility: Funding formulas should be flexible enough to respond to demographic 

changes in the epidemic. 

Reasonable Data Req&rnen&K Data used in the formulas to distribute funds should be 

readily available and reliable. 

Stability: Aggregate funding to various geographic areas should not fluctuate significantly 

from year to year. 

OPTTON 1: D&tribute l’ltle I Formula Fund on a Per-Nm-Case Bas& to CitieY w“th a 

Si~cant Rqxwtion of All New Cases Reported Natiimdy. 

This option targets funds to 41 cities with 72 percent of new cases reported in the 2 years 

prior to FY 1995, consistent with Congressional intent to target cities most affected. It 

also creates equitable per-case funding. 

OK!TON 2 D&tribute lltik I Fundk on a Per-New-Case Basir, Including an Income Factor. 

This option applies the Title IXformula to Title I formula funds. The formula is based 

on each city’s new cases reported for 2 years prior to FY 1995 and includes a per capita 

income adjustment. We select the same cities as under Option 1 to demonstrate this 

option. 

OK!TON 3: Distribute lltlk II Funds on a Per-New-Case Bash, &cMing an Ikcome 

Factor and A F-g Floor. 

This option establishes an average amount per case by dividing the dollars available by 

the number of new cases reported nationally for 2 years prior to FY 1995 and allocates 

funds to each State based on its new-case count. It also eliminates both the income 

factor in the formula and the $100,000 funding floor currently available to States. 

OPTION 4: D&tribute 71de I and Title II Formula Funds on a Per-New-Case Bas& as a 

Single Fonnuk Gnanti 

This option combines formula funds and distributes them on a per-new-case basis to both 

States and high-incidence cities. We use the same cities as in Options 1 and 2 to 

... 

111 
demonstrate this option. We also set a $200,000 floor to ensure a minimum amount of 

funding for every State. 

COMMENTS 

The PHS commented on this report; the full text of their comments is in Appendix D. 

The Assistant Secretary for Planning and Evaluation commented verbally. We thank all 

those who commented. 

In response to the comments we received, and in view of information now available on 

the FY 1995 budget request, we recasted our four proposed formulas looking forward to 

FY 1995. We believe this updated view will be more helpful during reauthorization 

discussions. We also made other editorial changes in the report in response to the 

comments received. 

iv 
TABLE OF CONTENTS 

EXECUTIVE SUMMARY


INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...1


FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5


Dilution of Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...6


Funding Disparities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...6


OPTIONS ...................................................... 10


Option l . . . . . . . . . .. o...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12


Option 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15


Option 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17


Option 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..O... . . . . . . . . . 19


APPENDICES 

k Current Formulas.....,.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..A-l 

B: Cases and Income Data: Cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..B-l 

CCasesand IncomeData: States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..C-l 

D:AgencyComments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..D-l 
INTRODUCTION 

PURPOSE 

To examine the current Ryan White CARE Act funding formulas, propose options for 

changing the formulas, and examine their potential impact on the distribution of funds in 

Fiscal Year 1995. 

BACKGROUND 

As of March 1990, the year in which the Ryan White C.A.R.E. Act was passed, over 

128,000 cases of Acquired Immune Deficiency Syndrome (AIDS) had been reported to 

the Centers for Disease Control (CDC). Some 78,000 people had died of the disease 

and nearly one million were infected with the Human Immunodeficiency Virus (HIV) 

virus. The rate of acceleration of the disease and the cost of care were both cause for 

alarm. 

Until 1990, the Federal response to the AIDS epidemic had been primarily prevention, 

through the CDC, and research, through the National Institutes of Health (NIH). In 

Fiscal Year (FY) 1990, the Public Health Semite (PHS) as a whole spent $1.6 billion on 

AIDS/H~ the CDC spent $443 million of this on prevention and NIH spent $744 

million on research. 

In the first decade of the epidemic, financing of AIDS-related health care shifted 

increasingly to the public sector as those affected turned to Medicaid and Medicare to 

finance their care. In FY 1990, the Federal Medicaid share of spending for HIV/AIDS 

was $670 million, and Medicare spending was $110 million. Social Security expenditures 

for HIV/AIDS in that year totalled $249 million, with $210 million for the Disability 

Insurance program and $39 million for the Supplemental Security Income program. 

Towards the end of the first decade, while the vast majority of AIDS cases were still 

reported in metropolitan areas, rural areas were beginning to experience an increase in 

cases. The AIDS/HIV population also began to change, with an increasing rate of 

growth in new cases among groups which historically have difficulty accessing care: the 

poor, minorities, homeless and intravenous drug users. 

On August 18, 1990, Congress passed Public Law 101-381 entitled The Ryan White 

Comprehensive AIDS Resources Emergency (CARE) Act of 1990 (the Act). The 

purpose of the Act was to provide “emergency assistance to localities disproportionately 

affected by the Human Immunodeficiency Virus epidemic and to make financial 

assistance available to States and other public or private nonprofit entities to provide for 

the development, organization, coordination and operation of more effective and cost 

efficient systems for the delivery of essential services to individuals and families with HIV 

disease.” 

1

The Act was created as a comprehensive response to the HIV epidemic and its impact 

on individuals, families, communities, cities, and States. It was to establish services for 

AIDS and HIV patients who would otherwise have no access to health care. It was also 

meant to provide emergency relief funding to communities with the highest number of 

reported AIDS cases. 

The Act is multifaceted, with four titles directing resources to various entities and 

allowing grantees maximum flexibility in the use of funds, particularly at the local level. 

The Federal role is minimized in favor of State and local control. The Health Resources 

and Services Administration (HRSA) in the Public Health Service administers Titles I, II, 

and III(b) of the Act. The CDC was to administer Title III(a), which has not been 

funded to date. 

Congress funded the Act at $221 million for FY 1991, $276 million for FY 1992, $348 

million for FY 1993, and $579 million for FY 1994. The President’s FY 1995 budget 

proposes funding at $672 million. 

Title I 

Title I provides emergency relief grants to cities (eligible metropolitan areas (EMAs)) 

which have reported a cumulative total of more than 2,000 AIDS cases, or a per capita 

incidence of 25 AIDS cases per 100,000, to the CDC by March 31 of the year preceding 

grant awards. 

Within 60 days after an appropriation becomes available, HRSA is required to allocate 

(formula) funds to grantees. Grants are for HIV-related outpatient and ambulatory 

health and support services. In-patient services are not permitted except for case 

management that prevents unnecessary hospitalization or expedites discharge. 

Half of the funds are distributed through a formula and the other half competitively, as 

supplemental grants, to EMAs which have demonstrated a severe need for financial 

assistance to address the epidemic and the ability to allocate funds expeditiously to areas 

of greatest need. 

Title I funds comprised 56 percent of the FY 1994 Ryan White appropriation. In FY 

1991, 16 grantees received $88 million. In FY 1992, 18 grantees received $120 million. 

In FY 1993, 25 grantees received $185 million. Congress appropriated $325.5 million for 

34 grantees in FY 1994, an increase of 76 percent over FY 1993. The President has 

requested $364.5 million for up to 41 grantees in FY 1995. 

Title 11 

Title 11,including Special Projects of National Significance (SPNS) (see next section), 

comprised 33 percent of the FY 1993 Ryan White appropriation. This title provides 

formula grants to States and territories to improve the quality, availability, and 

2

organization of health care and support services for individuals and families with HIV


disease.


A major intent of Title II was to develop service delivery systems to provide essential


services throughout the course of HIV disease. Congress envisioned the establishment of


community-based, coordinated, continuums of care to which everyone with HIV would


have access. Another intent was that funds be directed to both urban and rural areas,


with a special emphasis on areas most affected as well as the needs of smaller cities and


rural areas. Priority was to be given to low income individuals, children, families, and a


variety of special populations. To get the money out quickly to meet the greatest needs,


States are required to allocate 75 percent of services within 120 days after an


appropriation becomes available.


States may use funds in one or more of four ways. They may establish HIV care


consortia consisting of public and nonprofit private organizations and assist in the


planning, development, and delivery of comprehensive outpatient health and support


sexvices. They may provide home- and community-based care services including


outreach services to individuals in rural areas. They may provide assistance to assure the


continuity of health insurance coverage. Finally, they may provide appraved treatments


that prolong life or prevent serious deterioration of health.


Title II was funded at $88 million in FY 1991, $107 million in FY 1992, $115 million in


FY 1993, and $183.9 million for FY 1994. There were 54 State and territorial grantees in


FY 1993. The President has requested $213.8 million for FY 1995.


Special Proiects of National Significance: Title II also establishes a program of Special


Projects of National Significance (SPNS), for which up to 10 percent of the Title II


appropriation is set aside. These are competitive grants to public and private nonprofit


entities for special programs. Funds are provided on a 3 year cycle for projects that


contribute to advancing knowledge and skills in the delivery of health and support


services. In FY 1991, HRSA awarded approximately $4.4 million for 22 projects. These


projects continued in FY 1992 with $5.2 million and four new projects funded with an


additional $836,000. In FY 1993, nearly $6.1 million was awarded to support 27 projects.


An additional $2.9 million, $4.8 million, and $5.1 million in W 1991, 1992, and 1993,


respectively, was mandated by Congress to be used for reimbursement of dental health


providers who provided uncompensated care to people with HIV/AIDS.


Title 111


Title III(a), intended to provide formula grants to States for early intervention services


on an outpatient basis, and intended to be administered by CDC, has not been funded to


date. Title III(b) supports early intervention semices on an out-patient basis, including


counseling, testing, referrals, clinical and diagnostic services, and other therapeutic


services. It provides competitive grants to private non-profit organizations and public


migrant, community, and homeless health centers, hemophilia centers, and federally-


qualified health centers.


3 
Title IH(b) funds comprised 14 percent of the FY 1993 Ryan White appropriation. The 

title was funded at $45 million (121 grantees) in FY 1991, $49 million (136 grantees) in 

FY 1992, $48 million (136 grantees) in both FY 1993 and FY 1994. There were 54 State 

and territorial grantees in FY 1993. The President has requested $66.9 million for FY 

1995. 

Title IV 

Title IV was to provide demonstration grants for research and services for pediatric 

patients, evaluation and reports, and requires studies on partner notification and HIV 

disease in rural areas. Congress appropriated $22 million for FY 1994 for existing HRSA 

pediatric and adolescent AIDS demonstration projects to be folded into Title IV. The 

President has requested $27 million for FY 1995. 

SCOPE AND METHOIXXDGY 

The Ryan White Act will be reauthorized in FY 1996. This is the first in a series of 

studies on the implementation of the Ryan White Act which will provide information 

useful for the discussion surrounding reauthorization. Other reports are: FY 1992 Title 

and Title II Expenditures (OEI-05-93-O0331); Special Projects of National Significance 

(OEI-05-93-O0332); Consortia Activities (OEI-05-93-O0333); and a Technical Report of 

FY 1992 Expenditures (OEI-05-93-00334). 

