Ghana’s solution to cost- effective universal health care

Universal health coverage (UHC) remains a fundamental goal for many nations worldwide, ensuring that all individuals receive the healthcare services they need without suffering financial hardship. 

Ghana, like many developing nations, faces significant challenges in achieving this goal, particularly concerning the financial sustainability of its National Health Insurance Scheme (NHIS).

This article explores global healthcare models, examines Ghana’s healthcare challenges, and presents strategic health insurance designs that could provide sustainable solutions at the lowest cost.

Global healthcare systems

Healthcare systems worldwide operate under different models, which broadly fall into three main categories:

• Beveridge Model (e.g., UK, Sweden): Funded through general taxation, health care is provided by the government, ensuring universal coverage with minimal out-of-pocket expenses.

• Bismarck Model (e.g., Germany, France): Insurance-based system where employees and employers contribute to sickness funds, offering regulated but competitive services.

• National Health Insurance Model (e.g., Canada, South Korea): A hybrid approach where the government operates a single insurance system, while providers remain largely private.

• Out-of-Pocket Model (e.g., Many Developing Countries): Individuals pay for healthcare directly, leading to significant barriers to access.

Ghana follows a hybrid model with its NHIS, which shares characteristics with the Bismarck and National Health Insurance models but struggles with funding gaps and inefficiencies.

Challenges NHIS

Ghana’s NHIS, established in 2003, was a pioneering initiative in Sub-Saharan Africa aimed at achieving UHC. However, despite covering 95 per cent of disease conditions, the system faces major hurdles:

• Low active membership: Only about 40 per cent of Ghanaians are actively enrolled, limiting the risk-pooling potential (NHIA Annual Report, 2022).

• Financial sustainability issues: Revenue generation from premiums and government allocations remains inadequate, leading to delayed reimbursements to service providers.

• Service delivery inefficiencies: Despite coverage expansion, disparities in access persist, particularly in rural areas where healthcare facilities and personnel are limited.

• Fraud, abuse: Challenges such as unrealistic NHIS tariffs, duplicate claims and exaggerated billing strain the financial sustainability of NHIS.

• High out-of-pocket payments: Many patients still bear significant costs, undermining the scheme’s intent of financial protection.

Health insurance design strategies 

Ghana's healthcare system consists of public and private sector services, with the National Health Insurance Scheme (NHIS) playing a crucial role in providing coverage.

However, financial sustainability, quality of care and accessibility remain challenges. Below is an evaluation of various health insurance design strategies and their suitability for Ghana.

High-Deductible Health Plans (HDHPs)

Recommendation: Not Suitable for Ghana (at Scale)
Reasons:

• Low-Income Population: Many Ghanaians may struggle with high upfront healthcare costs, leading to delayed or forgone treatment.

• Limited Financial Literacy: HDHPs require consumers to make informed decisions about saving and spending on health care, which may not be feasible for much of the population.

• Challenges with Health Savings Accounts (HSAs): HSAs, which are typically paired with HDHPs, require a strong banking and savings culture, which may not be widespread, especially in informal sectors.

Alternative approach:

• A modified version can be explored for high-income earners and private insurance customers, where HSAs can be introduced with tax incentives.

• The government could introduce income-based deductibles to protect low-income groups while promoting cost-sharing among wealthier populations.

Tiered and narrow network plans

Recommendation: Highly suitable 
Reasons:

• Cost Control for Insurers and Patients: Narrow networks allow insurance providers (including NHIS) to contract with cost-effective, high-quality providers, reducing overall expenditure.

• Quality Improvement: Tiered networks can create incentives for providers to improve services to remain in the preferred category.

• Encourages Use of Public Healthcare Facilities: The NHIS can implement a system where public hospitals and accredited private providers form the preferred network to balance cost and accessibility.

Implementation Approach:

• NHIS and private insurers can classify providers based on quality, cost-efficiency and service availability.

• Patients can have lower co-pays when they visit Tier 1 providers (public hospitals, preferred private providers) and pay more for Tier 2 providers (non-accredited private hospitals, high-cost facilities).

• Digital tools (e.g., mobile apps or SMS services) can help patients identify tiered network providers and estimated costs.

Reference pricing

Recommendation: Moderately suitable 
Reasons:

• Reduces overpricing of medical services: Many healthcare services (especially diagnostics, lab tests and surgeries) vary significantly in cost. Reference pricing would set standard reimbursement rates for procedures, ensuring fair pricing.

• Encourages price transparency: Patients would be more informed about expected costs and could choose providers accordingly.

• Prevents unnecessary spending by NHIS: By capping the reimbursement amount, NHIS can avoid inflated claims from private providers.
Challenges, considerations:

• Limited Consumer Awareness: Many patients may not understand reference pricing and could end up paying out-of-pocket without knowing alternative providers exist.

• Implementation Barriers: Requires accurate data collection on current healthcare costs across facilities to set reasonable benchmark prices.

Implementation approach:

• Start with selective services, such as diagnostics (e.g., MRIs, CT scans), routine surgeries and laboratory tests.

• Implement public awareness campaigns to educate patients about price caps and alternatives.

• NHIS can use digital platforms (USSD, mobile apps) to allow consumers to check reference prices before seeking care.

Value-Based Insurance Design (VBID)

Recommendation: Highly suitable 
Reasons:

• Focuses on preventive care: VBID can reduce costs in the long term by emphasising preventive measures, reducing hospital admissions and chronic disease burdens.

• Aligns with NHIS goals: The NHIS already covers preventive services, but VBID can be used to enhance efficiency by linking cost-sharing to evidence-based treatments.

• Encourages better health outcomes: Chronic disease management (e.g., diabetes, hypertension) can be improved if VBID eliminates co-pays for essential drugs and preventive screening.

Implementation approach:

• Expand NHIS to fully cover preventive services such as vaccinations, prenatal care and chronic disease screening at no cost.

• Introduce cost-sharing based on value—e.g., low-cost access to life-saving medications, but higher co-pays for non-essential treatments.

• Incentives for Healthy Behaviour: Insurers could offer discounts for regular check-ups or adherence to chronic disease management plans.

Recommendations

Insurance Design Strategy    Suitability for Ghana    Key Benefits    Challenges

High-Deductible Plans    Not Recommended (at scale) Encourages price sensitivity    May cause delayed care, unsuitable for low-income populations
Tiered & Narrow Networks    Highly Recommended    Reduces costs, improves quality, and aligns with NHIS    Requires public awareness and provider cooperation
Reference Pricing    Moderately Recommended    Controls overpricing, enhances transparency    Requires data collection, patient education
Value-Based Insurance Design (VBID) Highly Recommended    Improves preventive care, lowers long-term costs    Requires strong coordination between NHIS and providers

Conclusion

For Ghana, tiered networks and value-based insurance design (VBID) present the most viable options for improving healthcare efficiency while controlling costs.

Reference pricing can be gradually introduced, while high-deductible plans should be limited to high-income groups with complementary savings mechanisms.

By implementing these strategies, Ghana can ensure that its health insurance system is financially sustainable, improves healthcare quality and enhances access for the general population.

The writer is a healthcare marketing strategist.