Paying for HIV Treatment Saves Money

A study of a South African mining company indicates shelling out for AIDS drugs could save $1 million or more every year.
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Charles Machiridza, a nurse at the Chiparawe Clinic, Marondera, administers an HIV test. (Photo: UK Department for International Development/Flickr)

Charles Machiridza, a nurse at the Chiparawe Clinic, Marondera, administers an HIV test. (Photo: UK Department for International Development/Flickr)

HIV puts an emotional, physical, and economic strain on people, which, in the hardest-hit parts of the world, can have a major impact on employers too. According to new research published in PLoS Medicine, it may make good business sense for those employers to take an active role in treating their HIV-positive employees.

By any measure, HIV/AIDS has hit sub-Saharan Africa harder than anywhere else on Earth. Nearly one in 20 adults live with the virus, and the region accounts for about three in four HIV infections, according to World Health Organization statistics. The numbers are even worse in South Africa, where nearly one in five people between the ages of 15 and 49 have the virus, according to estimates by the Joint United Nations Programme on HIV and AIDS.

The mine would be more productive and pay less for sick leave and death benefits by providing antiretroviral drugs—to the tune of around $296 million over 20 years.

But setting aside the human cost for a moment, HIV/AIDS also takes an enormous economic toll, for both individual households and businesses. Regarding the latter, the costs of employee turnover and absenteeism typically add up to about three percent of a firm's labor costs, according to a 2007 study of 12 companies in sub-Saharan Africa.

Numbers like that led a number of mining companies in South Africa to create their own programs to provide employees with antiretroviral drugs, in the hope that doing so could actually save money. Yet there's not been much of an effort to determine whether those mines' efforts are actually cost-effective in the long run, write a group of researchers led by Gesine Meyer-Rath, a physician and health economist.

To get a better handle on the economic impact of HIV on companies, the study authors created a mathematical model to examine the costs and benefits of providing HIV/AIDS care. The model included employment dates, the number of sick days, health care costs, and even hiring and promotion policies. To calibrate that model, the team used health and employment data on workers at a South African coal mine that provided HIV services to its employees.

In most cases, the team found, providing antiretroviral drugs is worth it. Once calibrated using data on workers at a South African coal mine that provided antiretrovirals to employees, simulations showed that all but the sickest workers would be out due to illness between 16 and 42 percent less if they received treatment. The analysis also revealed employees would stay with the company longer if they got treatment. All told, the mine would be more productive and pay less for sick leave and death benefits by providing antiretroviral drugs—to the tune of around $296 million over 20 years, the researchers estimated.

"Providing HIV care, including ART, in a workforce with high HIV prevalence and high resulting absenteeism and turnover can be cost-saving for the employer," the researchers write. "It is crucial that strategies such as those under study here are replicated in other companies in similar settings."

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