The Impact of AIDS on the Kaiser

Permanente Medical Care Program

(Northern California Region)

July 1988

NTIS order #PB89-116941
unabated.

PREFACE

The impact of AIDS on the Nation’s health and health care resources continues

Congress has responded to the AIDS crisis with large increases in Federal funds for

basic and applied research and education, and has begun to grapple with the difficult issues

involved in financing AIDS-related health care. AIDS is also appearing on the agenda of an

increasing number of congressional committees and raises numerous important issues that will

require further congressional attention and decisions. These developments led to a

recommendation by OTA’s Technology Assessment Board, with encouragement from the

Legislative Subcommittee of the House Appropriations Committee, that OTA provide “assistance

on AIDS-related issues to the Congress on a sustained basis.

The topic of this fourth paper in OTA’S series of AIDS-related issues is the impact of

the AIDS epidemic on the Kaiser Permanence Medical Care Program’s (KPMCP) northern

California region and was originally commissioned for OTA’s assessment of Medical Testing and

Health Insurance. Key OTA staff involved in the oversight of the project were Jill Eden, Larry

Miike, and Laurie Mount.

The KPMCP is a private, nonprofit, health care program that provides prepaid

medical and hospital services to more than 5 million people in 16 States and the District of 

Columbia. Its northern California region serves 25 percent of the area’s population and is

second only to the county health system as a provider of care to AIDS patients in San Francisco.

This paper reviews KPMCP’S northern California region’s AIDS cases between 1981 and June

1987 and presents a cost analysis of a sample of these patients. -.

The preceding Staff Papers in this series were: Do Insects Transmit AIDS?

(September 1987), AIDS and Health Insurance - An OTA Survey (February 1988), and How

Effective is AIDS Education? (June 1988). (See inside back cover for information on how to

order these publications.) Previous OTA reports addressing AIDS-related issues include: 1 )

Blood Policy and Technology (January 1985), 2) Review of the Public Health Service> Response

to AIDS (Technical Memorandum, February 1985), and 3) The Costs of AIDS and Other HIV

Infections: Review of the Estimates (Staff Paper, May 1987).

-—-
THE IMPACT OF AIDS ON THE KAISER PERMANENTE

MEDICAL CARE PROGRAM

(Northern California Region)

by

The Kaiser Permanence Medical Care Program

(Northern California Region)

Robert A. Hiatt

Bruce Fireman

Charles P. Quesenberry, Jr.

Joseph V. Selby

Denise Durant, Steve Hayes, Matthew Kaplan,

Anthony C. Knight, William Kramer, Kathleen M. Lewis,

Greg Lieberknecht, Paul Litsky, Walt Meyers, Lewis Sandy, P. David Sawi

prepared for

Health Program

Office of Technology Assessment

United States Congress

Washington, D.C. 20510-8025

July 1988

A Paper

in OTA’s Series on

AIDS-Related Issues
CONTENTS

Chapter page

1. Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 1

2. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......................................3

3. Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..-..........................~........... .................~......=5

Construction of the AIDS Database..

Data Collection Methods for Measur

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ng Resource Utilization . . . . . . . . . . . . . . . . . . . ...........................6

Unit Cost Calculation

Survival Methodology

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

4. Results .----...--....1 1

Analysis of the AIDS Caseload . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......................11

Cost of Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

5. Concluding Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...............~l

Appedix

A. Kaiser Permanence Medical Care Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................23

B. The Product-Limit Estimator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

C. Centers for Disease Control (CDC) California AIDS Projections _ Muu n_ _wuvvuummw v

-....3 7

D. List of Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................45

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................................47

Tables

Table

3-1.

3-2.

3-3.

4-1.

4-2.

4-3.

4-4.

4-5.

4-6.

4-7.

4-8.

4-9.

Pqq(’

AIDS Cases by Best Source of Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............5

AIDS Classification Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ................................7

Data on Resource Utilization of AIDS Patients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......................................8

Incidence of AIDS: 1981-June 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Number of AIDS Patients by Facility of Diagnosis: 1981-June

Distribution ofAgeat Diagnosis: KPNCR and General popula’

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

1987 .1 2

ion:

1981-June 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Initial Diagnosis for AIDS Patients . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...............13

Estimated Lifetime Hospital Utilization by In

in 913 AIDS Patients. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Estimated Lifetime Hospital Utilization by In

for the Sample of 30 AIDS Patients mtio---HHMtititi=mH==titH-=--= .................................14

Estimated Lifetime Utilization by Service Category

for the Sample of 30 AIDS Patients . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......15

Calculation of Product-Limit Estimates of the Distribution of

Lifetime Costs of Care for AIDS: Sample of 30 AIDS Patients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Estimated Lifetime Costs of AIDS for the Sample of 30 AIDS Patients . . . . . . . . . . . . . . . . . . . . . . . . . 16

4-10. Estimated Lifetime Costs by Initial AIDS-Related Diagnosis

for the Sample of 30 AIDS Patients MHMM-OUHHHHHHH-O---==HMH- .................................17

4-11. New Cases of AIDS From 1981- 1990-=...ti..tti.m.ti ...titi . . . . . . . . . . . . . . . . . . .....18
—

CONTENTS (cent’d)

A-1.

A-2.

A-3.

A-4.

A-5.

A-6.

A-7.

Percent Distribution Membership by Age and Sex 1980 and 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Number and Percentage Distribution of Group and NonGroup Members

for Selected Years: 1965 to 1986 ?6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Registration Charges for Selected Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Description of Prescription Drug Plans ................................................................~ ------ .........................30

Age-Specific Health Plan Utilization Rates, Calendar Year 1986 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

Percent of Average Hospital Occupancy, KPNCR, California, and

the United States, Selected Years From 1976 to 1986--=m-~.~~.~~~.~-~-~~ ..................33

Largest Non-Kaiser Northern California HMOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Figures

Figure Page

A-1. KPNCR Service Area Map --------------------------- -.-.-..--.-.---.-...-..2 4

A-2. Kaiser Foundation Health Plan Membership Northern California Region .......................25

A-3. KPNCR Application for Membership-Medical Questionnaire . . . . . . . . . . . . . . . . ..........................28

A-4. Individual Plan Programs ..H-...H=H...nu..HH-nu ----- ~mHHu u

.

t i

. .G u.

=

. - .

u

.

u 31 . .u 3 1
1. SUMMARY

The Kaiser Permanence Northern California Region (KPNCR) serves a total membership of more than 2 million people, 25

percent of the area’s population, and is second only to the county health system as a

provider of care to AIDS patients in San

Francisco.

From 1981 through June 1987, a total of

940 KPNCR patients were diagnosed with

AIDS. Pneumocystis carinii pneumonia (PCP)

was the presenting diagnosis in 63 percent of

the AIDS patients, while 15 percent were initially diagnosed with Kaposi’s sarcoma (KS).

These 940 patients represent 23.7 percent of

all cases reported to the State of California

during the same period for the same geographic areas. The incidence of AIDS within

KPNCR increased from roughly 1.6 cases per

100,000 members before 1984 to 19.7 cases

per 100,000 by June 1987. This represents a

59 percent average annual increase in the

number of new cases between 1984 and 1986,

the period of time for which complete annual

data were available. This rate of increase is

expected to decrease, but not significantly,

within the next 5 years.

Information on the cost of AIDS care

was available for 913 of the 940 patients.

Twenty-seven of the 940 cases were excluded

because the date of diagnosis was not available. The 913 AIDS patients (39 percent

were still alive in June 1987) were hospitalized a total of 1,994 times and stayed 23,697

days in total.

Lifetable methods were used to obtain

unbiased estimates of total lifetime hospitalizations and hospital days for all 913 cases.

This approach yielded a lifetime mean of 3.5

hospitalizations ( + O. 15) and a lifetime mean

of 39.3 (+ 1.27) hospital days per case. Corresponding medians were 3.0 and 32, respectively. Patients whose initial diagnosis was

PCP were hospitalized for longer periods than

were KS patients; the mean length of hospitalization was 12.0 versus 10.6 days.

A sample of 30 AIDS patients was

selected randomly from the 596 AIDS patients

who had received care in t he Kaiser

Permanence San Francisco or Oakland hospitals. Each patient’s total utilization of Kaiser

services was reviewed, beginning one year

prior to AIDS diagnosis, to derive costs for

inpatient care, outpatient care, tests and procedures, and pharmacy prescriptions.

The estimated mean cost from date of

diagnosis to death was $35,054 in actual dollars (standard error + $4,245). The median

cost was somewhat lower at $29,929, suggesting that the distribution of costs was skewed

toward the higher amounts (i.e., that a few

patients with very high costs increased the

mean).

Annual costs per patient were calculated

for three time periods-- 1984-85, 1986, and

the first half of 1987--to look for trends in

the costs of AIDS care. Total costs and hospital costs changed little from the first to the

second period, but fell 20 percent and 36

percent, respectively, in 1987. The drop in

hospital costs may be attributable to the establishment, in March 1986 of an outpatient

unit (known as the Infusion Center) to provide intravenous (IV) medication to AIDS

patients at Kaiser Permanence’s San Francisco

hospital. In its first 18 months of operation

this center saved an estimated 3,500 inpatient

days.

In contrast, annual outpatient pharmacy

costs climbed markedly from $386 per person

during 1984-85 to $2,423 in 1986 and $4,477

in 1987. This reflects the introduction of the
2 ● The Impact of AIDS on Kaiser Permanence

drug AZT as an outpatient treatment for

AIDS during 1986.

Total costs per AIDS patient for one year

of care averaged $25,119 from 1984 through

June, 1987. The product of the annual costs

per case ($25,1 19) and the number alive at

mid 1987 (346) gives an estimate of the total

cost of care for all AIDS patients in 1987

($8,691,174). If the incidence of AIDS and

survival time increased during this time, the

use of the number of cases alive at the midpoint of the year underestimates the average

number alive during the year. This could

also lead to an underestimate of total costs.

Limitations in KPNCR’S cost accounting

and data systems make it difficult to precisely

measure the overall impact of AIDS-related

care on the 1988 basic rate. The ratesetting

forecast for 1988 includes 14,120 patient days

related to AIDS or AIDS-related complex

(ARC). This represents 2.0 percent of the

total adult and pediatric patient day forecast,

or more than $8.6 million --a significant increase from the estimated 1987 inpatient cost

of $5.7 million.

Given the relationship of AIDS inpatient

costs to other services (e.g., outpatient visits

and ancillary services), the impact of

AIDS/ARC on the basic rate is in excess of

$0.55 per member per month, exclusive of

the cost of AZT.

A total of 2,501 new AIDS cases are

forecast for July 1987 through 1990. Assuming mean lifetime costs of $35,054, the costs

for providing care to these patients will be

$87.7 million. This estimate does not consider inflation, additional costs incurred as lifeextending therapies are developed, costs of

care for infected patients who do not yet fulfill the diagnostic criteria for AIDS (i.e.,

patients with ARC or human im -

munodeficiency virus seropositivity), or

changes in the cost of care resulting from

new alternative health care arrangements.
2. INTRODUCTION’

The Kaiser Permanence Medical Care

Program (K PMCP) is the largest private

health care program in the United States, and

the majority of its membership resides in

areas with large numbers of AIDS cases. The

Northern California Region of the program is

second only to the county health system as a

provider of care to AIDS patients in San

Francisco.

In the summer of 1987, the Office of

Technology Assessment contracted with the

Kaiser Permanence Northern California

Region (K PNCR) to report the impact of the

AIDS epidemic on its program with a special

focus on cost issues.

From 1981 through June 1987, a total of

940 KPNCR patients were diagnosed with

AIDS. This paper looks at how these cases

were identified, who they were, the services

they used, and the cost of their care. In

addition, background information is provided

on K PNCR’S organization, membership,

benefits structure, and ratesetting methods.

1 This report was prepared by the Northern California

Region of the Kaiser Permanence Medical Care Program

and does not necessarily reflect the views, data or policies

of any other region within the Kaiser Permanence Medical

Care Program.

●
3. METHODS

CONSTRUCTION OF THE AIDS

DATABASE

The KPNCR AIDS database was constructed from three computerized sources (described below) and contained a total of 940

patients diagnosed with AIDS between January 1981 and June 30, 1987.2

1) The Inpatient Utilization System

(IUS) file contains data for all hospitalizations at any KPNCR hospital and includes up

to 13 ICD-9-CM diagnostic codes per admiss ion. These data have been used in many

epidemiologic studies and their accuracy

verified for a variety of diagnoses.

The file was searched from 1981 onward

for definite and probable cases of AIDS, applying an AIDS case definition based on that

of the Centers for Disease Control (CDC)

criteria (10, 1 1).

2) The pathology file contains biopsy

reports from five major KPNCR hospital

pathology departments, including San Francisco’s and Oakland ’s. Probable cases of

AIDS were identified from biopsy diagnoses

of Kaposi’s sarcoma (KS), Pneumocystis

carinii pneumonia (PCP), candidiasis, and

certain non-Hodgkin’s lymphomas.

3) The KPNCR hospital pharmacy file

contains information on all patients on AZT

treatment protocols.

Medical records of most cases identified

only by the pathology file or the AZT list

were reviewed to verify the diagnosis of

AIDS and to identify the date of diagnosis.

