Providing HIV treatment to employees can lead to big savings for South African companies

Keith Alcorn
Published: 24 July 2012
Gold mine in Johannesburg, South Africa.

Provision of antiretroviral treatment through workplace health schemes in South Africa has the potential to save substantial sums for employers, as well as making a major contribution to treatment scale-up in the region, a new study presented at the 19th International AIDS Conference (AIDS 2012) in Washington DC shows.

Very large sums in employee sickness and death-in-service benefits could be saved, according to Peter Vickerman of the London School of Hygiene and Tropical Medicine, who presented a modelling study based on the costs of antiretroviral treatment provision in a large mining company. He found that the cost of drugs comprised just 5% of the HIV-related costs incurred by employers.

Although a growing number of companies in southern Africa provide HIV treatment through workplace programmes, his work is the first economic evaluation of the cost-benefit of providing antiretroviral treatment, and is likely to open eyes in any board room with significant interests in southern Africa.

The study looked at the costs of providing treatment in a large mining company operating two mines north of Johannesburg, which have been providing HIV-related medical care at outpatient facilities at the mines since 2003. Treatment is currently provided to all employees with HIV with CD4 cell counts below 350, as per international guidance.

Rather than just looking at the costs of treatment and life years saved in isolation, the analysis took into account the costs to the company of providing HIV-related benefits such as sick pay and death-in-service benefits, as well as the estimated costs of absenteeism in lost production, and the costs of training and recruiting new staff. The analysis also took into account the cost of setting up and running the HIV-related medical services. The model employed workforce data gathered between 2003 and 2010, and projected all the costs out to 2022.

The company employed 7000 to 8000 miners during the period 2003-10, and the model projects that – assuming a continued prevalence of around 15% and an annual HIV incidence of 1to 2% – the company can expect to be employing around 2000 HIV-positive staff in any given year.

In any year after 2011, the model assumed that 75% of those eligible will start treatment, but loss to follow-up will lie in the region of 5 to 11%, due to workforce turnover and migration to other ART programmes.

The modelling exercise found that the total cost of HIV-positive employees was 17% lower as a result of antiretroviral treatment provision, and the cost of absenteeism would be cut by one-third as a result of reduced sickness-related absenteeism. The 'HIV tax' on the business (the total costs of HIV to the business as a percentage of the payroll) fell from 6.3 to 5.6% as a result of ART provision.

The big surprise of the modelling exercise was just how little the provision of antiretroviral drugs contributed to the overall costs of HIV to the business, and how much was saved by their provision to employees. Antiretroviral drugs comprised just 5% of the total costs of HIV to the business, at just US$1.4 million per year. In comparison, benefits and absenteeism each cost the business over US$10 million a year without ART. Spending US$1.4 million per year on antiretroviral treatment was associated with an annual saving of US$4.3 million on benefits and absenteeism, and a net annual saving of US$5 million to the business.

Peter Vickerman stressed that results might vary in other companies depending on their benefits policy. In the case of the company studied, for example, the death-in-service benefit paid to surviving relatives was three times annual salary. Similarly, results may not be generalisable to other countries in the region with lower wages.

Nevertheless, the findings that companies operating in the region could expect to make substantial net savings if they introduce or expand antiretroviral treatment provision among employees are likely to make employers look more carefully at how to provide treatment, particularly where benefits and absenteeism are important business costs.

Reference

Meyer-Rath G et al. Company-level ARV provision to employees is cost-saving. A modelled cost-benefit analysis of the impact of HIV and ART on a mining workforce in South Africa. Nineteenth International AIDS Conference, Washington DC, abstract MoAE0203, 2012.

View the abstract on the conference website.