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Achieving universal health coverage in Ghana: why a premium-based health insurance model is not a better solution

Activists campaigning for universal access to healthcare in Ghana.Earlier in September this year, the Lancet published a special series on universal health coverage (UHC) which argued from ethical, political, economic, and health perspectives why a renewed effort to achieving UHC is necessary. The articles put forward many important policy propositions for achieving UHC, particularly on the need to abolish user fees for healthcare, and putting greater emphasis on public health financing and provision.

Indeed, the way health systems are financed is an important prerequisite for achieving Universal Health Coverage as this determines whether health services are available, and whether people can afford to use them. This link between financing and UHC is one which is clearly articulated in existing health policy documents in Ghana. However, with general elections less than two months away (December 7th), and as the different political parties articulate their visions and strategies for the health sector in particular, we ask whether the current modality of health financing in Ghana – the National Health Insurance Scheme (NHIS) – is an effective model for achieving UHC.

Up until 2003, the health financing model in Ghana was based on a fully fledged user fee scheme known as the Cash and Carry. Although vulnerable groups such as the poor people, pregnant women, and children were exempted from paying user fees, the policy had limited success in removing financial barriers to health services, as the exemption package was unclearly specified and inadequately funded. The system was also riddled with managerial and operational difficulties. As a result, the user fees policy denied many poor people access to the needed healthcare. 

The National Health Insurance Scheme (NHIS) was introduced as an alternative financing model in 2004 to ensure universal access to quality healthcare, provide financial protection and ultimately improve health outcomes. Membership in the NHIS is supposed  to be mandatory for all Ghanaians, and covers the direct costs of healthcare services and medicines for most common diseases in Ghana.  The scheme is financed from a range of revenue sources, notably, VAT revenue, payroll deductions from formal sector workers, and premium contributions from informal sector workers.

However, there are many challenges and shortcomings of the NHIS which makes it particularly ineffective for achieving universal access to healthcare. 

First, the way in which the NHIS is funded is unfair. This is because it is funded mainly from revenue generated from VAT which is regressive, and imposes a high tax burden on low income households. Ironically, despite being worse affected by VAT payments, low income households find it the hardest to afford the premiums required to enrol in the NHIS in order to benefit from the healthcare services it provides. Current enrolment rates on the NHIS stand at only 34% of the population (2010 data) mainly because of these high premium rates.

The second obstacle to achieving UHC under the NHIS is the high level of out-of-pocket (OOP) payments that still dominate healthcare financing in Ghana even eight years after the launch of the NHIS.  OOP payments accounted for just over a third (37%) of the total national health expenditure in 2009. Higher OOP payments at point of service have been noted to impoverish poor patients and limit access to live-saving care. In order for countries to reduce the burden of health expenditure on low income households, the WHO has recommended countries must reduce OOP payments to around 15% of total health expenditure. But Ghana’s OOP rate is about twice the recommended WHO threshold, and higher than that of other lower middle income countries.

The third challenge the NHIS faces with respect to UHC relates to the issue of sustainability. The World Bank has predicted the scheme would go bankrupt by 2013.  A large part of this problem is due to the inefficiencies of the scheme arising from poor premium and membership card administration. The cost of claims administration is estimated to have increased by around 40 folds since 2004.

The above are clear indications that the NHIS maybe a long way from achieving UHC. Maternal and child deaths rates in Ghana are among the worst in lower middle-income countries, with around one in every 280 pregnant women dying during childbirth, and about one in 15 children dying before their fifth birthday.  Also about three-quarters of the poorest 20% of pregnant women give birth without the presence of a skilled health worker. 

However,  as election day approaches,  it is encouraging to see all the major political parties being committed to pursuing UHC, though there are many loopholes in the policy plans they have put forward to achieve this.  These include the Convention People’s Party promising to  ensure universal health coverage, but without stated specifics as to how this will be achieved, to the New Patriotic Party committing to pursuing UHC but through public-private means that could in fact, lead to further exclusion of vulnerable people.  The current ruling party, the National Democratic Congress has promised to expand the benefit package and capitation system of the current NHIS system, but without specifics on how this will be achieved, and whether current system infrastructure could support its success.

In order to achieve UHC, policy propositions should be tailored to expanding access through the removal of financial barriers, while recognising the need to expand and improve health facilities.  On the demand side, payment by poor households can and should be abolished, with alternative and innovative means found to tax the higher income earners in order to fund quality health services. For instance, using property tax and scaling up the communication service tax (the ‘call tax’) could provide progressive forms of revenue to fund premium removal.  Another option could be to scrap the NHIS altogether and replace it with a national health service which will be funded from progressive tax revenue. Both of these options would improve coverage, and also provide efficiency savings from reduction in the cost of administering premiums. 