Medical records of many women who lacked

a specific diagnosis of AIDS were also

reviewed. At chart review, cases not fitting

CDC criteria for AIDS were removed from

the database.

In September 1987, the CDC expanded

its criteria for the diagnosis of AIDS to include AIDS-dementia and generalized wasting. Due to time constraints, these criteria

could not be applied in identifying cases in

the database. Therefore, the numbers presented in this report may underestimate the

total number of AIDS cases by about 5 percent (13). On the other hand, the AIDS database used in this report represents a combination of cases identified solely by computer

criteria and cases confirmed either by chart

review, the Confidential Case Report filed

with the State, or a report from an Infection

Control nurse. A few cases currently in the

file therefore may not represent AIDS.

Table 3-1 shows the frequency of the

best currently available source of diagnosis

for the 940 cases in the AIDS database in

decreasing order of certainty of the diagnosis.

On the basis of their initial AIDS-related

diagnosis, an attempt was made to classify all

cases as either AIDS with infection (042.0),

Table 3-1--- AIDS Cases by Best Source of

Confirmation

Source Number Percent

Chart review . . . . . . . . . . . . . . . . . . . . . . .

Copy of confidential caae report . . .

Infection control nume’s report...

IUS (hospitalization) file

and AZT file. . . . . . . . . . . . . . . . . . . . . .

IUS file and pathology file.....

IUS file only. . . . . . . . . . . . . . . . . . .

Pathology file only. . . . . . . . . . . . . . . .

AZT file only. . . . . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87

110

93

88

96

426

35

5

940

9.3%

11.7

9.9

9.4

10.2

45.3

3.7

0.5

100%

2 The prevalence of HIV seropositivity and of AIDSrelated complex (ARC) among the KPNCR membership

are unknown.

SOURCE: Kaiser Pennanente (Northern California

Region), uqxbl i shed data, Oakland, CA,

198s.

5
6 ● The Impact of AIDS on Kaiser Permanence

AIDS with neoplasm (042.2), or AIDS with

other diagnosis (042.9). In the absence of a

diagnosis of AIDS on the hospital discharge

form, a presumptive diagnosis of AIDS was

made in males less than 60 years of age if an

AIDS-related diagnosis was noted without an

alternative diagnosis to explain immune

deficiency. (The medical records of all men

less than 60 years of age who have a diagnosis suggestive of AIDS but not a diagnosis

of AIDS itself, are to be reviewed further.

Women and men over 60 years of age with 2

possible AIDS-related diagnoses were not included, but their charts are also to be

reviewed to identify possible additional

cases. ) The decision rules, based to the extent possible on the CDC case definition, that

were used to guide classification are summarized in table 3-2.

For each AIDS case, whether chart review

was performed or not, the date of diagnosis

was defined as the earliest date associated

with a diagnosis of AIDS or a diagnosis compatible with AIDS. This date was used in the

descriptive analysis of all cases and as the

starting point for the calculation of AIDSrelated costs in the sample.

DATA COLLECTION METHODS

FOR MEASURING RESOURCE

UTILIZATION

AIDS patients had voluminous medical

records and although a larger sample would

be desirable, time did not allow for complete

data collection for more than a sample of 30

patients. For each of the 30 cases in the

sample, complete inpatient, outpatient,

hospice, and home health care records, beginning 1 year prior to the date of diagnosis,

were reviewed by trained medical records

analysts. Each service or resource was entered as a separate item and assigned a cost.

As noted, sample size was limited

primarily by the time available to review

medical records with the appropriate scrutiny.

The sample was also restricted to patients

diagnosed since January 1, 1984, in order to

reflect more recent utilization patterns while

also allowing enough time for the disease to

run its course.

Table 3-3 provides details on the data

that were collected to help measure the

resource utilization of the 30 sample AIDS

patients.

UNIT COST CALCULATION

Average unit costs were assigned to all

the identified services provided to AIDS

patients. These unit costs are “fully loaded”

to include the expenses attributable directly

to the delivery of a service, the “overhead”

connected with the operation of the medical

facility, and the indirect “overhead” connected

with health plan operations. No effort was

made to separate the AIDS-related costs of

care from the costs of other services provided

to AIDS patients. Assuming average utilization of non-AIDS-related services among the

30 sample cases, the effect on the cost

estimates would be negligible. (See appendix

A, table A-5, for average utilization statistics

for all KPNCR members.)

Average unit cost calculation was based

on the standard methodology used for

KPNCR’S Medicare cost reports. Cost data

were drawn primarily from 1986 sources.

Hospital Bed Unit, Per Diem

The nursing costs of AIDS patients who

are hospitalized in units with non-AIDS

patients cannot be readily determined. However, in an AIDS-dedicated nursing unit,

such as in the San Francisco facility, nursing

costs are about 40 percent greater than the

costs for other medical/surgical patients.

This additional cost was included in the per

diem hospital bed cost. Overhead was allocated to direct costs (such as nursing and

supplies), based on the standard stepdown

methodology used for Medicare cost report-
The Impact of AIDS on Kaiser Permanente ● 7

Table 3-2. --AIDS Classification Guidelines

Case identified b y Class i f i cation

1. Copy of Confidential Case Report Included as a case; no chart review; initial

sent to the State diagnosis obtained from the case report

2 . Infection control nursing record s Included as case; no chart review; classifie d

(without copy of confidential cas e as 042.9 (AIDS, initial diagnosis unspecified )

report or information on initial diagnosis )

3 . Diagnosis on the IUS file:

a. ICD-9-CM diagnosis of AIDS

(279.10 - 279.19 before Sept. 1986 ,

042.0 - 042.9 thereafter) :

o With additional diagnosis o f

AIDS-related opportunistic infectio n

o With additional diagnosis o f

AIDS-related neoplas m

o With additional diagnosis o f

wasting or dementi a

o With no additional AIDS-re[ated diagnose s

b. No ICD-9-CM diagnosis of AIDS, bu t

male , <60 years old, and no othe r

diagnosis to explain immune deficiency :

o With AIDS-related opportunisti c

infection, including :

--Pneumocystis carinii pneumonia ,

--toxoplasmosis of central nervous syste m

--cryptococcoal meningiti s

--coccidiosi s

--CMV pneumonia, excluding neonatal

--progressive multi focal leuko -

--encephalopath y

--candidiasis of esophagu s

o With AIDS-related neop(asm :

--Kaposi}s sarcoma (ICD-9-CM 173.8 )

c. No ICD-9-CM diagnosis of AIDS,

female or male >60 year s

4 . AZT file or Pathology File only

Classified as 042.0, no chart review

Classified as 042.2, no chart review

Classified as 042.9, no chart review

Classified as 042.9, no chart review

Classified as 042.0, chart review pendin g

Classified as 042.2, chart review pending

Excluded from database, chart

review pending

Chart review done to verify diagnosis .

If chart review revea(ed that AID S

was not diagnosed, the case was removed

from the database

SOURCE: Kaiser Permanence (Northern California Region), unpublished materia[, Oakland, CA, 1988 .
8 ● The Impact of AIDS on Kaiser Permanence

Table 3-3 .--Data on Resource Utilization of AIDS Patients

Resource Data collected

1. Inpatient services a. Date and hour of entry, discharge, and transfer of service.

b. Inptient service (e.g., intensive care, medical/surgical,

hospice).

c. Specialty consultation.

2. Inpatient pharmac y

service s

3. Outpatient service s

(excluding psychiatri c

utilization )

4. Psychiatric service s

5. Outpatient pharmac y

service s

a. Utilization was estimated based on prescriptions ordered for

all hospitalized AIDS patients during an 8-day period of o b -

servation in the San Francisco and Oakland facilities in October 1987 .

a. Date of visit (or service).

b. Facility type .

c. Clinic type.

d. Provider type.

e. Procedures: diagnostic or therapeutic (e.g., lmbar puncture,

Laboratory, radiology).

f. Support services (e.g., social services).

g. Prescriptions: quantity, strength, refills .

For reasons of patient confidentiality, use of psychiatry service s

was assessed by the staff of the psychiatry departments in Oakland

and San Francisco. A list of all patients in the sample uas sub -

mitted to each department. Department staff examined charts to

record the follouing :

a. Date of visit.

b. Visit type .

c. Provider type.

d. Prescriptions.

It Has assuned that all prescriptions and refiils indicated in t h e

record uere actually dispensed and that refills were not prescribed unless indicated. This approach is inaccurate to the extent that clinicians fail to record refills authorized or patient s

fail to fill all prescriptions or refills indicated. In some in -

stances, notation of prescriptions uas incomplete. For exampie,

the quantity prescribed was often anitted. In such cases, a

standard quantity uas assuned (e.g., a 10-day supply of

antibiotic, orw-month supply of other medications).

SOURC E: Kaiser Permanence (Northern California Region), ~lished ~terial, Oakland, CA, 1$’~”
The Impact of AIDS on Kaiser Permanence ● 9

ing.

s Pharmacy costs, generally a part of the

allocation process, are specifically excluded

and treated as a separate cost area.

Physician Visits: Clinic and

Hospital

The cost of a physician’s office visit was

derived from The Permanence Medica l

Group’s 1986 Unit Cost Worksheet. Overhead

costs, including plant operation and local administration, were included. The emergency

room is considered an outpatient clinic and

assigned a visit cost along with other outpatient clinics. Inpatient physician services

(such as bed rounds) were treated separately

from physician clinic activity. There was no

overlap between the overhead costs allocated

to physician clinic v. physician hospital services.

Average visit costs were calculated by

dividing total clinic costs (including nonphysician provider costs) by total physician

visits. No distinction was made between the

cost of AIDS visits and other visits. It was

not possible to determine whether, on average, visits by AIDS patients consume more

(or less) resources than visits by others.

Medications: Inpatient and

Outpatient

The Pharmacy Chiefs at the San Francisco and Oakland hospitals agreed that, based

on their informal observations, the drugs used

to treat AIDS inpatients are more expensive,

on average, than those used to treat non3 The stepdown method allocatea the following overhead

coats to inpatient beds: 1) buildings and fixtures, 2 )

moveable equipment, 3) employee benefits, 4) administrative and general, S) maintenance and repaira, 6) operation of plant, 7) linen and laundry, 8) housekeeping, 9

dietary, 10) cafeteria, 11) nuraing administration, 12 1

central supply, 13) medical records, 14) social semice, 1S)

health plan administration, and 16) reeidenta’ salaries and

benefits.

AIDS inpatients who are hospitalized within

the same bed unit. Since the individual inpatient pharmacy costs incurred by the

sample of 30 patients were not available, a

mean per diem drug cost from pharmacy

medication logs for all AIDS patients hospitalized in San Francisco and Oakland in a

week in October 1987 was used.

The Pharmacy Chiefs also noted that

there is not a significant difference between

the cost of dispensing drugs to AIDS inpatients v. other patients in the same unit.

Consequently, average hospital dispensing

costs (inclusive of overhead) were added to

the cost of the AIDS medications.

Outpatient prescriptions were individually tallied and costed out using the current

cost of the drug in the pharmacy’s inventory

asset file. The costs were then adjusted to

reflect direct and indirect dispensing expenses.

Ancillary Services: Weighted

Procedures

Average unit costs were derived for the

ancillary services typically used by AIDS

patients. For many services, including EEG,

EKG, hospital laboratory, patholog y

laboratory, physical therapy, radiology, and

respiratory therapy, a weighted value methodology was used to estimate unit costs. All

applicable direct and indirect overhead were

taken into account.

It is widely acknowledged that weighted

value costing of ancillary services has

weaknesses. The major criticism is that the

cost weights employed are only approximations of the actual relative amount of

resources required to provide the various tests

and therapies. In addition, important cost

differences within a cost center (e. g.,

hematology v. chemistry laboratory tests) may

be masked. This could be significant if the

mix of tests provided to AIDS patients significantly differs from that given others.
10 ● The Impact of AIDS on Kaiser Permanence

Surgery

The cost of surgery was divided into two

components: 1) professional fees attributable

to the surgeon and anesthesiologist and 2)

hospital operating room costs (including the

recovery room and nurse anesthetists). The

total average hourly cost of the professional

component was drawn from the Medicare

Part B Revenue Worksheet. The total average

hourly cost of the operating room was

derived using standard stepdown methodology. Overhead was allocated to both cost

components.

Other Services

Other services covered by the health plan

and used by AIDS patients were assigned unit

costs. The average cost of a home health

visit was derived by dividing the total fully

allocated cost of the department of home

health by the total number of visits. The

costs of blood and blood products purchased

from county blood banks were defined as the

rates charged by those agencies. Ambulance

services and outside claims and referrals for

specialized services unavailable within the

health plan were treated similarly.

SURVIVAL METHODOLOGY

‘Survival” methods, also known as

“lifetable” methods, were used to examine the

distribution of such lifetime amounts and

costs of medical service utilization. Survival

methods were specifically developed to

estimate the amount of time that individuals

survive from a starting point to an endpoint,

given data on some individuals who are observed until the endpoint and some who are

not. Typically, the starting point is the time

of disease diagnosis and the endpoint is the

time of death. In this analysis, interest centers on the cost from diagnosis to death, rather than on the survival time from diagnosis to

death. 4 The cost for care from time of diagnosis to the end of observation is a nonnegative lower bound for the lifetime cost,

which cannot be known until death.

