Research shows savings can be achieved in Ugandan company provides HIV drugs to employees

By Jeff Sheehy on July 13, 2000

Researchers have found that it may be cost-effective for Ugandan companies to
provide HIV drugs to their employees with HIV when they get sick. 

The study team, headed by a University of California, San Francisco AIDS
researcher, developed an economic model that looked at the HIV-related costs to
operating the business, including limited medical care, lost productivity due
to illness, disability payments, new worker training, and death benefits paid
to the employee’s family. These costs were then compared with the cost of a
more intensive preventive care program, accounting for anticipated savings in
HIV treatment costs.

Study results were reported today (July 13) at the XIII International AIDS
Conference in Durban, South Africa.

The model used generic estimates from published studies and looked at companies
with over 500 employees.  A case study of a major Ugandan corporation will be
used to update the estimates. 
“These preliminary results suggest that it may be in the economic self
interest of Ugandan businesses to play a major role in treating their
HIV-infected employees.  Businesses are potentially important players if they
can determine the circumstances in which it makes sense for them to step up to
the plate,” said lead investigator Elliot Marseille, DrPH, MPP, a researcher at
the UCSF AIDS Research Institute and the director of Health Strategies
International.

He cautioned, “This is no panacea. The private sector won’t be able to provide
everything needed and should not be required to. Since many of the benefits of
treating HIV-infected workers accrue to the society at large and not just to
employers, there is a strong rationale for continued public sector involvement
as well. Also, the specific situation may vary for different companies, and
this is something we are trying to understand better through the case studies.”

The analysis focused on the costs and benefits of providing highly active
anti-retroviral treatment (HAART) and the preventive drug cotrimoxazole (PCTMX)
to employees with HIV once they become symptomatic.  The model reflects the
recent 85 percent price reductions in the cost of antiretrovirals for
developing countries.

The economic model factored in several costs generally experienced by a Ugandan
company due to employees with HIV.  African companies typically do not provide
health insurance, according to Marseille.  Instead, they either set up their
own clinics or contract with a clinic to provide health care to employees.  The
company incurs costs to treat opportunistic infections experienced by employees
with HIV at the clinics.

The model quantifies the lost productivity of the days lost by non-disabled
workers due to opportunistic infections and days lost between the total
disability of the worker and the start date of his/her replacement hire.  The
model also quantifies the training costs for the new hire and the initial
diminished productivity of the replacement as the new worker learns the job.
The other cost borne by the company is the cost of death benefits, standard
benefits offered by most Ugandan companies, Marseille said.
These costs can include the cost of the employee’s funeral, a lump sum benefit
paid to the deceased’s family, and travel expenses for the transport of the
deceased and his/her family to the deceased’s place of birth for burial.

These costs taken together are estimated to cost a company annually $327 per
skilled employee and $185 per unskilled worker.

The cost of providing only PCTMX plus the gain in productivity and diminished
incidents of death create annual cost savings of $74 per skilled employee and
$42 per unskilled employee.  The cost of HAART at the 85 percent price
reduction and PCTMX saves the company $86 per skilled employee.  HAART and
PCTMX for an unskilled worker ends up costing the company $29 per life-year
gained.

The study concludes that it saves Ugandan company money to fund either the
prophylactic PCTMX alone or along with HAART for skilled workers.  Providing
PCTMX alone to unskilled workers saves money while providing PCTMX with HAART
nears the break-even point.

Study co-authors are James G. Kahn, MD, MPH, of the UCSF AIDS Research
Institute and UCSF Institute for Health Policy Studies, and Joseph Saba, MD,
Axios International.