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March/April 2007 |
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If you have an interesting case study regarding the implementation of an HIV related workplace initiative that you would like to share, please contact Nathea on nnicolay@metropolitan.co.za |
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In keeping with AAAO's focus on the impact that HIV has on business in Africa, the theme of this edition is "HIV and AIDS Impact Assessments". I was recently surprised to realise that there are still many business decision makers and people involved in the AIDS industry who simply don't understand what an HIV and AIDS Impact Assessment is. Even more startling is the fact that many companies attempt to measure the impact of HIV through anonymous HIV Prevalence Surveys and Voluntary Counselling and Testing campaigns! This edition of AAAO will answer some questions you may have, such as: 1. What is an HIV and AIDS Impact Assessment? 2. What information can be obtained from such a study? 3. What can be done with this information? and 4. Why do organisations commission such studies? As a leader in the business response towards HIV and AIDS, Metropolitan publishes the results of its own HIV and AIDS Impact Assessment in its annual financial reports. We asked Metropolitan's HIV workplace manager, Nosipiwo Ngxabazi to talk about this case study in order to enhance our understanding of an Impact Assessment. Our second article explains the more generic concepts of an Impact Assessment and is written by Lee Sarkin who is an HIV and actuarial specialist at Metropolitan AIDS Risk Consulting. The fact that all the contributors of this edition are employees of Metropolitan is purely coincidental and as a result of the topic under discussion. The multitude of April public holidays has also meant that external HIV consultants could not contribute to this edition. As the editor I would like to apologise for this, but Metropolitan's vast experience in the field of Impact of HIV on business means that this, as with each edition, is one of substance. A final word of warning: Anonymous HIV prevalence studies - typically conducted through anonymous saliva testing - can yield an overall, statistically estimated HIV prevalence rate, within a sub-population. They cannot however, provide a financial assessment of the impact of HIV on a company's bottom line, nor can they provide information surrounding: numbers of AIDS-sick employees, estimated AIDS-related deaths, or future projections of HIV related statistics and costs. Voluntary Counselling and Testing (VCT) campaigns are incredibly valuable for individuals because unlike the anonymous HIV Prevalence Survey, participants can learn their HIV status and hopefully be empowered to manage this status. Overall results from VCT campaigns should be used with caution, since these campaigns rarely achieve employee take-up rates of more than 50%. This means that results are not necessarily representative of the overall HIV prevalence rate in the underlying population. There is always the possibility that too many high-risk employees decide not to test for example. With nearly half of the respondents in the recent World Economic Forum's Executive Opinion Survey expecting HIV and AIDS to have an impact on their business in the next five years, companies simply cannot ignore the value of an HIV and AIDS Impact Assessment.
Businesses across the world recognise the HIV and AIDS epidemic as a serious risk. In South Africa , where the epidemic is something that faces every employer, we are certainly no exception. Companies are increasingly expected to measure this business risk and put in place, strategies to manage and monitor the risk as well report on their efforts. To this end, in 2005, Metropolitan Holdings has tasked Metropolitan AIDS Risk Consulting to conduct an internal HIV and AIDS Impact Assessment with projections up to 2016. The sub-population model for predicting HIV prevalence and AIDS mortality was calibrated using the death claims data from the Group Life Assurance schemes, as well as the unbiased Voluntary Counselling and Testing (VCT) statistics from the 2003 to 2005 campaigns. The study provided a demographic impact assessment (HIV and AIDS related employee statistics) as well as a financial impact assessment (the HIV and AIDS related cost of employee benefits, human resources and medical expenses) which is categorised into 3 scenarios.