The primary advantage of survival methods for the examination of lifetime cost is

that they can make use of information about

patients who are still alive. The authors are

unaware of any other studies that have used

survival methods to estimate the cost of care

for AIDS or other illnesses. Survival methods

provide unbiased estimates of the lifetime

costs that eventually would be attained by

living AIDS cases if their future chances of

death at various cost levels continue to fit the

best model of the recent past. This approach

is especially appropriate for the examination

of lifetime health care costs in a rapidly

growing epidemic if the cases who have died

tend to have been short-lived and less costly,

or if the patients who are still alive tend be

in early and less costly stages of the disease.

The estimators of mean and median lifetime

amounts and costs of medical services utilized

were obtained by a basic method of survival

analysis known as the product-limit method

(8). (A formal presentation of the productlimit method is presented in appendix B.)

Subgroup specific estimates of lifetime

costs are assessed with the Iogrank test (12).

In addition to estimates of lifetime cost,

estimates of mean costs per patient per year

were calculated. These estimates are simple

cost rates derived by: 1) summing the total

costs of all patients for a given year, 2) summing the amounts of time that the patients

were observed for that year, and 3) dividing

the former sum by the latter sum. Thus,

every patient contributes to the estimate for a

given year if he is observed at all during the

year, and his contribution to the overall

estimate is weighted by the proportion of the

year for which he is served.

q For convenience, we use the term “coat” to present the

method for analysing both cost and amount of aervices

utilised.
4. RESULTS

ANALYSIS OF THE AIDS

CASELOAD

The 940 AIDS patients represent 23.7

percent of all cases reported to the State of

California during the same period for the

same geographic areas. The incidence of

AIDS within the Kaiser Permanence Northern

California Region (KPNCR) increased from

roughly 1.6 cases per 100,000 members before

1984 to 19.7 cases per 100,000 by June 1987

(table 4-l). This represents a 59-percent

average annual increase in the number of new

cases between 1984 and 1986, the period of

time for which complete annual data were

available. This rate of increase is expected to

decrease within the next 5 years. (A further

discussion of future AIDS cases is presented

later in this section).

By Facility

Nearly half of all AIDS patients

(426/940) were diagnosed at the San Francisco facility; Oakland ranks second in AIDS

caseload (table 4-2).

By Age and Sex

KPNCR AIDS patients are somewhat

older than other AIDS patients from the same

geographic area (table 4-3). Mean age at

diagnosis for KPNCR cases was 40.0 years as

compared to 38.1 years for cases reported to

the State. Within KPNCR, 98.6 percent of

AIDS patients were male, a proportion almost

identical to that for AIDS patients in the local

general population.

By Diagnosis

Pneumocyslis carinii pneumonia (PCP)

was the presenting diagnosis in 63 percent of

the AIDS patients (588/940), while 15 percent

of the AIDS patients (143/940) were initially

diagnosed with Kaposi’s sarcoma (KS) (table

4-4). Other reports suggest that a higher

percentage of AIDS patients in both the San

Francisco area (13) and elsewhere (14) present

initially with KS. This difference may be related to how the Kaiser AIDS patients were

initially identified; many of the cases were

found in the hospital discharge files. Because

Table 4-1--- Incidence of AIDS

1981-June 1987

1981- Jan. - June

1983 1984 1985 1986 1987 Total

Mu’her of cases

diagnosed . . . . . . . . . . . . . . . . 85 118 210 300 200 9 1 3

=

Incidence (pe r

100, OOOtirs). . . . . . . . . 1. 6 6 . 2 10.7 15.0 19.7

a

Twenty-seven of 940 cases were excluded due to unavai lable date of diagnosis.

SOURCE: Kaiser Permanence (Northern California Region), unpublished data, Oakland, CA, 1988.

11
12 ● The Impact of AIDS on Kaiser Permanence

KS, by itself, is seldom a reason for hospitalization, some AIDS patients may have been

identified by their first inpatient diagnosis

despite an earlier outpatient diagnosis of KS.

Hospital Utilization

The cost of AIDS care is largely a function of total inpatient days. The 913 AIDS

patientss (39 percent were still alive in June

1987) were hospitalized a total of 1,994 times

and stayed 23,697 days in total. Mean length

of stay per hospitalization was 11.9 days

overall. The average number of hospitalizations was 2.2, and the average number of

hospital days per patient was 26.0. For AIDS

patients who were still alive, total lifetime

hospitalizations will ultimately be higher.

Among AIDS patients who had died, there

were 2.6 hospitalizations and 33.4 hospital

days per patient. However, AIDS patients

who had already died are not representative

5 Twenty-seven of the 940 caaes were excluded becauee

the date of diagnosia Was not available.

Table 4-2--- Number of AIDS Patients by

Facility of Diagnosis

1981-June 1987

Percent

Facility Number of Total a

San Franciaco. . . . . . . .

Oakland . . . . . . . . . . . . . . . .

Santa Clara . . . . . . . . . . .

San Jose. . . . . . . . . . . . . . . .

Sacramento . . . . . . . . . . .

Vallejo........ . . . . . . . ..

Hayward . . . . . . . . . . . . . . .

San Rafael . . . . . . . . . . . .

Redwood City. . . . . . .

Walnut Creek . . . . . . .

So. San Franciaco..

So. Sacramento . . . . .

Martinez . . . . . . . . . . . . . . .

Richmond . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . . . .

4 2 6

1 7 0

8 1

3 9

3 7

3 3

3 1

2 9

2 6

2s

23

11

5

4

940

46.3%

18.1

8.6

4.1

3.9

3.5

3.3

3.1

2.8

2.7

2.4

1.2

0 5

0.4

100.0%

percentages may not total 100 due to rounding.

SOURCE: Kaiser Permanence (Northern California

Region), unpublished data, Oakland, CA,

1988.

Table 4-3--- Distribution of Age at Diagnosis:

KPNCR and General Populationa

1981-June 1987

KPNCR Genera 1 P o w I at i on

Age at diagnosis Number Percent b Number Percent b

Leaa than 14 yeara. . . . . . . . . . . . . . . . . 1 0.1% 3 0.1%

16-29 yearn . . . . . . . 129 14.1 582 14.5

30-39 yeara. . . . . . . 366 40.1 1,985 49.5

40-49 yearn . . . . . . . 270 29.6 993 24.8

50-59 years . . . . . . 110 12.0 343 8.6

60 years and over. . . . . . . . . . . . . . . . . . . 37 4.1 102 2.5

Total . . . . . . . . . . . . . . . . . 913C100% 4,008 100%

aData are for a geographic area comparable to KPNCR’O service area and include KPNCR cases.

b

Percentage may not total 100 due to rounding.

cTwenty-seven of 940 cases are excluded because the date of diagnosis waa unavailable.

SOURCE: Kaiser Perrnanente (Northern California Region), unpublished data, Oakland, CA, 1988.
The Impact of AIDS on Kaiser Permanence ● 13

of all AIDS patients in that they overrepresent those who die soon after diagnosis.

Thus, these results are underestimates of total

lifetime hospitalizations for the average AIDS

case.

Lifetable methods were used to obtain

unbiased estimates of total lifetime hospitalizations and hospital days for all 913 cases

(see Methods section above). These methods

draw upon information for all 913 AIDS

patients, living and dead, to estimate the distributions of lifetime hospitalizations and

hospital days. This approach yielded a

lifetime mean of 3.5 hospitalizations (+ 0.15)

and a lifetime mean of 39.3 (+ 1.27) hospital

days per case (table 4-5). Corresponding

medians were 3.0 and 32, respectively.

Patients whose initial diagnosis was PCP were

hospitalized for longer periods than were KS

patients; the mean length of hospitalization

was 12.0 v. 10.6 days.

Table 4-4--- Initial Diagnosis for AIDS

Patients a

Number Percen t

b

PCP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 588 62 .6%

KS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 15. 2

Other AIDS- related infect ion...... 104 11.1

Other AIDS-related neoplasm . . . . . . . 45 4 . 8

Other/unspecified

AIDS-related diagnosis . . . . . . . . . . 60 6 . 4

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 940 1 00%

a

First diagnosis appearing in any KPNCR database.

b

Percentages may not total 100 due to rounding.

SOURCE: Kaiser Permanence (Northern Cal ifornia Region),

unpublished data, Oakland, CA, 1988.

Table 4-5--- Estimated Lifetime Hospital Utilization

by Initiai Diagnosis in 913 AIDS Patients atb

Diagnosis N r Median 25th-75th percentil e Mean Standard error

Hospi ta 1 i zat i orw

PAP. . . . . . . . . . . . . . . . . 588

KS. n . . . . . . . . . . . . . . . . 143

Other . . . . . . . . . . . . . . . 182

Total . . . . . . . . . . . . . . 913

Hospital days

PCP . . . . . . . . . . . . . . . . . 588

KS. . . . . . . . . . . . . . . . . . 143

Other . . . . . . . . . . . . . . . 182

Total . . . . . . . . . . . . . . 913

3

3

3

3

32

28

32

32

2 - 4

1 - 4

1“5

1 - 4

18-5 6

15-4 7

17-60

17-53

3.4

3.1

4 . 3

3.5

41. 0

33. 0

38. 4

39. 3

0.1 9

0.2 6

0.4 6

0.1 5

1.64

2.6 4

2.7 3

1.2 7

a

Lifetable estimates are for the interval from diagnosis until death .

b

luenty-seven of 940 cases uere excluded due to wavailable date of diagnosis.

SOURCE: Kaiser Permanence (Northern California Region), unpublished data, Oakland, CA, 1988 .
14 ● The Impact of AIDS on Kaiser Permanence

COST OF CARE

The preceding section presented hospital

utilization data for 913 AIDS patients from

their date of diagnosis through June 1987.

The following cost analysis examines a sample

of 30 of these patients. Their mean and

median lifetime utilization and costs were

estimated using survival methods.

Characteristics of the 30-Patient

Sample

The sample of 30 AIDS patients was

selected randomly from the 596 AIDS patients

(63.4 percent) who had received care in the

Kaiser Permanence San Francisco or Oakland

hospitals (table 4-2).6 Each patient’s medical

records were reviewed thoroughly and their

total utilization of Kaiser services, beginning

one year prior to AIDS diagnosis, was re -

6 The sample was also restricted to patients diagnosed

since Jan. 1, 1984, in order to reflect more recent utilisation pattema while ah allowing enough time for the dinea8e to run its course.

corded to derive costs for inpatient care, outpatient care, tests and procedures, and

pharmacy prescriptions.

The 30 AIDS patients were representative

of KPNCR’S population of 940 AIDS patients

in the proportion still alive and in the health

plan (43.3 percent v. 38.5 percent), and in total hospitalizations and hospital days (table 4-

6). All 30 patients were men. Mean age at

diagnosis was 37.6 years (range 24.7 to 54.6

years). Fourteen of these patients had an initial diagnosis of PCP (47 percent), eight had

KS (27 percent) and another eight (27 percent) presented initially with other AIDSrelated diagnoses.

A higher proportion of the sample was initially diagnosed with KS (27 percent) than

the total group of 940 cases (15 percent). As

mentioned above, many of the 940 patients

were given the diagnosis associated with their

first hospitalization. This practice probably

misclassified some patients with the initial

diagnosis of KS into other categories. The

estimated mean survival time from diagnosis

to death for the sample cases was 15.1

Table 4-6--- Estimated Lifetime Hospital Utilization

by Initial Diagnosis for the Sample of 30 AIDS Patientsa

D i agnosis N - r Median 25th -7Sth percentile Mean Standard error

Hospi ta 1 i zat i ons

PCP . . . . . . . . . . .

KS . . . . . . . . . . . .

Other . . . . . . . . .

Total . . . . . . . .

Hospital days

PCP . . . . . . . . . . .

KS. . . . . . . . . . . .

Other . . . . . . . . .

Total . . . . . . . .

14

8

8

30

14

8

8

3 0

3

3

4

3

3 7

27

30

30

1 - 5

2 . 3

2 - 6

2 - 5

20-6 7

23-3 0

23-4 7

22-4 8

3 . 1

2 . 6

4 . 2

3 . 3

41. 4

26. 2

33. 0

37. 1

0 . 6

0.3

0 . 9

0 . 4

8 . 6

1 . 9

6 . 2

5 . 2

a

Lifetable estimates are for the interval from diagnosis mti 1 death.

SOURCE: Kaiser Permanence (Northern California Region), unpublished data, Oakland, CA, 1968.
The Impact of AIDS on Kaiser Permanence ● 15

months. Patients with an initial diagnosis of

KS had an estimated mean survival of 19.1

months compared to 9.8 months for those

with any other initial diagnosis.

Table 4-7 provides selected outpatient

and hospital statistics for the sample of 30

AIDS patients.

costs

Lifetime cost estimates for the sample of

30 AIDS patients are summarized in table 4-

8.

