(MONEY Magazine) – To fight AIDS and control its financial burden we should do the following: Health care. Shift much of the treatment of AIDS patients out of expensive hospitals and into more cost-effective programs. Hospital care now accounts for roughly 90% of all AIDS medical expenses, but hospitals often are not the best places for these patients to be. Under the case-management approach, patients would be attended to at home by visiting nurses and home health workers, or, if they were terminally ill, at hospices (which are small, specialized hospitals devoted to the care of the dying). One insurance company study concluded that case management would cost only one-twelfth as much as traditional hospital care, while enhancing the patients' quality of life. For case management to work, though, communities must administrate much of the home care, and employers and insurers must pay for it. Most such alternative health care is not now covered by health insurance. That is why AIDS patients wind up in hospitals. The health providers involved must also be willing to treat people with AIDS. Some nursing homes, for example, have turned away AIDS patients for fear of alienating other clients who might have an irrational fear of living near someone who has AIDS. Medicaid coverage should be expanded to include people with AIDS-related complex (ARC), a preliminary stage of the disease. Many hospitals that are already strapped financially by relatively low reimbursements for treating AIDS patients could be pushed into the red or be forced to cut services if the exploding number of ARC cases are not covered. Insurance. The insurance industry has been battling for the right to turn away customers who test positive for infection with the AIDS virus. Critics have opposed industry testing on two grounds. First, the test shows only the presence of the virus, not how soon -- or, perhaps in a few cases, even whether -- the person will get sick. Second, it would set a potentially far- reaching precedent for future genetic screening for susceptibility to all sorts of chronic illnesses, including cancer and heart disease. The insurance companies are winning this fight nearly everywhere. As a result, much more thought must be given to how people with AIDS -- and other serious illnesses -- can secure health coverage. Washington and Florida are leaders here. Both have enacted laws requiring insurers to join state- administered pools to provide coverage for people with pre-existing health conditions that would otherwise make them uninsurable. Premiums may be no more than 150% to 200% higher than the standard group rate. Similar programs should be adopted in all states to guarantee that the sick have at least the same access to affordable coverage as other ''bad risks'' such as new drivers and workers in hazardous jobs. Education. Target AIDS education where it will do the most good at the local level. As David Kanouse, senior behavioral scientist at the Rand Corp., explains: ''In Los Angeles, where only about 5% of I.V. drug users are infected, you aim your efforts at the users. In New York City, where most drug users are already infected, education should be aimed at their sex partners to stop the disease's spread.''

The message should be designed by people with expertise in marketing and psychology. It should be delivered in schools to children nearing puberty and on television to those who are unlikely to read printed material. In all cases, the language used should be as explicit as possible. As Robert May, a biologist at Princeton, says: ''It is high time for public education about AIDS to be pursued as seriously as is marketing for soap and beer.'' Disease control. One draconian solution to the AIDS epidemic, which Cuba is actually trying, would be to test a lot of people and quarantine those who were infected. Leaving aside the crucial question of whether such an approach would be appropriate in a democracy, most health-care workers argue that it would not work: it would drive into hiding the very groups -- homosexuals, drug users, inner-city minorities -- who are now most likely to carry the virus.

The solution lies in the opposite direction. We must encourage people to get tested voluntarily by passing laws to ensure that the test results, and the tracing of sexual contacts, would be handled with the same confidentiality already accorded the victims of other sexually transmitted diseases, including syphilis and gonorrhea. As a further step, we need laws that would specifically ban discrimination against AIDS sufferers in housing, employment, nursing-home eligibility and the like. Only with such protection in place will - people feel secure enough to come forward and be tested. In the final analysis, however, the responsibility for fighting the AIDS epidemic comes down to the individual. Anyone who thinks he or she might have been exposed to the virus should get tested immediately to avoid unwittingly spreading it. (Since some people harbor the virus for more than a year before it can be detected by the current exam, those in a high-risk group may want to get tested annually.) People should not hesitate to ask their sexual partners to be tested too. And, regardless of whether he or she feels at risk, any sexually active person who is not involved in an exclusive, long-term, monogamous relationship should learn the guidelines for ''safe sex.'' Send for the Surgeon General's free pamphlet, Report on AIDS, by writing to S.G. AIDS, P.O. Box 23961, Washington, D.C. 20026.