1. The Status Quo scenario is based on the estimated 13% of HIV positive employees who have taken up HIV disease management on an anonymous basis with Qualsa (Qualsa is Metropolitan's HIV disease management provider). 2. The No Treatment scenario was also modelled for comparative purposes - here, the assumption is that no employees access antiretroviral treatment or care. 3. The Effective Treatment scenario assumed that most HIV positive employees received care and all AIDS-sick employees received antiretroviral treatment. The HIV statistics and related costs were applied to each scenario for the purposes of a comparison. The difference, for example, between the No Treatment scenario and the Status Quo scenario gave an indication of what savings had already been made under the current HIV and AIDS treatment programme. The Effective Treatment scenario provided an indication of further savings that might be possible should more employees access antiretroviral treatment and care. The study reported an estimated total HIV and AIDS related cost (in 2006) to be 2.2% of payroll. The 2.2% comprised employee benefit costs (1%), medical costs (0.6%) and human resource costs (0.6%). The employees benefit costs include insurance premiums related to Group Life Assurance and Permanent Health insurance for employees who are HIV positive. The human resource costs (which usually are incurred by companies as a result of HIV and AIDS), include those associated with sick leave and absenteeism, loss in productivity, recruitment to replace employees lost to AIDS-related deaths, and subsequent training of new staff (sick leave and loss in productivity formed the bulk of HR costs). HIV and AIDS related medical costs include hospitalisation, medical care and medication as a result of AIDS related illnesses or opportunistic infections. It should be noted that these costs reduce dramatically when a company takes a pro-active approach to HIV and AIDS, by making preventative disease management and antiretroviral treatment available to HIV positive employees. Apart from the savings that have already been incurred as a result of having employees on Metropolitan's treatment programme, further enrolment (with regard to disease management) indicates that there is a lot of scope for savings on medical costs. Metropolitan's Impact Assessment study showed a savings in HIV related costs for 2006 -thanks to the implementation of an HIV and AIDS disease management programme employed in 2003. The current saving, (which is calculated by measuring the no treatment against the status quo scenario), was pegged at around R4.2-million for 2006. The saving for 2007 has been projected as R4.5-million, with a further R8.4-million that could be saved if the take-up rate of disease management increases. After taking into account the cost of antiretroviral treatment, the net savings for 2006 were R2.8-million which is a clear indication that a comprehensive HIV workplace programme generates enough savings to pay for itself. Metropolitan expects these savings to continue into the future which is clearly enough business incentive to encourage wide-scale participation in the Metropolitan HIV disease management, as well as other workplace interventions such as Voluntary Counselling and Testing. The financial implications of this assessment have enabled Metropolitan to look into the future and judge the various impacts of a poor HIV and AIDS management campaign. The impact assessment has also been useful in that it has allowed Metropolitan the opportunity to re-assess its HIV and AIDS workplace intervention strategy. Clearly, increased status awareness and access to HIV disease management will mean a greater the reduction in company costs related to HIV illness and death. Metropolitan's HIV workplace strategies will be focused on improving take-up rates for both VCT and HIV disease management. Actions that will be undertaken as a result of the impact assessment results, include the provision of compulsory (company-wide) HIV counselling sessions in 2007 which will be followed by voluntary testing (research in other organisations has shown a take-up rate of up to 80% can be reached through the implementation of compulsory counselling). A consent form to enrol on disease management will also be introduced during counselling in order to ensure maximum support for those who test positive. Disease management is freely available on a confidential basis to all Metropolitan employees and the employer receives monthly reports on total employees enrolled on the programme with no identities being revealed. Metropolitan's own impact assessment has proved invaluable to the bottom line of the company - after all, in South Africa, a well thought out HIV and AIDS management plan would be of benefit to any employer looking to improve the well-being of their employees and reduce costs. ACKNOWLEDGEMENTS: NOSIPIWO
NGXABAZI
What is an HIV and AIDS Impact Assessment? An HIV and AIDS impact assessment is a quantitative assessment of the current and future demographic and financial impacts of HIV and AIDS on a sub-population of lives. HIV positive employees progress through various stages of disease, each associated with different symptoms that result in different demographic and financial impacts to an employer. When conducted on the employees of a workforce, an impact assessment therefore aims to provide an organisation with key measures that reflect the dynamic HIV and AIDS burdens placed on an employer. Actuaries have long been involved in making financial sense of the future by assisting employers to measure the impact of HIV and AIDS on their employees, as well as on the financial bottom line. HIV and AIDS impact assessments typically consist of a demographic impact assessment and a financial impact assessment. These key measures include estimates of:
