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National Health Insurance Scheme

NHIS Review

Terms of Reference for Defining Options for National Health Insurance Scheme Reforms

  • Background

    Ghana has been undergoing transformational changes in its healthcare financing over the past decades. Among other developments, the National Health insurance Scheme established by National Health Insurance Act 2003 (Act 650) replaced the “Cash and Carry” system during this period. The primary objective of the scheme is to ensure financial access to basic health care services for residents without having to pay out-of-pocket at the point of health care service delivery. The National Health Insurance Scheme has become an integral part of Ghana's strategy to move towards universal health coverage.

    The active subscriber base of the NHIS as at December 2014 was 10.5 million. Over 29 million attendances at healthcare facilities were made on account of the NHIS in 2014. Currently, 69% of NHIS registered subscribers are exempted from paying premiums. These include SSNIT contributors and pensioners, persons under 18 years old, persons 70 years old and above, pregnant women, indigents (the core poor), persons with mental health conditions, categories of disabled persons designated by the Minister responsible for Social Welfare, as well as beneficiaries of the Livelihood Empowerment Against Poverty Programme (LEAP). These exempt categories count for close to 69% of registered members of the scheme, and as a consequence only an estimated 31% of members pay contributions, which contributions are also not at fixed actuarially determined rates.

    Revenues emanating from contributions collection over the years form a relatively small proportion of NHIS inflows, accounting for 3.4% of total revenue in 2014. The NHIL contributed 73.8% of total revenue while SSNIT contributions accounted for 20.4%.

    From fragmented pools of funding prior to 2012, the scheme now operates a single pool of funds from which services are procured from providers and administrative and operational expenses covered.

    The NHIS benefits package is anecdotally estimated to cover 95% of disease conditions reported in Ghana, with services ranging from primary curative care to care at tertiary facilities for all enrolled persons without co-payments or usage limits of any kind. In a state driven social intervention program such as the NHIS, where the Scheme is funded mainly through tax revenues and statutory deductions, the country’s health goals ought to guide the design of the benefits package. Furthermore, the tax-paying population should be able to perceive the benefits package as valuable in order to sustain their support to the NHIS.

    In a well-designed public health insurance scheme such as the NHIS is, the criteria for choosing essential health interventions to be covered should include the following:

    • Ability to technically deliver the desired results and the capability to deliver services successfully
    • The targeted diseases constituting heavy burden on society, taking into account individual illness as well as social spillovers
    • Social benefits exceeding costs of the interventions
    • The needs of the poor being stressed.
    A scanning of the literate leading to the establishment of the NHIS however does not show any significant evidence that such rigour was taken into account.

    Purchasing of health services within the NHIS is mainly through fee-for-service and diagnosis related groupings, with capitation being piloted in the last couple of years in the Ashanti Region, and currently being scaled up in three additional regions from July 2, 2015. Methods of paying providers have had an effect on provider behavior within the NHIS. Accordingly, payment methods have to be carefully selected and implemented in a way that incentivizes providers to exhibit appropriate behaviours and reduce the risk of perverse incentives.

    Moral hazards facing the scheme in the form of fraud and abuse have been estimated to be losing the scheme anything ranging from between 5 and 10% of claims costs. Initiatives by the NHIA such as centralized claims processing, clinical audits and linking of diagnoses to treatment, to mention a few, have had an effect of reducing the prevalence of fraud and abuse, but more needs to be done.

    In recent times, high and increasing claims costs have placed the scheme under severe financial pressure. This has contributed to the scheme’s inability to pay claims in time to healthcare providers for services rendered to NHIS subscribers. This is in part due to an increase in the active membership of the scheme, as well as an escalation in medical costs, especially the cost of medicines.

    Indeed since 2005, the cost of providing health care to NHIS subscribers has increased much faster than the financial resources allocated to the scheme. The NHIS has therefore experienced persistent and increasing annual deficits since 2009.

    Delays in reimbursing providers have on several occasions led to the withdrawal of services to NHIS subscribers by providers. It has also led to unauthorized copayments and denial of service to NHIS subscribers which has had the effect of lowering confidence in the scheme.

    On the side of the costs of operating the scheme, concerns have also been raised by some. In some quarters, it is felt that the scheme should have a lean and efficient operational structure. In other quarters, it is felt that the legacy of the heavy administrative and operational structure bequeathed by the previous structure had yet to be fully rationalized.

    The foregoing and several other factors have led to calls from stakeholders for the scheme to be reformed.

    Indeed, with the strong commitment shown by Government to a robust NHIS and Universal Health Coverage, the time is opportune for such a reform to be undertaken.

