South African Companies Using Managed-Care Plans to Control Health Care Costs in Country With 20% AIDS Prevalence

South African companies have begun using managed-care plans to control health care costs for HIV-positive employees, a move considered "revolutionary" in a country with a 20% HIV/AIDS prevalence rate, the Wall Street Journal Europe reports. Managed-care plans, which aim to constrain costs by managing how patients use health care services, help firms keep HIV-positive employees productive and working longer, according to the Journal Europe. Alexander Forbes, a South African employee-benefits consulting firm, has established a program with a unit of the United States Agency for International Development that has enrolled 20,000 South African workers in managed-care plans, according to the Journal Europe. Alexander Forbes uses a model called Direct AIDS Intervention in which companies and insurance firms determine long-term costs for insuring HIV-positive workers rather than insuring against the "day-to-day risk" of illness, the Journal Europe reports. Under DAI, employers and insurance companies determine the amount it will cost to cover HIV-positive employees for 10 years, and a separate fund is established to cover those costs. Companies encourage employees to be tested for HIV, and those employees who test HIV-positive are immediately given antiretroviral drug regimens, enabling employees to work longer and continue paying into the company's health insurance plan, according to the Journal Europe. An Alexander Forbes cost-benefit analysis determined that by using DAI companies can save $16,737 by keeping an employee on the job for seven years longer than without the program and avoiding absenteeism costs. By continuing to use the current health care coverage system, Alexander Forbes determined that companies would have to pay about $42,194 in health costs for an HIV-positive employee over 12 years.

"Hurdles" to Managed Care
There are several "hurdles" to establishing a managed-care system in South Africa, including changing the way companies and employees think about health insurance and HIV/AIDS, according to the Journal Europe. About 30% of South African workers currently are covered by employer-provided health plans, and many HIV-positive employees do not disclose their HIV status so they do not lose their health coverage. In addition, companies will have to be more "transparent" about HIV/AIDS-related risks before managed-care plans become more accepted, according to the Journal Europe. According to Markinor, a South African market-research company, about one-third of 130 South African companies surveyed in 2003 had established a budget to address HIV/AIDS, and about 45% of the companies had a "fully documented" HIV/AIDS policy, according to the Journal Europe. Some South African companies that currently quantify HIV/AIDS-related risks and costs include AngloGold, Impala Platinum Holdings and Gold Fields (Spicer, Wall Street Journal Europe, 1/22).

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