Welcome to our site!


National Health Insurance Scheme


Understanding NHIS Capitation By Anthony Gingong|5/5/2015

Globally every nation has a plan on resource mobilisation and utilisation as reflected in periodic budget preparation and presentation. In developing budgets, specific allocations are made to all sectors with emphasis on priority projects or areas. These allocations are arrived at after thorough interrogations of all the ingredients desired to achieve the needed results. The ceilings put on each activity area is described as a cap on the activity’s fund. Specific tax regimes are capitated for certain development projects including social developments. Known examples in Ghana are the Ghana Education Trust Fund (GETFUND) levy, National Health Insurance (NHI) Levy, NYEP/GYEDA talk tax, and recently the Ghana Infrastructure Fund. These are taxes capitated for specific social development interventions.

Capitation is not a preserve activity of only states and state governments, but also individuals use it to organise their lives and future. As responsible persons we practice capitation in our daily lives with our earnings and their resultant expenditures. When one makes an income, he/she capitates part for basic needs of life including food, shelter, and love/gratifications as well as capitates  some as savings, investments, transportation, school fees, and remittances. They are capitated because you put a limit as to how much you are spending on each area, and you further define what each area entails.

Capitation refers to a fixed amount per head and widely used in the revenue collection environment where it is sometimes referred to as poll tax, head tax, uniform tax, or fixed amount. Contemporary it is used to describe healthcare service payment as one of the most efficient payment methods for health care services delivered. Countries all over the world who have either achieved or working towards the achievement of Universal Health Coverage use capitation as a part of the payment mix. Capitation payment method is prescribed for countries which implement social health insurance system, especially where we have a generous benefit package without co-payment.

In health care financing, Capitation is often referred to a payment arrangement for health care service providers for a set amount for each enrolled person assigned to them, per period of time, whether or not that person seeks care. The schedule of payment can be daily, weekly, bi-weekly, monthly, half yearly or yearly. In most countries the monthly payment is the most practiced because of its convenience to both the payer and payee. The practice of capitation gives the subscriber the right to choose a preferred provider, and intermittently the subscriber can choose to remain or change a provider depending on satisfaction or other wise of the services rendered. Basically we have three types of capitation payment methods.

Primary Capitation: A relationship between a primary care providers in which the provider is paid directly by the health insurance scheme for those enrolled members who have selected the facility as their preferred primary provider (PPP).

Secondary Capitation: A relationship arranged by the health insurance scheme and a secondary facility or specialist provider including diagnostics where the secondary provider is also paid capitation based on the number of enrolled membership.

Global Capitation: A relationship based on a provider who provides services and is reimbursed per-member per-month (PMPM) for the entire network population.

Benefits of Capitation

Timely availability of funds- capitation is an advanced payment system where funds are transferred to the health care facility even before the services are rendered. Hence it is ensures health care providers or management are able to mobilise necessary and or need logistics for the daily activities.

The readily availability of funds facilitates improved quality of care since managers are able to supply both medical and non-medical consumerable to their care givers. Health providers up their care giving skills to maintain their enrolees for fear of losing them to other facilities. There is consistency of care with guaranteed follow-ups and appropriate referrals where necessary since each subscriber is tied to a particular providers who has access to the medical history of the subscriber.

The implementation of capitation payment methods Introduces managed competition between and among providers. The amount of money paid depends on the facility’s enrolled figure, that is, the more you enrol the more you earn at the end of each payment period. So a facilities ability to retain its members and possible improved on it suggest the facilities income.

One of the challenges confronting payment through the fee for service method, and diagnostic related grouping payment has to do with claims management. Each day and months providers spend valuable time preparing claims that involves huge paper work and transport. In capitation there is reduce burden of claims processing. Facilities are only required to provide utilisation data instead of preparing a whole claim form.

Capitation ensures providers are able to manage Patient data effectively and efficiently since the person is tie to a specific provider for a period of time. This allows for care continuity and positive outcomes since the persons care process is not interfered with.

Providers are encouraged to invest in public health activities such as health education and promotion in other to reduce the number of people who fall sick and come to the facility for care. This positive approach ensures people live health life styles and has the potential to control the incidence of non-communicable disease occurrence.

