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  Management of Social Transformations - MOST

Discussion Paper No. 19

HIV/AIDS and business in Africa:
A socio-medical response to the economic impact?
The case of Côte d’Ivoire

by
Laurent Aventin
Pierre Huard

Contents

I. The HIV/AIDS epidemic in Côte d’Ivoire and its impact on Abidjan’s industrial sector II. Analysis of the costs and dysfunctions caused by HIV/AIDS in the workplace III. Some thoughts on a suitable response by businesses to HIV/AIDS Conclusion and prospects

Tables and diagrams
Notes
Bibliography


Abstract

Using the findings of research carried out in 1995-1996 on the economic impact of HIV/AIDS on three firms in Abidjan, we look into companies’ reactions to the dysfunctions caused by the epidemic. The dysfunctions result in two main categories of costs: the observable and quantifiable costs, for the most part absenteeism on health grounds, the cost of medical care and falling productivity; and the less easily perceptible effects of the gradual disorganization of work. The complexity and diversity of the effects of HIV/AIDS on businesses raises the question of devising an appropriate strategic response. In this context, it would appear that the key variable is the turnover level, and that this, therefore, is where action should be taken. Such action may, for instance, be in the form of improved medical monitoring of employees in the workplace or participation by employers in employees’ health insurance. In our analysis such measures are not just socially sound, but make economic sense in that they would help check the deterioration in socialization and learning capacities and in working relations, skills and routines, i.e. the main conditions for productive work.

See also:
The Effect of HIV/AIDS on Businesses: the Example of the Republic of the Côte d'Ivoire MOST Newsletter 9, 1998


I. The HIV/AIDS epidemic in Côte d’Ivoire and its impact on Abidjan’s industrial sector

    1.1 Côte d’Ivoire and HIV/AIDS
The number of AIDS cases reported by the World Health Organization in Côte d’Ivoire had reached 31,963 by 20 November 1996, placing the country in seventh position in the African continent, behind the countries of the Great Lakes region, and foremost among West African countries (WHO, 1996). This sorry record had been presaged by the studies of the spread of HIV infection in Abidjan carried out in the late 1980s (Denis et al., 1987; De Cock et al., 1989). The findings showed that the adult population was particularly affected, with the HIV seroprevalence rates in urban and rural areas increasing with age up to the 20-29 age bracket before falling in the older age groups (Gershy-Damet et al., 1991). Moreover, although it is difficult now to forecast the dynamics of the epidemic in Côte d’Ivoire because of the multitude and complexity of factors to be taken into account (Garenne, 1996), the increase in HIV prevalence among pregnant women in Abidjan over the years is particularly worrying. A 3.3 per cent finding was published in 1987 (Denis et al., op. cit.), while in 1989 the figure was put at 8.3 per cent (Gershy-Damet et al., op. cit.) and in 1995, at 13.7 per cent, with as much as 17.1 per cent in the 25-29 age bracket (Sylla-Koko et al., 1995). For all the information and prevention measures taken in the country in the 1990s, especially in Abidjan, epidemiological data reveal a high risk of HIV transmission for the sexually active adult population. It is also important to note that most of the economically active population falls within the 20-29 and 30-39 age brackets.
    1.2 Impact of HIV/AIDS on sectors of the economy
This is of particular concern to us here because the combined characteristics of the epidemic adversely affect economic activity in countries with a high prevalence of HIV, especially Côte d’Ivoire. If the working population continues to be affected over a long period, it is to be feared that both the agricultural sector (Barnett and Halswimmer, 1995; Gillespie, 1989) and the industrial sector (Nkowane, 1988; Baggaley et al., 1995) will suffer the economic consequences. The extra burden placed on both households and organizations (firms, co-operatives, associations), is slowly but surely undermining domestic economic performance (Forsythe et al., 1996). We were particularly interested in Abidjan’s industrial sector and the effects the HIV epidemic could have on its activity for two main reasons. One was the high prevalence observed in Abidjan and the concentration of manufacturing firms in the area (PRDE, 1996), and the other was the difference in AIDS cases between men and women. Because the man/woman ratio of AIDS deaths in the period 1986-1992 was 6 to 1 (Garenne, 1996) and most of the workers employed in the industrial sector, with the exception of a few firms, are men, the assumption was that this sector would be particularly affected by HIV infection as compared with other urban occupations in which women predominate. Three firms located in Abidjan were thus the focus of a research project (1) whose findings, presented below, formed the basis for a study of the dysfunctions caused by HIV/AIDS and possible responses by businesses to them.
    1.3 Presentation of the findings of the study carried out in Abidjan
The study of three manufacturing firms carried out in Abidjan in 1995 and 1996 (table 1) enabled the impact of HIV/AIDS on their activities to be identified and measured, using as a basis the cases of HIV infection reported by each establishment’s resident physician (table 2). This method thus excludes cases of seropositivity among staff members not known to the company doctors.
 