This study focuses on the formulas governing the distribution of Ryan White Title I and 

Title II funds, and how certain changes in those formulas would affect distribution in the 

future. Concerns about this issue were raised by many people we talked to as we 

designed this study: congressional staffers, representatives of national organizations, 

experts, grantee staff, and Federal officials. We expect the formulas to be an important 

focus for discussions during reauthorization. 

In the study we compare the relative distribution of Ryan White funding allocations 

between States and high incidence cities (EM&) for FY 1991, FY 1992, and FY 1993. 

We compared trends in funding levels. We use case data provided by CDC for this 

analysis. Then, based on the President’s FY 1995 budget request, we calculate FY 1995 

allocations for Titles I and 11using formulas based on factors other than cumulative case 

counts. We assess the impact of these new formulas on allocations to States and EMAs 

by comparing them to projected FY 1995 allocations under the current formulas. 

The next study in this series will suxvey grantees concerning several general aspects of the 

implementation of the program. 

We conducted this inspection in accordance with the Standards for Inspections issued by 

the President’s Council on Integrity and Efficiency. 

4


I 
FINDINGS


As a backdrop to this discussion, it is important to understand not only the formula 

governing each Title, but also a new AIDS case definition implemented by the CDC in 

January 1993. Because each formula is based on case counts, this new definition is 

bound to have a significant impact on the distribution of funds. 

The CDC’S expanded AIDS surveillance case definition of AIDS includes all HIVinfected persons who have <200 CD4+ T-lymphocytes, or a CD4+ T-lymphocyte 

percentage of total lymphocytes of <14 and pulmonary tuberculosis, recurrent 

pneumonia, or invasive cervical cancer, in addition to the clinical conditions included in 

the AIDS surveillance case definition published in 1987. 

Before it was put into effect, the CDC estimated that this expanded definition would lead 

to a 75 percent increase in the number of newly reported cases in the first year it was in 

effect; experts then expected the rate of increase to level off. However, in early March 

1994, the CDC reported that in the first year of the definition, the number of cases 

reported grew by 111 percent, from 49,016 in 1992 to 103,500 in 1993. 

Half of Title I funds are distributed to high-incidence cities (eligible metropolitan areas, 

or EMAs) through a formula based on both (1) cumulative AIDS cases reported to CDC 

as of March 31 of the most recent fiscal year and (2) per capita incidence (cases per 

100,000) of cumulative AIDS cases. 3 The formula weights the EMAs’ cumulative total 

of AIDS cases more heavily to target funds to areas experiencing the greatest burden of 

the epidemic (in the law, the “localities disproportionately affected’’).4 The remaining 

half of Title I funds are distributed to EMAs via competitive supplemental grants. 

Title II funds are distributed to all States, Puerto Rico, the District of Columbia, and up 

to U.S. territories (all referred to as “States” in this report) via a formula. The formula 

distributes funding on a proportional basis and is a function ofi (a) a State’s total 

reported AIDS cases for the 2-year period preceding the fiscal year in which funds are 

requested, and (b) a State’s average per capita income divided by the U.S. average per 

capita income. States receive the greater amount of the formula calculation or a 

minimum allocation of $100,000. Unlike Title I, which targets only the cities with the 

highest (cumulative) case counts, Title II provides funding for all States. 

. 

> AppendixA presentsthe formulasforTitle I,Title II,andthe fouroptions presentedin this report. 

4 In the past year,the Office of Managementand Budget has also made changesin the definition of 

MetropolitanStatisticalAreas. These changesaffectthe numberof AIDScasesbeingreportedin metropolitan 

areas,which in turn affectsthe distributionof Title I formulafunds. 

5 
As thenumberof high inckknce citks increases, the proportion of lltle Ifhn& going to 

citkwdh thekzrgest caseknzdkklike~ todecreasc 

The number of EM% has increased from 16 in FY 1991 to 34 in FY 1994. The 

President’s FY 1995 budget projects an increase of up to 7 EMAs for FY 1995. While 

this means that more cities can access Title I funds, it also inevitably means that the 

proportion of formula funds going to the ENL% with by far the most cases will decline, 

even if total dollars increase. For example, from FY 1991 to FY 1993, New York’s 

proportion of total formula funds declined from 37 to 31 percent despite increased 

appropriations. 

Possible dilution of funding for areas with the largest caseloads concerns some of the 

people we spoke with at the beginning of our study. They view it as conflicting with the 

intent of Congress to target funds to areas experiencing the greatest burden of the 

epidemic. They seek ways to target Title I funds in the face of increasing needs and 

appropriations which at some time in the future are certain to level off. 

The cumntfonnuiks have kd to bquitia in fiuuhg between grantees on a per-new-case 

bask We f&th&to betxpeci@tr wforTIde& andksssofor lltle17. 

Some people we spoke with as we designed this study expressed the view that Ryan 

White funding across grantees should be equitable - that is, that grantees should receive 

the same amount of funding per case. They also questioned whether the cumulative case 

count in the Title I formula is the most appropriate way to address the current geography 

of the AIDS epidemic, since it includes persons who have died. Instead, they proposed 

funding based on new cases reported. 

We examined the distribution of Title I and Title 11funds between FY 1991-1993 to 

learn whether either formula has produced significant funding inequities on a per-case 

basis (new cases reported). 

l%e Title I formula has produced significant inequities in jimding on a perctise bash between high incidence cities. 

A look at the 16 cities funded from FY 1991 through FY 1993 shows both a wide range 

and significant differences in funding levels per case. For example, Table 1 on the next 

page shows that in these three years, on average, San Francisco received $4,354 per case 

while Chicago received $1,673, a difference of 160 percent. Furthermore, the national 

average amount received per case was $2,639 in those years; yet 12 of the 16 EMAs 

received less than that amount. 

These inequities exist primarily due to the cumulative case counts. Cities such as San 

Francisco and New York which have been struggling with the AIDS epidemic for many 

years, have much higher cumulative case counts than other cities which at present are 

experiencing large rates of increase in their caseloads. This disparity in cumulative case 

6 
------ ------ ------

counts points to a weakness in the Title I formula: it is not flexible enough to meet the 

changing demographics of the epidemic. 

TABLE 1 

TITLE 1FORMULA FUNDING PER REPORTED CASE 

FOR ORIGINAL 16 EMAs 

FY 1991-FY 1993 

EMA


San Francisco


New York


Jersey City


Newark


Houston


Los Angeles


Miami


Dist. of Col.


Dallas


Ft. Lauderdale


San Diego


San Juan


Boston


Philadelphia


Atlanta


Chicago


TOTAL


Funds New Cases 

1991-1993 1990-1992 $/Case 

$26,206,255 6019 $4,354 

65,188,920 19326 3,373 

3,671,757 1124 3,267 

8,099,881 2900 2,793 

7,817,958 3551 2,202 

17,180,530 7882 2,180 

8,852,698 4244 2,086 

7,283,634 3543 2,056 

4,239,970 2093 2,026 

4,903,566 2517 1,948 

3,600,036 1877 1,918 

5,565,320 2929 1,900 

3,776,815 2032 1,859 

4,925,715 2658 1,853 

5,297,244 2952 1,794 

5,892,174 3522 1,673 

$182,502,473 69,169 $2,639 

Funding Distribution from HRSA; case data from HIV/AIDS Surveillance, 

First Quarter Edition, Issued April 1991, 1992, and May 1993. Case 

COWItSare cases reported as of March 31 of the preceding year. 

We also looked at Title I formula and supplemental funds combined (Table 2). The 

degree of variation in per-case amounts across grantees is roughly the same as for the 

formula funds alone. However the dollar amounts are much higher: San Francisco 

received the largest average amoun$ $9,782 per case, and San Juan the least, $3,394- a 

difference of 188 percent. Also, while the average amount received per case was $5,260 

between FY 1991-1993, 13 of the 16 EMAs received less than this amount. 

7 
--------- ------ ------ ------

TITLE I FORMUIA AND 

EMA 

SanFrancisco


Jersey City


New York


Houston


LosAngeles


Boston


Dist. of Col.


Vewark


Miami


Oallas


San Diego


Zhicago


Philadelphia


ct. Lauderdale


4tlanta


San Juan


rOTAL


SUPPLEMENTAL FUNDING 

FOR ORIGINAL 16 EMAs 

FY1991 -FY1993 

Funds 

1991-1993 

58,875,136 

7,362,801 

113,821,426 

17,333,540 

36,826,670 

9,214,779 

15,967,546 

13,018,014 

18,683,630 

9,041,156 

8,000,908 

14,948,165 

10,624,115 

9,464,341 

10,726,012 

9,940,840 

$363,849,079 

PER REPORTED CASE 

New Cases 

1990-1992 $/Case 

6,019 $9,782 

1,124 6,551 

19,326 5,890 

3,551 4,881 

7,882 4,672 

2,032 4,535 

3,543 4,507 

2,900 4,489 

4,244 4,402 

2,093 4,320 

1,877 4,263 

3,522 4,244 

2,658 3,997 

2,517 3,760 

2,952 3,633 

2,929 3,384 

69,169 $5,260 

%nding distributionfrom HRSA; case data fromHIV/AIDS Surveillance,First Quarter 

Edition Issued April 1991, 1992, and May 1993. Case counts are cases reported as of 

March 31 of the preceding year. 

The Ilde II fomudk produces greater 

@u@? equip than the lWe I foimuik 

At first glance the figures presented in Table 3 would appear to belie this statement, 

since between FY 1991 and FY 1993, Title II dollars per case ranged from $17,647 in 

South Dakota to $1,911 in Hawaii, with an average of $2,152. This is an anomaly, 

however, stemming from a handful of States that have extremely high per-case averages. 

North and South Dakot~ for example, received $17,647 and $16,013 per case 

respectively. A few States like these have extremely low case counts yet nevertheless are 

eligible to receive the minimum Title II grant of $100,000. 

The more important fact to note is that despite this anomaly, over two-thirds of the 54 

Title II grantees received funding between $2,000 and $2,475 per case - close to the 

average of $2,152. This is because the formula is based on a new-case count rather than 

a cumulative count. 

8

------

TABLE 3 

TITLE II FUNDS PER REPORTED CASE: FY 1991 -FY 1993 

STATE 

South Dakota 

North Dakota 

Wyoming 

Vermont 

Alaska 

Montana 

Puerto Rico 

Idaho 

Arkansas 

Kentucky 

Mississippi 

Alabama 

Utah 

Iowa 

Nebrasks 

Oklahoma 

Minnesota 

Texas 

Louisiana 

North Carolina 

Delaware 

Wisconsin 

West Virginia 

Arizona 

Tennessee 

New Mexico 

Missouri 

Oregon 

Georgia 

Pennsylvania 

Nevada 

Rhode Island 

New York 

Guam 

Maine 

Ohio 

Illinois 

South Carolina 

Virginia 

Florida 

Virgin Islands 

Indiana 

Maryland 

Washington 

California 

Colorado


New Hampshire


Dist. of Col.