Data is readily available for management decisions when capitation is practised. Providers as well as the NHIS are able to do effective costing to determine adequacy of per capita rate. Morbidity trends, customer behaviour, logistic utilizations are a few examples that readily are available when practising capitation.

Efficiency in management of resources, control of abuse including multiple visits to facilities by subscribers, rational prescriptions, bonding between caregivers and clients, early renewal of cards are all associated with capitation.

Opposing capitation

This efficient payment method has always experienced initial resistance anywhere it is being introduced. Providers will first resist capitation with the excuse that the per capita rate is low. This is most often the result of conflict per capita with per encounter.  Per encounter is the cost of treating an individual that is, the total utilisation expenses that is attributed to an individual who falls ill, whilst per capita rate actually deals with the entire population.

Anxiety on the provider front duty suspicion of delay in payment is another reason why providers resist capitation. In the case of Ghana, the experienced of delayed payment is real hence the quick accession that capitation will face a similar fate.

Some providers feel the enrolment process is often influenced and thus favour favourite facilities to their disadvantage. However the experience on the ground is that providers who delay in accepting the concept often lose out and are left with at risk clients.

Smaller facilities are initially discriminated since subscribers prefer one shop facilities instead of relying on referral system. Facilities near bigger facilities, as well as CHPS compounds are often severely hit with low enrolments.

In the case of Ghana, one sees a gravitation towards public and CHAG facilities when subscribers are given the option to choose their preferred primary providers. The reason could be due to hesitations by the providers in accepting capitation as a payment method.

One cannot rule-out idiosyncrasies in the opposition to capitation. There are individuals who are psychically allergic to the mention of capitation and resist it without any explanation. People have personal experiences with the word capitation and sometimes relate those experiences which are alien to healthcare financing e.g. the concept of capitation grant being implemented by the Ministry of Education through the Ghana Education Services might have giving some negative unintended consequences which might to anticipated in health care if that concept is adopted.

The fear of losing members to bigger facilities is a real possibility to arouse opposition to capitation. In capitation clients are free to change their PPP, in the case of Ghana every six months change is allowed.

Capitation basket

The phrase capitation basket refers to the range of services considered and clustered for bulk payment. In Ghana these services are known as the primary care services and include the basic clinical services that can be administered at the most basic level of care which is the CHPS compound. The package is non-discriminatory in that they are same for CHPS compound through to even Teaching hospital that opts to practice capitation. In the basket include OPD consultations for primary cases such as simple malaria, pneumonia, minor cuts, maintenance and refill, health education and promotion, OPD wound dressing, and also investigations such as quick test, deep stick, urine and stool routine examination, rapid diagnostic test, Haemoglobin test and any other test that can be carried out at the CHPS centre. Note that checking of blood pressure and temperatures are considered as the OPD client consultation process. All conditions needing specialist care such as hypertension, diabetes, eye care, as well as in-patient care including surgeries are not alienated from the capitation basket.

Way Forward

The successful roll-out of capitation will be a function of several factors which includes a well-defined leadership role from the ministry of health. Healthcare service provider, and the NHIA see each other as equal partners with providing service, and the other paying for the services that have been approved under the NHIS by the Minister responsible.

Implementation of any health care policy especially financing mechanism must first evolve and involve effective stakeholder engagement. The critical persons and institutions are will be linked to the subject must be part of the process from inception. This is what will infused in the feeling of ownership and responsibility. Health care professionals general have the feeling of importance, and are trained to be independent minded, hence will resist any move seen or can be said to be imposition. When the environment is created for them air their views the fertile ground is therefore prepared for acceptability even if the views are not taken on board.

Relevant communities members such as the chiefs, queen mothers, religious leaders, assembly representatives, unit committees members and organised groups in the communities must been seen to play significant roles in capitation processes especially the question of enrolment to preferred primary providers.

Sensitisation is critical in implementing capitation. The service providers, subscribers, media, insurance staff, and the general public must be well sensitised. The sensitisation will create awareness to all involved and doubts cleared. All who have stake in the process will get to know the roles and responsibilities.

The National Health Insurance Scheme needs to embark on comprehensive facility mapping to identify the health care providers in each catchment area. It is highly useful to have data on all providers, their location, types of services rendered, population served, distance from one facility to the other, and available referral points.

