The National Health Insurance Scheme (NHIS), The Real issues

The National Health Insurance Bill has been passed into law by the parliament of Ghana. This seeks to set up a National Health Insurance Scheme (NHIS), which would enable residents in Ghana to obtain, at least, basic healthcare services without paying money at the point of delivery of the service. This will replace the cash and carry system currently in place. An accompanying memorandum signed by the Minister of Health, Dr Kweku Afriyie, said the Bill would provide a policy and regulatory framework in the country for health insurance that would enable the nation to achieve the goal of equitable access to basic healthcare in relation to need rather than socio-economic or socio-cultural status.

The NHIS has been welcome in principle by all and sundry since the cash and carry system in place currently is not the best of schemes considering the socio-economic or socio-cultural status of the Ghanaian. The current government also made it a cardinal in its election campaign in 2000. However, the politics, funding and its implementation have left much to be desired.

The politicians are taking advantage of a very important and crucial issue to play politics. The ruling government having used the scheme as a political bait to woe voters is bent on rushing the scheme through with the danger of it not being sustainable. The opposition NDC who introduced the cash and carry system but started a similar NHIS on a pilot basis in the districts want that to be continued. This the current government sees as a political threat.

The funding issue has generated much heat than the political aspect explained above. Many people including the NDC and the labour unions under the Trade Union Congress (TUC) are against the main source of funding the scheme. The bill imposed a national health insurance levy on members of the scheme in order to finance the scheme. This is typical of premiums paid for health insurance schemes. However, the problem arose when the government decided to use a 2.5% deduction of workers contribution to the Social Security and National Insurance Trust (SSNIT).

The TUC threatened to take government to court and organised not too effective nationwide demonstrations. The opposition NDC boycotted parliament on the day of passing the bill into law. The minority organised a press conference to justify this stance. They asked government not to use the SSNIT since they have limited scope to absorb the scheme and also the deductions will jeopardise the lifespan of the scheme.

The above paragraphs put the past events on the NHIS into the right perspective, which forms the basis of this article. We will look at the need for adequate independent research into the effect of the 2.5% deductions on the SSNIT. This will go a long way to stabilise the situation for both government and the public. Also we take a cue from the NHS in the UK, which has existed in many forms since the NHIS Act in 1912. The government of Ghana with its politicians have taken to responding to any report about the economy. Any report about the economy which is not in their favour will be responded to and the source of data for that particular analysis is condemned. This was demonstrated by the recent response by Dr. Osafo-Marfo on the slow pace of the economy in the first quarter reported by CEPA. The government should rather make data available and encourage such independent bodies to carry out research work on all aspect of the society.

An independent report from the Ghana Society of Actuaries or CEPA etc about the effect of the 2.5% deduction from the SSNIT contributions could have settled the minds of many. The government’s assertion that many countries have used 15% instead of the 17.5% is rather unfortunate. This means that government is knowingly overtaxing the working public on the Social security contributions by 15% all this time the NPP has been in power. A simple proportion can tell you that if SSNIT cannot manage the 17.5% then it cannot do better with 15% overnight. What do the Finance Minister and his deputy mean with prudent investment and a yield of 8% p.a., SSNIT could turn its 3.9 trillion cedi assets into a very viable fund?

Folks, let us not be deceived by mere rhetoric and political statements. We are talking about asset classes in Ghana involving treasury bills (with the longest maturity being one year), three year government index linked bond, dollar denominated stock of corporate bonds, less than 30 listed equity stock market and a volatile housing market plaque with land litigations and guards. All these coupled with unnecessary government interventions in the investment decision making at SSNIT. Where can the 8% return come from amidst high inflation? How can a long term fund like SSNIT match its liabilities to contributors with such limited assets to invest in and grow. Please make data available for academia to help in this regard. There may be a way forward.

It was also claimed that the director of SSNIT at a conference in Swedru admitted to the fact that through actuarial analysis the 2.5% deduction will reduce the duration of the scheme from 50 years to 25 years. If true, then this is a very alarming statement, which needs further actuarial research. It is unfortunate that SSNIT has become an unwilling accomplice to this gross disservice to the people of Ghana.

Given the fact that the management of SSNIT has been under public scrutiny for fund mismanagement, high salaries for its directors etc, I therefore call on the management to come out and demonstrate to Ghanaians the new ways and prudent investments that they have discovered and which did not exist previously. Also how the new investment portfolio is going to look like for a rate of investment return of about 8% as quoted by the deputy minister of finance given the high rate of inflation.

Fellow countrymen both home and abroad who are privileged to be educated come to the aid of the general public and explain the effect of the 2.5% on the national pension. I believe this is a noble call of service to mother Ghana devoid of any politics. Nobody should get me wrong here, I agree in principle to the idea of better healthcare system, which can replace the cash and carry. I therefore agree with KSM in his uncensored thoughts (asemsebe) reported by the chronicle recently.

Folks, we all want a National Health Insurance Scheme and we should all back any government that wants to implement it. But the fact is when you look at the four components of the health delivery chain, it is clear that the government does not have the adequate structures in place at this point to support its successful implementation.

KSM went on to ask why the politics about the issue? Besides, I advise against government intervention in economic activities. You see folks, Governments have a tough time governing even under the best of circumstances and the last thing it should do is to assume additional critical operational roles in the economy. The record is clear that governments are inefficient when it comes to operating businesses. A better approach is for government to spend a couple of years focusing on the creation of the necessary conducive environment, especially within the insurance industry. This would allow private sector resources to provide the services that the NHIS is expected to fulfill. Let’s face it, how many people in Government today have run successful businesses and how many truly understand what it takes to develop and operate a commercial business, let alone running a complex nationwide system like NHIS?”

The U.K, which has run such a system since the National Insurance Act 1946, which came into force in 1948 is having serious problems. The political thought at the time was that if the National Health Service (NHS) gave treatment free people would get treatment early and public health would improve, and the population would be fitter. The cost to the NHS would then decrease.

Some hope indeed! The demands on the service has steadily increased year on year, charges for some services had to be made and the NHS has continuously been under resourced. There are long waiting lists for treatment etc. That is still the position today. This same political thought is being followed in Ghana on the NHIS even though we have the benefit of hindsight.

The system, which has been advocated by some people for healthcare and medical services in the future, is a partnership of the state and the private sector to provide a national scheme. A similar system was operational in the U.K in 1912, when compulsory sickness insurance was introduced under the NHIS for employed people between the ages of 16-70.

The Friendly Society Movement ran the scheme and many existing societies set up sections or became approved societies. Some larger insurance offices set up countrywide approved societies.

Individuals were free to choose their approved societies, and societies could select their members, but could not refuse anyone because of age. The main benefit was a weekly sickness benefit and a flat contribution was paid weekly by people of all ages. A government subsidy was given to make up the balance of contributions.

Such a system can be adopted in Ghana with the current insurance companies running the NHIS in partnership with government and an effective regulatory system as proposed in the current NHIS Act put in place. The insurance companies will have the capacity to afford the expertise needed to design the schemes. Each insurance company may have a slightly different scheme and compete on the benefits or contributions. This will be good for the general public.

Concerning affordability and availability to the public, I suggest that the scheme should be made compulsory for employed people between 21-60 years. Government, Hospitals in collaboration with the insurance companies will ensure that people in this age category carry their NHIS cards to the practitioners. In addition private health insurance schemes will run alongside the current system to provide those that will want more than the basic service to do so.

In conclusion, this article seeks to stir up the issue of the 2.5% deduction and also a lesson from the U.K. I hope this will not end the write up on this important issue.