Massachusetts


Michigan 

Kansas 

Connecticut 

New Jersey 

Hawaii 

TOTAIJAVG 

Funds 

1991-1993 

300,000 

219,872 

244,037 

300,000 

300,000 

256,197 

16,520,102 

300,000 

1,244,633 

1,173,506 

1,625,056 

2,057,855 

738,197 

490,499 

363,877 

1,396,972 

1,276,798 

20,139,425 

4,824,689 

3,605,739 

554,356 

1,295,753 

416,071 

2,092,429 

2,248,535 

717,498 

3,833,362 

1,846,634 

8,376,328 

7,827,679 

1,305,177 

577,819 

48,330,884 

10,656 

376,142 

3,967,672 

8,716,907 

2,247,710 

3,751,967 

28,482,462 

101,484 

2,104,243 

5,711,996 

3,619,091 

45,696,302 

2,497,921 

307,027 

3,921,396 

5,086,166 

3,745,223 

826,931 

2.747,197 

13,432,803 

1,068,159 

$275,019,614 

New Cases 

1990-1992 .--— 

17 

13 

34 

59 

: 

4,712 

86 

503 

483 

679 

893 

321 

214 

159 

618 

569 

9,021 

2,162 

1,619 

249 

586 

189 

952 

1,027 

326 

1,787 

853 

3,677 

3,541 

611 

271 

22,669 

5 

178 

1,683 

4,165 

1,079 

1,804 

13,710 

49 

1,021 

2,781 

1,797 

22,757 

1,249 

154 

1,964 

2,609 

1,931 

429 

1,430 

7,012 

559 

127,791 

S/Case —.— 

17,647 

16,913 

7,178 

5,085 

4,688 

4,342 

3,506 

3,486 

2,475 

2,430 

2,393 

2,304 

2,300 

2,292 

2,269 

2,260 

2,244 

2,233 

2,232 

2,227 

2,226 

2,211 

2,201 

2,196 

2,169 

2,167 

2,169 

2,165 

2,161 

2,154 

2,136 

2,132 

2,132 

2,131 

2.113 

2,107 

2,093 

2,083 

2,080 

2,077 

2,071 

2,061 

2,054 

2,014 

2,006 

2,000 

1,994 

1,977 

1,949 

1,940 

1,926 

1,921 

1,916 

1,911 

$2,152 

Funding distrhtial frwn HRSA; cam data frun HIV/AIDS SUWSIIIMCORsprxt. FwstOusIIsr Edithm,


Issued A@ll 1901, 1SS2, and Mny 1W3, Case counts are casea repated a.! of March 3! C4Iho pfOCSdintJyew


9

OPTIONS


We present four options, and some variations of them, for funding formulas that could be 

used to address the inequities described and target funds to need. We recognize that 

formulas could be constructed in countless ways; our intention is to present some general 

ideas that might be helpful in constructing a final allocation methodology. We also do 

not see these options as mutually exclusive. We believe that it could be valuable to 

combine various ideas to develop a formula. 

We realize that the best reflection of the current geographical impact of the AIDS 

epidemic would be prevalence data - a count of live AIDS cases by city and State. 

However, not all States report AIDS-related deaths to CDC, so that reliable prevalence 

data is not available. Also, data on the number and the proportion of people with AIDS 

and HIV requiring care, those already in care, and the insurance status of those people, 

is not available. 

Therefore we base our options on 2-year counts of new AIDS cases as reported by CDC 

and published in their “HIV/AIDS Sumeillance Report, First Quarter Edition,” issued in 

October, 1993. The case counts are from October 1991 to September 1993, which 

includes three quarters (January-September 1993) of reporting using the new CDC 

definitions These counts are the most up-to-date counts available for cities and States. 

We view these new-case counts as more accurate than cumulative counts in terms of 

reflecting those alive with AIDS today who need semices. 

We examine each option against five criteria which we believe could be useful in 

assessing any new formula. We recognize that there are inherent tensions between some 

of these criteria, making it unlikely that a formula could be devised that would fully 

satis~ all of them. Our purpose in proposing them is to provide a framework within 

which potential formulas, and the tradeoffs inherent in them, can be evaluated in a 

systematic manner. The five criteria are: 

Equ@: The amount of funding should be the same per case to minimize inequities 

between and across geographical areas. 

Targeting: Funds should be targeted to areas with the greatest concentration of cases, 

and in amounts sufficient for grantees to develop the continuum of care called for in the 

law. 

FZmibility: Funding formulas should be flexible enough to respond to demographic 

changes in the epidemic. 

Reasonable Datu Requiremenfi: Data used in the formulas to distribute funds should be 

readily available and reliable. 

5 Case counts throughMarch 1994will be usedbyHRSA toestablish FY 1995allocations.


10

Stability: Aggregate funding to various geographic areas should not fluctuate significantly


from year to year.


Some readers may question or even disagree that “equity” should be a criterion for


evaluating formulas. Instead, they may advocate including variables in formulas to


deliberately target funds to cities and States based on the differing demographics of the


epidemic and service needs they have. Indeed, both of the current formulas already


include such variables: incidence (cases per 100,000) in the Title I formula and per capita


income data in the Title II formula. Many other potential variables were mentioned to


us during the course of this study: HIV seroprevalence rates (since services are also


provided to people with HIV infection but not an AIDS diagnosis), numbers of infected


women and children, the cost of health care in different locations, tuberculosis and


sexually transmitted disease rates, the migration of people with HIV/AIDS, minority


population statistics, poverty statistics, health insurance statistics, and others.


We understand that it could be valuable to include new variables such as these in future


formulas, but for several reasons we have chosen not to do so in this report. First, we


believe that any national formula governing the distribution of funds among grantees that


are by nature so diverse should strive to achieve equity as much as possible. Second, we


are concerned that much of the data mentioned above either does not exist or is not


completely reliable. Third, based on our reading and discussions for this study, we do


not believe there is consensus about which variables are most important or the extent to


which they should be factored into a national formula. Finally, as the Act is structured


today, monies are available to meet the special circumstances and needs of individual


grantees through the Title I supplemental funding mechanism.


For these reasons, we have chosen to present a few simple, basic options, and describe


some variations which Congress could use to target funds in response to the changing


face of the epidemic and the specific needs of grantees. We present each option looking


ahead to FY 1995, which we believe is the most useful approach for the discussion


surrounding reauthorization. It is important to note that we present the information


available at this time to show how new formulas might affect funding; however the actual


amount of the FY 1995 allocations, whether governed by the current formulas or


different formulas, will be highly dependent on the size of the actual appropriation, the


number of cases reported by cities and States as of March 1994, and, for Title I, the


number of cities eligible for funding.


Readers will note that in Tables 4, 5, and 8, we have identified a number of EMAs by


letter rather than name (City ~ for example). Our FY 1995 projections, under both the


current and proposed formulas, are based on CDC data as of September 1993.


However, these particular cities may or may not be eligible for Title I funding in FY


1995, since eligibility will be based on case counts and incidence rates not currently


available.


All tables show the FY 1994 allocations reported by HRS~ and projected FY 1995


allocations under the current formulas and the proposed options.


11 
OPTION 1: Dktn3ute Title I Formula Fund on a Per-tie Basis to (l-ties wr”tha 

Sign@cant Pkpwtion of AU New Cases Reprted National& 

This option targets funds to the cities with the highest numbers of new cases, consistent 

with Congressional intent. It also eliminates the funding inequities produced by the 

cumulative case count in the current formula. Table 4 presents the results of applying 

this option to the proposed Title I formula amount ($182.2 million) for FY 1995. 

First we calculate projected FY 1995 formula allocations using the current formula, as a 

basis for comparison with this Option 1 new formula. We identify seven metropolitan 

areas that might quali~ for Title I funding in FY 1995 based on either a cumulative case 

count or incidence. These seven cities, combined with the existing 34 grantees, bring the 

total number of possible EMAs to 41, which is the maximum number of cities that 

HRSA predicts will be eligible for funding in FY 1995. To identify the cities, we use 

CDC case counts as of September, 1993.6 We then calculate projected allocations for 

all 41 cities using the current formula, which is based on cumulative case counts and 

incidence. 

We next calculate projected FY 1995 allocations under the new formula. We identify the 

41 metropolitan areas with the highest number of new AIDS cases reported for the two 

year period, October 1991 to September 1993. This period includes three quarters of 

reporting under the new CDC definition. Collectively, these 41 cities reported 72 percent 

of all new cases nationally in that period and 86 percent of all new cases reported in 

metropolitan areas (population 500,000 or more). 

We then calculate an average dollar amount per case ($1,764) based on these case 

counts and the Title I FY 1995 budget request (formula portion only). Last, we calculate 

a FY 1995 allocation for each EMA and compare it to the projected allocation under the 

current formula. 

ANALYSIS 

Equity: This option provides the same amount per case ($1,764) for each EMA. Under 

the current formula, dollars per case would range from $3,898 to $1,307; 28 of the 41 

cities would receive less than $2,000 per case. 

Targeting This option targets Title I formula funds to the cities with a strong majority of 

new cases reported both nationally and by metropolitan areas. Up to seven new cities 

would be funded. The cities with the highest number of newly reported cases would 

receive the greatest amount of funding. 

6

Appendices B andC contain thecasecounts, incidenee, andpercapita income figures
 usedto


calculate thfour
options.


12

FZexiM& ~isoption protides the flefibili~ totarget aid based onchan@ng case 

counts, whether increasing or decreasing. 

Data Re@wwnts : The data required, new cases reported, is the same as now used in 

the current Title II formula. 

StubiZdy: Funding is somewhat less stable than if based on a steadily growing cumulative 

case count as it is now, since a new-cases count could conceivably rise or fall in any given 

year. Using a 3-year case count might lend greater stability. 

Ponce, Puerto Rico is the only current grantee that is not eligible for funding under this 

option, due to a relatively low new-case count of 522. Of the 33 other FY 1994 grantees, 

17 receive increased funding under this option, including two of the largest grantees, New 

York and Los Angeles. Fifteen see decreased funding, including San Francisco. One city 

sees no change. 

VARIATIONS 

The incidence factor which is a small part of the current Title I formula could be 

retained to target relatively more funds to cities with higher incidence rates. This would 

produce some inequity in funding per case, although less than that produced by the 

cumulative case count in the current formula. 

Alternatively, rather than introducing other variables into the national formula, Congress 

could continue to use Title I supplemental funds to target the special needs of individual 

EMAs. 

IfCongress decided that the impact on the cities that would lose funds (including Ponce) 

would be too great, they could hold them harmless at FY 1994 funding levels at a cost of 

about $4 million (and at the expense of City H, which would be displaced by Ponce). 

Alternatively, Congress could use Title I supplemental funds for this purpose. 

Another variation would be to collapse all Title I funds into a single formula grant. This 

alternative eliminates funding inequities completely and dispenses with the need for 

Federal personnel to review applications and monitor competitive grants. option 4 

provides a look at this type of approach. 

