PHM-Exch> Ghana: where 'successful health insurance' is neither successful nor in fact health insurance

Wed Feb 24 12:18:02 PST 2010

From: Anna Marriott AMarriott at oxfam.org.uk

In Oxfam’s continuing efforts to promote discussion and evidence-based
debate on health care financing and delivery in poor countries we are
circulating this email on the topic of the National Health Insurance Scheme
(NHIS) in Ghana.

The World Bank and some other international aid agencies frequently cite
Ghana as an example of how social health insurance can work in poor
countries.[i]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn1>The
truth is that while substantial progress has been made in health
financing in the country over the last decade, the current system remains
seriously inequitable and punishes the poorest.

Typically social health insurance (SHI) is financed predominantly by
employment-based contributions and has two main goals – to increase revenues
and to improve the equity and efficiency of the health system. In this
context any suggestion that Ghana gives the world a good practice example of
health insurance ignores a number of critical facts: that the Ghana NHIS is
funded predominately by tax rather than insurance contributions, that it has
failed to increase overall funding for health, and that it is the features
and systems of the insurance scheme itself that significantly contribute to
ongoing inequity and inefficiency within the health system.

The analysis below provides more detail and evidence on the challenges faced
by the NHIS in Ghana and on the welcome ambition and decision of the new
government to move away from a contribution-based system to a single nominal
lifetime payment with extensive exemptions, paid for by increased tax
revenues. The decision, if implemented well, offers the chance for Ghana to
build a truly universal health system accessible to all Ghanaians, which
could be the envy of Africa.

Please note that you can opt out of receiving these emails at any time by
sending an email to amarriott at oxfam.org.uk

*Ghana – where ‘successful health insurance’ is neither successful nor in
fact health insurance*

Ghana’s National Health Insurance Scheme (NHIS) was introduced in 2003 and
has been operational since 2005. It has been part financed throughout by a
series of World Bank loans, and has benefited from significant amounts of
World Bank technical
support.[ii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn2>The
scheme was introduced in response to public demands for the removal of
the old ‘cash and carry’ system of user fees that led to large scale
exclusion from health care and financial suffering. The implementation of
the NHIS has improved access and reduced financial barriers for its members.
However, to suggest that Ghana provides a good practice example of social
health insurance for other poor countries to learn from ignores the fact
that the scheme is in fact predominately tax rather than insurance funded
and is failing against its key stated objectives: to increase revenues for
health and to improve the equity and efficiency of the health system. These
issues are discussed in turn:

* *

*Reaching the poor?*

Claims from the government and the World Bank that after five years the NHIS
now covers more than 60% of the Ghanaian
population[iii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn3>appear
exaggerated and misleading.
In recent research, Witter and
Garsong[iv]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn4>provide
a more accurate estimate by counting only those members who hold
valid membership cards and explicitly discounting fraudulent and inaccurate
membership claims from insurance providers. This approach puts the coverage
rate at more like
45%.[v]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn5>While
this growth in membership is nevertheless impressive, the overall
figure sadly hides deep and serious inequity within the system:

   - Only 29% of the poorest Ghanaians are enrolled compared to 64% of the
   richest. This means that while everyone is paying for the NHIS through
   taxation it is the better-off who are disproportionately reaping the
   benefits of public subsidies for
health.[vi]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn6>
   - Insurance coverage for the poorest members of the population fell from
   4% in 2005 to 1% in 2008 in a country where 28% of the population are living
   below the poverty
line.[vii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn7>
   - The informal sector, including large sections of the population with
   the most unstable and often lowest revenues, are the only group that are
   required to voluntarily join and pay premiums individually and in cash.
   Unfairly, they are also paying more per head than others in the scheme.
   [viii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn8>Membership
levels of the informal sector are likely to tail off as recent
   surveys revealed that affordability is given as the main reason for not
   joining the scheme by 91% of poor
households.[ix]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn9>
   - Data suggests that the non-insured, commonly the less well-off, may be
   using fewer services and/or less expensive services as a result of increased
   tariffs for health services outside of the NHIS.
   - Insurance financing is likely to reinforce and perpetuate historical
   imbalances in the level and quality of services across different areas and
   regions in Ghana as reimbursement payments flow to those facilities already
   in a strong position to attract more patients. These tend to be higher-level
   facilities such as hospitals and similarly those districts and regions with
   higher levels of infrastructure to facilitate
access.[x]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn10>The
poor who are disproportionately located in rural and remote areas with
   poor infrastructure are at an automatic disadvantage.

