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Of Hiv/Aids in South Africa

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Of Hiv/Aids in South Africa THE LONG RUN COSTS AND FINANCING OF HIV/AIDS IN SOUTH AFRICA Prepared by the Centre for Economic Governance and AIDS in Africa and Results for Development Institute JUNE 2010 Teresa Guthrie, Centre for Economic Governance and AIDS in Africa (CEGAA) Nhlanhla Ndlovu, CEGAA Farzana Muhib, Results for Development Institute (R4D) Robert Hecht, R4D Kelsey Case, Imperial College London Copyright © 2010 Results for Development Institute 1875 Connecticut Avenue, Suite 1210, Washington, DC 20009 Suggested citation: aids2031 Costs and Financing Working Group. The Long-Term Costs of HIV/AIDS in South Africa. Washington, DC: Results for Development Institute; 2010. The work presented in this report was conducted as part of the aids2031 project, with financial support from the Government of Luxembourg, the Bill & Melinda Gates Foundation, and the Norwegian Agency for Development Cooperation. The findings, interpretations, and conclusions expressed herein are those of the aids2031 Costs and Financing Working Group and do not necessarily reflect the views of the Results for Development Institute, its Board of Directors, or the funders of the project. Typesetting, layout, and cover design by Elizabeth Sanders. For additional information, please contact [email protected] or visit us on the web at www.resultsfordevelopment.org/projects/aids2031-costs-and- financing-working-group TABLE OF CONTENTS LIST OF FIGURES .................................................................................................................... iii LIST OF TABLES .......................................................................................................................iv APPENDICES ...........................................................................................................................iv ABBREVIATIONS .....................................................................................................................iv ACKNOWLEDGEMENTS...........................................................................................................vi . EXECUTIVE SUMMARY...................................................................................................... 1 Rationale and importance of tHe study .......................................................................................... 1 Aim and objectives of tHe study..................................................................................................... 1 MetHodology ................................................................................................................................. 2 Scenarios ....................................................................................................................................... 3 Epidemiological Impact.................................................................................................................. 3 Estimated costs of eacH scenario.................................................................................................... 6 Policy options ................................................................................................................................ 8 Current HIV prevention efforts must be stepped up ............................................................................8 SoutH Africa needs to carefully manage its spending and expansion of ART ........................................9 The government must address the impending HIV/AIDS financing gap................................................9 There is need for stronger HIV/AIDS cost analysis and monitoring ......................................................9 Final tHoughts.............................................................................................................................. 10 1. INTRODUCTION .............................................................................................................. 11 1.1 Brief Background on aids2031............................................................................................. 11 1.2 Socio-economic performance and forecast in South Africa.................................................. 13 1.3 HIV/AIDS Epidemiological Situation and Response in SoutH Africa...................................... 13 1.3.1 HIV/AIDS Policy Developments and Progress ..........................................................................13 1.3.2 The National Strategic Plan (2007–2001).................................................................................14 1.4 Purpose and Objectives of tHe SoutH African Case Study..................................................... 15 2. METHODOLOGY.............................................................................................................. 16 2.1 Meetings witH Key Respondents: Steering Committee, DOH, DSD and otHer Relevant Departments, Development Partners and Service Providers ............................................... 16 2.2 Review of tHe Literature on SoutH African HIV/AIDS Costings ............................................. 16 2.2.1 Missing Prevention Unit Costs.................................................................................................17 2.2.2 Missing Treatment Unit Costs .................................................................................................18 2.2.3 Unit Costs Needing Improvement/Updating ...........................................................................18 2.3 Collection of tHe Current Coverage Rates ............................................................................ 18 2.4 Developing tHe Scenarios.................................................................................................... 19 2.5 Modelling tHe Epidemiological Trends to 2031.................................................................... 24 2.6 Applying tHe Prioritisation Model to Examine Options for Improved Efficiency in Resource Allocation ........................................................................................................................... 24 2.7 Costing Using tHe Resource Needs Model (RNM) Costing Model ......................................... 24 2.8 Measurement of tHe Public Allocations for HIV/AIDS Programmes in SoutH Africa.............. 24 June 2010 ii 3. FUTURE EPIDEMIC TRENDS AND POSSIBLE IMPACT OF THE SCENARIOS .......................... 25 3.1 Projected HIV Infection Rates in SoutH Africa...................................................................... 25 3.2 Child Mortality Due to HIV/AIDS ......................................................................................... 27 3.3 Numbers of Patients Receiving ART in SoutH Africa............................................................. 28 3.4 Modes of Transmission in SoutH Africa ............................................................................... 31 4. MEDIUM AND LONG-TERM COSTS ASSOCIATED WITH DIFFERENT HIV/AIDS PROJECTION SCENARIOS........................................................................................................................... 33 4.1 Summary of Resource Estimates and Comparisons among tHe THree Scenarios .................. 34 4.2 Scenario 1—Narrow NSP Interventions to 2011 .................................................................. 39 4.3 Scenario 2—Expanded NSP to 2021..................................................................................... 42 4.4 Scenario 3—Hard CHoices to 2015....................................................................................... 45 4.5 Comparison of tHe Cost-Effectiveness of tHe Scenarios ....................................................... 47 5. FINANCING FOR HEALTH AND HIV/AIDS IN SOUTH AFRICA ............................................. 48 5.1 Public Revenue Sources ...................................................................................................... 48 5.2 HealtH Financing in SoutH Africa ......................................................................................... 49 5.3 Overseas Development Aid (ODA) for HealtH in SoutH Africa .............................................. 49 5.4 Business Sector Contributions to Health in South Africa...................................................... 51 5.5 Public Allocations for HealtH in SoutH Africa ....................................................................... 51 5.6 Public Funding for HIV/AIDS in SoutH Africa........................................................................ 51 5.7 External Aid for HIV/AIDS in SoutH Africa............................................................................ 53 5.8 HIV/AIDS Funding CHallenge ............................................................................................... 53 6. SUMMARY AND POLICY OPTIONS ................................................................................... 54 6.1 Summary ............................................................................................................................ 54 6.1.1 MetHodology ..........................................................................................................................54 6.1.2 Scenarios ................................................................................................................................55 6.1.3 Epidemiological Impact...........................................................................................................55 6.1.4 Estimated Costs of tHe Scenarios.............................................................................................56
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