13

------ -------------

TABLE 4 

OPTION 1 

TITLE I FORMULA FUNDS DISTRIBUTED ON PER-CASE BASIS TO 41 CITIES 

WITH MAJORllY OF REPORTED U.S. CASES IN TWO PRIOR YEARS 

(Ranked by size of grant in ‘New Formula” column.) 

FY 1995 Budget Request (Formula Portion): $182,250,000 .-. —-—-—— .-.-—.— —.. -.—---— -. 

CURRENT FORMULA NEW FORMULA Diff.: 

Old VS 

Projected New 

Clw FY 1995 Formula

New York 

Los Angeles


San Franasco


Chicago


Washington D.C.


Miami


Houston


Philadelphia


Boston


Atlanta


San Juan, PR


Dallas


Newark


Baltimore


San Diego


Fort Lauderdale


Tampa-St. Pete


Detroit


Oakland


Riverside/San Bern.


Seattle


Nassau/Suffolk Co.


Denver


West Palm Beach


New Haven


Orange Co. CA


City A


Orlando


Phoenix


Saint Louis


New Orleans


Kansas City, MO


Bergen-Passaic NJ


Jersey City, NJ


City B


City C


City D


City E


City F


City G


City H


Ponce PR


City I


City J


Actual 

FY1994 

45,835,380 

12,617,337 

19,056,960 

4,706,676 

5,225,866 

6,875,102 

5,676,753 

3,479,453 

3,091,876 

4,066,062 

4,561,223 

3,445,177 

5,166,261 

2,232,355 

2,696,880 

3,555,421 

1,955,256 

1,623,489


2,379,546 

1,299,021 

1,617,949 

1,403,882 

1,626,755 

1,959,886 

1,235,428 

1,426,850 

1,319,2 

1,175,959 

1,176,039 

1,691,877 

1,251,712 

1,277,031 

2,306,302 

0 

Projected 

FY1995 

32,980,861 

12,898,418 

14,221,979 

5,675,881 

6,157,582 

7,235,526 

6,2=,576 

4,614,459 

4,281,146 

4,693,862 

5,147,513 

4,293,970 

5,395,89!3 

3,663,947 

3,629,889 

4,340,289 

3,215,149 

2,404,019 

3,234,108 

2,118,013 

2,760,750 

2,426,529 

2,593,940 

3,114,023 

2,510,956 

2,030,880 

2,801,110 

2,372,680 

1,846,899 

1,785,574 

2,375,415 

1,970,528 

2,243,109 

3,533,059 

1,744,183 

2,040,121 

1,352,72 

1,393,14: 

2,034,8; 

1,422,656 

1,400,781 

36,066,602 

15,667,483 

11,441,989 

7,465,157 

6,886,709 

6,608,066 

6,366,458 

5,493,495 

5,161,945 

4,812,760 

4,784,543 

4,521,772 

4,193,750 

4,050,901 

3,712,298 

3,550,050 

3,449,527 

3,243,190 

3,153,248 

2,610,071 

2,587,145 

2,433,715 

2.371.991 

2;320:847


2,301,448


2,239,723


2,181,526


2,118,038


2,036,914


1,994,588


1,918,755 

1,851,740 

1,664,802 

1,643,640 

1,594,260 

1,458,466 

1,329,726 

1,305,036 

1,290,927 

1,208,040 

1,158,660 

: 

0 

$182,250,000 

2%


-20% 

32”A 

12% 

-9% 

1% 

A% 

3% 

-7% 

-2;; 

11% 

-1;: 

3;; 

z; 

-:: 

-25% 

-8% 

1o% 

+2.% 

-1 1% 

10’?40 

12% 

-19% 

-6°k 

-26?6 

-53% 

-9% 

-29% 

na* 

-470 

* 

!?3% 

-1OYYO 

-1 00% 

-100Y. 

TOTAL $159,994,501 $182,250,000 

� Not eligible for projected FY 1995 (current formula). 

14

OPHON 2 lMribute lltle I Forrnuk Fumik on a Per-Nm-Case Bas@ In&dhg an 

Ihcorne Factor. 

This option demonstrates the results of applying the Title II formula to Title I formula 

(o~y) tids. The Title II formula produces a proportional distribution of funds. We 

base our calculation on each State or territory’s number of cases reported in the past 2 

years. Each State’s proportion of cases is adjusted by the ratio of U.S. per capita income 

to the city’s 1989 per capita income, reported by the Census Bureau from the 1990 

Census. 

We use the same cities as in Option 1 to demonstrate this formula. We compare their 

projected FY 1995 allocations as produced by this formula with the projected allocations 

under the current formula, based on cumulative case counts and incidence. Table 5 

presents the results of these calculations. 

ANALYSIS 

E@ity This option reduces, although does not eliminate, the funding inequities per case 

across EMAs described in our findings, since it is based on new cases rather than 

cumulative counts. The current Title I formula, for example, produces funding per case 

from $3,898 to $1,307. This option produces a range of $2,320 to $1,554 per case. 

Ta~etin~ As with Option 1, EMAs with the largest caseloads and the majority of cases 

nationally are targeted, consistent with Congressional intent. Since funds are distributed 

on a proportional basis, EMAs with the most cases continue to receive amounts 

proportional to their need. In addition, the inclusion of the income factor targets 

relatively more money to cities with lower per capita incomes. 

FZaibility This option provides the flexibility to target aid based on changing case counts. 

However, limitations described below relative to the income data, specifically, mean that 

the income-related portion of the formula is less reflective of current realities. 

Reasonabk Dahz Requirerrwn& Data requirements for this option would be the same as 

now. However, this option requires income data for cities, which is only available 

through the national census conducted every 10 years. These figures become more 

outdated the farther the year from the Census. 

Stab@: The Title II formula is somewhat less stable than the current Title I formula, 

given fluctuations in the number of new cases reported compared with constantly 

increasing cumulative case counts. 

As with Option 1, Ponce is the only current grantee not eligible for funding under this 

option. Seventeen current grantees see increased dollars under this option compared 

with the current formula; this includes all of the largest grantees (those with new-case 

counts of about 3,000 or above) except San Francisco. Sixteen grantees (San Francisco 

included) receive less funding. 

15 
VARIATIONS 

Stability in allocations could be increased by using a 3 year rather than 2 year case count. 

Congress could hold harmless those EM% losing funding, at N 1994 Title I formula 

levels, using Title I formula funds and decreasing allocations to other EMAs, or using 

supplemental funds. 

TABLE5 

oPnoN 2 

APPLY TITLE II FORMULA TO TITLE I FORMULA PORTION FOR 41 CITIES 

WITH MAJORITY OF REPORTED U.S. CASES IN TWO PRIOR YEARS 

(Ranked by sizo of grant in ‘New Formula’ column.) 

FY 1995 Budget Request (Formula Potion): $182,250,000 — ... 

Clw


New York


be Angeles


San Francisco


:;::go


Houeton


Washington D.C.


San Juan, PR


Philadelphia


Boston


Newark


;~;