7 Because the application of survival methods to cost data may be unfamiliar to the

reader, the key terms in the calculation of

lifetime means and medians are presented in

detail. The first column presents the total

cost for each case in order of ascending cost

and the second column indicates whether the

corresponding cost is a final lifetime cost for

a case who has died, or whether it is a total

as of June 30, 1987, for a case who was then

still alive and in the health plan. The third

column, assigns a rank (j) to the 17 cases

whose total costs are final lifetime totals. For

each of these ranked cost levels, the fourth

column indicates the number of patients who

attained higher cost levels divided by the

number who reached that level. (This column

‘7 All cost data were measured in actual dollars.

estimates the conditional probability of surviving to cost more than the jth level, given

attainment of that level.)

The fifth column results from multiplying the proportion in the fourth column by

all the other proportions in the fourth column

that are higher in the table. This product is

an estimate of the proportion of all cases who

would survive past cost level j and go on to

attain higher cost levels, assuming they were

all observed until death. The estimate of

median lifetime cost is $29,929, the cost level

corresponding to the highest proportion in

column 5 that is less than or equal to 0.50.

A plot of the column 5 proportions

against the corresponding column 1 cost levels

is known as a “survival curve.” The sixth and

seventh columns estimate the mean lifetime

cost of AIDS care by calculating the area

beneath this survival curve. The $35,054 at

the bottom of the last column is the area

beneath the survival curve and an estimate of

mean lifetime cost. The standard error for

this mean is $4,245. The median cost was

somewhat lower at $29,929, suggesting that

the distribution of costs was skewed toward

the higher amounts (i.e., that a few patients

with very high costs increased the mean).

Estimates of median and mean lifetime

costs by service category are presented in

table 4-9. The use of inpatient services by

AIDS patients was about three times as much

Table 4-7--- Estimated Lifetime Utilization by Service Category

for the Sample of 30 AIDS Patientsa

Servic e Median 25th-75th percentil e Mean Standard error

Outpatien t

Clinic visits . . . . . . . . . . . . 14 17- W 47. 3 8 . 0

Prescript ions . . . . . . . . . . . . 29 10”54 29.4 4.2

Lab/procedures . . . . . . . . . . . 69 24-12 1 69.1 8 . 6

HoSDi ta[

Hospital i zat ions . . . . . . . . . 3 2 - 5 3 . 3 0 . 4

Hospital days. . . . . . . . . . . . 3 0 22-4 8 37. 1 5 . 2

Lab/procedures . . . . . . . . . . . 1 0 2 82-21 0 149. 7 24. 1

a

Li fetable estimates are for the interval from diagnosis mti 1 death.

SUJRCE: Kaiser Permanence (Northern California Region), unpublished data, Oakland, CA, 1988.
16 ● The Impact of AIDS on Kaiser Permanence

Table 4-8. --Calculation of Product-Limit Estimates of the Distribution of Lifetime Costs

of Care for AIDS: Sample of 30 AIDS Patients

( 1 ) ( 2 ) (3) ( 4 ) ( 5 ) ( 6 ) (7)

Cases Estimated

surviving past proportion of Cost at j Area under

Alive & Rank j/case s al 1 cases *O minus cost survival

cost in plan j surviving to j survive past j at j - 1 curve to j

o

S 2,549

s 3,154

$5,03 6

$6,64 9

$8,28 1

S 8,5 ~

$12,208

$14,424

$15,877

$16,016

$16,129

S16, 607

$18,623

$19,564

$23,164

$23,41 9

S27, 097

S28, 660

$28,861

S29, 735

$29,89 8

S29, 929

S29, W3

$33,34 3

$33,74 9

S34 ,338

S36, 475

S58 ,386

S60, 728

$75,711

30/30

. .

1.00

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

No

Yes

No

No

No

Yes

No

Yes

Yes

No

No

No

No

No

No

No

No

No

No

No

Yes

No

. . . . . . . .

. .

. .

. .

. .

. .

. .

. . . . . . . .

.- . . . . . .

.- . . . . . .

. . . . . . . .

. . . . . . . .

. . . . .- . .

. .

1

. .

21/2 2

. .

19/2 0

. .

17/1 8

. .

0.95

. .

0.91

0.8 6

0.81

. .

0.76

. -

. .

%15 ,877

. .

$ 252

$ 477

$ 2,016

. .

%15 , 8~

. . . .

2

3

4

. .

5

. .

$16,11 8

S16, 551

$18,28 3

. . . .

15/1 6

. .

$4,54 1

. .

$21,96 8

. -

. .

6

7

8

9

10

11

12

13

14

15

16

. .

17

. .

12/1 3

1 1/12

10/1 1

9/1 o

8 / 9

7 / 8

6 / 7

5 / 6

4 / 5

3 / 4

2 / 3

. .

0 / 1

. .

0.7 0

0.6 4

0.5 9

0.5 3

0.4 7

0.4 1

0.3 5

0.2 9

0.2 3

0.1 8

0.1 2

. .

0.0 0

. .

s 5,49 5

s 202

s 873

s 163

s 31

$ 6 4

s 3,34 9

s 406

s 588

S 2,13 8

$21,911

. .

S1 7,325

. .

S26, 148

S26, 289

S26,851

S26, 947

$26,96 4

S26, W3

S28, 365

S28, 508

S28, 680

S29, 180

S33 ,027

. .

$35,05 4

SCURCE: Kaiser Permanence (Northern California Region), unpublished data, Oakland, CA, 1988.

Table 4-9--- Estimated Lifetime Costs of AIDS for the Sample of 30 AIDS Patients a

Servic e Median 25th-75th percentil e Mean Standard error

Outpatien t

Clinic visits . . . . . . . . . . . . . S 3,311 S 1,722-S 5,557 S 4,02 5 S 780

Prescriptions . . . . . . . . . . . . . S 1,326 s 195-S12,919 S 5,21 8 S1,21 6

Lab/procedures. . . . . . . . . . . . S 1,113 S 674-S 2,35 1 S 1,22 6 s 174

Hospital

Hospitalizations . . . . . . . . . S14,430 S 9,881-S22,60 7 S719,223 S2,W 1

Pharmacy . . . . . . . . . . . . . . . . . S 3,796 S 2,594-S 6,073 $ 4,63 5 s 669

Lab/procedures . . . . . . . . . . . S 3,547 s 2,279-s 4,64 0 % 3,43 2 $ 403

All services . . . . . . . . . . . . . S29,929 S28,660-S34,33 8 s 35,05 4 S4,245

a

Lifetable estimates are for the interval from diagnosis until death.

SWRCE: Kaiser Permanence (Northern California Region), unpublished data, Oakland, CA, 1988.
The Impact of AIDS on Kaiser Permanence ● 17

as outpatient services. For outpatient

pharmacy, the mean costs substantially exceeded the median because a few longer lived

patients accumulated high costs from AZT

use. (The wholesale cost of AZT was $9,825

per year. AZT patients also incur extensive

laboratory work.) Laboratory tests were frequently performed, but along with less common procedures (e.g., bronchoscopy, lumbar

puncture), were not a major cost factor.

Patients with a primary diagnosis of PCP

had higher mean lifetime costs (table 4-10)

than those with other presenting diagnoses,

due largely to their greater hospital utilization

(table 4-7). Outpatient costs were lower for

PCP (mean = $4,589 + 740) than for KS

(mean = $6,376 + 1,355) or other diagnoses

(mean= $7,546t 1929). Given the small size

of the three diagnostic subgroups, the differences between the subgroups are suggestive, but not statistically significant.

Annual costs per patient were calculated

for three time periods--1984-85, 1986, and

the first half of 1987--to look for trends in

the costs of AIDS care. Total costs and hospital costs changed little from the first to the

second period, but fell 20 percent and 36

percent respectively in 1987. The drop in

hospital costs may be attributable to the establishment, in March 1986, of an outpatient

unit (known as the Infusion Center) at Kaiser

Permanence’s San Francisco hospital.8

In contrast, annual outpatient pharmacy

costs climbed markedly from $386 per person

during 1984-85 to $2,423 in 1986 and $4,477

in 1987. This reflects the introduction of

AZT as an outpatient treatment for AIDS

during 1986. As noted earlier, the wholesale

cost of AZT was $9,825 per year.

Total costs per AIDS patient for a single

year of care averaged $25,119 from 1984

through June, 1987. The product of the annual costs per case ($25,119) and the number

alive at mid 1987 (346) gives an estimate of

the total cost of care for all AIDS patients in

1987 ($8,691,174). Furthermore, if the incidence of AIDS and survival time increased

during this time, the use of the number of

cases alive at the midpoint of the year underestimates the average number alive during

the year. This could also lead to an underestimate of total costs.

8 The Infusion Center provides intravenous (IV )

medication to patients who would otherwise need to be

hospitalized. Ninety-five percent of its users are AIDS

patients. Two registered nureea are dedicated to operating

the Infusion Center 5 days a week. An average of16 AIDS

patients are treated in the Infusion Center daily. In its

firet 18 months of operation this center saved an estimated

3,500 inpatient days.

Table 4-10--- Estimated Lifetime Costs by Initial AIDS-Related Diagnosis

for the Sample of30 AIDS Patients a

Diagnosis Nuhe r Median 25th-75th percentil e Mean Standard erro r

PAP. . . . . . . . . . . . . 14 $33,34 3 $23,164-S58,38 6 S39,785 $7,16 6

KS.. . . . . . . . . . . . . 8 $29,~ 5 $28,861-$29,W3 S27,348 $2,26 8

Other . . . . . . . . . . . 8 S34,33 8 $29,929-S36,47 5 S30,18 6 S3,79 6

Total . . . . . . . . . . 30 S29,929 S28,660-S34,33 8 S35,054 S4,245

a

Lifetable estimates are for the interval from diagnosis until death .

SCURCE: Kaiser Permanence (Northern California Region), unpublished data, OakLand, CA, 1988.
18 ● The Impact of AIDS on Kaiser Permanence

Because there is no systematic way to

identify Kaiser members who have been

diagnosed with AIDS-related complex (ARC)

or are HIV seropositive, it is not possible to

estimate their costs of care. ARC cases are

frequently not documented as such in any of

the computerized databases and the identity

of members who are HIV seropositive are

protected by State confidentiality requiremen ts. California law also prohibits

mandatory testing. Clearly, these patients

also contribute to KPNCR AIDS-related

costs.

Impact on 1988 Rates

Limitations in KPNCR’S cost accounting

and data systems make it difficult to precisely

measure the overall impact of AIDS-related

care on the 1988 basic rate. The ratesetting

forecast for 1988 includes 14,120 patient days

related to AIDS or ARC. This represents 2.0

percent of the total adult and pediatric

patient day forecast, or more than $8.6 million. g Given the relationship of AIDS inpatient costs to other services (e.g., outpatient

visits and ancillary services) that were outlined above, the impact of AIDS/ARC on the

basic rate is in excess of $0.55 per member

per month, exclusive of the cost of AZT.

$0.55 per member per month represents approximately 0.8 percent of KPNCR’S nonMedicare dues rate for 1988. Given the current emphasis by employers and the Federal

government on health care cost containment,

virtually all rate increases will have a significant impact on KPNCR’S ability to attract

and retain members.

The impact on the outpatient pharmacy

supplemental benefit rates was calculated

based on estimates of the utilization of AZT

with in the member population and across

drug plans. AZT coverage in the outpatient

pharmacy benefit added $0.17 per member

9 Note that the $8.6 million is the 1988 projected coat for

inpatient services only and is a significant increase from

the eatimated 1987 inpatient cost of $S.7 million. These

costs are consistent with those estimated using survival

anaylsis methods (see Methoda section above).

per month to the loading for the pharmacy

benefit. In addition, it was assumed that

providing AZT to patients who are without

supplemental drug plans and unable to make

full payment would result in an approximately $500,000 to $700,000 revenue shortfall.

This revenue shortfall was added to the basic

rate.

It is theoretically possible to continue adding to the basic rate to cover increases in

AIDS costs, but employers have expressed

great reluctance to pay for AIDS-related care

through their premiums and are demanding

experience-based rates that reflect only the

costs of their own employees. At present,

HMO Federal qualification prohibits

10 Eighty-eight percent ‘f

experience-rating.

the total membership is affiliated with

employer groups.

Forecast of AIDS Cases and

costs

Table 4-11 presents the numbers of incident AIDS cases within KPNCR for 1981-

1986 and projects incidence for 1987 through

10 Federal legislation to modify this requirement is currently under consideration.

Table 4-11. --New Cases of AIDS From

1981-1990

Nunber of Percentage

Year neu cases increase i n cases

1981 -1983 . . . . . .

1984 . . . . . . . . . . .

1985 . . . . . . . . . . .

1986. . . . . . . . . . .

1987 (est. )....

1988 (est. )....

1989 (est. )....

1990 (est. )... .

85

118

210 1.7 8

300 1.4 3

429 1.3 9

582 1.3 5

757 1.3 0

960 1.2 7

SOURCE: Kaiser Permanence (Northern Californi a

Region), unpublished data, Oakland, CA ,

1988.
The Impact of AIDS on Kaiser Permanence ● 19

1990. Estimates for 1987 through 1990 assume the annual percentage increase in cases

projected for California by the Centers for

Disease Control (CDC) using the model presented at the Coolfont Conference in June

1986 (see appendix C). A total of 2,501 new

AIDS cases are forecast for July 1987 through

1990.

