The experience of Ghana

Building-up National Health Insurance

Von Caroline Jehu-Appiah

Ghana like most sub-Saharan African countries has over the years implemented a number of health financing reforms in an attempt to increase equity in access to health care services. These reforms have included the abolition of user fees post independence and provision of free health services in the 1950’s, the re-introduction of user-fees in the late 1970’s and then national health insurance in 2003 after years of experimentation with district mutual health insurance schemes.

Photo: Jonathan Ernst, The World Bank,

The introduction of the NHIS was in fulfilment of the 2000 election campaign promise by the incoming national patriotic party (NPP) that passed the National Health insurance Act (Act 650) in 2003 in a bid to replace user fees at the point of service delivery (associated with the opposition party) as a more equitable and pro-poor health financing policy (Ackor 2002).

The Ghana NHIS is unique in that it is a combination of both Social Health Insurance and District Mutual Health Insurance concepts. Whether or not the poor are included depends in part on the design features of the MHO and the implementation of the schemes (Bennett et al. 1998, Jakab et al. 2001). The design of the Ghana District Mutual Health Insurance Schemes (DMHIS) has an in-built equity in financial contribution mechanism based on ability to pay and not on need. Membership is legally mandatory and requires all persons aged 18 years and above to contribute a minimum of GH ¢7.20 ($8) per year to their district schemes to enroll. However in practice it has been hard to enforce for informal sector workers who form the bulk of the population for whom there is no database and whose incomes are hard to assess. Therefore, almost all informal workers who have to voluntarily enroll pay a flat-fee premium of GH ¢7.20 ($8). There is some flexibility for DMHIS to vary their premiums and premiums may be more than the statutory US$ 8, but then again it’s a flat fee and not income-adjusted.

The NHIS provides exemptions for children under 18 years if both parents are registered, pregnant women, pensioners over 70 years and the core poor (indigents)(LI 1890, 2003). A relatively broad pre-defined benefits package of outpatient and inpatient services can be accessed at accredited private, and all levels of mission and public health facilities that covers 95% of the disease burden in Ghana. Every DMHIS contracts accredited providers (public, private and mission) to deliver services to its members and reimburses them after submission of claims for services. This system separates the purchasing and provision functions to increase transparency. Currently the NHIS reimburses providers based on the Ghana Diagnostic Related Groupings (G-DRGs) and a medicines tariff list. The broad open-ended benefits package, low premiums, limited funding, no co-payments and increasing coverage raise concerns for the financial sustainability of the NHIS and may call for additional reforms or trade-offs (Witter and Garshong 2009).

Coverage and equity

Since its introduction in 2003 the NHIS has expanded in scope and coverage. By the end of 2009 there were a total of 145 District Wide Mutual Health Insurance Schemes and more than 13 million people had enrolled representing 60% of the population (NHIA 2010). Despite such strides recent empirical evidence shows enrollment among the poor is low (Asante and Aikins 2008, DHS 2008, Jehu-Appiah et al. 2011b). Households in the richest quintile are significantly more likely (41%) to enroll compared to the poorest quintile (27%) indicating inequitable access to NHIS (Jehu-Appiah et al. 2011b).

In the past failure to reach the poor under mined the successful implementation of the exemption policy (Aikins and Arhinful 2006, Nyonator and Kutzin 1999) and if corrective measures are not put in place may also undermine the successful implementation of NHI in Ghana. It therefore appears from all indications that the operational challenges and difficulties in implementing the exemption policy under the ‘’cash and carry system’’ are being retained under the NHIS exemptions.

As the country moves towards universal coverage it is anticipated that the NHIS will replace both user fees and exemptions obviating the need to identify the poor. In the mean time however, there is a compelling need for the MOH to find practical and cost-effective methods for identifying the poor for premium exemptions as a means of ensuring the desired pro-poor impact of NHI to reduce inequities in health in Ghana.

Utilization of OPD services

After 6 years of implementation, health facility records show a substantial increase in utilization as shown in figure 2. Outpatient utilization increased from 0.52 visits per capita in 2006 to 0.81 in 2009, an increase of 56%, after stagnating at 0.4 with the introduction of user fees (GHS 2010). How much of this is due to moral hazard or supplier induced demand is not known, it is also not known if the insured poor are utilizing services as much as the rich when ill.

Given the recent evidence of inequities in NHIS enrollment (Asante and Aikins 2008, Sulzbach et al. 2005, GSS 2009, Sarpong et al. 2010, Jehu-Appiah et al. 2011b) a further empirical evaluation is needed to understand if these inequities in enrollment translate into inequities in utilization and therefore access to health care. This is important to inform policy and has implications for the future design of the NHIS.

The impact on out of pocket (OOP) expenditure

The NHIS has provided financial protection to insured persons compared to the non-insured. Analysis shows that between the two surveys GLSS 4 (1999) and GLSS 5 (2006), the share of those seeking care among those with a health problem increased from 43 percent to 60 percent.

GLSS 4 and 5: changes in illness self-perception and demand patterns (percent)






Had a medical problem



Sought care



Did not seek care



Did not have a medical problem



Sought care



Did not seek care




This was almost a 50 percent increase and suggests improved overall access to health care in the period, which could also have resulted from increased availability of health services in the country, or generally improved incomes of the population that increased their ability to pay for care.

A study by Abt Associates/HealthSystem2020 that collected baseline data for two districts in 2004 and again after NHIS implementation in 2007 finds that individuals insured by the NHIS were about twice as likely to seek formal care for illness/injury and about half as likely to self-treat or seek informal/traditional care, compared to the uninsured(Atim 2010).

