South African Companies Using Managed-Care Plans to Control Health Care Costs in Country With 20% AIDS Prevalence
January 22, 2004
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
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