Assuming mean lifetime costs of $35,054,

the costs for providing care to these patients

will be $87.7 million. This estimate does not

consider inflation, additional costs incurred as

life-extending therapies are developed, costs

of care for infected patients who do not yet

fulfill the diagnostic criteria for AIDS (i.e.,

patients with ARC or HIV seropositivity), or

changes in the cost of care resulting from

new alternative health care arrangements.

Comparison With Other Cost

Studies

The mean lifetime cost of $35,054 differs

from other published estimates. In one study,

lifetime inpatient charges were estimated to

be $27,571 for 85 patients who died at San

Francisco General Hospital in 1984 (15). Another report cited medical costs of $46,505

per year for 45 patients in Massachusetts

studied in 1984-85 ( 14). Other estimates

have suggested that individual costs may be

as high as $147,000 based only on hospital

charges (4). In comparing these disparate

estimates, several factors deserve attention:

1)

2)

3)

4)

5)

the number of hospital days per patient,

the per diem cost of a hospital day,

whether ambulatory services are included,

the calendar year during which care was

delivered, and

the statistical methods used to derive

estimates.

The number of hospital days for an

AIDS patient is the largest single contributor

to costs. The estimate of 37.1 mean lifetime

hospital days in the sample of 30 AIDS

patients (39.3 days among all KPNCR AIDS

patients) is somewhat higher than that of

Scitovsky et al., who reported a mean of 34.7

days per patient at San Francisco General

Hospital. However, Scitovsky et al. studied

only persons who had died. Using this approach, the Kaiser mean lifetime hospital

days were 33.4 days per patient.

Seage et al. estimated a mean of 61,7

lifetime hospital days per patient in Massachusetts, 66 percent more than in this study.

In general, data from the Northeast suggest

significantly longer hospital stays per patient

than San Francisco-based studies (2). This

could be due to differences in the casem ix

between regions. For example, a higher proportion of intravenous drug users are generally reported in the Northeast (2). Such

patients are more likely to present with opportunistic infections other than with KS, a

factor clearly related to increased hospital

days in these data and those of others.

Moreover, these patients may have less extensive personal support networks to provide

alternatives to hospitalization. In New York

City, about 15 percent of the AIDS patients

hospitalized in municipal hospitals are homeless (3). The San Francisco Bay area may also

provide more community support services

than other areas (15).

The dollar value of an inpatient day also

differs among these studies. Per diem, “fully

loaded” medical-surgical costs in the two

KPNCR hospitals studied were about $400 in

1986 dollars. 11 The San Francisco General

Hospital’s charges for a regular bed were

$662 in 1984 dollars. Charges in the Massachusetts study were also approximately $650

per day in 1984. (See the discussion of unit

cost calculation in the Methods section. )

11 The $400 includea overhead costs such ae: capital related costs, employee benefits, administrative and general,

maintenance and repairs, operation of plant, linen and

laundry, housekeeping, dietary, cafeteria, nuraing administration, central aupply, medical records, social semice,

health plan administration, and residents’ salaries and

benefits, Pharmacy costs, usually a part of the allocation

process, are specifically excluded and treated aa a separate

coat area.
20 ● The Impact of AIDS on Kaiser Permanence

Ambulatory as well as inpatient utilization has been included in this study in contrast with the analyses of Scitovsky et al. and

Hardy et al. Every effort was made to account for all provided services including

psychiatric, hospice, and home health services, as well as “out-of-area” services furnished by non-Kaiser providers.

It is not surprising that costs may differ

year to year. For example, the introduction

of new medication (i. e., AZT an d

pentamidine) increased pharmacy costs

dramatically. In contrast, hospital as well as

total costs decreased in 1987, perhaps due to

the opening of the Infusion Center at the San

Francisco hospital in May of 1986. In its

first 18 months of operation, the Infusion

Center saved an estimated 3,500 inpatient

days.

The use of survival analysis methods in

this analysis contrasts with studies that

estimate lifetime costs or utilization based

only on persons who have expired. The

lifetable method appropriately yielded higher

cost estimates.

Finally, to be consistent with other

analyses, the mean and median lifetime

estimates of utilization and cost in this report

extend from the date of diagnosis until death.

From the date of the first AIDS symptom recorded in the medical chart (instead of diagnosis) until death, the estimated mean cost of

care for AIDS patients is $37,897 and the

estimated median cost is $31,796 compared to

estimated mean costs of $35,054 and

estimated median costs of $29,929 from time

of diagnosis until death.
5. CONCLUDING COMMENTS

As of mid- 1987, the Kaiser Permante

Northern California Region (K PNCR) did not

have a disproportionate share of AIDS cases;

its share of northern California A 1 DS cases

(23.7 percent) was almost equivalent to the

proportion of northern California residents

enrolled in its health plan (25 percent).

H o w e v e r, on a national basis, Kaiser

Permanence’s share of AIDS cases may exceed

that of other national carriers, because it attracts such a significant proportion of its enrollment from northern California. This im -

pact ma y eventua11y affect Kaiser

Permanence’s ability to compete, especially in

instances where the buyer seeks geographicalIy broad-based coverage alternatives, such as

in the Federal Employees Health Benefits

Plan or in other national or Statewide organ izat ions.

K PNCR believes that it is extremely vulnerable to future adverse selection for several

fundamental reasons, including the following:

o As a federally qualified heal t h

maintenance organization, KPNCR is

required to enroll all group-sponsored

applicants regardless of preexisting cond it ions. In contrast, many indemnity

insurers and self- insured employers are

able to to limit coverage of preexisting

cond it ions or otherwise restrict the

coverage of AIDS.

o K PNCR’S conclusion that its benefit

package is generally more comprehensive than its competitors’ and therefore

more attractive to enrollees who perceive themselves at high risk of disease.

o KPNCR research indicating that a disproportionate share of its A IDS cases

are among individual or small group

m e m bers. Only a few of KPNCR’S

competitors are currently active in the

individual or small group markets.

Consequently, over time, the program

may have a disproportionate number of

individual and small group AIDSrelated cases. This situation may be

aggravated if self- insured employers are

free to determine whether they will

cover the costs of treating A IDS

patients.

KPNCR contends that as the AIDS

epidemic continues, a growing number of insurers and employers may be motivated to

take action to avoid covering the high cost of

treatment for A IDS patients. KPNCR

believes that there are already many signs

that this is occurring, including legislative

contriversies over the use of human im -

munodeficiency virus test results to exclude

high-risk persons from coverage, the use of

other tests (e. g., T-cell subset studies) to

screen high-risk persons, and modifications

in other insurers’ marketing strategies to

reduce exposure.

KPNCR believes that legislative action

may be necessary to address the breakdown

of health insurance coverage for AIDS and

suggests that legislation not only could create

a financing mechanism for AIDS patients who

do not have health benefits coverage but also

could assure that no single segment of the

health benefits industry bears a disproportionate share of the AIDS burden.

Such legislation, KPNCR believes, should

provide incentives for health benefits plans to

maintain or increase their enrollment of persons with AIDS rather than avoid covering

them, and legislation should also encourage

providers to deliver high-quality and costeffective AIDS-related care,

2 1
Appendix A: KAISER PERMANENCE MEDICAL CARE PROGRAM

BACKGROUND

The Kaiser Permanence Medical Care

Program (KPMCP) is a private, nonprofit,

health care program that provides prepaid

medical and hospital services to more than

five million people in 16 States and the District of Columbia. It also enrolls individuals

and groups and accepts the risk for both the

cost and volume of services.

The Kaiser Permanence Northern California Region (KPNCR) operates 14 hospitals

and 26 outpatient medical offices, with 2,364

physicians and over 21,000 employees. It

serves a total membership of more than 2

million people, 25 percent of the area’s population. The range

services offered

KPNCR as one of

prehensive private

systems anywhere.

is shown in figure

of resources and scope of

by the program qualify

the largest and most comsector health care delivery

A map of the service area

A-1.

This appendix provides background information on the KPNCR organization, its

membership, benefits, ratesetting, utilization

patterns, and market competition.

ORGANIZATION

KPNCR consists of three entities: Kaiser

Foundation Health Plan, Inc. (KFHP), The

Permanence Medical Group, Inc. (TPMG),

and Kaiser Foundation Hospitals (KFH).

KFHP is a California nonprofit, publicbenefit corporation. It is an administrative

and contracting organization with functions

that include enrolling members, maintaining

membership records, collecting payments, and

contracting with TPMG and KFH for professional and hospital services. As a federally

qualified health maintenance organization

(HMO), the health plan:l

1 Federal legicilation to liberalize aome of these requirements is currently under consideration.

●

●

●

●

nia

the

Act

and

the

is required to provide basic health services, including physician and inpatient

hospital services, rehabilitation and

physical therapy, outpatient mental

health services, alcohol and drug abuse

treatment, laboratory and radiology,

home health, and preventive health care;

is not permitted to have deductibles for

basic health services and is limited as to

the amount of copayment that can be

charged for these basic health services;

is required to enroll all group sponsored

applicants;

must use community rating for nongovernment groups.

KPNCR is also regulated by the CaliforState Department of Corporations under

Knox-Keene Health Care Services Plan

of 1976. The act mandates basic benefits

copayment limitations similar to those of

Federal act but does not require com -

munity rating. California health care service

plans that are not federally qualified HMOS

are permitted to experience-rate. The State

Act also permits non-federally qualified

HMOS to establish preexisting condition

clauses for group enrollment.

K FH is a California nonprofit,

charitable corporation and is obligated

through contract to provide or arrange health

care facilities for KFHP members.

TPMG is a for-profit California professional corporation. It is composed of

physicians, representing the major specialties

in medicine, who practice at KFH facilities,

where the staff and equipment necessary for

diagnosis and treatment are provided. TPMG

is compensated by KFHP with an annually

negotiated amount per member per month;

physicians are not compensated on the basis

of individual services provided. The relationship between TPMG and KFHP is exclusive.

23
24 ● The Impact of AIDS on Kaiser Permanence

Figure A-l ---KPNCR Service Area Map

ANORTHERN CALIFORNIA REGIO N

Madkd Centaf

o Future Medlcd Center Sit@

O Future kdiCd ~fiCO Sit@

.

I

●

/

/

w ‘-

- – :

Martinez

chmon d

/

.< .-’

Sunnyvale -> MllPita s

/ ● “ \

San Jose/Santa Teres a

?dap not drawn to scale.
The Impact of AIDS on Kaiser Permanence ● 25

MEMBERSHIP

Growth within KPNCR has been steady,

with the addition of both medical centers and

freestanding medical offices paralleling

increases in membership. AS of the end of

1986, membership totaled 2,016,990 (figure

A-2) . Table A -1 details KPNC R

membership by age and sex for the years

1980 and 1986.

Funds established through collective

bargaining arrangements. (Association plan

enrollment is also available on a medical

review basis to organizations that do not meet

the criteria for group health plan coverage.)

Table A-1 . --Percent Distribution of

Membership by Age and Sexa

~

b

1980 and 1986

The majority of KPNCR members are

group members. In 1986, 88 percent of

members were affiliated through employer

groups, and 12 percent were enrolled as

individual members. The breakdown of

group versus individual membership has

remained relatively stable since 1975 (table

A-2).

Elements of a Group

In order to qualify for health plan group

membership, potential subscribers must meet

one of three conditions. They must be

employees of one common carrier, working

partners and their employees, or eligible for

coverage through Health and Welfare Trust

Figure A-2.-Kaiser Foundation Health Plan Membership

Northern California Region

Thousands

2100. 20 1(3,0$0

1 92!3 023 1900

1700 1 694 240

1500 /

1262 27cl

130 0 {

1100 ‘ 972.2? T

900

700 , d~6.060 {

500

300 30~,671

100

Age 1980 1986

Uales

Under 65.............11 .8 % 11 .1%

0-14. . . . . . . . . . . . . . . 5.0 4 . 2

15-19 ...............20. 3 20. 3

20-44 . . . . . . . . . . . . . . . 9.3 9 . 8

45-64 ...............46. 4 45. 4

Over 65.. . . . . . . . . . . . . 2.6 3 . 5

Total . . . . . . . . . . . . . . .49. O% 48.8%

Fetnales

Under 65.. . . . . . . . . . . .48.1% 47.3%

0“14. ..............11. 3 10. 6

15-19 . . . . . . . . . . . . . . . 4.9 4 . 1

20-44 . . . . . . . . . . . . . . . 22.3 22. 2

45-64 . . . . . . . . . . . . . . . 9.6 10. 3

Over 65. . . . . . . . . . . . . . 2.9 3 . 9

Total . . . . . . . . . . . . . . . .50.9% 51. 2%

Mates and fefna[es

Under 6 5 . . . . . . . . . . . . . . 94. 5% 92 .6%

0-14 . . . . . . . . . . . . . . . . .23.1 21. 7

15-19 . . . . . . . . . . . . . . . . 9.8 8 . 3

20-44 . . . . . . . . . . . . . . . .42.6 42. 5

45”64. ...............19. 0 20. 1

Over 65.. . . . . . . . . . . . . . 5.5 7 . 4

Total. .. ............100. O % 100. o%

aThe percentage reflect average health plan

b

membership.