The modelling of these key measures is often referred to as the demographic impact assessment which can then be linked with the HIV and AIDS related workplace costs resulting from these impacts, in the financial impact assessment. Costs involved include Employee Benefit (group life assurance and disability cover) and Medical Scheme costs (HIV disease management and the cost of hospitalisation), as well as Human Resources costs such as loss in productivity, absenteeism, sick leave, recruitment and training costs. These key measures and impacts are also projected into the future. The improvement in AIDS-related mortality and morbidity resulting from HIV positive employees enrolling on an HIV disease management programme can be quantified. Scenario modelling can be used to model the impact of alternative HIV and AIDS intervention strategies on the demographics and finances of an employer's business. For example the HIV and AIDS related costs associated with a No Treatment scenario can be compared to the costs associated with a Treatment scenario. This comparison can be used to establish the HIV and AIDS related savings that have already been made as a result of introducing an HIV workplace programme that includes access to medical and antiretroviral treatment, support and care. What tools are used to do an HIV and AIDS Impact Assessment (IA)? AIDS and demographic models are used to conduct the impact assessment. These are typically developed by the Actuarial Society of South Africa as well as by actuaries and demographers consulting on the risk of HIV and AIDS to business. The model used to conduct a study on a sub-population of lives needs to take into account the specific risk characteristics of the population as well as the movements in and out of the population. In other words, risk characterictics such as age, gender and regional distribution of the lives assessed are being used to ensure that the estimated HIV statistics match the underlying HIV prevalence and AIDS mortality of the population as closely as possible. The risk characteristics of new employees joining and employees leaving the company should also be taken into account to ensure that the statistically estimated HIV and AIDS figures are as close as possible to true underlying prevalence rates. Models that base their estimation on national HIV and AIDS statistics without adjusting these to reflect the characteristics of the specific organisation in question are not suitable for an IA. Why do organisations commission these studies? Current South African Labour legislation requires companies to address their HIV and AIDS risk. Amongst others, the Employment Equity Act, the Code of Good Practice on Key Aspects of HIV and AIDS and Employment, and the Technical Assistance Guidelines released by the Department of Labour, provide the legislative framework and guidelines to assist organisations in managing their HIV and AIDS risk. Furthermore, the King Report on Corporate Governance (King II) recommends that an organization:
Who uses these studies? Managers of internal HIV and AIDS workplace programmes, employee wellness managers, human resource managers and executive management are all users of an IA. The study is typically used to measure the size of HIV and AIDS related risk in the workplace and the associated cost, as well as monitor the relative success in addressing this risk on an ongoing basis. Executive management might therefore be more interested in the financial IA whereas the human resource management will be interested in the demographic IA in order to monitor the take-up on programmes such as disease management. According to a recent report by the World Economic Forum , 57% of South African organisations that responded to their survey have conducted quantitative HIV and AIDS risk assessments (impact assessments). The report states that there seems to be a positive correlation between the HIV prevalence rate in the country and the percentage of companies who conduct HIV and AIDS risk assessments. Although South Africa - as one of the hardest hit countries seems to lead the way - a large number of companies base their estimates of the impact of HIV and AIDS on perception alone. The report warns that very few companies have attempted to measure the effects of the virus on their operations and that this may be hindering their ability to implement the most adequate response to the epidemic. Conclusion HIV and AIDS Impact Assessments form a vital part of a comprehensive HIV workplace programme. An IA assists the employer in quantifying the size of the HIV and AIDS risk to the company and provide essential information to construct, tailor and monitor on an ongoing basis, the management of HIV and AIDS in the workplace. An HIV workplace programme that is managed without a sound actuarial IA runs the risk of being both inadequate and inefficient in addressing the needs of HIV positive employees and in reducing HIV and AIDS related workplace costs. LEE
SARKIN
Disclaimer Copyright subsists in all materials in this publication. You may use the information and print or reproduce materials from this publication only for your own non-commercial personal use. The views expressed in this publication do not necessarily reflect those of Metropolitan. As always we encourage responses on any of these issues covered. Metropolitan takes every possible care and effort to ensure that the information supplied is as accurate and current as possible. However, Metropolitan does not assume any liability and will not in any way whatsoever be held responsible for any liability arising from the use of any information, calculators and advice supplied in this eNewsletter.
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In this issue
LEGAL SNIPPET What does the law say about compulsory HIV testing in the workplace? "Testing of an employee to determine that employee's HIV status is prohibited unless such testing is determined justifiable by the Labour Court in terms of section 50 (4) of this Act". Employment Equity Act, no. 55 of 1998.
PREVENTION SNIPPET: Would an Impact Assessment enhance strategies to prevent new HIV infections in the workplace? An impact assessment that is done well and used in the management of HIV and AIDS in the workplace, combined with a high take-up on disease management, should reduce the negative impact or risk of HIV & AIDS in your business. A compulsory Counselling and Voluntary Testing campaign, whereby people are properly counselled before taking the HIV test, will also enhance prevention strategies and improve take up on Disease Management. Source: Nosipiwo Ngxabazi, Wellness Manager - Metropolitan
EMPLOYEE BENEFITS SNIPPET: What are the HIV and AIDS related productivity losses of a typical company in the agricultural industry in the South Africa, that does not have an HIV programme in place? HIV and AIDS related productivity losses depend on factors such as gender, age and regional distribution of the employees - these factors also influence the HIV risk profile of the employer. HIV and Aids related productivity losses in the workplace are typically costing a national agricultural company between 1.5% and 2.5% of payroll per annum. Source: Nathea Nicolay, Aids Risk Consulting
HIV AND AIDS VITAL STATISTICS FOR SOUTH AFRICA IN 2007
Source: Nathea Nicolay from ASSA2003 Aids and Demographic model
Contact info: Published
by Editorial Board Desiree
Daniels Nathea
Nicolay Nosipiwo
Ngxabazi Arlene
Georgeson
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