UHC is achievable in Ghana, but only when the financing policies are adopted!

Yussif Nagumse is a health policy officer at Oxfam-GB

Sidua Hor is the National Coordinator for the  Universal Access to Free Healthcare Campaign in Ghana

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5 Responses to “Achieving universal health coverage in Ghana: why a premium-based health insurance model is not a better solution”

  1. We have heard a lot from OXFAM and their persistent demand on Ghana to change over from Health Insurance System to National Health Service. Their proposal is good but they should understand that Ghana is not UK. We have tried purely taxed funded health system before and we saw the challenges that we went through. I believe we must continue with the NHIS and as we move forward, we do the best we can to improve the system in favour of the poor.

    34% population coverage in less than 10 years is no mean achievement. I know from literature a good number of countries-the developed countries, that took more that 10 years to achieve the feat that we have made in less that 10 years. We are not tapping our own shoulders for the 34% achievement, but compared with pioneering countries, we are not doing bad.OXFAM should give Ghana a break!

  2. yussif says:

    Thank you for sending us your comment.
    I think the ultimate objective is to have a health financing system which ensures that every Ghanaian is able to access the healthcare that they need without financial constraints or hardship. In other words, to establish a healthcare system where access is determined by citizenship or residence rather than the ability to pay. This is what OXFAM and the Universal Access to Free Healthcare Campaign are actively advocating for.
    The fact remains that the NHIS premium is the biggest barrier to insurance coverage and, indeed, access to care in Ghana. Some people might disagree to this and suggest the low coverage in the NHIS is down to adverse selection. But this in itself is a function of household’s financial constraints. Therefore, until the premiums are removed, one cannot see how the majority of Ghanaians can obtain insurance coverage.
    Indeed, you are right in pointing out that it took some developed countries several decades to reach universal coverage with Social Health Insurance (SHI) system. But is this not a vindication that if we want universal coverage now, we have to try other proven systems that have immediate results? Germany was able to achieve universal health coverage with an SHI system only after several decades when the economy got predominantly formal and the government used greater public funds to enrol people who could not afford premiums. Around the world countries that have achieved Universal health Coverage (UHC) have done so by using tax revenue to expand population coverage. Even in predominantly SHI systems such as Germany and France, there is an increasing move towards funding health from tax revenue. When a tax funded system was tried in Ghana health indicators showed promising signs, although system was challenged by economic downturn and a decline in general revenue. But Ghana has got better economically and with effective revenue generation a tax funded system should be feasible and effective now.
    The NHIS is funded mainly from general tax revenue, which every Ghanaian contributes to. But access is restricted for many poor people because they cannot afford the NHIS premium. Is now not the time to remove the insurance premiums to enable every Ghanaian have access the healthcare that they need?

    • Abraham says:

      MattAll of this debate over the firuge is irrelevant unless you also report the key anomaly of the Ghanaian system- that what is described as insurance is actually funded primarily through VAT. This means all Ghanaians pay for a system only a few can access. This means between the tax revenue and the health services is an inefficient, self serving and ultimately unnecessary insurance bureaucracy. All of this is covered in detail in the report, which it seems you had not read when you made your original post. . This is the richness of the argument and one you would do well to reflect in your chosen role as research quality vigilante. I enjoy your blog at times but a bit more humility on your part would be welcome in future. Kwame

  3. The best thing in these plan is that there is no change in Medicare plans in the future and even the premiums are totally paid in a very comfortable way by the middle class citizens in Ghana !

    • Assane says:

      Kwame you make a reasonable point that the diuncjst between coverage and VAT is the crucial issue. But I think you misinterpret Matt’s comments here. He’s not trying to say that the research is or isn’t correct, or that it does or doesn’t make a valid point or a useful contribution (as the comments between him and me demonstrate, we both consider the outcomes of the furore from the report to have had at least some tangible positive outcomes, which is great).He’s merely pointing out that the research methodology of any major paper, especially from (justifiably) well-respected organisations need to be pretty explicit. If you look over some of his older posts (and I’m glad you like the blog, so I hope you have) he makes this argument about several papers and bits of research, academic or advocacy led. I don’t think he’s making any grand claims to a final voice or anything here.This blog is basically a place for us to air ideas, get thoughts out (hence the name). It started out of a series of facebook arguments that were quickly clogging up our facebook pages and boring all our non-development friends (and most of the ones who do work in development!). We’re not always going to be able to make detailed critiques on everything we cover, but we don’t claim to either. Matt’s making a valid point here, even if he’s not attempting to get to the bottom of the truth’ of the Ghanaian health system, something neither he nor I would claim to be experts on.

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Global Health Check was created by Anna Marriott and is currently edited by Mohga Kamal-Yanni