The most critical success factor in capitation is enrolment of subscribers to facilities. This must be done and seen to be done in the most transparent manner, with the subscriber allowed the free mind to decide which provider he/she prefers as a care giver and in the case of Ghana as a preferred primary care giver. The enrolment is important to providers because it is the number of enrolees that informs your total capitated amount per month. The more enrolees you have the higher the amount of money you are paid. For the subscriber it is about trust and confidence, so the subscriber will like to select a provider that represents trust and confidence since it is about health. In the case of the NHIS it about the satisfaction of the subscriber, and if the subscriber is satisfied the scheme feels accomplished. The NHIS needs to facilitate the process of enrolment to ensure all its subscribers have facilities to seek health care if it becomes necessary. Thus is important for the entire tripod to show interest in the enrolment of subscribers for the purposes of capitation.

Enrolment process should be very active. Providers who do not show interest in enrolment end up with little numbers and worst still with sick persons and hence high utilisation. When subscribers do not voluntary pick their PPPs then the NHIS has no choice than to assign them. In this scenario the subscriber may be assigned to an un-preferred provider. The NHIS may have wrong data with possibilities of non-subscribers and person with expired cards being enrolled to facilities if it fails to involve it staff in the enrolment process. Data on enrolment must be consistently cleaned and shared with providers to limited suspicion and possible faulty membership.

It is prudent to define the method or mechanism to be used in enrolment process. The use of paper and later transferring of data into the computers poses challenges and has the potential to distort data in generated for and from the providers and enrolment officers.

Most stakeholders will resist capitation for fear of delayed payment and possibility of losing payments due them, hence for a successful implementation the NHIS must first clear all previous debts or outstanding claims owed the providers. This builds confidence and trust in the providers and the subscribers as well.

Providers must be assisted to fully comprehend the differences between per capita rate and per encounter rate. In most instances we use per capita rate and explain it as per encounter in other to justify complain of low rate. Thus in sensitisation it is useful to let stakeholders understand that; per capita rate refers to the entire population of enrolees of which not more than 15% may visit health facility at any given time yet each enrolee is accounted for in transferring funds to the provider. In the case of per encounter only individuals who sought care are paid for whilst those who have not sought medical care not accounted for in payment.

The role of Community Health Planning and Services (CHPS) compounds is critical in capitation. Fortunately in Ghana the range of services defined for the capitation are basic and consist of services that can easily be provided by the officers of the CHPS compounds. The ambiguity lies in the concept of CHPS. Whilst some think that CHPS concept was primary for public health activities at the community level including health education and promotion through homes visits, immunisation, and antenatal services, others think that CHPS concept has come to fill a large gap of geographical accessibility to health care by the deprived communities. I then to support the later argument because in most situations the enrol nurse or community health nurse is the only skilled person in 40 km radios. If she does not provide the clinical services then quacks to will do it, and we all know the results of quacks providing clinical services. Secondly who will listen to educational talk with the children running temperature of 40 degrees plus and urging towards convulsion. Between the TBA and the Community health nurse who will understand and appreciate danger signs in pregnancy, I definitely think the CHN is better positioned.

My personal thought on adding CHPS to the providers to implement capitation is that, a flat amount of money should be set aside for public health activities. This is because enrolment at that level will see small numbers because of their small population figures as well as the locations which generally are remote, hard to reach, small communities deprived from every social amenity except free air. An effective public health campaign including high immunisation, malaria control, avoidance of diarrhoea and helminthic infestation, family planning acceptance, prevention of sexually transmitted infections will ensure low morbidity and high savings of the capitation transfers.

Finally is the issue of TRUST, a prime ingredient in insurance administration all over the world. Providers need an appreciable level of trust in the NHIS with regards to timeliness in payment and openness to issues that evolve as we continue to work towards a sustainable health insurance scheme. The NHIS must demonstrate truthfulness in all situations to the providers and even subscribers as well. When there is delay in payment it should be communicated to providers immediately so that they can further communicate to their suppliers. This will prevent suppliers from harassing providers who likely will vent their frustrations to not only poor NHIS subscribers the NHIS as a body.

© NHIS. All Rights Reserved.