Baltimore


Detroit


~~~$ag&


Oakland


Riverside/San Bern.


Seattfe


New Haven


Denver


West Palm Beach


City A


Saint Louis


Nassau/Suffolk Co.


Orlando


New Orleans


Phoenix


Orange Co, CA


Kansas C@, MO


Jersey City


City B


Bergen-Passaio


City C


Citv F
 ,, 

8$;

City D 

City G 

City J 

City I 

Ponce PR 

TOTAL 

CURRENT FORMULA NEW FORMUIA 

0!?% 

Actual Projected P~j~&d New 

IV 1994 FY 1995 Formula 

—. 

46,635,380 32,980,661 34,723,675 

12,817,337 12.898,4Y8 15,112,940 1?; 

19,066,960 14,221,979 10,338,646 -27% 

4,708,676 5,675,661 7,767,256 37% 

8,875,102 7.235.526 7,535,197 4% 

5,876,753 6:2@576 6,408,124 

5,225,888 6,157,562 6,310,797 X 

4,581,223 5.147.513 6,293,801 22% 

3,479,463 4,614,459 5,s40,394 27% 

3,091,876 4,281,146 5,043,079 16% 

5,166,261 5,395,693 4.844.752 -1o% 

4,088,082 4,693,862 4:732:712 1% 

3,445,177 4,293,970 4,351,714 1% 

2,232,355 3,683,947 4,316,283 16% 

1,623,469 2,404,019 3.744.121 56% 

2,696,880 3,629,869 3;556;333 -2% 

1,965,256 3.215,149 3,461,900 8% 

3,555,421 4.340.289 3,201,288 -26% 

2,379,546 3:234:106 3,142,701 

1,299,021 2,116,013 2,560,211 2:2 

1.617.949 2.760.750 2.395.271 -13% 

1;235:428 2,510:966 2:3&:329 -5% 

1,626,755 2,593,940 2,316,924 -11% 

1,969,666 3,114,023 2,261,086 -27% 

0 2,801,110 2.226.796 .—— -21%

1,176,039 1,785,574 2,202; 012 23% 

1,403,662 2,426,529 2.156.453 -11% 

1,319,944 2,372,680 2:150;611 -9% 

1,691,877 2,375.415 2,062,035 -12% 

1,175,959 1,846.899 2,057.571 11% 

1,426,860 2,030,860 2,017,113 -1% 

1,251,712 1,970.528 1,883,644 

2,308,302	 3,533,059 1,703,096 -5:2 

1.744.183 1,598,136 -6% 

1,277,03: 2,243:109 1,467,009 45% 

0 2!040,121 1,466,386 -26% 

0 o 1.412.937 nan 

0 1:346;473 

: 1,352,784 1,318,551 ::% 

0 0 1,286.536 na* 

0 1,393,140 1;148i569 -18% 

0 1,400,761 o -loo% 

1,422,656 0 -loo% 

976,7~ 2,034,604 0 -100% 

S159.994,501 $182.250,000 $182,250,000 

*Not eligible for projected FY 1995 (current formula), 

16

OITION 3: D&bibute lltik II Funds on a Per-New-Case Basik, Excluding an Income 

Factor and A Funding Fkwr. 

Readers might ask why we propose changing the Title II formula, since it produces much


more equitable funding per case than the Title I formula. We believe that while the


new-case count in the formula does significantly even out inequities, this option


represents a way to ensure equity more purposefully.


This option establishes an average amount per case by dividing the dollars available by


the number of new cases reported nationally for 2 years prior to the year of funding, and


then allocating funds to each State based on its case count. Also, this option eliminates


both the income factor in the current formula and the $100,000 funding floor available to


States.’


As a basis for comparison, we first calculate projected FY 1995 allocations using the


current Title II formula and based on the FY 1995 budget request less 10 percent for


SPNS funding ($192.5 million). We then calculate projected allocations using the new


formula. Table 6 on page 18 shows the results of these calculations.


ANALYSIS 

Equity: Under this option, every State is funded. Every State also receives the same 

allocation per case. The current formula produces a wide range in funding per case, in 

large part due to the $100,000 floor for States with relatively small case counts. For 

example, funding per case ranges from $845 to $20,000 in FY 1994 and would be $1,192 

to $12,500 in FY 1995 under the current formula. 

While this option creates equitable Title II funding on a per-case basis, it is also true that 

States with EMAs in them would receive Title I funds as well. This creates inequity by 

raising their total allocation per case (Titles I and II dollars combined) compared to nonEMA States. 

Ta~etin~ The States with the highest number of new cases receive the most dollars. 

However, some States might complain that without a minimum allocation, funds are 

spread too thinly for them to develop the continuum of care called for in the legislation. 

FZaibiZity: This option provides the flexibility to target aid based on changing case 

counts, whether increasing or decreasing. 

Reasonable Data Requirement.x The data required - new cases reported - is the same as 

that used in the current Title II formula. 

7 MinimumTitle II grantawardsapply only to States and do not include territories.. 

17 
TABLE 6 

OPTION 3 

TITLE II FUNDS DISTRIBUTED ON PER CASE BASIS, NO FLOOR 

(Ranked by size of grant in ‘New Formula column.) 

FY 1995 Budget Request (lese SPNS): $192,507,300 

CURRENT FORMULA I NEW FORMULA I Diff.: 

STA7E


.———


California


New York


Florida


Texas


New Jersey


Illinois


Puerto Rico


Georgia


Pennsylvania


Maryland


Massachusetts


Michigan


Missouri


Connecticut


Virginia


Ohio


Dist. of COL


Washington


Louisiana


South Carolina


North Carolina


Arizona


Colorado


Tennessee


Indiana


Alabama


Oregon


Oklahoma


Wisconsin


Minnesota


Nevada


Mississippi


Arkansas


Kansas


Kentucky


Hawaii


Delaware


Utah


Rhode Island


New Mexico


Iowa


Nebraska


Maine


New Hampshire


West Virginia


Idaho


Vermont


Alaska


Virgin Islands


Montana


Wyoming


South Dakota


North Dakota


Guam


TOTAL


Actual 

FY1994 

28,172,762 

26,126,095 

16,361,666 

11,813,625 

6@50,&57 

5,363,921 

7,521,643 

4,527,265 

4,421,998 

3,625,966 

3,501,905 

2,874,019 

2,716,091 

2,246,095 

2,403,511 

2,519,172 

2,155,767 

2,262,588 

2,494,411 

2,091,875 

1,996,053 

1,655,383 

1,794,570 

1,675,354 

1,394,906 

1,421,553 

1,170,946 

1,133,726 

1,069,752 

970,420 

924,694 

900,115 

821,978 

605,134 

641,709 

545,494 

515,066 

511,096 

452,600 

465,763 

333,799 

292,135 

205,421 

160,060 

173,904 

130,115 

100,000 

100,OOO 

68,703 

100,OOO 

100,OOO 

Ioo,ooo 

100,000 

3,379 

S162,705,300 

I I Old W 

Pn&jelctete Projected New 

FY 1995 Formula — -. -.-.-..— 

33,346,929 

30,924,375 

19,366,649 

13,983,535 

7,872,106 

6,349,051 

8,903,0S7 

5,358,760 

5,234,136 

4,291,905 

4,145,060 

3,401,857 

3,214,924 

2,858,609 

2,644,936 

2,981,639 

2,551,892 

2,676,129 

2,952,531 

2,476,066 

2,362,646 

2,196,140 

2,124,158 

1,983,047 

1,651,095 

1,682,633 

1,386,000 

1,341,945 

1,288,221 

1,148,646 

1,094,759 

1,065,429 

972,941 

716,271 

759,564 

645,679 

609,662 

604,964 

535,723 

574,978 

395,104 

345,788 

243,148 

189,456 

205,643 

154,012 

117,118 

100,000 

93!655 

100,000 

100,OOO 

100,OOO 

100,OOO 

4,529 

$192,507,300 

34,891,648 

32,417,233 

19,533,444 

13,505,065 

8,605,671 

6,475,965 

5,901,452 

5,270,823 

5,202,663 

4,608,129 

4,407,718 

3,388,291 

3,111,723 

2.980,788 

2,934,025 

2,920,664 

2,797,745 

2,714,908 

2,673,490 

2,327,446 

2,200,663 

2,151,064 

2,148,412 

1,882,532 

1,604,628 

1,563,210 

1,356,118 

1,261,257 

1,234,535 

1,150,362 

1,116,960 

933,918 

677,603 

698,768 

698,768 

666.702 

630.628 

554,472 

543,763 

530,423 

376,774 

330,011 

235,150 

1%,403 

165,715 

142.%0 

114,903 

104,214 

81.501 

76,156 

53,443 

41,416 

10,689 

4,008 

S192.507,300 

5% 

5% 

1% 

-3% 

9% 

2% 

-34% 

-2% 

-1% 

7% 

6% 

-o% 

-3% 

12% 

3% 

-2% 

1o% 

1% 

-9% 

-6% 

-3% 

-2% 

1% 

-5% 

4% 

-7% 

-2% 

-6% 

-3% 

o% 

2% 

-12% 

-lo% 

-2% 

-.9% 

3% 

3% 

-8% 

2% 

-8% 

-5% 

-5% 

-3% 

4% 

-lo% 

-7% 

-2% 

4% 

-13% 

-24% 

47% 

-59% 

-89% 

-12% 

18

StabiMy ~reeofthe four largest ~antees gatianincrease in funding under this option 

compared with the current formula. Many of the smaller grantees lose funding. 

However, those losing the most proportionally are States with relatively low case counts 

that would lose the $100,000 floor. Puerto Rico is adversely affected by the removal of 

the income factor in the current formula. Their per capita income, at $4,172, is far 

below that of any other grantee; the next highest is Virgin Islands ($9,440) followed by 

Mississippi ($9,648). 

VARIATIONS 

If Congress wished to target States with a higher incidence of AIDS (cases per 100,000), 

they could introduce an incidence factor into the formula such as that in the current Title 

I formula. However, this would produce some inequities in funding per case. 

As explained under Option 1, Congress could hold harmless the States losing funding, by 

funding them at the prior year’s levels and decreasing allocations to the other States. 

Some people we spoke with at the beginning of our study think that States, especially 

rural States, need a minimum amount of funding two or more times greater than the 

current $100,000 in order to create a continuum of care. If we apply a $200,000 floor in 

our FY 1995 example, nine States are eligible. As discussed above under “Equity,” 

however, such a floor would reintroduce funding inequities on a per-case basis. 

Congress could decide that similar to Title I, Title 11funds should be targeted to the 

States most affected by the AIDS epidemic. For example, in FY 1995 Congress could 

fund only the 24 States which collectively reported 91 percent of all new cases nationally 

from October 1991 to September 1993. The other 30 States, each with less than 1 

percent of the cases reported in that period, would not be funded; collectively, these 

States received $15.5 million in FY 1994, just under 10 percent of the total FY 1994 

formula allocation. 

0K7TON 4: Distribute lltk I and lltlk II Fomudk Fund on a Per-NW-Case BasiY as a 

Single Fomudh Gmn& 

This option shows Title I and Title 11formula funds (only) combined into a single 

formula grant, with the funds distributed on a per-new-case basis to both States and cities 

(EMAs). Our example uses the same 41 cities as Options 1 and 2. We also set a 

$200,000 floor for States (not territories) to address concerns that some people we spoke 

to raised that large rural States with low case counts need such a floor to develop the 

mandated continuum of care. 

To calculate the option, we first establish an average amount per case by dividing FY 

1995 dollars from the budget request ($374.7 million in Title I and Title II formula funds, 

minus SPNS) by the number of new cases reported by States for 2 years prior to FY 

1995. We then allocate funds to each State based on its new-case count. For the four 

States with allocations under $200,000, we impose the $200,000 floor and recalculate the 

19

per-case allocation for the other 50 States. We show the projected allocations compared


with projected FY 1995 Title II allocations, based on the current formula.


This option shows the dollar distribution of funds across States, and between the various


areas in the States with EMAs. Funds could be distributed in a variety of ways. One


way would be to give the entire grant to States, with mandated amounts designated for


each EMA. Another way would be to grant EMAs their allocations directly, with States


granted the balance-of-State portions. We are not recommending any one specific


mechanism by which funds should be disbursed under this option.


Tables 7 and 8 show the results of our calculations. Both tables array States


alphabetically for ease of reading. Table 7 shows the results of this option for the 32


States without EMAs. Table 8 shows the results for the 22 States with one or more


EMAs. This includes Washington, D. C., currently a Title I grantee, which includes the


District of Columbia, currently a Title 11grantee. Table 8 also includes cities A through


J, which as noted under Options 1 and 2, could be eligible for Title I funding in FY 1995


under the current formula or our proposed formulas.


ANALYSIS


Ei@y This option greatly reduces per-case funding inequities. First, it eliminates