  • Objectives

    The main objectives of the NHIS reforms proposed to be carried out are to ensure:

    • financial sustainability of the scheme
    • an increase public confidence of the scheme
    • an increase coverage of poor and vulnerable groups in the scheme
    • efficiency in health service purchasing
    • improvement in knowledge and information systems for decision making
    • accountability and efficiency in the operations of the scheme
    • provision of a framework for periodic review of the scheme
    • alignment of the scheme to broad health sector goals

  • Purpose

    The purpose of the reform proposed to be carried out is as follows:

    • Establishing a sustainable, pro-poor and a more efficient NHIS, by redesigning, reorganizing and reengineering the scheme
    • Creating a solid ground for improved service delivery across the scheme, in order to facilitate better provision of services to residents
    • Creating a smart scheme based on knowledge and information

  • Outputs
    • As-is analysis: In cooperation with all relevant practitioners, document current NHIS design, identify shortcomings, constraints to operational efficiency and bottlenecks
    • To-be analysis: Provide recommendations on options for NHIS reforms, taking into account the long term sustainability of the scheme in the areas of financing and benefits package design, coverage of poor and vulnerable groups, equity, accountability mechanisms and operational efficiency
    • Action plan draft: Based on all of the previous analyses, an action plan should be prepared, containing steps and processes for implementing the proposed recommendations including stakeholders to be consulted and strategies for mitigating risks of implementing the proposed recommendations
    • Change Management and Communication Strategies: Develop change management and communication strategies to support implementation of the proposed recommendations.
  • Key Questions to be answered

    The key reform questions to be asked include the following:

    • What is happening

      • What are the gaps in the existing system
      • Are there any issues of concern
      • What is being done to address the gaps and concerns and are they working
    • What are the reasons for what is happening

      • What are the issues and why are they occurring
      • Do we know their root causes
      • Do we need to do further diagnostics to identify the root causes
    • What needs to be done

      • What actions should be taken to bring a permanent resolution to issues identified
      • Should these actions be undertaken in clearly defined phases
    • Apportionment of responsibility

      • Identify persons and institutions that should take actions
      • What support do they need to be successful
    • Definition of timelines

      • Prioritize actions
      • Set deadlines for their completion
    • Measurement of success

      • Determine key indicators for success
      • Set up systems for measuring success
      • Determine reporting structures
  • Deliverables
    • Inception Report , which shall consist of the work plan to carry out the assignment detailed note on the proposed approach and methodology as well as an identified list of key stakeholders. The terms of reference may be improved and refined for better achieving the outcomes, through mutual discussions at the inception report stage
    • Draft report, to be submitted to Advisory Committee for comments
    • Advisory Committee Report , to be taken into consideration in producing the Final Report
    • Final Report
    • Power Point Presentation, Presentation to His Excellency the President, Minister for Health and other selected persons on the Final Report.
  • Expected Duration of the Assignment

    It is expected that the assignment will require a total of 4 months with the following schedule:

    • Inception Report: within 2 weeks of inauguration of the Committee
    • Draft Report: Within 2 months after acceptance of Inception Report
    • Advisory Committee Report: Within 14 days of Advisory Committee Meeting
    • Final Report: Within 30 days after completion of Advisory Committee Report
  • Structure for Work Delivery

    Technical Committee

    The Technical Committee will be responsible for securing relevant information for producing the various reports listed above. It will also be responsible for producing and coordinating stakeholders and organizing an Advisory Group workshop to consider the Draft Report. The Technical Committee will be made of the Following
    Mr. Chris Atim - African Health Economics and Policy Association
    Hon. Dr. Victor Bampoe - Deputy Minister for Health
    Dr. Obeng Apori - CEO Ridge Hospital
    Mr. Peter Yeboah - Executive Director, CHAG
    Prof. Irene Agyepong - School of Public Health, University of Ghana
    Dr. Huihui Wang - Senior Economist, World Bank
    Mr. Nathaniel Otoo - Acting Chief Executive, NHIA

    Advisory Committee

    The Advisory Committee will consider and make recommendations on the draft report submitted by the Technical Committee. The report will be considered at a two day workshop with the option of members sending in written comments if they are unavailable.

    The Advisory Committee will include any of the following:

    International Experts

    Mr. Ricardo Bitran - Bitran & Associates, Chile
    Prof. Winnie Yip - Oxford University

    Local Experts

    Prof. Badu Akosah - Former Director General GHS
    Mr. Nuamah Donkor - Former Minister of Health
    Prof. Frimpong Boateng - Former CEO Korle-Bu
    Mr. Charles Abugri - SADA
    Dr. Eli Atipui - Registrar, Medical & Dental Council
    Representative of Ministry of Finance
    Representative of Ministry of Gender, Children & Social Protection


    Hon. Richard Anane
    Hon. Yileh Chireh
    Hon. Mohammed Muntaka
    Hon. Matthew Poku Prempeh


    Prof. Adonoo - School of Public Health, University of Ghana

    Civil Society

    Dr. Steve Manteaw - ISODEC
    Mr. Kofi Asamoah - TUC
    Rep. Coalition of NGOs in Health

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