HIV/AIDS in private sector companies: cost impacts and responses in southern Africa

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Date: May 2009
From: HIV Therapy(Vol. 3, Issue 3)
Publisher: Future Medicine Ltd.
Document Type: Report
Length: 5,286 words

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Author(s): Gavin George [[dagger]] 1 , Jeff Gow 1 , Alan Whiteside 1


ART; companies; cost impacts; HIV/AIDS; prevention; private sector; responses; treatment; South Africa; southern Africa

This article examines the impacts on, and responses of, private sector companies to the HIV/AIDS epidemic in sub-Saharan Africa, particularly southern Africa. Southern Africa has the worst HIV epidemic in Africa in terms of morbidity and mortality; it also has some of the best and most innovative responses by companies.

Background of HIV/AIDS in sub-Saharan & southern Africa

Sub-Saharan Africa is by far the region in the world most affected by HIV/AIDS [1] . Despite having just 10% of the global population, it has 66% of people living with HIV/AIDS (PLWHAs) and 72% of deaths in 2007 were AIDS related. It was estimated that approximately 5% of adults in the region were PLWHAs at the end of 2007, compared with a global prevalence rate of less than 1% [1] . Table 1 summarizes the latest available UNAIDS estimates of the numbers of PLWHAs and AIDS-related deaths in selected countries.

Southern Africa accounted for 35% of all PLWHAs and almost a third (32%) of all new HIV infections and AIDS deaths globally in 2007 (South Africa had an estimated 5.7 million PLWHAs at the end of 2007) [1] . The epidemic is occurring in the most economically developed part of Africa with South Africa alone accounting for a third of sub-Saharan Africa's gross domestic product [GDP]).

The increase in mortality due to AIDS has already had a significant demographic effect. Individuals and households face increasing risks, both directly through the risk of infection and indirectly as the traditional social insurance mechanisms (mutual support within extended families) are eroded. The mortality and morbidity associated with AIDS are different from any other type of sickness and disease. Whereas most diseases prey largely on children or the elderly, HIV is transmitted mainly through sexual intercourse, which makes young, sexually active adults the most vulnerable. The majority of PLWHAs are aged between 19 and 45 and are the primary breadwinners of their families [2] .

Cost of HIV/AIDS to a company

There is a growing body of evidence from recent research [2,3] that the HIV/AIDS epidemic is having profound and wide ranging financial impacts on businesses in South Africa. However, this data comes from relatively few and intensive case studies, and many business leaders, even in high prevalence sectors of the economy, are often unable to point out current and specific impacts of the epidemic on their operating costs and revenue.

The individual costs of having one employee with HIV/AIDS are composed of direct, or out-of-pocket costs and indirect, or productivity-linked costs. The direct costs include increased medical costs, and the costs of recruiting and training replacement employees. The indirect costs include the reduced productivity of the ill employee, their increased leave and absentee days, increased supervisor's time in managing the ill employee, the costs to production until a replacement is hired and initially lower productivity of the new employee [2] .

The organizational costs of...

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Gale Document Number: GALE|A225007660