* *

*Insurance or a tax financed health system?*

The principle source of funding for most social health insurance models is
earmarked contributions by employees and their employers. In Ghana 70-75% of
the NHIS is tax financed through a 2.5% health insurance levy added to VAT –
this means all Ghanaians are contributing financially to the health system
despite less than half of the population benefiting from the scheme. A
further 20-25% of funds come from contributions from those employed in the
formal sector and currently only 5% from informal economy worker
contributions.

The NHIS’s heavy reliance on tax funding erodes the notion that it can
accurately be described as insurance and in reality is more akin to a
tax-funded national health care system, but one that excludes half the
population. The majority (77%) of those who remain uninsured today cannot
afford to pay the insurance premium
required.[xi]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn11>Achieving
health care for all in Ghana will mean scaling up to cover all
those who cannot pay their own insurance. To fund this will mean even
greater reliance on additional tax-based financing.

*Increased revenue for health and increased efficiency?*

Many commentators incorrectly regard the NHIS as contributing additional
funding for health in Ghana. The reality is that its growth appears to have
substituted for other public revenue – funds from the NHIS are included in
the health sector budget, and what it adds is then deducted from the
Ministry of Finance’s own budget allocation to the
sector.[xii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn12>

Furthermore, contrary to the efficiency gains predicted, the NHIS is
unfortunately riddled with inefficiency and cost-escalation problems, as has
been a common experience of implementing social health insurance worldwide:

The administration system introduced to process over 800,000 individual
insurance claims each month through 145 District mutual health insurance
schemes under the NHIS is complex, fragmented, expensive and slow. Major
delays in provider payments have developed and as of the end of 2008 around
$34 million was owing to health
facilities.[xiii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn13>While
rising utilisation could increase efficiency by reducing unit costs,
this would also lead to further efficiency losses due to the additional cost
of revenue collection and NHIS overhead costs.

Like many health insurance schemes the NHIS suffers from fraud and moral
hazard with providers gaming the system to maximise reimbursement payments.
The new ‘DRG’ tariff structure introduced in 2008 (paying per episode of
care, according to disease groups) has exacerbated problems of gaming with
some facilities showing a doubling of NHIS claims within the first month.
The introduction of fee-for-service for medication has seen an increase in
the number of drugs per prescription from 4.5 in 2005 to 6 in
2008.[xiv]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn14>There
are also concerns of perverse incentives within the insurance scheme
to provide more curative and less preventative health care.

An increasing number of private providers have been accredited under the
NHIS with the argument that this will widen access. However, tariffs for
using private providers are higher and some commentators believe this will
be another driver of cost
escalation.[xv]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn15>

Improved governance and accountability?

It is widely assumed by the World Bank and increasingly by other aid
agencies and governments that splitting the role of purchaser and provider
within a health system will help to improve provider accountability and
responsiveness. With the NHIS failing on its chief objectives of raising
additional revenue and improving equity and efficiency, perhaps its value
added might lie here. Unfortunately this is not the case. The NHIS faces
severe constraints even managing claims effectively, ‘never mind acting as
an active purchaser’ to ensure health care is appropriate and effective.
[xvi]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_edn16>Problems
of accountability and transparency are exacerbated by a complex,
confusing and fragmented institutional insurance architecture with unclear
lines of responsibility and division of labour. Routine data is kept
confidential and information on the activities of the District mutual health
insurance schemes is largely unavailable.

Looking forward

It is misleading to describe Ghana as a poor country success story for
social health insurance. The NHIS could be more accurately described as a
tax funded system with a third-party membership and payment channel which
works to exclude the majority of poor Ghanaians and leads to inefficiency
and cost escalation. The theoretical value-added of establishing this
parallel system, which brings significant transaction costs, have not been
realised.