Percentages may total 100 due to rounding.

SOURCE: Kaiser Permanence (Northern California

Region), “Annual Statistical Review, n

unpublished internal document,

Oakiand, CA, 1980 and 1986.
26 ● The Impact of AIDS on Kaiser Permanence

There are several other conditions that ●

apply to group membership:

●

●

Groups must be composed of

five subscribers or of one subscriber in a group of 25 or more

eligible employees that offers

dual or multiple choice of health ●

plans to employees;2

At least half of the monthly subscriber premium rate must be

contributed by the employer.

This makes the employer a ●

participant in providing health

care and creates an incentive for

the employer to include only

eligible employees in the group;

2 A “subscriber” is the head of the family unit andin

whose name membership is obtained. This isin contr~t to a “member,” defined as any individual who is

entitled to KPNCR services.

Employees must work a minimum

of 20 hours per week or be

permanent part-time employees.

This is also an incentive for the

employer to include only eligible

employees in the group;

All new groups with 50 or more

potential subscribers must have

dual choice arrangements. This

corresponds with KPNCR’S principle of voluntary enrollment; and

A majority of the eligible subscribers of a group must be covered by Workers’ Compensation.

This increases the likelihood that

work-related injuries and illness

will be covered under Worker’s

Compensation rather than under

the KPNCR benefits.

Table A-2--- Number and Percentage Distribution

of Group and NonGroup Members

for Selected Years: 196!5 to 1986a

Number of members (in thousands

Northern Cal i fornia Group Nongroup Percent distribution

(as of Dec. 31) mmbership meniwship Total Group Nongroup

1965 . . . . . . . . . . . . . . . . . . . . . . 531. 8 114. 1 645. 9 82% 18%

1970 . . . . . . . . . . . . . . . . . . . . . . 844. 9 127. 4 -972. 3 8 7 13

1975 . . . . . . . . . . . . . . . . . . . ● . . 1123. 5 128. 8 1252. 3 9 0 10

1980 . . . . . . . . . . . . . . . . . . . . . . 1521. 6 172. 8 1694. 3 9 0 1 0

1985 . . . . . . . . . . . . . . . . . . . . . . 1751. 1 224. 8 1976. 0 8 9 11

1986 . . . . . . . . . . ● . . . ● . . . . . ● ● 1784. 7 232. 8 2017. 0 88 12

aData include membem of families who contract individually with the health

plan either by direct enrollment or by convemion from a health plan group.

SOURCE: Kaiaer Permanence (Northern California Region), “Annual Statistics Review,” unpublished internal document,

Oakland, CA, 1986.
The Impact of AIDS on Kaiser Permanence ● 27

Elements of Individual

Membership

The Federal HMO Act and California’s

Knox -Keene Act require HMOS to offer

members who are leaving their employer -

sponsored groups an option to convert to an

individual (or “direct-pay”) plan. KPNCR is

one of a few northern California HMO/PPO

health carriers that offer health plans to individuals who are not converting from their

carrier’s group plan. Only 5 of 19 competing

health plans allow non-conversion individual

enrollment.

Eligibility

There are two types of direct-pay members. “Conversions” are individuals who leave

an existing group and want to retain their

program membership. “Direct enrollments”

initiate membership with KPNCR independent of prior group membership.

Conversions face no medical restrictions

upon applying for direct- pay membership.

However, they are required to choos e

KPNCR’S conversion coverage within a

specified time after their group enrollment

ends. Fifty-seven percent of direct-pay

members are conversions.

Direct enrollment applicants must complete an application and a medical history

form (figure A-3). Applicants indicating a

history of health care problems are either rejected outright or asked to have a physical

examination by TPMG physicians. All applicants over 46 years of age also must undergo a physical examination. The criteria

used to determine an individual applicant’s

eligibility are applied uniformly, regardless of

age, occupation, or sex, and are typical of

general health insurance practices. Overall,

approximately 20 percent of direct enrollment

applicants are rejected. (This percentage has

remained constant over time. )

BENEFITS3

Group Members

Basic benefits for group coverage include

physician office visits, hospital services, Xrays, laboratory tests, immunizations, and eye

exams. In addition, limited coverage for extended care in a skilled nursing facility;

neuromuscular rehabilitation; physical,

speech, and occupational therapies;

hemodialysis; organ transplants; bone marrow

transplants; home health services, alcoholism,

drug abuse, or addiction treatment; and mental health care are included in the plan.

KPNCR offers several benefit packages

for groups. Basic benefit packages generally

differ in two ways: 1 ) registration charge

(i.e., outpatient visit fee) and 2) selection of

supplemental benefits.4

The office visit registration charge for

medical services ranges from no charge to

$20. The registration charges applied to

specific services and the designated ranges of

these charges are summarized in table A-3.

Supplemental benefits are optional and

go beyond the HMO benefits required by

Federal and State statutes. Supplemental

benefits can either be the extension of a basic

benefit or the incorporation of a new benefit,

such as an outpatient prescription drug

3 This section provides an overview of KPNCR’S basic

non-Medicare benefito and should not be interpreted aa a

definitive list of contractual benefits.

A Employem determine which supplemental benefits are

offered to employees.
28 ● The Impact of AIDS on Kaiser Permanence

Figure A-3--- KPNCR Application for Membership-Medical Questionnaire

D O NOT WRITE IN THIS SPAC E

IGisor Foundation Health Plan, Inc. ● . .

M

Northorn Califorrm Ragion Iuusm

~ . PtmwaJum Mding Addrc~: P.O. ROX 129 =

Oakland, Callfornm 94604 Medical No,

APPLICATION FOR MEMBERSHIP - MEDICAL QUESTIONNAIRE SU 8SC R I aE R

INSTRUCTIONS: Us. ink or typevvritor 10 complcre questionnsir~ and use a SEPARATE questionnmre for each member of your famllv who is #pplYing for member$hlp. ALL QUESTIONS MUST BE ANSWERED. ALL QUESTIONNAIRES MUST BE SIGNED.

INCLUDE A CHECK FOR THE NONREFUNDABLE PROCESSING FEE. 00 NOT SENO CASH.

ANY MISREPRESENTATION OF THE PRESENCE OF PRE-EXISTING IMPAIRMENT OR DISEASE WLL VOtO YOUR COVERAGE.

I hereby apply for membership in the Kaiser Foundation Health Plan, based on the following:

NaMc .-, .,- ,. cl,. + Ml . ----- nnl F LAS T I HOME PHON E I wC) Q K Puc3NF

1

—. , 2 ~ - ; - - ~ - ,. - -

ADDRESS (N UM13E R & STREET) AGE 81 RTFIDATE

3, 4 5. i

C ITV STAT E Z I P MAR IT AL STATU S

6, 7, U SINGL E C MARRIE D

SEX

8. z MAL E ~ F EMAL E 19 Height without shoes ft., Inches 10. Weight, undressed ‘bs.

I I

NAME OF EM PLOVE R OCCUPATION (Dlm%o dmcrlbo what You do)

11

12, 1~ Ye s ‘~ N o Were you previously a member of the Kaiser Foundation Health Plan?

If Yes, give group number or name

and Medical Record Number If known

When did your former membership begin _ and end

13, c Ye s ~ N o Have you ever been treated or examined at a Kaiser Permanence Medical Center?

If Yes, I Ist Iocatlon and date of last exam or treatment:

If seen using a different name or maiden name, give name:

14 c Yes C No Have you ever been re)ected for medical Insurance Includlng Kaiser Foundation Health Plan, or been offered

Insurance at a higher (rated up) prem turn ~

If Yes, please explaln

—

15, C Yes ~ No Were you ever rejected from military service or discharged from mll!tary service for medical or psychological

reasons 7

If Yes, please explaln

.. ----

16, z ‘{e s ~ N o Do vou regularly drink alcoholz ~ Beer C Wine C Hard Llcwo r

If Yes, how much)

~ Yes G No Do you smoke? If so, how much per dav? How long have you smoked?

+ IF YOU QUIT, how many Years dld vou smoke? How long since you’ve qultz

17 Date of last physical examination. Please check the examlnat!on received: o routine examination

D OB-GYN (Obstetrics.Gynecology)

G Other (please specify)

Name and address of examining physician:

18. ~ Yes O No Have you ever been advised to have surgery which you have not yet undergone?

If yes, give details.

How many times have vou vlslted a physician in the last year? Please Ilst reasons for vlslts (symptoms, complalrm,

etc. )

b

CIUESTIONS TO BE ANSWERED FOR ALL FEMALE APPLICANTS OVER THE AGE OF 13.

20 Date of your last menstrual period. ,/ / 21. c Ye s ~ N o Are vou now pregnant 7

MO D A Y VEA R

0 \

(OVER)
The Impact of AIDS on Kaiser Permanence ● 29

Figure A-3. --KPNCR Application for Membership-Medical Questionnaire (Cent’d)

22 Have you ever been hospitalized, diagnosed or treated for any of the tollowlngq Please Place a check (0 m the Yes or No column

EVEF?Y ITEM MUST BE CHECKED. IF YES, EXPIAIN BELOW IN NUMBER

Yes N o

Alcoholism

Serious anemia or other blood dmeases

Arthrltls, gout, or painful joints

Asthma , wheezing

Chronic cough emphysema or other chronic lung dweases

Back ache or back m)ury

Serious bodily Injury or dmabdlty

Cancer, leukemia or tumors

Convulsions, seizures or epdepsy

Diabetes or sugar In urine Medicafron ” ~ Oral ~ Injection

Dtarrhea or colms (chrome) Rectal bleeding or other rectal adment

Ear problems or loss of haanng

Tubes now present In ears for otltfs meda

Eye condmon (cataract, Irltm, etc )

Glaucoma

Gallbladder stones ~ Yes ~ No Surgically removed

Goiter or thyroid condltlon

Hay fever or allergles

Currently on allergy mpctlons

Headaches ~dlsabling) or mlgrame

Yes ~ NO Have you ever been treated or are

Yea No

o

0

0

c1

Heart attack or other hearf trouble

Heart murmur

Hypertension or h!gh blood pressure

Herma (rupture) ~ Yes ~ No Surgically repa[red

immunological deflclency, such as Acqumct Immune Dehclency

Syndrome (AIDS), Aids-related complex (ARC)

Ulcers of stomach or duodenum

Venereal Disease

Persstent Indtgestlon or peptic symptoms

Kidney condmon, kidney StOfleS

Loss of urine control, bladder problems, or dlfflcult unnatlon

prostate problems

Liver conditions ~ Clrrhosm~ Jaundice ~ Hepatttls

Paralysls Strokes

serious skin disease, melanoma, psonasls

Female organ abnormality

Irregular vaginal bleeding

Mental ! ernouonal disorders

Psychlatnc counsehng

Drug addctlon or abuse (Please sp6cIfy)

you being treated for any other condltlon not hsted above? Please describe:

24 ~ Yes ~ No Do you have or have you had unexplained and ~ or undiagnosed symptoms such as wefght loss, swollen

glands, fever, skin Iestons, rash or rectal problems? If yes, please explaln:

25 ~ Yes ~ No Are you currently taking medications for any of the conditions noted in Items 22 or 23? If Yes, list medlclnes:

~ Yes ~ No Are you currently or regularly taking any other medlcat!ons or drugs? If Yes, please list:

26 ~ Yes ~ No Are any of the above condlt!ons now present? If Yes, which condltlon(s)?

.—-—

27 If Yes IS checked for any condition m Items 22 through 26, gwe details below:

I

CONDlltON

HOSPfTA1. NAME AITENDING PHW51CMN Imto of Last

(If hospltailzed) ~ PHYSICIAN’S ADDRESS TREATMENT—

1

(IF ADDITIONAL SPACE IS NEEDED PLEASE ATTACH AN EXTRA SHEET.)

TfIIs medcal questtonna(re must be updated to include any mndmon or disease wh!ch occurs afer the date of submms}or of :hls appkanon and pr,or to Kaiser Foundation

- —

+eaw Plan s aueptance Failure to provule trus mformabon !O Kamer FourMat(on Health Plan WIII consf!tufe a nwsreoresertauon of the presence of a pre-exmong conclmon or

o,sease 31cj ~ay ,oId four coverage Acceptance of the nonrefundable pfocassmg fee by Kaiser Foundation Health Plan does not constitute

ac~tenw of your application ● s s Haetth Pkn member. The Health Plan reserves the rfght to reject ● ny ● ppllcant ● nd ie not otsllgated to

dlscloae the reason for relactlon

1 hereby cemty that the toregomg answers are true ● nd cgmpbte and to the beat of my knowIecfge my heatth IS amurate~y represented (n the tive Stalefnerw. I understand

that Heatth Plan may require me to have a phywcal exammaoon, and I authorize the rebasa of any mtormahon from such exammatron to Health Plan for use m UJnstcianng my

apphcauon I also understand and agree Us* whenevw ~ m ftm dnmtatraison of fha Setwce Agreement. Katser Permanence phyaoans may dmcas.s wrth Health Ran

medc.al mformaoon related to thw agpiicaoon.