Table 1: Presentation of the three establishments in Abidjan
 
Period of study
Sector of activity
Average number of employees over the period
Date established
Firm 1 (1989-95)
Agri-food stuffs
275
1969
Firm 2 (1993-95)
Textiles
1,150
1966
Firm 3 (1991-95)
Cardboard packaging
83
1981
 

The research period varied from one firm to another because of the nature and quality of the information needed for a retrospective study (table 1). The research involved repeated interviews with company doctors (2) and with chief executives, personnel managers, chief accountants, other managerial and supervisory staff and workers. Other information from outside the three firms was obtained from members of associations for HIV-infected persons, trade unions and insurance companies. The findings of partial investigations into other industrial and agro-industrial enterprises bear out the arguments set out below.
 

Table 2: Number of employees infected by HIV in each firm as reported by the doctor
 
Period of study
Living 
Dead
Total
deaths
%
a.a.r.c.*
a.a.r.c.
 a.e.p.**
%
Firm 1 (1989-95) 16 21
37
56.8
5.3
1.9
Firm 2 (1993-95) 8 31
39
79.5
13
1.1
Firm 3 (1991-95) 5 9
14
64.3
2.8
3.4

Source: Aventin, Huard 1997. (3)
* Annual average of reported cases.
** Average number of employees in the period (cf. table 1).

Table 3 presents an evaluation of the direct and indirect costs of HIV/AIDS to the three firms, taking into account only reported cases, as exhaustive data is unavailable. These costs, which are observable and quantifiable in monetary terms, are distinct from the organizational costs which are ‘difficult to quantify’ (Aventin and Huard, 1997) or the ‘invisible costs’, so named because they are difficult to observe and evaluate. The latter effects of the epidemic on businesses will be analysed in part 2.2.
 

Table 3: HIV-related costs by firm and by item of expenditure
in thousands of CFA francs (4)
 
Items of expenditure
Firm 1
1989-1995
Firm 2
1993-1995
Firm 3
1991-1995
Medical care
32,273 = 25%
7,000
0
Prevention 1,329 635 1,600
HIV screening (negative results) 709
0
0
Wage bill for medical staff 6,711 6,748 2,600
Invalidity pension
30,285 = 24%
0
0
Sick leave 11,928
9,814 = 18%
8,925 = 31%
Absenteeism (terminal phase)
n.e.*
n.e.
2,820
Funeral delegation 4,009 1,800 848
Dismissals and severance pay
0
587 451
Recruitment and training
0
2,790 900
Loss of productivity/post adjustments 17,010
13,500 = 25%
5,864 = 20%
Funeral costs
17,261 = 14%
11,026 = 21%
4,587 = 16%
Rise in cost of health insurance 6,335
/
/
Total/year 18,264 17,967 5,719

Source: Aventin, Huard 1997 (cf. note 3).
* n.e. = non-evaluable.

Having calculated the highest cost percentages for each firm, we found that the impact of HIV varied from firm to firm, in particular according to such social policies as a firm’s contribution to employees’ health insurance or payment of an invalidity pension as in the case of firm 1. Absenteeism on health grounds represented 31 per cent of the overall cost for firm three. Was that due to the fact that almost none of the employees had health insurance, and consequently did not have access to medical care as easily as in firm 1? Moreover, we noted that for all three firms, the highest costs were incurred during to the employees’ morbidity phase. The table reveals that, even including its indirect consequences such as recruiting and training new employees, death does not appear to be what is most costly. This observation will be discussed in the second part.