There is no doubt that the people of Ghana, and the new government they
elected in 2009, have recognised many of the problems outlined in this
summary.  The new government have laid out plans to move away from an
insurance-based system in 2010 and introduce a nominal one-off payment for
access from the age of 18 with extensive exemptions. This progressive
decision should be welcomed and its implementation supported by
international aid agencies. However, anecdotal evidence suggests that far
from supporting this decision, aid donors are trying hard to water it down.
This would be a significant missed opportunity.  Based on current evidence
and the repeated demands of Ghanaian citizens for free health care Oxfam, in
partnership with national organisations and networks ISODEC, the Alliance
for Reproductive Health and the Essential Services Platform are calling for:

   - An urgent and public commitment from the government that the one-off
   fee will be modest and affordable for the majority of Ghanaians and not
   actuarially determined
   - An accurate costing analysis of providing universal access to health
   care free at the point of use and an identified financing gap to implement
   this

   - Increased tax based financing for health care, focussing on progressive
   taxation options including a National Health Oil Levy on all oil revenues.
   - Increased aid for health from international agencies and bilateral
   donors to meet the financing gap
   - A move away from any fee-for-service provider payments to a global
   budgets or appropriate alternative system and look to streamline or even
   dismantle the parallel purchaser insurance architecture as a means of
   reducing fragmentation, inefficiency and unnecessary costs
   - Increased investment in expanding, improving and regulating the
   performance of health care providers so that all citizens can access quality
   and effective prevention, treatment and care services
   - An open and transparent process throughout so that citizens, organised
   civil society and parliamentarians can track progress, analyse evidence and
   input into the decision making and implementation of the new health
   financing policy

------------------------------

[i]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref1>For
example: ‘Ghana & Rwanda Set the Example on Scaling Up Health
Insurance
in Africa’
http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/GHANAEXTN/0,,contentMDK:22383215~menuPK:351958~pagePK:2865066~piPK:2865079~theSitePK:351952,00.html

[ii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref2>See
for example, Ghana Health Insurance project-
http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=351952&menuPK=351984&Projectid=P101852and
http://web.worldbank.org/external/projects/main?pagePK=64312881&piPK=64302848&theSitePK=40941&Projectid=P073649

[iii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref3>
http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/GHANAEXTN/0,,contentMDK:22383215~menuPK:50003484~pagePK:2865066~piPK:2865079~theSitePK:351952,00.html

[iv]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref4>Witter
and Garshong (2009) ‘Something old or something new? Social health
insurance in Ghana’ BMC International Health and Human Rights, 9:20

[v]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref5>Witter
and Garshong 2009, Op Cit.

[vi]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref6>2008
NDPC survey (published May 2009),
http://www.ndpc.gov.gh/GPRS/Citizens'%20Assessment%20of%20NHIS%202008.pdf

[vii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref7>The
government of Ghana has a very narrow definition of the poorest that
is
used for the NHIS, known as the ‘indigent’ population.  Civil Society has
criticised this definition as far too narrow and excluding the many millions
more people below the poverty line.

[viii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref8>Interviews
conducted on behalf of Oxfam found that while the informal sector
premium was supposed to be a standard fee, in reality premia charged
commonly fall between 15 and 25 Ghana cedis per person. This compares to a
government subsidy in 2008 of 14 Ghana cedis per member).

[ix]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref9>2008
NDPC Survey, Op Cit.

[x]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref10>Witter
and Garshong 2009, Op Cit.

[xi]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref11>2008
NDPC survey found that: “on average 77% of individuals who have not
registered with the scheme attribute their non-registration status to
affordability issues. The proportion is even higher among the rural dwellers
(85%) than urban dwellers (64.5%).
http://www.ndpc.gov.gh/GPRS/Citizens'%20Assessment%20of%20NHIS%202008.pdf

[xii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref12>
Witter and Garshong 2009, Op Cit.

[xiii]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref13>Ibid.

[xiv]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref14>Ibid.

[xv]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref15>Ibid.

[xvi]<http://merlin.oxfam.org.uk/mail/amarriot.nsf/($Drafts)/$new/?EditDocument&Form=h_PageUI&PresetFields=h_EditAction;h_New,s_NotesForm;Memo#_ednref16>Ibid.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://phm.phmovement.org/pipermail/phm-exchange-phmovement.org/attachments/20100225/3e3e6355/attachment-0001.html>