inequities between EMAs by basing funding on a new rather than a cumulative case


count and then calculating a per-case allocation. Secondly, it provides a more equitable


distribution of funds between EMA States and non-EMA States. This formula only


counts the new cases in EMA States once, unlike today when States receive Title I


formula funds based on the cumulative case counts of the EMAs there, and Title 11funds


based on the entire State’s new-case count.


The $200,000floor, however, does produce some funding inequities. Under this option,


the average per case allocation for all States excepting the four receiving $200,000 is


$2,598. For those four States, their per-case allocations range from $25,000 to $3,509.


Ta~efbzg This option ensures that high-incidence cities are targeted, consistent with


Congressional intent. The $200,000 floor ensures that every State receives a minimum


amount of funding, helping them accomplish a basic goal of Ryan White by establishing a


continuum of care.


FZexibi.Zi@This option provides the flexibility to target aid based on changing case


counts, whether increasing or decreasing.


Reasonab14 Data Requirement The data required, new case counts, would be the same


as now.


StabiZity: Non-EMA States receive proportionately large increases under this option,


primarily because (former) Title I formula dollars are added to the funds available. (The


20

four States receiving $200,000 gain thanks to the floor.) Tenofthe 22 EMA States gain 

increased funding 12 of the 22, including the 4 largest States, lose funds. 

TABLE 7 

OPTION 4 

STATES WITHOUT EMAs 

TITLE I AND TITLE II FUNDS DISTRIBUTED ON A PER CASE BASIS AS A SINGLE 

WITH A $200,000 FLOOR 

FY 1995 Budget Request (litfe I formula pottion; Titfe II less SPNS): $374,757,300 

—— .. ...— - —— -—. 

I CURRENT FORMULA : 

Cases I Actual Projected I 

oct91- I FY1994 FY1995 I 

GRANTEE Sept 9(3 I Titte II Title II I 

-— —— -

ALABAMA 1170 1,421,553 1,662,633 I 

ALASKA 78 100,000 100,OOO I 

ARKANSAS 657 821,978 972,941 [ 

DELAWARE 472 515,066 609,662 [ 

GUAM 3 3,379 4,529 [ 

HAWAII 499 545,494 645,679 [ 

IDAHO 107 130,115 154,012 / 

INDIANA 1201 1,394,908 1,651,095 I 

IOWA 282 333,799 395,104 I 

KANSAS 523 605,134 716,271 I 

KENTUCKY 523 641,709 759,554 I 

MAINE 176 205,421 243,148 

MISSISSIPPI 699 900,115 1,065,429 

MONTANA 57 100,000 100,OOO 

NEBRASKA 247 292,135 345,788 

NEVADA 836 924,894 1,094,759 

NEW HAMPSHIRE 147 160,060 189,456 

NEW MEXICO 397 485,763 574,978 

NORTH CAROLINA 1707 1,996,053 2,362,646 

NORTH DAKOTA 8 lW,000 100,000 

OKLAHOMA 944 1,133,726 1,341,945 

RHODE ISLAND 407 452,600 535,723 

SOUTH CAROLINA 742 2,091,875 2,476,066 

SOUTH DAKOTA 31 100,OOO 100,00’0 

TENNESSEE 409 1,675,354 1,983,047 

UTAH 415 511,096 604,964 

VERMONT 86 100,000 117,118 

VIRGIN ISLANDS 61 68,703 93,655 

VIRGINIA 2196 2,403,511 2,844,=6 

WEST VIRGINIA 139 173,904 205,843 

WISCONSIN 924 1,069,752 1,266,221 

WYOMING 40 100,OOO 100,OOO 

TOTAL 18,183 $21,558,097 $25,437,212

FORMULA GRANT 

- —------ -

NEW I Diff, 

FORMULA I Old VS 

Projected I New 

FY 1995 I Formula 

— - .—-------- -

3,039,501 819’o 

202,633 1 os~o 

1,706,797 75% 

1,226,192 101VO 

7,794 727. 

1,296,334 101% 

277,971 80?. 

3,120,034 89% 

732,598 85% 

1,358,683 w% 

1,3S8,683 79?0 

457,224 88% 

1,815,907 70°h 

20’0,000 100% 

641,672 86% 

2,171,814 98% 

381,886 102?’0 

1,031,352 79% 

4,434,554 88% 

200,000 1oo% 

2,452,383 83% 

1,057,331 97Y. 

4,525,479 83% 

200,000 100% 

3,660,390 85?’0 

1,078,113 78% 

223,416 91% 

158,470 69% 

5,704,909 10170 

361,103 75% 

2,400,426 90”A 

200,000 1000/0 

$47,683,648 

21

TABLE8 

OPTION4 

STATESWITHEMAo 

TITLEI ANDTITLEII FUNDSDISTRIBUTEDON A PERCASEBASISAS A SINGLEFORMULAGRANT 

WITHA $200,000 FLOOR 

FY 19s5 BudgetRaquaet(TitlaI formulaportion;Tiio II Ieee SPNS):3374,757,300 —— 

r ~ ; Diff: 

Caeae I CURRENT FORMUIA CURRENT FORMUtA I NEWFORMUIA ~ Old W 

Octsl - I ActualFY1204 I ProjaotedFf1995 Projaoted [ New 

GRANTEE Sopt93 I Tiie I TRIOII I TM* I TittoII I FY 1995 1 Formula 

—. — —— 

ARIZONA 

Phoenix 

Bai.of stata 

Total 

CALIFORNIA 

Los Angelaa 

Oakland


Orango
 c.


Rhreida/San Barn.


San Dieoo


San Frenoieco


CityE


city G


Baf.of stata


Total


COLORADO


Denver


Sal. of Stato


Total


CONNECTICUT


NW Havan


CityF


Bal.of State


Total


FLORIDA


Forl Laudwdal.


Miami


Orlando 

Tampa& Pate


WeetPalmBaach


CityA


Sal. of Stato


Total


GEORGIA


Atlanta


Bal.of Stata


Total


ILLINOIS


Chicago


Bal. of Stata


Total


LOUISIANA


NW Orfaans


Bal. of State


Total


MARYLAND


Baltimore


Bal. of Stat.


Total


MASSACHUSETTS


Boston


Bal. of State


Total


I


1155 1,175,959 1,M6,800 3,000,533 

4s5 1,182,028 

1610 1,855,3s3 1,s46,890 2,196,140 / 4,182,561 3% 

28,172,752 

5ss4 12,617,337 12,S08,41 8 I 23,079,422 

1788 2,379,548 3,234,108 4,844,980 

1270 1,420,S50 2,030,S60 3,2S9,287 

1400 1,289,021 2,118,013 3, S44,S38 

2105 2,506,ss0 3,520,s89 5,468,503 

8488 19,056,980 14,221,978 I 16,554,940 

740 1,352,7S4 I 1,922,419 

8s5 1,393,140 I 1,770,537 

2675 I 6,940,286 

26115 28,172,762 40,870,271 33,346,920 I 67, S43,213 -9% 

I 

1345 1,528,755 2,593,040 I 3,494,127 

263 883,238 

160s 1,7s4,570 2,593,940 2,124,158 I 4,1 77,3s5 -13% 

I I 

1305 1,235,428 2,510,956 I 3,390,212 I 

732 0 1,901 ,s36 \ 

194 I 503,986 I 

2231 2,246,095 2,510,956 2,858,809 I 5,795,834 11% 

2013 3,555,421 4,340,2S8 I 5,229,500 

3747 6,875,102 7,235,528 9,734,196 

1201 1,31s,044 2,372,8S0 I 3,120,034 

1956 1,9S5,256 3,215,149 I 5,081,422 

1316 1,959,888 3,114,023 I 3,41 8,7SS 

1237 2,s01,110 3,213,558 

3150 I 8,1 S3,271 

14820 16,361,588 23,078,777 19,366,640 I 37,980,762 -12% 

2729 4,068,052 4,803,862 I 7,0ss,570 

1216 I 3,159,002 

3045 4,527,285 4,803,882 5,358,780 I 10,248,573 2% 

4233 4,708,676 5,875,ss1 I 10,996,758 

614 1,595,088 I 

4847 5,363,021 5,675,8S1 6,349,051 I 12,591,846 \ 5% 

I 

108s 1,801,877 2,375,415 2,826,476 I 

013 2,371,850 \ 

2001 2,4S4,411 2,375,415 2,952,531 I 5,198,325 / -2% 

22S7 2,232,355 3,563,947 5,967,293 \ 

1152 2,992,739 I 

3449 3,825,968 3,883,947 4,201,905 I 8,960,032 I 11% 

I 

2S27 3,021,876 4,281,146 7,603,947 I 

372 966,405 I 

3200 3,501,905 I 4,281,146 4,145,080 I 8,570,353 I 2% 

22

~~ 

cases CURRENT FORMUIA CURRENT FORMLJIA ~ NEW FORMUL4 Old Vi 

oot91 - ActualFY 1994 Projaotad FY 1995 Projected New 

GRANTEE Sapt93 Ttio I Tie II Ttie I TRlell [ FY 1995 Formula 

MICHIGAN 

Detrott 1839 1,623,48S 2,404,019 4,777,472 

Sal. of state 697 1,810,711 

Total 2536 2,874,019 2,404,019 3,401 ,s57 6,588,183 12% 

MINNESOTA 

city D 

Bal.of Stato 

754 

107 

0 1,958,762 

277,971 

Total 881 970,420 1,148,646 2,236,761 49% 

MISSOURI 

Kansas City 1050 1,251,712 1,970,526 2,727,757 

Saint Louis 1131 1,178,039 1,7s6,574 2,938,184 

Bal. of Stat. 148 3s4,4s4 

Total 2329 2,71 6,(M1 3,756,102 3,214,924 6,050,425 -15% 

NEWJERSEY 

Bargan-Passaic 944 1,277,031 2,243,10S 2,452,383 

JerseyCity 932 2,306,302 3,533,059 2,421 ,20S 

Newark 2378 5,166,261 5,395,693 6,177,720 

CityJ 571 1,400,781 1,4s3,380 

BaLof state 1616 4,198,148 

Total 6441 6,650,657 12,572,S42 7,872,106 18,732,841 -22% 

NEW YORK 

Nassau/SutfoikCo. 1360 1,4Q3,882 2,426,528 3,S65,052 

NewYork City 20451 45,835,360 32,980,861 53,128,913 

Bal. of Stat. 2432 6,318,005 

Total 24263 26,126,095 35,407,390 30,924,375 83,031,970 -5% 

OHIO 

Cm H 667 o 1,706,797 

Bal. of Stat. 1529 3,972,134 

Total 2166 2,981 ,S39 5,678,930 47% 

OREGON 

City B 904 I 1,744,1s3 2,348,4SS 

Bal. of State 111 288,363 

Total 1015 1,170,946 I 1,744,1s3 1,386,000 2,636,832 -1 9% 

PENNSYLVANIA I 

Philadelphia 3115 3,479,453 4,614,459 8,082,348 

Bai. of Stata 77s 2,023,736 

Total 3894 4,421,998 I 4,614,459 5,234,136 10,116,082 3% 

PUERTO RICO I 

Ponce 522 976,793 I 2,034,804 1,356,085 

San Juan 2713 4,561,223 5.147,513 7,048,005 

Bal. of State 1182 3,070,675 

Total 4417 7,521,643 I 7,182,317 8,903,057 11,474,784 40% 

TExAs 

Dallas 2564 3,445,1n I 4,293,970 8,660,923 

Houston 3610 5,676,753 6,223,576 9,378,288 

city c 627 I 2,040,121 2,148,433 

city I 643 I 1,422,856 1,670,426 

Bal. of State 2464 6,401,136 

Total 10106 11,813.82Y I 14060,323 13,983,535 28,259,207 -7% 

WASHINGTON STATE 

Seattle 1467 1,617,949 I 2,780,750 3,811,066 

Sal. of State 565 1,467,793 

Total 2032 2,262, S86 I 2,760,750 2,678,129 5,278,659 -3% 

WASHINGTON D.C. 5,225,S66 

Dist. of Col. 2W 2,155,787 I 2,551,692 5,439,927 

Washington D.C. 1611 I 6,157,582 4,704,731 

Total I 6,157,582 2,551 ,6S2 10,144,658 14% 

TOTAL THESE STATES 125.901 $159,904,501 S166,600,793 I $182,250,000 $167,070,088 S327,073,S52 

23

VARIATIONS 

Using 3 years of case counts might guard further against fluctuations in year to year 

allocations. 

As noted under previous options, Congress could retain either the current incidence 

factor in the Title I formula or the income factor in the Title II formula, in order to 

further target funds under this option. However this would produce further per-case 

funding inequities. 

Alternatively, Congress could use Title I supplemental funds, as now, to meet the special 

needs of specific States or cities. 

As noted under Option 1, Congress could fold Title I supplemental funds into this grant 

to make a single formula grant. This would serve to minimize per-case funding inequities 

across grantees, as well as simplify administration. 

COMMENTS 

The PHS commented on this report; thefull textoftheir
commentsisinAppendixD.


The Assistant Secretary forPlanning and Evaluation commentedverbally.
 We thankall


thosewho commented.


Inresponse tothecommentswe received, and inviewofinformation now available
 on


theFY 1995budgetrequest, we recasted ourfourproposedformulas looking
forwardto


FY 1995.We believe this updatedviewwill be more helpful
duringreauthorization


discussions. We alsomade othereditorial
 changesinthereportinresponsetothe


commentsreceived.


24

APPENDIX A 

FUNDING FORMUI.AS 

TllZE k 

PerCapita
 Incidenee


fCumul.
AIDSCases


Funding Em = (.75T) Cumul. AIDSCases
EM&_ + (.25-I-)


[Cumul. AIDSCases
EMA~oT) er Capita Incidenee
 h+f Cumul.AIDS Cases


‘TOT 

Funding StateX = T ‘FStateX 

(‘F&ate~oT ) 

‘FStateX= (# New AIDSCases ofStatex) q Av!z. Per C.aU- KaIncome U.S

(?Avg. PerCapita Income
Statex

‘FStateToT
 = E ‘FStateX


x=1


0P170N 1 

Funding E- = (#ofNew AIDScases” EMAJ Total
FundsAmrouriated 

[# ofNewAIDSCiMC!SEMATOT1 

A-1

OP7TON 2


Funding EM&=T ‘FE
 (m&fT---)

‘FE- = (#New AIDScases” ofEMQ ~AvQ.PerCaDita Income
U.S.


(vAvg.PerCapita Income
E@ 1


‘FEMATO~=	E ‘FEMAX


x=1


o?TloN 3 

Funding State. = (#of New AIDS cases*State.) [Total Funds ADmomiated ]


‘- (#ofNeWAIDS-State~o~J


0F770N 4


FundingGranteeX= (# of New AIDSeases*Granteex) Total Funds ADDrODtiEited

I # of New AIDS cases Grantee~o~) 

$200,CKKl
 Foor Adjustment


Adjusted #	ofNew = # ofNewAIDScases Granteero~
 -# ofNew AidsW= of


AIDScases Grantee TOT Grantees receiving
 floor


AdjustedTotal Funds Appropriated= Total Funds Appropriated- Funds Appropriat~ to


Grantees receivingfloor


* # ofNew AIDScasesis
a hvo-yearcase count


EMA = Eligible Metropolitan
 l%ea


T = Total FundsAppropriated forTitle IorTitle
 11


DF = Distribution
 Factor


FOR OPTION 1ONLY EM& = Cities withnewly reported AIDScases
 nationally


inthetoptwo-thirds ofthetotal cases
 reported.


A-2

APPENDIX B 

AIDS CASES and PER CAPITA INCOME 

FOR METROPOLITAN AREAS* .-—-—.-z.— -— -... .. ....----..—-—— ..- ....—— 

Cases Re orted Per 

Cumulative 8 ct91 - Capita 

cm 

New York


Los Angeles


San Francisco


Chicago


Washington D.C.


Miami


Houston


Philadelphia


Boston


Atlanta


San Juan, PR


Dallas


Newark


Baltimore


San Diego


Fort Lauderdale