II. Analysis of the costs and dysfunctions caused by HIV/AIDS in the workplace

    2.1 Quantifiable or monetary costs and compensatory measures taken by managers
These are costs of the disruption to firms as itemized in table 3. The costs, of which managers are aware, vary from one business to another, as regards both their amount in proportion to the number of employees and the proportion of each cost to the total amount, which is why these results must be interpreted with caution. The comparative analysis must take account of organizational differences and the policies of each firm. For instance, if lost productivity accounts for 31 per cent of total costs in firm 3, it is partly because the other costs are low. In firm 2, the maximum amount set aside by the employer for medicines is 15.5 million CFA francs a year, whereas in firm 1 the annual expenditure is six times higher for four times fewer employees. It can also be seen that mortality-related costs are apparently lower than morbidity-related costs. This applies to the three firms, all of which have a well-organized system for the participation of work colleagues in the funerals of deceased employees. Only a limited number of workers are allowed to attend funerals and in some cases they are selected by personnel officers and union delegates so as to prevent mass absenteeism. In fact, however, the situation is rather more complex because it may be difficult for employers to go against the strong sociocultural traditions associated with funerals (Eschlimann, 1985; Thomas, 1991). From additional ad hoc surveys we have found that some managers of major tropical crop plantations have had to regulate attendance at funerals strictly, on pain of dismissal, so as to curb massive and regular absenteeism. No studies have been made of the costs of these consequences, but we cannot rule out the assumption that deaths from AIDS give or have given rise to substantial indirect costs.

Since, then, the economic cost of HIV/AIDS varies according to policy and organizational factors, it is only to be expected that managers’ reactions will vary according to the extent of the impact identified, and also according to their strategies and investment capacity. Diagram 1 presents all the compensatory measures observed during this study.

Diagram 1: Compensatory measures and expected effect of negative feedback

Diagram 1 does not only concern the three firms under consideration, but aims to give a broader picture of the situation, particularly as regards discriminatory practices. (5) Analysis of the measures taken by firms to offset the consequences of HIV/AIDS shows that they can be divided into two tendencies. One has to do with a process we call a ‘dynamic of rejection’ since the thrust of the measures involved is one of exclusion - primarily unlawful screening, discrimination in recruitment and unfair dismissal (Aventin, 1996). The immediate effectiveness of such measures conceals serious dysfunctions which we shall address below. The other tendency, which remains hypothetical, would imply a ‘dynamic of consolidation’ and would consist of combating absenteeism by introducing improved medical monitoring of employees or enabling them to have access to medical care through the employers’ contribution to health insurance. Training employees with all-round skills, capable of changing post according to need, is another way of coping with the problems caused by absenteeism. More flexible shift work when work is required around the clock allows for a better distribution of staff according to skills and work requirements. However, even though these measures offset the difficulties and help consolidate productive work, they are of limited effectiveness because they have no incidence on turnover, a major factor in the disorganization of work.

    2.2 Disorganization of work and invisible costs
Staff morbidity and mortality increase turnover in businesses as departures have to be made up for by new recruitment to keep up staff numbers. Even though this may mean that the number of employees remains stable, staff rotation and the upheaval it can cause by changing the ratio of experienced to new employees give rise to training problems (Glance et al., 1997) and also socialization problems. Socialization is what enables the new employee to fit into the work community by internalizing tacit knowledge about the professional, social and cultural environment. This knowledge is an integral part of learning, which is not confined merely to acquiring technical and professional skills, and will determine the behaviour of the individual in a coherent group. ‘Workers are subjects who evolve, who are not endowed a priori with a particular principle of rationality but whose behaviour is constructed through the learning process’ (Dosi, 1991). This is conducive to greater consistency in individual tasks and the activity as a whole, that is to say models of interaction which provide efficient solutions to specific problems (Coriat and Weinstein, 1995) and helps to strengthen the firm’s capacity to react and adapt to an unfavourable environment (Kalika, 1991). These routines thus form tacit models of behaviour adopted by workers almost automatically; they form the heart of the enterprise and are the basis for its efficiency (Nelson and Winter, 1982).

Diagram 2: Triangle of invisible costs

This evolutionary approach to a firm’s activity (diagram 2) stresses the mechanisms through which skills are built up and passed on, and so makes for a clearer understanding of the nature of the impact of HIV/AIDS. The fact is that changes in the proportion of new to old employees caused by faster turnover raise two key problems: first, the loss of consistency in the firm’s activity because of the inexperience of new employees, particularly when it comes to tacit knowledge that is not easily transferred; and second, the decline in capacity for transmitting knowledge as skilled employees die or can no longer work because of AIDS. This shows the cumulative effects of what was initially a change in the turnover rate. Replacing absent employees per se does not worry the employer particularly (unless they are the most highly qualified workers), but it does have effects which are not immediately apparent, especially as the consequences of staff rotation only emerge over time, leading to the gradual disruption of the routines that are specific to a particular firm. Since the routines have a strong tacit dimension, they cannot be easily imitated (Dosi et al., 1990). Earlier, we mentioned the concept of a ‘dynamic of rejection’ in the context of some firms’ reactions to HIV/AIDS-related problems. Thus, although the ‘rejecting’ measures might have the immediate effect of reducing costs, they ultimately lead to the disorganization of work by speeding up staff turnover. The long-term effect might be the opposite of the one desired, since the disruption of routines and capacities for learning can be expected to affect performance and competitiveness. It is nevertheless difficult to identify and gauge these consequences in terms of costs, which is why the term ‘invisible costs’ has been used.


