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Drug Coverage in Ghana’s National Health Insurance Scheme

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  • 301
    Drug Coverage in Ghana’s National
    Health Insurance Scheme
    Questions to Consider while Reading This Case
    This case relates to the issues of fi nancing and paying for medicines presented in chapters 7
    and 8. The case illustrates the pharmaceutical fi nancing choices facing low- and middle-in-
    come countries.
    If Ghana wanted to provide expanded access to medicines, what other choices did it have
    besides creating something like the NHIS?
    What were the particular problems that the NHIS drug benefi t was intended to overcome?
    To what extent, as of 2008, had it accomplished its goal?
    Who ended up actually paying for the benefi t?
    What role did decentralization play in the scheme’s emerging problems?
    If you were to advise the government, what changes in the scheme would you suggest?
    How can it make revenues match expenses?
    This case was prepared by Nathan J. Blanchet, Marc J. Roberts, and Michael R. Reich. It is intended
    as a basis for class discussion rather than as an illustration of either e ective or ine ective handling
    of an administrative situation.
  • 302 Case Study J
    In January 2009, Ghana’s former vice president, John Atta Mills, of the
    National Democratic Congress, won a runo election for president by a very
    narrow margin—about one half of one percent—and with the narrowest of
    parliamentary majorities. It was a major victory for a man who had lost the
    previous two elections in 2000 and 2004. A big decision facing the incoming
    administration was what to do about the fi nancial crisis that was then devel-
    oping in the countrys recently introduced National Health Insurance
    Scheme (NHIS), especially with respect to its drug benefi ts. The scheme
    had been the centerpiece of the rival New Patriotic Partys program at the
    beginning of the decade. But by 2008, medicine spending accounted for
    nearly half of annual NHIS expenditures (46 percent), and funding to sup-
    port the system was becoming insu cient.
    As of 2008, Ghana’s health system functioned relatively well compared to
    those in similar African countries. After two decades of reform, 60 percent
    of the population lived within an hour’s travel time (by foot) of a health
    facility. With two doctors and nine nurses or midwives per 10,000 people,
    Ghana’s human resource levels were about twice those of its neighbors.
    About 70percent of all children received BCG (bacille Calmette-Guerin,
    a vaccine for tuberculosis [TB]); measles; diphtheria, pertussis, tetanus
    (DPT); and polio immunization by 12 months. In addition, rates for several
    individual vaccinations were in the mid-90 percent range. The total fertility
    rate had also decreased markedly from 6.4 births per woman in 1998 to 4.0
    births per woman in 2008 (GSS 2009). Life expectancy at birth was 60 years,
    and World Health Organization (WHO) data put under- ve mortality at 115
    per 1,000 live births.
    All this had been accomplished with a per capita income of about
    US$590 and with 29 percent of the population living below the poverty
    line (World Bank 2009). Ghana had attained the Abuja Declaration target
    of allocating 15percent of public spending to health, although total health
    expenditures remained low (at US$33 per capita, compared to an average
    of US$75 in lower-middle-income countries) (World Bank 2009). The
    country was rapidly urbanizing, though about 60 percent of the popula-
    tion still resided in rural areas and agriculture accounted for about one-
    third of the national economy.
    Ghana’s health care delivery system included both public and private
    sector facilities (48 percent and 9 percent of all facilities, respectively)
    (Segre and Tran 2008). Nonprofi t facilities, most notably those run by the
    Christian Health Association of Ghana, received substantial fi nancial sup-
    port from the government and were often viewed as an “implementer”
    alongside the (larger) public Ghana Health Service. However, frequent
    stock-outs at all these facilities, even of essential medicines, regularly drove
  • Drug Coverage in Ghana’s National Health Insurance Scheme 303
    patients to the private sector. Because 90 percent of private pharmacies
    were located in urban areas, in rural areas licensed “chemical sellers” played
    a prominent role in supplying medicines to the population and were often
    the fi rst point of contact for patients seeking care.
    The disease burden confronting the system had been steadily changing.
    Infectious diseases still accounted for a large share of outpatient visits, with
    malaria alone recently accounting for 40 percent. Directly Observed Treat-
    ment Short-course coverage for TB had technically reached 100 percent,
    but the quality of that coverage remained low in many places (USAID 2009).
    The countrys HIV prevalence (between 2.2 percent and 3.6 percent) was
    below prevalence rates in many other countries in the region (Ballou-Aares
    et al. 2008). Recent economic growth had led to an increase in noncommu-
    nicable diseases. WHO reported rises in hypertension, diabetes, chronic
    renal disease and cancer, as well as in alcohol and tobacco use and substance
    abuse (WHO 2006).
    The National Health Insurance Scheme
    In 2000, the opposition New Patriotic Party (NPP) was voted into power, in
    part based on its campaign promise to abolish the cash-and-carry drug pol-
    icy and fees for outpatient services that had been introduced during the
    severe economic turmoil in the 1980s. (The only two previous elections, in
    1992 and 1996, had been won by the ruling National Democratic Congress
    [NDC]. That party was established by Flight Lieutenant Jerry Rawlings,
    who originally came to power in a military coup in 1981.) In 2003, the NPP
    fulfi lled its campaign promises by passing the National Health Insurance
    Act. It did so over the vehement opposition of the NDC, which cooperated
    with allied unions to organize strikes in protest and even walked out of the
    legislature in an unsuccessful e ort to block passage of thereform.
    In this highly charged climate, infl uential leaders in the NPP decided
    that the new initiative had to meet three criteria:
    The policy had to result in establishment of a national system that could
    quickly be scaled up to cover the majority of the population.
    The policy had to be publicly perceived as an NPP initiative, not a con-
    tinuation of the previous governments e orts.
    The policy had to be formulated and passed through Parliament before
    the elections in 2004.
    The creation of the NHIS followed in 2004, and actual benefi ts began to be
    provided in late 2005 (Witter and Garshong 2009). (The NPP was returned

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Drug Coverage in Ghana’s National Health Insurance Scheme

Illustrates the dilemma facing a low-income country that is trying to respond to citizen dissatisfaction with the costs of medicines but faces the major challenge of how to pay for these benefits. The National Health Insurance Scheme (NHIS) system Ghana created is often called “social health insurance,” but the Ghanaian version is far from ideal. The new system seems to have met some of its goals: financial protection has improved, satisfaction is up, and price barriers to effective access have receded enough so that utilization has increased. That increase, however, is both a sought-for result and a longer-run problem, since surplus funds have now been depleted, drug costs have increased steeply, tax revenues will generally grow only as quickly as the economy, and the demand for medicines is likely to grow much faster. The current benefit package and financing system cannot survive in the long run without significant modifications.

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