Future of Federal and State Funds for Domestic AIDS Services ‘Pretty Bleak’

Many charities are at the mercy of federal budget priorities. For organizations that provide services to

people with HIV and AIDS those priorities can often be literally a matter of life and death, especially as individuals and grant makers have been cutting their donations to such groups.

Many of the 950,000 Americans with HIV or AIDS receive some kind of health-related service that is supported by federal dollars. Some of those funds — $18.5-billion in the 2004 fiscal year — are directed to charities through grants, and thus exert great influence on those organizations’ ability to offer services.

Even charities that receive no government funds at all are affected by federal budget priorities, because they are called on to fill gaps in service.

“The nonprofit sector can do things that government can’t do, things that the government won’t fund,” says Jennifer Kates, director of HIV policy in the Washington office of the Henry J. Kaiser Family Foundation.

She cites needle-exchange programs, designed to prevent the spread of HIV among injection-drug users as one example. The federal government is legally prohibited from spending money on such programs, and while several states sponsor needle-exchange programs, authorization for such programs usually stirs controversy from people who say such methods condone and promote drug use. For instance, James E. McGreevey, the former New Jersey governor, was criticized when he signed executive orders in October allowing needle-exchange programs in three cities in the state.

Slow Growth

While the federal government continues to increase spending to combat HIV and AIDS every year, the pace of growth has slowed considerably and has not kept up with growing demand for services, AIDS advocates say.

From 1982 to 1989, federal spending nearly doubled each year; since then the annual increases have been much smaller. In the last fiscal year, the government spent 11 percent more than it did the previous year for both domestic and international programs. In the appropriations bill passed last month by Congress for the 2005 fiscal year, financing for the Ryan White Comprehensive AIDS Resources Emergency Act, the largest federal program dedicated to HIV/AIDS, went up $45-million — an increase entirely attributable to a jump in support for the AIDS Drug Assistance Program. Programs for domestic HIV prevention and housing assistance for AIDS patients saw decreases from the 2004 fiscal year in the new appropriations bill.

In the face of a growing number of new HIV infections, and the expanding number of people who are living longer with the disease with the help of drug therapies, the relatively small increases in federal spending pose a challenge, says Jeffrey Levi, associate professor of health policy at George Washington University’s School of Public Health and Health Services.

“The general fiscal picture is pretty bleak,” he says. Given the ballooning federal deficit, the cost of the war in Iraq, domestic security, tax cuts, and other budgetary pressures, he says, “Congress is not going to have the flexibility to increase funding in this area, even if it wanted to.”

State budgets are faring no better, says Laura A. Hanen, director of government relations at the National Alliance of State and Territorial AIDS Directors, an umbrella organization in Washington for people who administer state programs to treat people with the disease and prevent its spread.

States contribute a large amount of money to those with the virus: In the 2004 fiscal year, states paid $4.3-billion toward Medicaid for HIV and AIDS care, while the federal government spent $5.4-billion. As states look for ways to cut their budgets, money for HIV and AIDS programs have already taken a hit, Ms. Hanen says. “Unlike the federal government, states have to balance their budgets,” she says. “It wasn’t like AIDS was singled out to balance the budget, but these programs are no longer considered a third rail.”

The budget crunch has also hit large cities with substantial numbers of people with HIV and AIDS. “The city of San Francisco, to balance their budget, had to cut their funding for AIDS programs,” says Ms. Hanen. “I don’t think anyone thought that would ever happen in San Francisco, but everything is fair game at this point.”

In San Francisco, this year’s cuts of about one-quarter of the city’s HIV/AIDS budget were aimed at so-called support services — such as nutrition programs, transportation to doctor’s appointments, housing assistance, and child care — and not at “core” services, such as direct medical care.

That reflects a larger trend in government spending priorities, says Ms. Hanen, a trend that is likely to continue when the Ryan White CARE Act is extended as expected in 2005.

Governments are taking a triage approach, says Mr. Levi. “As you have fewer resources, there will be much more focus on the medical services that people with HIV need,” he says. States are already rationing care, by creating waiting lists for drug coverage, imposing limits on how much help each patient can obtain, and taking other steps to stretch their dollars, he says. He says he worries that that approach will be harmful to people with AIDS because, he says, support services often make medical care more effective.

Preventing Infection

In addition to the drop in government funds for support services, the share of federal money spent on preventing HIV infection is steadily shrinking, according to the Kaiser foundation, going from a high of 18 percent of the AIDS-related part of the federal budget in 1995 to just 11 percent in 2004.

Most of that money is administered through the Centers for Disease Control and Prevention, in Atlanta, which last year shifted its emphasis from educating people who are at high risk for infection to people who already are HIV positive.

The idea is that transmission of the disease could be halted most effectively if the people who are infected with the virus would take greater precautions. As Ms. Kates describes it, “It was motivated by a real frustration, one that all of us working in HIV have, that there is still a stable number of new infections every year, and getting that number down is very hard.”

The shift in policy left some charities that focus on prevention without a key source of money, says Mr. Levi.

For example, Metro TeenAIDS, a Washington group, lost federal aid for its prevention program due to this shift.

“The flaw in the feds’ logic is that they say that prevention has not been working, and they base that assumption on the fact that there continues to be a steady number of new HIV infections every year in the United States,” says Adam Tenner, Metro TeenAIDS’s executive director. “But in other countries, where HIV prevention is not in place, we’ve seen much higher numbers of new infections. We’re doing better than the curve. We all agree that we can do better with prevention. But AIDS is a disease that’s 100 percent preventable, and this amounts to seeing to it that young people will learn about HIV prevention from the person who tells them that they’re HIV positive. We strongly believe this is a completely immoral stance.”

Some AIDS charities hope that private donors will step in and finance programs that educate people at high risk for contracting HIV. Mr. Levi contends that such support might be appealing to private donors “because frankly, prevention is less expensive than treatment, and it doesn’t require the same type of infrastructure that medical treatment requires.”

International Focus

That argument may not necessarily go that far, however, as more and more private donors have shifted funds and attention to the international epidemic. Some 37.8 million people worldwide now have the disease, according to the United Nations, and the United States has stepped up efforts to help stem the spread of the disease. The fastest growing federal HIV/AIDS budget category is international prevention and care, according to a Kaiser Family Foundation analysis. From 1995 to 2004, federal support of international AIDS programs soared from $127-million to $1.9-billion.

The shift doesn’t bode well for charities that serve Americans with AIDS, says Mr. Levi: “I’m most concerned about domestic HIV needs disappearing from the radar screen.”

Ms. Hanen agrees that nonprofit organizations will continue to be affected significantly by government spending decisions: “There is, and there will be, plenty of work for charities to take on.”