III. Some thoughts on a suitable response by businesses to HIV/AIDS

    3.1 Impact of HIV/AIDS on business: breakdown and trends
There are two kinds of impact of HIV/AIDS on firms, one easily observable, as confirmed by micro-economic or sectoral studies, and the other less visible, working slowly on the organization and operational structures of industries. At the moment, managers are concerned only about the visible effects, and then only in the context of their own business, whose individual characteristics make them all special cases. If we refer back to the findings of the survey carried out in Abidjan (table 3), firm 1 was not very concerned about recruiting and training new staff because it had reorganized its post system in response to the drop in client orders in the early 1990s, not because of HIV/AIDS. Economically speaking, therefore, it was not worried about the absence or lack of staff, since it was overstaffed at the time. Such was not the case of firm 2, which was thriving and replaced the 31 employees who died or left and trained the newcomers.

The different impact of HIV/AIDS on the various firms makes it difficult to devise an overall solution to what is, moreover, an evolving problem. We also question the effectiveness of the various measures observed today, both because they are incomplete or deal only with the ‘symptoms’, and because, like discriminatory practices, they speed up the processes of the disorganization of work which, over and above the visible costs, are clearly the most serious consequences. What is now needed is to seek a transitional solution to these problems that will be applicable to most industries and at the same time tackle the root cause of the problem, i.e. staff turnover.

    3.2 The importance of medical aid schemes in firms
It may be posited that, while opting for a health policy may entail costs for a firm, it has its advantages, one of them being that it reduces absenteeism on health grounds, which also puts a burden on the firm. On the basis of this postulate and our observation of firm 1’s implementation of a social and health policy, we can see the economic sense of such an option and how it can be used to offset variations in turnover.

In the absence of any public social provision for individual medical aid in Côte d’Ivoire, with the exception of just a few medical centres which offer services funded in part by the Caisse Nationale de Prévoyance Sociale (National Social Welfare Fund) (CNPS, 1994), some public and private sector enterprises contribute in varying proportions to the payment of employees’ health insurance (Aventin and Gnabéli, 1996). One might wonder why firm 1, whose highest cost is for medical care, continues to be willing to allocate large amounts to medical aid. We would like to suggest three possible, and complementary, replies to this question:

    Before the emergence of HIV/AIDS, this policy helped give this international-type firm a positive social image in the eyes of both staff and consumers.

    It recognizes the relationship between the physical health and morale of the staff on the one hand, and work productivity on the other.

    The quality of social benefits, especially the offer of medical cover, in a country where health care is expensive (World Bank, 1993), is highly appreciated by employees. This policy, which is of benefit to the staff as a whole, narrows hierarchical gaps and strengthens social ties and work cohesion among employees.

