-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO/HEHS-00-189R		

TITLE:     Ryan White CARE Act: Title I Funding for San Francisco

DATE:   08/24/2000 
				                                                                         
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GAO/HEHS-00-189R

B-286131

August 24, 2000

MACROBUTTON The Honorable Tom A. Coburn

Vice Chair

Subcommittee on Health and Environment

Committee on Commerce

House of Representatives

Subject: Ryan White CARE Act: Title I Funding for San Francisco

Dear Mr. Coburn:

This letter responds to your request for additional information regarding
funding for San Francisco under the Ryan White CARE Act. Specifically, you
asked that we compare San Francisco's fiscal year 2000 title I grant award,
which was determined using the act's hold-harmless provision, with what the
award would have been had deceased AIDS cases been included in the
calculation. You also asked how funding for San Francisco that was based on
the inclusion of deceased AIDS cases would have compared with the amount San
Francisco would have received if the fiscal year 2000 hold-harmless level
had been reduced by 25 percent.

In brief, San Francisco's fiscal year 2000 title I grant award would have
been 26 percent less had both living and deceased AIDS cases been used to
calculate the award instead of the current hold-harmless provision. The
reason for this result is the substantial decline in newly reported AIDS
cases in San Francisco compared with other eligible metropolitan areas
(EMA). Therefore, a 25-percent reduction in the current hold-harmless level
would have provided San Francisco with funding comparable to what it would
have received if title I grants had been calculated on the basis of both
deceased and living cases.

This analysis is based on data obtained from the Centers for Disease Control
and Prevention and computer models we developed to calculate how funding
would change under various formula scenarios. We performed our work in
August 2000 according to generally accepted government auditing standards.

BACKGROUND

The Ryan White CARE Act of 1990 provides health care and preventive services
to people infected with the human immunodeficiency virus. Prior to the 1996
reauthorization of the act, the number of both living and deceased AIDS
cases was used to distribute title I funds among EMAs. Under this practice,
areas of the country with the longest experience with the disease had the
most deceased cases and therefore received funding disproportionate to their
share of living cases in need of care. The 1996 reauthorization eliminated
this practice by counting only live AIDS cases. The effect of the change was
to shift funding away from EMAs with higher proportions of deceased cases
and toward those with newly diagnosed cases. As geographic trends in the
disease change, the revised formula automatically realigns funding with the
current distribution of the disease.

A hold-harmless provision was also included in the 1996 reauthorization to
provide for a gradual transition to new funding levels for those EMAs that
would otherwise have experienced substantial funding decreases. This
provision allowed grant awards for affected EMAs to decline by no more than
5 percent by fiscal year 2000. In fiscal year 1996, four EMAs benefited from
the hold-harmless provision: San Francisco, New York, Houston, and Jersey
City. By fiscal year 1999, all but San Francisco had made the transition to
the new formula.

Under the current title I formula, EMAs receive grant awards that are
proportional to the number of living AIDS cases. In fiscal year 2000, Los
Angeles had 6.9 percent of all AIDS cases nationally and received 6.7
percent of title I funding. Similarly, Miami had 4.4 percent of all AIDS
cases and received 4.3 percent of title I funding. EMAs received $1,290 in
title I funds per AIDS case in fiscal year 2000. However, because of the
hold-harmless provision, San Francisco's grant award was substantially
higher: it received $2,360 per AIDS case, or 80 percent more than other
EMAs. As a consequence, San Francisco received 6.7 percent of title I
formula funding even though it had just 3.8 percent of all living AIDS
cases.

RESULTS OF DIFFERENT FUNDING APPROACHES

If both deceased and living AIDS cases had been used to calculate fiscal
year 2000 title I formula grants instead of the hold-harmless provision, San
Francisco's grant would have been about 4.9 percent of all title I formula
funding, or 26 percent less

than it actually was (see fig. 1). Thus, a 25-percent reduction in the
current hold-harmless level, as provided for in H.R. 4807, would have an
effect on San Francisco's

funding similar to that of calculating grant awards on the basis of both
deceased and living cases.

Figure 1: San Francisco's Share of AIDS Cases and Its Share of Title I
Funding,

FY 2000

An important reason that San Francisco's share of living AIDS cases is so
much lower than its share of title I formula funding is that the rate of new
cases has declined to a much greater extent in San Francisco than in almost
any other area of the country. As figure 2 shows, San Francisco's newly
reported AIDS cases dropped by over 50 percent between 1990 and 1999, while
other EMAs have shown either smaller declines (Los Angeles) or increases
(Miami).

At the start of the decade, Los Angeles and San Francisco were reporting
nearly the same number of new AIDS cases (2,130 in Los Angeles and 1,923 in
San Francisco). By the end of the decade, San Francisco was reporting half
as many new cases as Los Angeles (904 compared with 2,027). Similarly, at
the start of the decade, Miami was reporting about half as many new AIDS
cases as San Francisco (1,076 in Miami compared with 1,923 in San
Francisco). By the end of the decade, Miami was reporting about 70 percent
more new cases than San Francisco.

We did not obtain comments from other parties because your request pertains
to the formula provisions in the law and not to the activities of any agency
or organization.

- - - - -

If you have any questions regarding this letter, please contact me at (202)
512-7118 or Jerry Fastrup at (202) 512-7211. Greg Dybalski and Michael
Williams made major contributions to this work.
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