There is a growing move at the international level towards universal health coverage (UHC) as an essential way of reducing financial impoverishment caused by spending on healthcare and of practically ensuring that everyone obtains full and equal access to key health services. For many developing countries, the main way of achieving UHC has been through the adoption of Social Health Insurance Schemes.
In 2003, Ghana made the bold decision to implement a National Health Insurance Scheme (NHIS) which aimed at universal coverage, despite vocal opposition from donors and technical experts. This was a great breakthrough considering that for over two decades the country had implemented a cost-sharing approach to healthcare financing. But while the user fees era helped raised the needed revenues, it brought about needless deaths and lower usage of healthcare services, especially by the poor. The NHIS sources of funds have primarily come from VAT, social security contributions, premiums and budgetary allocations.
Over the past decade under the NHIS, Ghana has made substantial progress in extending healthcare and increasing usage of health services for many poor people who previously could not afford it. But there are challenges. Currently, children, most formal workers, pregnant women and the aged are exempt from payment of the insurance premium, but a large proportion of the population who are in the informal sector are mandated to pay or renew premiums annually if they want to enjoy the scheme’s benefits. This arrangement is creating barriers to access and there are still over 50% of the population who are not covered by health insurance. Besides, the financial sustainability of the scheme is also seriously threatened. In 2009, it was running a deficit of GHC 19. 5m which more than doubled to GHC 47.3 m at the beginning of 2011.
In the past months, I have been writing articles with the aim of proposing some other sources of funds which Ghana could consider to generate funds for the NHIS. First, over 70% of the funds for the NHIS has been contributed by the National Health Insurance Levy (i.e. VAT). I therefore join the growing calls to consider increasing the NHIL by about 0.5-1.5% from its current 2.5% to a maximum of about 4%. This increment is important to enable the NHIA to meet its ever increasing costs on claims, operations and administration.
Secondly, I call for the consideration of so-called “sin taxes” as another avenue of raising new domestic resources without necessarily increasing income tax rates or generating significant opposition from the public and corporate bodies. These are taxes levied on products considered harmful to health. Examples are tobacco and alcohol. A WHO report shows that by raising tobacco taxes and taxes on other ‘harmful products’ by 50%, low-income countries like Ghana could generate new funds for health to the tune of about $1.4 billion each year. The good thing about “sin taxes” is that they raise money while also protecting health. This is an important source we can look at to finance our new NHIS.
Thirdly, we could also look at the telecommunications sector. Ghana has nearly 18 million active telecommunication subscribers and if each subscriber is deducted at least GHC 3 (about $1.50), for example, which is spread throughout a year to finance the scheme, GHC 54 million ($27m) could be generated.
Fourthly, wouldn’t it also be a good idea to focus on the financial sector to ensure it makes a fair contribution to society? Considering that commercial banks alone make over GHC 100m profit each year, a tiny tax of as little as 1 % applied to financial institutions and transactions (shares, bonds, currency and their derivatives) could raise tens or even hundreds of millions in revenue to meet the cost of pursuing the objectives of the NHIS.
While calling for increased sources of finance, the fifth recommendation is for the NHIA, the Ministry of Health and other stakeholders to implement a number of cost-saving measures by tackling the inefficiencies, cost-escalation, corruption and abuses in the health sector. These could be used to support the NHIS. In the 2011 Budget, it was reported that a nationwide clinical audit in 2010 helped realise nearly GHC 8 million – which gives an indication of the fraud and abuses in the system. Recent research estimates that if we pay attention to reducing the ‘waste’ in the health system, nearly GHC 374 million could be generated annually to support the financing of the National Health Insurance Scheme.
For the NHIS in Ghana to progress further towards UHC, business-as-usual is not an option as our inaction will cripple the functioning of the scheme. These funding sources should be considered before the scheme collapses.
*Albert A. Arhin (2012) is doing a PhD in Geography. He was previously a Research and Policy Manager for Oxfam in Ghana working on health, climate change and agriculture. Picture credit: Sheelamohan and http://www.freedigitalphotos.net.