I a- for Heatm Plan membership and agree that I shail atsda by the pmwsmns of the %r-wce Agreement and Heatfh Ptan regubatrons I understand that the Servtca

Agraarmemt provIdas that *I cfalms, Incfuding madxxi malpracaw dams, wkh anee because I or someone wrth a relauonshlp to me, behave mat some conduct In, or ansmg

from, w rgianonstvp with K&ser Foundaficm ~ Ptan, lnc , KZSSW Foundatmn Hmptals or The Permanence MadIcaI Group, Inc-, as a marnoer w ss a Potwnf. tiaa ~used

any ham are subfect ?0 CWdng afO@dtiOn,

(In ma event me appkant IS a mmor, or m 1~, the ap@caIWs name should be entered on rhe “Signature of N@c.ant” Ins, and the parent or guardm should sign

where ind~ted )

IMPORTANT: ALL QUESTIONS MUST BE ANSWERED, APPLICATION WILL BE RHt,JRNED IF ANY QIJESTION IS NOT ANSWERED.

I

I L

SIGNATURE of APPLICANT OAT-E SiGNAllJRE OF PARENT OR GUAROIAN DATE

9SCOS IREW 4 8~ REVERSE
30 ● The Impact of AIDS on Kaiser Permanence

Table A-3--- Registration Charges for

Selected Services

Servic e Range of charges

Outpatient physician visits

including eye exams . . . . . . . . . . No charge to S5

Xrays and laboratory Mork..... No charge to S5

Inhalation, occupational,

or physical therapies . . . . . . . . No charge to S5

Physician house calls . . . . . . . . . No charge to S5

Mental health visits . . . . . . . . . . No charge to S20

SOURCE: Kaiser Permanence (Northern California

Region), unpublished data, Oakland, CA,

1988.

benefitor hearing aid coverage. The supplemental benefits available to most groups

are: 1) outpatient prescription drugs and

certain accessories (e.g., syringes), 2) eye glass

and contact lens coverage, 3) hearing aid

coverage, 4) durable medical equipment, and

5) dependent coverage options.

Seventy-six percent of KPNCR’s enrolled

members have a drug benefit. Table A-4

details the types of available pharmacy

coverage, member charges per prescription,

average monthly cost, and member participation rate.

Table A-4. --Description of Prescription Drug Plans

Drug plan Average monthly Particip tion 1? code Hedxr pays subscriber cost a

rat e

1 Blue Boo k

c ($1 minimun) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3.2 6

2 $1 charge per prescription for (whichever is greater):

34 days’ supply (or one cycle of a contraceptive drug)

or manufacturer’s smallest package . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 0

7.2%

60. 4

4 $1 charge per prescription for (whichever is greater):

Other than contraceptives :

100 days’ supply or manufacturer’s smallest package

Contraceptives :

5 $ 3

i n

6 S2

i n

7 No

one cyc’le or manufacturer’s sma([est package . . . . . . . . . . . . . . . 9.0 8 1 . 4

charge per prescription for items as described

Plan Two . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 0 8 . 3

charge ~r prescription for items as described

Plan Two . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A 12. 7

charge for 100 day’s supply or manufacturer’s smallest

package. Reasonable rates for purchase of excess

. . . of both of the above llmltatlons.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. 7 19. 9

8 NO charge for 100 days’ SUP P1[ or manufacturer’s s~lles t

package, whichever is greater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A 0.1

~Addition represents incremental cost of drug option to self oniy subscriber, first quarter 1988.

Percent of a~l mmbers participating in a drug p(an, first quarter 1987.

~The price for which a wholesaler wou(d sell the product to a retailer.

Only offered to Federal enployees.

‘Only offered to Medi-Cal menixrs under pilot project.

SWRCE: Kaiser Permanence (Northern California Region), internal marketing docunent, Oakland, CA, 1988.
The Impact of AIDS on Kaiser Permanence ● 31

Direct-Pay Members Figure A-4--- Individual Plan Programs

Direct-pay members are offered the same

basic benefits as group members. Two plans

are available; however, direct-pay members

converting from group coverage are limited

to Plan I. The primary difference between

the two plans is the outpatient office visit

registration charge. Plan I registration

charges are $5 per visit for most office visits,

versus $15 per visit in Plan II. Neither plan

offers an outpatient prescription drug benefit

(except for members with part A and part B

Medicare coverage).

Figure A-4 provides a comparison

between Plan I and Plan H.

RATESETTING

KPNCR groups are community-rated.

All groups with the same benefits and

contract renewal date have rates that reflect

the same comm unity rate standards.

Variations in prepaid rates from group to

group reflect differences in benefits, contract

renewal dates, and length of contract.

The method for calculating the base

community rate (i. e., excluding supplemental

benefits and administrative charges) for any

year involves the following steps:

1. The total expenses (i. e., revenue

requirement) for providing care is

forecasted;

2. Revenue from all sources, including

basic dues for contracts prior to

renewing in the current year, is

forecasted. In addition to basic dues

before renewal, other revenue sources

inc lude Medicare, nonmembe r

revenue, interest income, etc;

The fO( (wing ● re the COSts ard benef i ts of the tw Ka I ser f-t im !ieai th P ( an

Irdivi*( Plan progr~ wai (able in 1987 :

8enef i ts Plan 1 Plan [1

In the hapita(

A(l ~ysician srd surgeon services Ilo charge NO charge

Intensive care/Cardi M Car e No charge NO charge

R OOM ad board NO charge NO charge

Laboratory ad X - ray $3 per test $S oer test

or X-ray or X-ray

physical therapy No charge NO charge

Other necessary services and s~[ ies

(irxluding special rsmsing) No charge No charge

In the ~tor~s Offic e

(KO OgS limit for q of t~ ~i~~ )

Office viaits (irtc[udes routine

fityxica( ● xma, wet [-baby check-~,

arsi Ob/Gy7t a~int~ts) $5 per VISI t $15 per visit

Nearing and vision ● xaminations $5 per visit S15 per visit

Physical therapy visits $S per visit $15 per visit

Al lergy teats and injection vistts $3 per visit S 3 per visit

Administered medicati~, i n J ec t Ions ● tlergy testing end treatment

inter i a (s No charge No charge

Laboratory a-d X- ray $3 per test $5 wr tes ~

or X-ray

Maternity Care

or X-ray

—

Physicim and rnrsamedical

office visit s

$5 per VISI t

llospita( services

S15 per visl t

No charge No charge

Caasarem delivery No charge NO charge

Cca@icati~ of pregnMc y No charge No charge -

Pmsacriptiat Drq -fit s

Adini Sterd bhi(e in the hosDital

or in the &torts office “ MO charge MO charge

Obtained at P IUI #tamnacies Not coverea Mot covered

~i- Sefwic e

Authoriz4 by a Plan ~ysici~ No charge No charge

Merita( HesltiIc.oM

Office visits.

W to 20 visits per ca(edsr year $20 per visit

Groq therapy S20 per visit

$10 per visit S1O per visit

I@apitalization - up to 4S d ey s of

frpatiertt care per ca(endar year NO charge MO charge

Akdsoligaajo~ ~t i N

Offica visits $5 per visit S15 per visit

b$pita(ization - Limited to the

mxwa( of toxic sbt~e(s )

fra the syat m No charge NO charge

Thts is intardetj omly as a general descrlp[l~ of the p(anls benefits.

It IS not a contract. For aditione[ infoimatl~ on these and other bmeflts, please refer to

this P(mCs ‘Oiscloaure Form/Evi~e of Coverage~ or call a Service Representativ e

at a Hea(th Plan Office.

1987 Hcnth(y Charge

P(an 1 Plan 1[

S*criber Onl y

S 65.73 S60.1 7

S@acriber$nd~D ~t 130.46 119.34

Subscriber ad Tuo or More Dqen&t-ttS 178.05 161.81

SCURCE: Kaiser peMS$nmte (Northe rn Caof orn,a Rq,m), ~rket,pg ~ rwhure

Oakland, CA, 1987.

3. The shortfall between items 1 and 2 is

divided by member-months for all

groups after renewing their contracts

for the current year. This is the per-
32 ● The Impact of AIDS on Kaiser Permanence

member-per-month (PMPM) increased Revenues in excess of expenses and

revenue requirement for all contracts capital generation requirements are used to

renewing in the current year; moderate rate increases in the future.

4. The PMPM is converted into three step

rates: subscriber only, subscriber plus UTILIZATION PATTERNS

one dependent, and subscriber plus two

or more dependents. These rates,

graduated by quarter, are applied to all

groups as they renew in the current

year.

Under community rating, KPNCR is at

risk for the accuracy of its forecasts and for

unexpected fluctuations in costs.

Table A-5 provides age-specific health

plan utilization rates for 1986. KPNCR

hospitals have experienced higher average

occupancy rates than California hospitals as a

whole. From 1976 through 1982, KPNCR

hospitals followed the national patterns for

average occupancy. However, in 1984

KPNCR hospitals did not experience the

Table A-5. --Age-Specific Health Plan Utililization Rates,

Calendar Year 1986

Doctor off ic e

Hospital day s Discharges Average visit s

Age grotp per 1,00 0 per 1,00 0 1 ength per 1,000

(male and femle) per year per year of stay per year

O-M. . . . . . . . . . . . . . . . . . .

0-14 . . . . . . . . . ● . . . . . . .

0-4......., . . . . . .

5-9. . . . . . . . . . . . . .

10” 14.. . . . . . . . ● . .

15-19 . . . . . . . . . . . . . . . .

20-44 . . . . . . . . . . . . . . . .

20-24 . . . . . . . . . . . .

25-29 . . . . . . . . . . . .

30-34 . . . . . . . . . . . .

35-39 . . . . . ● . . . . . .

40”44 . . . . . . . . . . . .

45”64. . . . ● . . . . . . . . . . .

45”49. . . . . . . . . . . .

50”54. . . . . . . . . . . .

55-59 . . . . . . . . . . . .

60-64 . . . . . . . . . . . .

45+ . . . . . . . . . . . . . . . . . . . .

65-69 . . . . . . . . . . . . . . . .

70-74 . . . . . . . . . . . . . . . .

75-79. . . . . . . . . . . . . . . .

00-84. . . . . . . . . . . . . . . .

85+ . . . . . . . . . . . . . . . . . .

Total . . . . . . . . . . . . . . . . .

235

92

177

44

58

136

235

220

289

248

208

207

433

261

352

481

698

1,337

949

1,296

1,649

2,213

2,928

317

54

25

44

14

17

3 7

62

6 8

86

6 7

48

42

76

4 9

65

84

115

195

149

189

233

296

395

6 4

4 . 4

3 . 7

4 . 0

3 . 1

3 . 5

3 . 7

3 . 8

3 . 3

3 . 4

3 . 7

4 . 3

4 . 9

5 . 7

5 . 3

5 . 5

5 . 7

6 . 1

6 . 9

6 . 4

6 . 8

7 . 1

7 . 5

7 . 4

4 . 9

3,35 9

3,71 0

6,3 W

2,66 0

2,18 2

2,32 0

3,09 8

2,87 3

3,34 0

3,24 1

2,94 1

3,08 7

3,96 2

3,25 0

3,81 4

4,07 3

4,93 0

6,36 3

5,51 6

6,65 0

7,43 0

8,00 0

6,29 8

3,58 1

SOURCE: Kaiser Permanence (Northern Californi aRegion), “Annual Statistical Review,” unpublished internal document,

Oakland, CA,1980 and 1986.
The Impact of AIDS on Kaiser Permanence ● 33

dramatic drop in occupancy that occurred for-profit competing plans have either enthroughout the State and country (table A-6). tered the northern California market or converted from nonprofit status. Table A-7

MARKET COMPETITION

shows the profit status and other key data for

a selection of competing HMOS.

Many of KFHP’s competitors in northern

California are also nonprofit organizations, 1 Although KPNCR hospitals are open to all membere of

although in recent years a growing number of the community, they primarily serve KPNCR members.

Table A-6--- Percent of Average Hospital Occupancy,

KPNCR, California, and the United States,

Selected Years From 1976 to 1986

197 6 197 8 198 0 1982 1984 198 6

KPNCR . . . . . . . . . . . . . . . . . . . . . . . . . 75 .8% 5 .8% 77.9% 76. 5% 77.3% 68 .6%a

Ca( i forni ab. . . . . . . . . . . . . . . . . . . . 65. 6 66. 3 68. 7 68. 5 64. 1 65. 4

United States b

. . . . . . . . . . . . . . . 74. 6 73. 6 7S. 6 75. 3 69. 0 N/A

~he lower occupancy rate reflects a reduction of elective admissions during a 7 week strike by hospital employees during

b 1986 .

Includea Kainer Permanence facilities.

SOURCES: American Hospital Association, HosDital Statistics (Chicago, IL: AHA, 1!371- 198 S). State of California, Office

of Statewide Health Planning and Development, “Quarterly FinanciaI and Utilization Report, 4th Quarter,

1986,” Sacramento, CA, April 15, 1987.