~~~p:-St. Pete


Oakland


Riverside/San Bern.


SeatUe


Nassau/Suffolk CO.


Denver


West Palm Beach


New Haven


Orange Co. CA


City A


Orlando


Phoenix


Saint Louis


New Orleans


Kansas City, MO


Bergen-Passaic


JeJe~ City


Ci~ C


City D


City E


City F


City G


City H “


City I


City J


Ponce PR


cases Rate Sept 93 Income** --———- —... -.-——. 

55699 155.3 20451 $16,281 

21850 61.1 8864 16,188 

17424 279.8 19,965 

9376 34.5 4233 12,899 

58.7 3905 18,881 

9563 120.1 3747 9,799 

9312 72.8 3610 14,261 

7169 42.5 3115 12,W1 

6627 40.2 2927 15,581 

6679 56.4 2729 15,279 

6745 87.3 2713 6,383 

5891 64.4 2564 16,300 

7413 80.6 2378 9,424 

4661 66.6 2297 11,994 

4909 56.7 2105 16,401 

88.4 2013 19,814 

:E 66.6 1956 14,374 

3529 28.7 1639 9,443 

4164 57.2 1788 14,676 

2754 36.6 1480 13,879 

3546 49.1 1467 18,308 

3266 38.4 1380 20,864 

58.9 1345 15,590 

F& 86<5 1316 15,712 

2731 60.4 1305 12,968 

2832 29.0 1270 19,890 

2189 94.7 1237 13,661 

2291 1201 13,879 

2245 E:: 1155 14,096 

2245 33.3 1131 10,798 

2905 46.9 1068 11,372 

45.4 1050 13,799 

2476 52.8 21,234 

3001 111.8 932 13,060 

1949 40.3 14,478 

1719 65.0 827 14,295 

1629 20.9 754 16,642 

1504 31.5 740 14,087 

1414 50.2 732 11,081 

1525 332 665 16,905 

1441 20.6 657 9,258 

1605 31.1 643 na 

1548 34.2 571 

1411 74.5 522 3,7:: 

Avg U.S. Per Capita Income: $14,420 

Total Cumulative Cases: 339,250 

Cumulative Cases, Metro. Areas: 288,572 

Total New Cases: 144,084 

New Cases, Metro. Areas 120,4&l 

�Reported in HIV/AiDS Suweillance Report, Issued October 1993. 

Includes three quarters of reporting under new CDC definition. 

�*Reported by Bureau of the Census as of 1989 (most recent available). 

B-1

APPENDIX C 

AIDS CASES AND PER CAPITA INCOME 

FOR STATES AND TERRITORIES —.—.—. ....-—..---.—-——- .-... —.-.— 

Cases Reported Per 

from Ott 91- Capita 

STATE Sept 93* Income** -.-——— —-— —---

California


New York


Florida


Texas


New Jersey


Illinois


Puerto Rico


Georgia


Pennsylvania


Maryland


Massachusetts


Michigan


Missouri


Connecticut


Virginia


Ohio


Dlst. of Cd.


Washington


Louidana


South Carolina


No* Carolina


Aruona


Colorado


Tennessee


Indiana


Alabama


Oregon


Oklahoma


Wisconsin


Minnesota


Nevada


Mississippi


Arkansas


Kentucky


Kansae


Hawaii


Delaware


Utah


Rhode Island


New Mexico


iowa


Nebraska


Maine


New Hampshire


West Virginia


idaho


Vermont


Alaska


Virgin Islands


Montana


Wyoming


South Dakota


North Dakota


Guam


TOTAL


26115 

24263 

14620 

10106 

8441 

4847 

4417 

3945 

3894 

3449 

3299 

2536 

2329 

2231 

2196 

2186 

2094 

2032 

2001 

1742 

1707 

1610 

1808 

1409 

1201 

1170 

1015 

944 

924 

861 

836 

699 

657 

523 

523 

499 

472 

415 

407 

397 

262 

247 

176 

147 

139 

107 

86 

76 

61 

57 

40 

31 

6 

3 

144.084 

16,409 

16,501 

14,698 

12,904 

18,714 

15,201 

4,172 

13,631 

14,068 

17,730 

17,224 

14,154 

12,989 

20,169 

15,713 

13,461 

18,681 

14,923 

10,635 

11,897 

12,885 

13,461 

14,821 

12,255 

13,149 

11,486 

13,418 

11,893 

13,276 

14,389 

15,214 

9,848 

10,520 

11,153 

13,300 

15,770 

15,854 

11,029 

14,981 

11,246 

12,422 

12,452 

12,957 

15,959 

10,520 

11,457 

13,527 

17,610 

9,440 

11,213 

12,311 

10,661 

11,051 

9,928 

�Reported in CDCS HIV/AIDS Surveillance Report, issued October 1993. 

Inciudes three quarters of reporting under new CDC definition. 

�*Reported by Bureau of the Census as of 1989 (most recent available), 

c-1 
APPENDIX D 

AGENCY COMMENTS 

D-1 
DEPARTMENTOF HEALTH& HUMAN SERVICES PubIii Health Serwce 

Memorandum 

. FEB22]994 

Deputy Assistant Secretary for Health Management Operations


Office of Inspector General (OIG) Draft Report “The Ryan White


Act : Funding Formulas,” OEI-05-93-00330


Inspector General, OS


Attached are the Public Health Senice’s comments on the


subject draft report. The report contained no recommendations


and our comments reflect general concerns and suggest


technical revisions to narrative and tables.


� 

Anthon


Attachment

PUBLIC I-IEALTH SERVICE fPHS) COMMENTS ON THE 

OFFICE OF INSPECTOR GENERAL (OIG) DRAFT REPORT: 

“THE RYAN WHITE ACT: FUNDING FORMULAS, “ 0EI-05-93-O0330 

GENERAL COMMENTS 

The PHS appreciates the timeliness of the OIG examination of


the formulas governing the Ryan White Comprehensive AIDS


Resources Emergency (CARE) Act funds and proposed options to


change the formulas. Since this report is the first in a


series of studies intended to provide information that may be


useful during the reauthorization of the Ryan White CARE Act,


we offer the fbllowing comments for your consideration.


Background 

Wy formula funding approach to ciistri,buting HIV/AIDS funds


will not fully address the total need for assistance. It is


reasonable that a formula should take into account new cases


reported, and perhaps include multiple years of reporting, as


proposed with the 2 or 3 Year case count. Over time, the


possible contribution to funding disparity caused by the


expanded AIDS case surveillance definition should subside.


This decrease in cii.sparity will occur once all States have


fully implemented Surveillance methods under the new


definition and individuals who meet the new case definition


are fully incorporated into case counts.


Ryan White funding has provided an incentive to timely 

reporting of AIDS cases since there i.sa direct financial 

incentive for a State to report cases by the funding cut-off 

date. On the other hand, States have not had sufficient 

resources to adequately conduct other aspects of AIDS 

surveillance, such as followup cases reported with no 

identified risk. Any options which might be proposed and/or 

adopted that would expand data required of State-AIDS


surveillance or HIV sero-surveillance programs should


concurrently provide sufficient additional resources for


strengthening these programs.


QF&&ZU2


In reviewing the options for funding formulas presented in the


OIG report, a clarification on reporting of AIDS-related


deaths would be useful. The PHS aurees that a reasonable


approach would be to base funding zormulas on persons living


with AIDS, as opposed to cumulative or incident AIDS cases 

which may include deceased persons. The reason stated i.nthe 

report however, that this is not feasible since reporting of 

AIDS-relateci deaths is not required by Federal law i.s 

incorrect. Indeed, neither reporting of AIDS cases nor AIDSD-3 
2


related deaths is required by Federal law. However,


ascertainment of vital status of persons reported with AIDS is


done routinely by all State health departments through review


of death certificates. States voluntarily share such


information with the Centers for Disease Control and


Prevention (CDC). Accurate State-specific data prevalence 

(the number of persons living with AIDS) by city and State 

would require that: (1) AIDS-case reports be updated promptly 

when persons die, and (2) movements of persons with AIDS from 

city-to-city or State-to-State be accurately monitored. While 

States use death certificates to update AIDS case reports, to 

base funding on such updates may create a disincentive to 

complete death reporting. In addition, tracking the movement 

of individuals from one geographic area to another during the 

course of their HIV illness would be beyond the scope of 

affected communities (e.g., this would require making a change 

of residence in a person with AIDS a reportable event to 

health departments). 