The study carried out in Abidjan did not directly take into account increases in employee productivity in relation to the quality of the medical aid, since it is a relation that is difficult to prove. Nevertheless, there probably is one, especially considering the often difficult organizational and working conditions under which industries in Africa have to operate.
    3.3 How a socio-medical policy could help mitigate the organizational dysfunctions caused by HIV/AIDS
HIV infection requires medical treatment that is both complex and highly costly and is still unavailable in most African countries which, like Côte d’Ivoire, do not have an established social security system. The price of the latest treatments would in any case be unaffordable by most Africans. Nevertheless, diseases associated with HIV, such as tuberculosis, whose resurgence has been observed (Braun et al., 1989), can be treated with generic antibiotic drugs in African countries. Judging from the findings of 256 consecutive autopsies carried out in Abidjan on HIV-infected persons, in 36 per cent of cases the cause of death was tuberculosis (De Cock et al., 1992), the main opportunistic disease linked to HIV in Africa. The monitoring of employees with tuberculosis by company doctors would enable a better check to be kept on whether they take the medicine prescribed, help avoid drug resistance (Vareldzis et al., 1994) and relieve some of the pressure on anti-tuberculosis centres, which are often overwhelmed by the number of patients. Occupational medicine, both preventive and curative, (6) has therefore the means to combat certain HIV-related pathologies, even though the patient will eventually die. At issue is whether it is possible to delay the date of death and, above all, provide patients with the medical care that will enable them to continue working in the best possible conditions. Inevitably there will be significant differences between an establishment which plays no part in its employees’ health and one which employs a full-time doctor and partly funds its employees’ health insurance. Given the same type of work organization, (7) the question therefore is to ascertain whether, in terms of costs but also of production capacity, prioritizing medical aid is more efficient than failing to make any contribution to the medical care of employees. Although most of the executives questioned said that employees’ health problems were not the firm’s concern, it is still true that workers’ health is a vital economic tool:
    The presence of a company doctor usually leads to improved medical monitoring of employees and the early diagnosis of pathologies. This has three advantages. The first is to prevent illness through appropriate treatment, thus preventing or limiting the length of sick leave which would otherwise have been necessary. Secondly, it enables possible recurrences to be predicted and avoided where there is such a risk. Lastly, the doctor can prescribe sick leave promptly when an employee is contagious so as to prevent other workers from becoming infected and thus also having to take leave.

    The employer’s contribution to employees’ medical cover facilitates access to health care and prevents the partial purchase of drugs or the interruption of a course of treatment which the worker considers too expensive.

All these measures are of benefit to the employees, but also to the employer, for there will be less absenteeism on medical grounds. This is true for all pathologies, including those associated with HIV. Moreover, in the case of chronic and fatal illnesses, the life expectancy of employees may depend, among other things, on these policies, even though it is difficult to assess years of life gained or ‘recovered from invalidity’ (Brunet-Jailly, 1996) for people with AIDS treated with antibiotics alone compared with workers with no socio-medical benefits at their workplace. The lack of research into these aspects in Africa does not allow us to base our analysis on observed results. Assuming, however, that the difference is significant, such policies would effectively reduce the turnover rate and related problems. Social relations would also be less disrupted if the entry of new employees into the firm were better regulated. The Heilbronner report stresses the negative, if not dangerous, impact of absenteeism on the firm’s operations through staff increases or the use of temporary labour, the under-utilization of equipment and the disruption of the production cycle (Heilbronner 1977 cited in Thébaud and Lert, 1983). Lastly, the transmission of skills and learning of tacit knowledge would be greatly facilitated if skilled HIV-infected employees could remain in their posts longer and in better conditions. Employers implementing such a policy point out moreover that ‘seriously ill employees want to work whenever they can, right up until death; work is often a way of fighting for life’.
    3.4 Discussion of the economic profitability of such a policy
It is practically impossible to compare the medical expenditure of the three firms (table 3) because of the difference in their social policies. The cases studied illustrate three approaches to sickness coverage: firm 1 offers effective coverage with an internal mutual insurance scheme which has been operating for many years, while firm 3 offers no medical aid other than interest-free loans to be paid back in several stages. This practice, widespread in enterprises in Côte d’Ivoire, is also used by the other two firms concerned by the study. Over the period under consideration, the amount contributed by firm 2 came within a ceiling set at 15.5 million CFA francs a year for an average of 1,150 employees and their families, the employer’s contribution per beneficiary thus being very small. It is the doctor’s job to manage and distribute medicines, according to their availability, over the accounting year. It is difficult to assess the effectiveness of this scheme, since in 1995 the annual benefit per permanent employee family was 15.5m/1,400 workers = approximately 11,000 CFA francs, as against 107,322,000 CFA francs/290 workers = 370,000 CFA francs for firm 1, i.e. 33 times more. One of the features of the system used by firm 2 to forecast and determine the amount of medical expenditure is its emphasis on monitoring and control of the health expenditure committed, which, unlike firm 1’s approach, does not depend on the needs or demand of the staff. The disparity between the contribution of firm 1 and that of firm 3, which does not participate in the medical expenditure of its employees, illustrates the two extremes, bearing in mind that firm 1’s health scheme is one of the most effective we have seen in Abidjan. (8)

With no data available on the cost of medical absenteeism - whatever the pathological cause - before and after the introduction of a medical aid scheme, we have been unable to carry out a comparative study. Nevertheless, it is possible to present and state the case for the various parameters that enter into such a comparison. The question of cost or profitability remains the core issue for managers. We will base our demonstration, on the one hand, on the potential gains to be derived from opting for a well developed medical policy and, on the other, on the possibility of cutting the cost of such a policy.