Benefit incidence analysis of health care services

Gashong et al (SHIELD 2010) in evaluating existing inequities in health care utilization finds that benefits in public sector outpatient services are pro-rich: the richest groups gain more than 20% of the benefits at all facilities. Benefits at the primary care levels are more evenly distributed across rich and poor groups than total benefits gained from district and regional/teaching services. Richer groups gain more benefits from regional/teaching hospital levels than poorer groups and findings show that for total public inpatient care, the rich gain the most benefits. The district level is the only level of public inpatient care that benefits between the richest and poorest groups are more equally distributed. The richest groups gain most of the private inpatient and outpatient health care benefits. Inpatient services are very pro-rich because the richest groups get almost half of all private inpatient service benefits. The poorest group gain less than 5% of the share.

Quality of care

Results from a recently conducted study (Jehu-Appiah et al. 2011a) indicate clients have concerns with regard negative providers attitudes, long waiting times and unavailability of drugs for insured clients. However they are generally satisfied with the quality of care provided with regard to service delivery adequacy, effectiveness of treatment, quality of drugs, sufficiency of good doctors and availability of equipment.

The issue of negative provider attitudes and interpersonal relationships is a long-standing concern in public health facilities and (Asenso-Okyere et al. 1999, Osei-Akoto 2003, MOH 2009) (Asenso-Okyere et al. 1999, Osei-Akoto 2003, MOH 2009) has become more pronounced with increased utilization due to NHIS.

The growing dissatisfaction of insured clients who perceive they are given poorer quality of care and wait longer compared to the fee paying clients (Bruce et al. 2008) needs to be urgently addressed to retain and attract new members. However, the existing provider payment mechanism does not promote quality of services.

Resource mobilization

The NHIS has introduced an innovative approach to raising funds to cover the healthcare. Substantial revenues have been raised through the VAT levy and formal sector contributions to subsidize health care for exempted groups. The NHIS levy constitutes the most important source of NHIS revenue. SSNIT contributions are the second most important. Not surprisingly, Ghana has reportedly also since at least 2008, joined the handful of African countries that have attained the Abuja target of 15% share of public spending on health. This is largely the result of the earmarked taxes for the NHIS.

Financial sustainability

Despite the undoubted success, the NHIS faces a number of implementation challenges with implications regarding its future financial sustainability. A problem that is increasingly occupying the attention of the NHIA regards rising costs of the NHIS that are partly attributed to reported fraud and abuses within the system. Much of this reported fraud is said to be related to providers gaming the system, since controls and verification capacities of the DMHIS are presently weak. An underlying problem here is said to relate to the provider payment mechanisms, both the initial fee for service and the current DRG systems being seen as promoting or being open to such abuses. NHIA staff reportedly told the 2008 health sector review team that “we don’t get simple malaria cases any more – all malaria is complicated”.

The use of fee-for-service for medication under the NHIS has seen an increase in the number of drugs per prescription from 2.4 in 2004 to 6 in 2008. Table shows a dramatic increase in outpatient costs per card bearer since the DRG payment system was introduced in 2008. The cost per claim rose from GHc 8.48 to GHc 19.29 in just one year between 2008 and 2009.

Delays in claims reimbursements to providers

Major delays of up to 6 months in provider payments have developed as a result of the complex fragmented system with 145 DMHIS processing over 800,000 individual claims. In addition the frequent delays in reimbursing providers are affecting the availability of drugs in public facilities. With frequent stock-outs, insured clients are made to buy drugs in the open market decreasing their pay-off of insurance and thus not living up to people’s expectations. Consequently, urgent efforts by the NHIS to timely reimburse providers should improve the purchasing and availability of drugs and restore confidence in the scheme.

Supply side constraints
Increased utilization of services has naturally increased pressure on health facilities and staff. Without concomitant investments in infrastructure, medicine supplies and staff, overall progress on improving access and quality of care will be limited. Insufficient attention has been paid to supply side constraints since the introduction of the NHIS and severe problems remain. The inadequate number of health personnel and imbalances in their distribution across the country remains acute. The perceived poor quality of care at many health facilities itself acts as a disincentive to join the NHIS.

Way forward

Cost containment strategies include a mixture of provider payment mechanisms. Capitation for all outpatient primary care services will initially be piloted in the Ashanti region and scaled up to the rest of the country. In addition to improve efficiency, the gatekeeper system needs to be enforced and linking financing to results. To address delays in reimbursing provider the NHIS is embarking on centralized of claims processing and electronic submission of claims.

Coverage against the risk of illness and financial protection has grown rapidly and is now more than half the population and climbing. The NHIS has increased the financial resources available to the sector very significantly, so much so that Ghana has attained its Abuja target. The NHIS has demonstrated that it is possible to design and implement a social health insurance scheme not only for formal sector employees in Africa but also for rural and informal sector populations as well.

*Dr. Caroline Jehu-Appiah obtained her MD degree from the Friendship University in Moscow, Russia, a Master of Science in Health Economics from York University, UK, and is currently a PhD candidate at the Radboud University in the Netherlands. She is currently the Deputy Director of Policy in the Policy, Planning Monitoring and Evaluation of the Ghana Health Service with the responsibility for policy development, planning, monitoring and evaluation of policy implementation and gender mainstreaming in the health sector. Her current research interests are in the areas of health insurance, equity analysis, impact evaluation and performance based financing. Contact:



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