Criteria 

The OIG report examines each option against five criteria that


they consider useful in assessing any new allocation


methodology: equity, targeting, flexibility, reasonable data


requirements and stability. In the case of “targeting,” the


report states that “funds should be targeted to areas with the


greatest concentration of cases, and is not spread so thin as


to be ineffective.” The PHS disagrees that $1 million to


$2 million for new Title I grantees is ineffective. There is


substantial evidence that funds to new Title I grantees are


extremely useful in creating a community planning process as


well as filling gaps in a continuum of care.


The criterion of “stability” seems inconsistent with the


criterion of “flexibility. “ The tables clearly demonstrate


that proposed changes in funding formulas result in


substantial disruptions of current funding and future funds.


The “flexibility” criterion, combined with the “targeting”


criterion will create a scenario in which certain States and


eligible metropolitan areas could move in and out of funding


as demographic changes occur, resulting in major disruptions


in “stability .“


In the past, the formula was based on cases reported from 

statistical units (Metropolitan Statistical Areas - MSAS) as 

published in CDC’S HIV/AIDS Surveillance Reports. Because 

these MSAS are not administrative units, MSAS frequently cross 

administrative/legal jurisdictions. The result is that CDC 

receives numerous ad hoc requests by the various agencies that 
3 

use the Ryan White formula (e.g., HRSA, HUD) to parcel out


these cases across State/county/city lines.


In addition, part of the formula requires calculation of a


rate to ensure equitable distribution of funds. However,


because it is difficult to obtain accurate denominator data,


these rates are only crude estimates of the impact of the


epidemic in the targeted areas, and they are not responsive to


changes in the demographics of the affected populations.


Denominators for the calculation of rates are not readily


available, especially by geographic and demographic subgroups.


There are necessary delays following the decennial census


until stratified population counts are made available to CDC


by the Bureau of the Census. Official estimates of annual 

population change by demographic/geographic substrata are 

frequently unavailable. Therefore, CDC is required to develop 

crude estimates of annual population change with limited 

statistical resources. 

Another criterion to be considered in developing funding 

options is “reasonable data requirements. ” Data used in the 

formulas to distribute funds should be readily available and 

reliable. It is reasonable to base funding formulas on AIDS 

statistics because national AIDS surveillance is currently the 

only system that collects data completely and consistently on


persons who are in care, or require care, for severe HIV


disease. However, these data are “readily available and


r~liable” only insofar as concerted collaborative efforts


among CDC and other State/local health departments continue to


prioritize the collection of AIDS suneillance data.


lft in the future, AIDS suneillance were reemphasized or the 

quality and completeness of the data were compromised due to 

fiscal or persofiel constraints at Federal/State/local levels, 

then long term legislation tied to these data could result in 

inequitable distribution of resources. The data are available 

and reliable and are dependent on the continued support for 

the AIDS surveillance system. 

Methods 

The tables provided in the report do not i.nclucie comparative 

data necessary for any meaningful analysis and the inclusion 

of Fiscal Year (FY) 1994 data would provide the needed 

clarification. Specifically, for Tables 4 through 7:


(1) formulas proposed should be based on FY 1993 data for


comparison of actual ET 1993 awards and changes that would 

have occurred if DrODOSed formulas had been used: and 

(2) actual data oh F? 1994 awards should have be& provided, 

again to highlight how proposed formulas would have changed 

135

4


the funding picture. If actual FY 1994 data had been used, 

major funding disruptions that would result from formula 

changes would have been highlighted, e.g., a 31 percent 

decline in funding for New York City and a 46 percent decline 

in funding for San Francisco in Table 4. By comparing 

proposed FY 1994 to actual FY 1993, any funding disruptions 

caused by the formula change were masked by the 76 percent 

Title I funding increase from FY 1993 to FY 1994, an increase


not likely to be repeated in future years.


TECHNICAL COMMENTS 

(1) Definitions: The report uses the words “equity” and


“parity” as if they mean the same thing. Equity means


fairness, and is not an absolute term. Parity means equality


as in amount, status or character. Equal funding for each


recently reported AIDS case is one interpretation of equity,


but many other interpretations are equally valid. For


example, an interpretation inconsistent with the stated


purpose of the Ryan White CARE Act is in the report itself,


“to establish services for AIDS and HIV patients who would


otherwise have no access to health care.” It may be useful to


provide a more extensive discussion of why “equity’”was


selected as the principal determinant for the analysis and


driving force behind the proposed allocation formulas. Is


this the factor that best describes the need for Ryan White


services?


(2) The cover page should be more accurately titled, “The Ryan 

White CARE Act: Funding Formulas.” 

(3) Page 2, second full paragraph. The last sentence should 

read: “The Health Resources and Services Administration 

(=A) in the Public Health Service administers Titles I and 

II of the Act. The HRSA and the Centers for Disease Control 

and Prevention (CDC) were to administer Title III of the Act.” 

(4) page 2, second paragraph under Title I Section. The last 

sentence should be rewritten as follows: “HRSA is required to 

allocate funds to grantees within 60 days after an 

appropriation becomes available.” 

(5) Page 2, third paragraph under Title I Section should be 

amended to read, “as supplemental grants to eligible 

metropolitan areas which have demonstrated a severe need for 

additional financial assistance to address the epidemic and 

the ability to allocate funds expeditiously to areas of 

greatest need.” 
5


(6) On Page 3, Line 2, insert “areas most affected as well as”


between the words “on” and “the.”


(7) Page 3, first paragraph. The last sentence should be 

deleted and replaced with: “To get the money out quickly to 

meet the greatest needs, States are required to allocate 75 

percent of services within 120 days after an appropriation 

becomes available.” 

(8) page 3, Title III Section, first sentence should read: 

“Title III(a), intended to provide formula grants to States 

for early intervention semices on an outpatient basis, and 

intended to be administered by CDC, has not been funded to 

date. “ 

(9 ) Page 3, second paragraph. The last sentence: delete the


word “drugs” and insert the words *approved treatments.”


(10 ) Under the heading of Special Projects of National


Si.gni.ficance rewrite the last two sentences as follows: “ln


FY 1991, HRSA awarded approximately $4.4 million for


22 projects. These projects continued in FY 1992 with


$5.2 million and four new projects funded with an additional


$836,000. In FY 1993, nearly $6.1 million was awarded to


support 27 projects. An additional $2.97 million,


$4.84 million, and $5.10 million in FY 1991, 1992, and 1993,


respectively, was mandated by Congress to be used for


reimbursement of dental health providers who provided


uncompensated care to people with HIV/AIDS.”


(11 ) Page 4, SCOPE AND METHODOLOGY. The first line in the 

first paragraph should read: “The Ryan White Act will be 

reauthorized in”FY 1996.” 

(12) Page 4, first paragraph, second sentence, third line. 

Replace the word “debate” with “discussion.” 

(13 ) Page 5, first paragraph, mentions the implementation of 

the January 1993 AIDS case definition as an important backdrop 

with significant impact on the distribution of funds. Another 

important backcirop factor with significant hpact which has 

not been mentioned i.s the December 31, 1992 Offf.ce of 

Management and Budget (OMB) definition of Metropolitan 

Statistical Areas. The new definitions in many cases are 

substantially different than the definitions they replaced, 

and they significantly affect the numbers of AIDS cases being 

reported in affected metropolitan areas. For example, New 

Haven, CT now includes Bridgeport/Stamford CT, which increases 

the number of AID cases reported in this metropolitan area,


and would affect any funding based on AIDS cases reported.

., . 

6


(14) Page 5. Rewrite the first sentence of the third


paragraph as follows: “Title II funds are distributed to all


States, Puerto Rico, the District of Columbia, and up to five


U.S. territories via a formula.”


(15) Page 5, fourth paragraph is not accurate. The CDC’S


expanded AIDS surveillance case definition includes all HIV-


infected persons who have < 200 CD4+ T-lymphocytes/uL or have


CD4+ T-lyreDhocvtes, 14 Percent of total T-1vnmhocvtes, and


adds pulmonary TB, recurrent pneumonia, and invasive uterine


cervical cancer. The CD4+ T-cell percentage has been omitted


in the OIG report.


(16) Page 6. The second sentence in the second paragraph 

should read: “Partly as a result of the new CDC definition, 

the number of eligible cities increased to 34 in l?y1994 and 

HRSA expects an increase by as many as 4 to 7 in FY 1995.” 

(17) Page 10. Add to the second paragraph: “Additionally, 

the number and the proportion of people with AIDS and H~ 

requiring care, those already in care, and fie insurance 

status of those people, is not available.” 

(18) Page 10, third paragraph, last sentence. The report 

never acknowledges that services are also provided to people 

with HIV infection who do not have an AIDS diagnosis. 

(19) Page 11. The first paragraph under Option I needs 

clarification; denominator is cases reported to Title I 

eligible metropolitan areas (-). 

(20) Page 11 second paragraph, last sentence. The proposed 

variation is the way supplemental funds are currently awarded. 

(21) Page 12, Table 4. A column giving the actual FY 1994 

formula allocation, which i,s now available, would be helpful. 

(22) Page 13. In regard to the methodology for Option I,


second paragraph, comparison should also be made to the actual


1994 distribution. This distribution would help identify


instances of service delivery disruption in cities which get


level or decreased funding and data which does not take into


account full year funding of services providers.


(23) Page 14, second paragraph. The statement to “hold 

[cities that would lose funds] harmless” at the FY 1993 

levels, fails to recognize that changes may occur in


FY 1996.


D-8

7


(24) Page 14, third paragraph. The variation collapsing all


Title I funds into a formula grant fails to take into account


the role of the supplemental grant.


(25) Page 15. Table 5 should add a column for actual


distribution of 1994 dollars.


(26) Page 16. Option 3: first paragraph. This option does 

not examine the impact of dollars per case from Title I in the


“equity” discussion.


(27) Page 17. Table 6 should include a column with actual


FY 1994 dollars.


(28) Pages 21-22, Table 7. States without EMA include the 

District of Columbia. Under the CARE Act, the District of 

Columbia receives Title II funds and also qualifies as an EMA 

and receives Title I funds. The amounts proposed for Guam and 

the Virgin Islands fail to take into account that the minimum 

Title II grant awards apply only to States and do not include 

territories. 

(29) Tables 7 and 8. Add a column with FY 1994 actual


dollars.


(30) Table 8 should include the District of Columbia. 

D-9