By a developed health policy, for enterprises with over 50 employees, we mean: regular checks on employees by a doctor employed by the company and working on the premises, the employment of nursing staff, the provision of premises to be used as a dispensary equipped with essential drugs and first aid material, (9) and a contribution by the employer to employees’ medical insurance so that they can afford pharmaceutical products. (10) In addition to cutting the cost of medical absenteeism, these arrangements should be conducive to a reduction in the loss of productivity of employees who, even when in poor health, continue to work for fear that, without a medical certificate - which means paying for an appointment with a doctor and the travel costs incurred - they will have their daily wages docked. At the same time the presence of a company doctor regulates the behaviour of employees who take unwarranted sick leave. Lowering the morbidity rate through improved access to care and pharmaceutical products also reduces staff movements. A lower incidence of staff mortality and an increase in the average duration of attendance at work encourage the transmission of skills and acquisition of the tacit knowledge specific to the group. There is indeed a price to pay for the absence of all these compensations. Is that price higher overall than the cost of health insurance? To judge that, we need to establish a cost/effectiveness curve. If, as we suggest, the costs of the disorganization of work are cumulative and progressive, we would obtain a curve of the following type:

Diagram 3: Curve showing the progressive cost of the disorganization
of work caused by HIV

We are not in a position to determine the relative time- and cost-scales, which vary according to many parameters relating to the fragility and vulnerability of each business. However, if we take the hypothesis illustrated by diagram 3, we can see that the cost of the disorganization of work can rise exponentially until the business collapses; alternatively it may take the shape of a logistic-type curve, levelling out at a high cost level which eats into profitability and, even though it may be stabilized temporarily, leaves the business far more vulnerable than it would be without HIV/AIDS. Setting up a health system is a costly investment in the early years; thereafter, rigorous management is needed to limit fluctuations in the cost of the system borne by the beneficiaries, i.e. the employees (and their families). It may be assumed that the disorganization of work will eventually cost more than a medical aid system and the sooner medical monitoring and care are made available, the sooner the dysfunctions caused by the HIV epidemic will be brought under control. The different firms’ responses will ultimately depend on how the typical cases suggested by this diagram evolve, and the cost of a workplace health system will be seen, not as an additional burden, but as an investment which will become profitable after so many years, depending on the firm.

In order to speed up or increase the return on this investment, it is important to be aware of ways of minimizing the cost of a medical aid scheme for employees while providing the same levels of service and efficiency. Several measures are worth considering and indeed necessary:

  1. We have observed (cf. note 8) that the most efficient health insurance systems are those that are based on an in-house mutual insurance scheme, into which all the insured employees of a firm pay a percentage of their salary, topped up by the employer, every month. Ratios of 40/60 and 20/80 are common. The employees’ contribution is deducted at source from the wage bill and the contributions as a whole fund medical expenditure. The company doctor manages and costs this expenditure as the person signing prescriptions for employees. It is a method that is generally two to three times less costly than using a private insurance company.
  2. If the company has a dispensary, the medical service can stock up with common pharmaceutical products from Côte d’Ivoire’s central pharmacy, where prices are 40 per cent lower than in retail outlets. This calls for storage facilities and stock management, but the savings made by the employer and contributing employees are substantial.
  3. The doctor can and indeed must as a priority prescribe generic medicines which are less expensive than privately licensed products. The option set out in paragraph 2 above facilitates the introduction of a company policy favouring essential generic medicines.
The measures in paragraphs 1 and 2 give employees optimum access to health care in the workplace. Moreover, the medical service controls expenditure, which makes it easier to manage the health system and keep expenditure down.


Conclusion and prospects

We have noted that the lack of effective treatment against HIV/AIDS in Africa indirectly affects economic activity, since such treatments would prolong the life expectancy of HIV-infected persons and affect the mortality and morbidity of a company’s workforce and hence its turnover, all the attendant organizational consequences. However, there is little evidence of suitable medical response: too few businesses outside the public sector contribute to employee health insurance. A survey carried out in Abidjan in 1992 covering 2,064 households in the Yopougon district showed that 18.4 per cent of individuals said that they had medical insurance and 58 per cent of those insured were with the Mutuelle Générale de Fonctionnaires (civil servants’ mutual insurance scheme) (Touré et al., 1993). This means that their access to this benefit is connected to their professional status. In the private sector, the provision of insurance for employees is far less common, with the exception of managers, who generally have private social security coverage paid for by the employer (Bazin and Gnabéli, 1996).