Table A-7. --Largest Non-Kaiser Northern California HMOS

Enrol lment Profi t Qua 1 i f i cation P [an Headquarter

3/8 7 status statu s age cit y

Foundation Heal th Plan. . . . . . . . . . 165,45 6 P FQ 9 Scramento

Take Care. . . . . . . . . . . . . . . . . . . . . . . 15,00 0 NP FQ 8 Caklan d

L i f eguard. . . . . . . . . . . . . . . . . . . . . . . 105,00 0 NP FQ 8 San Jose

Bay Pacific. . . . . . . . . . . . . . . . . . . . . 84,051 P FQ 8 San Bruno

HEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,00 0 NP FQ 5 Emeryvi 1 le

Max{care (N. Ca . . . . . . . . . . . . . . . . . 59,10 0 P FQ 13 Bur 1 i ngame

Health Plan of America. . . . . . . . . . 46,20 0 NP FQ 6 Orange

Hea(th Plan of the Redwoods. . . . . 32,10 0 NP FQ 7 Santa Rosa

Institute for Preventiv e

Medicine ( 1PM). . . . . . . . . . . . . . . . . . 24,22 5 P FQ 8 Va 11 ejo

Chi ldren’s Hospital . . . . . . . . . . . . . 21,00 0 NP NFQ 11 San Francisco

French Hospital . . . . . . . . . . . . . . . . . 17,500 NP FQ 136 San Francisc o

Healthcare.. . . . . . . . . . . . . . . . . . . . . 17,42 5 NP FQ 11 Sacramento

Sums Health Plan. . . . . . . . . . . . . . . 17,00 0 P F Q 2 Fresn o

Contra Costa Health Plan. . . . . . . . 10,80 9 NP F Q 13 Martine z

ValuCare.... m . . . . . . . . . . . . . . . . . . . 10,20 0 P F Q 1 Fresn o

Abbreviations: P =forprofit, NP = nonprofit; FQ= federally qualified; NFQ =not federally qualified.

SOURCE: Intemtudy, The InterStudy Ed~e, Excelsior, MN, Summer 1987.
Appendix B: THE PRODUCT-LIMIT ESTIMATOR

The product-limit estimator for the distribution of lifetime cost, S(c )

is given by:

~(c ) - ‘H P J

,

J<c

where c is a level of lifetime cost attained b y

a case who died.

j

is a ranking from 1 to J for the J levels of

lifetime cost attained by cases who died.

Pj

is the proportion of cases surviving to attai n

higher cost levels among all cases observed

to attain the jth cost level .

‘ n is the product calculated over all j less than c .

J<C

;(c ) is the estimated proportion of all cases whos e

lifetime cost will be more than c .

The product-lirnit estimate of median lifetime cost is the cost level c

for which S(c) - 0.5; the estimate of mean lifetime cost is the area beneath a

plot of S(c); namely ,

Ninety-five percent confidenc e limits are presented for this mean

lifetime cost, using the variance estimator

Var(~) - ~ (A2

~%)/[n~(n~

-d~ ) ] ,

c

where dC

is the number of cases who die at cost level c, and

nc

is the number of cases who attain a cost of c or more,

and

A c = Z ‘(C) (Cj - C.l-~)

J > c

34
Appendix C: CENTERS FOR DISEASE CONTROL (CDC)

CALIFORNIA AIDS PROJECTIONS

—
36 ● The Impact of AIDS on Kaiser Permanence

DEPARTMENT OF HEALTH SERVICES

714/74 P Street

SACRAMENTO, CA 9s814

To: Readers of the AIDS

Subject : Centers for Disease

An addendum has been attached

Monthly Field Activities Report

Control (CDC) California AIDS Projections

to AIDS Monthly Activities Report. At our

Donald O. Lyman, M.D., Chief

Office of AIDS

1) Public Health Service Plan for the Prevention and Control of AIDS and

the AIDS virus: Report of the Coolfont Planning Conference June 4

-

6,1986.

(Copies available Upon request).

2. Statistical Report No.86-1: An Empirical Model for Projecting Trends in

AIDS Cases, w. Meade Morgan, Ph.D., AIDS Program, Center for Infectious

Diseases, Centers for Disease Control, Atlanta, Gerogia 30333.
The Impact of AIDS on Kaiser Permanence ● 37

ACQUIRED IMMUNODEFICIENCY SYNDROME (AIDS)

MONTHLY FIELD ACTIVITIES REPORT

January 1981 - December 31, 1986

Department of Health Services

Office of AIDS

P.O. BOX 160146

Sacramento, CA 95816-0146

California Cases by residence at onset of illness from

January 1981 to December 31, 1986 (includes 13 cases

reported prior to January 1981)

1. CASES AND DEATHS REPORTED THIS MONTH

PRIMARY DISEASE CASES

KS without PCP 24

PCP without ks 106

Both KS and PCP 8

01 without XS or PCP 37

TOTALS THIS MCNTH 175

DEATHS

34

85

7

24

1 5 0

2. RISK GROUP SUMMARY OF CASES REPORTED THIS MONTH

NUMBER OF CASES

MALE

Hemophiliac

Heterosexual Contact

Transfusion

Parent at Risk

None/Apparent/Unknown

TOTAL

● NOTE Negative Values

Homosexual 1 5 0

Bisexual 1 9

Intravenous (IV) Drug Use~ 4

0

4

3

0

-64

174

indicate a

o

0

1

0

2

1

0

93*

1

change in

TOTAL

CASES

150

19

5

0

6

4

0

-9*

175

risk.

% OF

TOTAL

85.71

10.86

2.86

O.co

3.43

2.29

0.00

-5.14

100.00
38 ● The Impact of AIDS on Kaiser Permanence

8 o f 8

3. PRIMARY DISEASE CASES TOTAL DEATHS DEAD

ks without PCP 1636 24.08 677 41.38

PCP without KS 3797 55.88 1860 48.99

Both XS and PCP 357 5•25 242 67.79

01 without KS Or PCP 1005 14.79 537 53.43

TOTAL TO DATE 6795 100.00 3316 48.80

ks kaposics sarcom a

PCP = Pneumocystis carinii pneumonia

ox = other opportunistic infections

4. A GE

Under S

05 - 13

14 - 19

20 - 29

30 - 39

40 - 49

Over SO

unknown

TOTAL

CASES

21

6

15

1063

3148

1660

858

24

6795

5. RACE/ETHNICITY

% OF

TOTAL

0.31

0.09

0.22

15.64

46.33

24.43

12.63

0.35

White, not Hispanic

Black, not Hispanic

Hispanic

Haitian

Asian or Pacific Is.

American Indian/Alaskan

Other

Unknowl

100.00

TOTAL

CAszs

5390

606

673

6

71

7’

1

41

6795

% OF

TOTAL

79.32

8.92

9.90

0.09

1.04

0.10

0.01

0.60

100.00
The Impact of AIDS on Kaiser Permanence ● 39

6. RISK GROUPS

NUMBeR OF CASES

TOTAL

CASES

* O F

FEMALE TOTAL

Homosexual

Bisexual

Intravenous (IV) Drug User

Hemophiliac

Heterosexual Contact

Transfusion

Parent at Risk

None/Apparent/Unknown

5s07

721

127

47

33

100

4

13s

o

0

28

8

25

36

7

17

5507

72%

155

55

58

136

11

152

81.04

10.61

2.28

0.01

0.85

2.00

0.16

2.24

TOTAL 6674 121 6795 100.00

7. FATALITY RATES BY TI~ OF DIAGNOSIS

RATE

76.92

CASES

13

DEATHs

Before 1981 10

1981 Jan-June 19 18

Jul-Dec 40 33

94.74

82.50

1982 Jan-June 78 59

Jul-Dec 135 102

75.64

75.56

1983 Jan-June 284 211

Jul-Dec 389 294

74.30

75.58

1984 Jan-June 537 376

Jul-Dec 713 478

70.02

67.04

1985 Jan-June 989 575

Jul-Dec ~146 528

58.14

46.07

1986 Jan-Jun 1411 459

Jul-Dec 1041 173

32.53

16.67

TOTAL 679S 3316 48.00
40 ● The Impact of AIDS on Kaiser Permanence

AIDS CASES BY COUNTY OF RESIDENCE AT ONSET OF ILLNESS

January 1981 - December 31, 198 6

San Francisco . . . . . . . . . .

Los Angeles . . . . . . . . . . . .

San Diego . . . . . . . . . . . . . .

Alameda (e%. Berkeley) . .

Orange . . . . . . . . . . . . . . . . .

Santa Clara . . . . . . . . . . . . .

San Mateo . . . . . . . . . . . . . .

Riverside ............o..

Sunoma . . . . . . . . . . . . . . . . .

Contra Costa . . . . . . . . . . . .

Sacramento . . . . . . . . . . . . .

Marin .**eeoom ● ***eeeo* ●

Sam Bernardino . . . . . . . ..

Santa Barbara . . . . . . . . . .

M0fiterey . . . . . . . . . . . . . . .

Ventura . . . . . . . . . . . . . . . .

Fresco . . . . . . . . . . . . . . . . . .

San Joaquin . . . . . . . . . . . .

Santa Cruz. ..........eo.

SOIWIO. . . . . . . . . . . . . . . . . .

Berkeley ......*** ...6. .

Kern .. ..........O . . . . . .

IZendocino . . . . . . . . . . . . . .

San Luis Obispo . . . . . . . .

Nepal . . . . . . . . . . . . . . . . . . .

El Dorado. . . . . . . . . . . . . . .

Lake .*.*.*@. .*..*...* . .

Shasta . . . . . . . . . . . . . . . . . .

Stanislaus . . . . . . . . . . . . .

Yuba ..9. . . . . . ● *eo*e*e* ●

Butte . . . . . . . . . . . . . . . . . . .

Imperial . . . . . . . . . . . . . . .

Herced . . . . . . . . ● eemoo**m

Placer. ...........m.. . . .

Siskiyou ● oOmO*oe ● 000000

Yolo .* OOOOOOOOO.*000*..

Glenn . . . . . . . . . . . . . . . . . .

Humbolt/Del North . . . . . . .

Znyo . . . . . . . . . . . . . . . . . . .

K @ ● oe**o** ● *eeo**m* ● *

Hadera . . . . . . . . . . . . . . . . .

Plumas . . . . . . . . . . . . . . . . .

San Benito ● 0000000 ● **.*

Sutter . . . . . . . . . . . . . . . . .

Trinity 900000s0 ● ba*****

Tulare ....O . . . . . . . . . . . .

TOTAL

CASES

2471

2430

358

283

245

133

109

107

95

92

72

63

49

39

31

25

24

18

18

17

14

14

13

13

11

7

5

4

4

4

3

3

3

3

3

2

1

z

1

1

1

z

1

1

1

1

6795

DEATHS

1302

1108

184

115

127

53

49

70

49

3s

28

31

20

14

16

11

13

11

10

6

6

3

7

8

5

5

5

2

3

2

2

3

2

2

2

0

1

1

0

1

1

1

0

1

1

0

3316
The Impact of AIDS on Kaiser Permanence ● 41

Yea r

1981 & before

1982

1983

1984

1985

1906

PROJECTED:

1906

1987

1988

1989

1990

1991

Reported cases of

Residents of

Table 1

AIDS ‘DS-RelaCed Deaths among

Wifomia - ~ecembez 29, 1986

cases

Diagnosed

67

202

639

1219

2136

2129

cases

Dfagnosed (68% bounds)

3250 (3100, 3400)

4650 (4350, 4950)

6300 (5600, 6900)

8200 (6600, 9300)

~o~oo (7500, 12100)

12900 (8100, 14600)

Deaths

21

66

2s3

608

1136

1122

Deaths (Range)

1930 (1870, 2000)

2950 (2800, 3100)

4200 (3900, 4500)

5700 (5000, 63CO)

7500 (6050, 8500)

9600 (6950, 11150)

Table 2

Perceng of California C a

-

’rea (SWA) of Residenc e

December 29, 1986

REPORm CASES:

Yea r San Francisc o

1981 6 before 52.2

1982 53.0

1983 48.0

1984 48. 6

198S 42-6

1986 45.1

PROJECTED CASES:

32.8

35.6

39.3

35.7

3a.2

37.2

14.9

11.b

12.7

15.7

19.2

17.7

42.8 37.3 19.9

33.5 (2Y.4, 37.7)* 35*7 (3L4, 40.1)* 30e8 (26.4, 35.5)0

● 68z confidence bouncls are given in Darencheses.

.
42 ● The Impact of AIDS on Kaiser Permanence4

8

●

\\\

\

w

m

a)

m

o

CJ

m

n—

<

u

a) m

m

I

.3

a

u

a)

L

o

Q

a)

E

(spummoql)
Appendix D: LIST OF ABBREVIATIONS

AIDS

ARC

AZT

CDC

HIV

I us

K FH

KFHP

KPNCR

KPMCP

KS

PCP

TPMG

--acquired immunodeficiency syndrome

--AIDS-related complex

--azidothymidine (currently known as zidovudine)

--Centers for Disease Control

--human immunodeficiency virus

--Inpatient Utilization System

--Kaiser Foundation Hospitals

--Kaiser Foundation Health Plan

--Kaiser Permanence Northern California Region

--Kaiser Permanence Medical Care Program

-- Kaposi’s sarcoma

--Ptleumocyslis cat-itlii pneumonia

--The Permanence Medical Group, Inc.

43
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1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

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45