We note that there are three main limitations to the establishment of workplace health-care schemes. Firstly, even the progressive establishment of a medical aid scheme involves disbursement and therefore implies that funds are available for what is in many cases an unforeseen investment. Secondly, public and private sector employees and their families are only a minority of the working population; workers in the informal sector are not accounted for. Thirdly, such a policy accentuates the sometimes paternalistic role of employers in Africa (Henry, 1993) - when employees lose their jobs they also lose the social benefits that go with them, in particular access to health insurance. That being said, the employer should consider these health-related issues not as a favour granted to employees or a secondary aspect in relation to work, but as an economic tool for staff management.

Notwithstanding the above-mentioned limitations, the application of a health policy by firms might lead to interesting trends at the macro-economic level:

  1. In most companies in Côte d’Ivoire, and probably in the whole of Africa, employers assure managerial and key staff of secure status through a permanent contract, a higher-than-average salary and medical insurance. With the HIV/AIDS epidemic, the ‘bosses’ tend to give greater protection to employees with skills but are disinclined to invest in the health of other, ostensibly less useful, employees. This duality increases tensions between these two categories of employee within an enterprise, and the workers will demonstrate or protest in order to obtain similar rights to managers, in particular with regard to health protection (Bazin, 1995). The tensions and conflicts may be positive in some cases, since they may force employers to take a position and to improve matters by giving employees minimum access to health care. But the employers may also resist the demand, thereby sustaining an atmosphere of tension and conflict which beyond a certain point is no longer constructive but harmful since it results in lower worker productivity, higher turnover and the disruption of socialization in work groups (Pelled, 1996). These conflicts affect continuity on the job and put pressure on the employer to meet the claims of dissatisfied employees (employers being aware of the repercussions of worker dissatisfaction on production). Ultimately, then, these imbalances might be expected to lead to an overall improvement in the situation of all employees.
  2. This dynamic imbalance effect (Hirschman, 1974) might also occur between companies. International firms and big formal sector companies may introduce health care schemes or improve existing ones, and if this trend is sufficiently pronounced, firms which had not opted for such a policy might see some merit in it. There is a knock-on effect resulting from all the imbalances, just as there is between the formal and informal sectors. Many people do not consider it worthwhile to work in the formal sector because they do not want to pay tax. However, the emergence of new benefits in the formal sector might be an incentive to formalize informal establishments. The expansion of the formal sector would mean improved labour productivity, greater job security through compliance with regulations and increased state revenue through the levying of taxes and other contributions, and would consequently generate more public resources and increase the scope for action.
  3. Lastly, the development of medical aid schemes in the workplace would give rise to an additional network for the distribution of medicines and health care which will play an important role when treatment for HIV/AIDS or a vaccine become available in Africa, particularly in countries where health systems are inadequate, overloaded or not very efficient. Health care in the workplace would become a backup for national health policies and an effective economic and public health tool in the fight against HIV.
(Thanks to Marion Houlès for her critical reading of the first draft of this paper.)


TABLES AND DIAGRAMS
‘HIV/AIDS and business in Africa: A socio-medical response to the economic impact?
The case of Côte d’Ivoire’

Table 1: Presentation of the three establishments in Abidjan

Period of study
Sector of activity
Average number of employees over the period
Date established
Firm 1 (1989-95)
Agri-food stuffs
275
1969
Firm 2 (1993-95)
Textiles
1,150
1966
Firm 3 (1991-95)
Cardboard packaging
83
1981

Table 2: Number of employees infected by HIV in each firm as reported by the doctor

Period of study
Living 
Dead
Total
deaths
%
a.a.r.c.*
a.a.r.c.
 a.e.p.**
%
Firm 1 (1989-95) 16 21
37
56.8
5.3
1.9
Firm 2 (1993-95) 8 31
39
79.5
13
1.1
Firm 3 (1991-95) 5 9
14
64.3
2.8
3.4

Source: Aventin, Huard 1997. (11)
* Annual average of reported cases.
** Average number of employees in the period (cf. table 1).

Table 3: HIV-related costs by firm and by item of expenditure
in thousands of CFA francs (12)

Items of expenditure
Firm 1
1989-1995
Firm 2
1993-1995
Firm 3
1991-1995
Medical care
32,273 = 25%
7,000
0
Prevention 1,329 635 1,600
HIV screening (negative results) 709
0
0
Wage bill for medical staff 6,711 6,748 2,600
Invalidity pension
30,285 = 24%
0
0
Sick leave 11,928
9,814 = 18%
8,925 = 31%
Absenteeism (terminal phase)
n.e.*
n.e.
2,820
Funeral delegation 4,009 1,800 848
Dismissals and severance pay
0
587 451
Recruitment and training
0
2,790 900
Loss of productivity/post adjustments 17,010
13,500 = 25%
5,864 = 20%
Funeral costs
17,261 = 14%
11,026 = 21%
4,587 = 16%
Rise in cost of health insurance 6,335
/
/
Total/year 18,264 17,967 5,719

Source: Aventin, Huard 1997 (cf. note 3).
* n.e. = non-evaluable.

 

Diagram 1: Compensatory measures and expected effect of negative feedback

Diagram 2: Triangle of invisible costs

Diagram 3: Curve showing the progressive cost of the disorganization
of work caused by HIV


Notes

1. The research findings will be presented in the doctoral thesis of Laurent Aventin, available in 1998.

2. The medical information provided by the doctors was anonymous for reasons of confidentiality in the study. The doctors took a very active part in the research, particularly when certain cost assessments required them to identify cases.

3. For further information on the costs presented in table 3, refer to the article by Aventin L., and Huard, P.: ‘Reactions of African firms to the impact of HIV/AIDS on their operations: Some thoughts based on observations made in Abidjan, Côte d'Ivoire’. Submitted to both the Revue d'Economie du Développement and the Journal of African Economies at the time of writing this paper.

4. US $1 = 500 CFA francs.

5. It should be noted that because of the sensitive nature of the topic, research into discriminatory practices in business, in particular with the assistance of associations of seropositive persons or legal experts, cannot be conducted in conjunction with research on economic costs in the same firms. The two studies were therefore carried out simultaneously in different firms.

6. Initially, decree No. 65-210 of 17 June 1965 stated that ‘the company doctor shall be responsible for dispensing first-aid to workers who are victims of accidents or taken ill where such need arises in the workplace and with the means available to the establishment …’. In practice all manifestations of sickness of employees are treated in the workplace, including those not related to work.

7. According to Weiss, the organization of work affects absenteeism and can become a management tool to regulate the structural dysfunctions of the enterprise, in particular those caused by absenteeism (Weiss, 1979).

8. Research carried out in Abidjan in 1995 and 1996 on 30 companies from all sectors provides insights into the different health schemes and coverage of these companies. The findings of these studies are partially presented in a paper (cf. bibliography: Aventin and Gnabéli, 1996).

9. List of first aid products laid down in labour law: Decree No. 67-321 of 21 July 1967, which codifies the statutory provision pursuant to Part VI ‘Health and Safety - Medical Service’ of Law No. 64-290 of 1 August 1964, establishing the Labour Code. Official gazette of Côte d’Ivoire, 9 July 1968. Terms retained in the amendment to the Labour Code of February 1995.

10. Although labour law regulates the presence of a doctor and medical staff in the workplace according to the number of employees, and the provision of premises, equipment and first aid material, these conditions are not always respected by the employer. Furthermore, the employer’s contribution to the payment of employees’ medical insurance is not compulsory or even recommended.

11. For further information on the costs presented in table 3, refer to the article by Aventin L., and Huard, P.: ‘Reactions of African firms to the impact of HIV/AIDS on their operations: Some thoughts based on observations made in Abidjan, Côte d’Ivoire’. Submitted to both the Revue d'Economie du Développement and the Journal of African Economies at the time of writing this paper.

12. US $1 = 500 CFA francs.



 
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About the authors

Laurent Aventin: Studying for a doctorate in public health, research funded by the Agence Nationale de Recherche sur le SIDA (National AIDS Research Agency). Works with the Grand Programme SIDA, ORSTOM, 911 Av. Agropolis, BP 5045, 34032 Montpellier Cedex 1 - France. E-mail: laurent.aventin@mpl.orstom.fr

Pierre Huard: Professor at the University of Aix-Marseille II, Laboratoire d’Economie et de Sociologie du Travail (CNRS) (CNRS Laboratory of Economics and Sociology of Labour), 35 Av. Jules Ferry, 13626 Aix-en-Provence - France. E-mail: huard.p@univ-aix.fr


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