Mistakes in health insurance’

Ther African countries would easily achieve Universal Health Coverage. The scheme, which dical Insurance, a private commercial health insurance company in Ghana, in this interview

It is not working the way we want, and again, the government hospitals have no choice but to do NHIS. But increasingly, the private hospitals are coming out of it. Once you go to a government hospital, or even a private one, yes you would get a consultation, you may not get all your labs done, then they write you a prescription and you get the drugs.

Initially, and even till now, there are pharmacies that are supposed to be supplying on NHIS, but also no longer supply due to non-payment, sometimes for as long as 18 months. It creates a bit of problem for the private sector, because now you owe a provider for more than 30 days and he is ready to stop his services. This is because they do not want you to go as far as the government did. There is a lot pressure on us to ensure we are not only paying, but also on time.

The industry itself is not growing. We have been at this 200,000 range for a very long time, so what happens is that, you are with Nationwide Insurance now, you utilise services, your premium goes up, and you quit nationwide then move to the next company. So we are kind of recycling the same people, not growing the industry per se. That is another problem we are dealing with.

Generally, the private sector is more efficient in running health insurance since companies work for profit, and this can only be achieved when they are efficient.

What do you think Nigeria learn from Ghana’s health insurance?

I used to work at Ghana’s National Health Insurance Agency (NHIA), when teams from Nigeria visited Ghana to understudy what we had. When we started, Ghana was the beacon. We seemed to have gotten it right, but, from 2013 when sustainability issues came, we are no longer the shining star.

What do you think you got right at the beginning?

I do not know whether we got it right. When we started, - the premiums like I said were nothing to write home about – and we are using tax funding, with the number of enrolees low. But once the numbers increased, the tax could no longer sustain them. People aged 18 below as well as 70 and above get free healthcare, those in between, who work in the formal sector are also still free. Anybody having a baby also got free care, so there was a lot of frees.

As for the informal sector in the middle, whether you could afford to pay or not, certain could be gotten for free, like maternal care, yet the premiums being paid were not realistic. They became a bigger chunk since informal is more than the formal sector. Once you got more people in the informal sector registering for almost nothing, the state could no longer sustain it, and that is what went wrong.

You get the taxes from formal sector, the indirect tax from NHIL but it still could not sustain all the freebies in the middle. In the beginning, it seemed right, but it was like a disaster waiting to happen and it was forecasted by a few donor agencies. It was bound that by 2012/2013, if Ghana did not find alternative source of funding, it was not sustainable, and sure enough, it happened. As to whether we really got it right in the beginning, I do not know.

Do you think the problem could be tied to low tax revenue?

If the NHIS is to be funded by tax, then the tax net needed to be widened. Again, our minimum benefits package is very generous. It covers about 95 percent of health conditions in Ghana, including major things like heart. In the beginning, and at least on paper, it covers a lot of things.

Now, people are getting just Panadol because the providers are refusing to supply hospitals. However, if they were being paid, they would have supplied it. For instance, the price of Panadol on the open market is 1GHS, but NHIS is paying 20 Pesewas. Even at the 20 Pesewas, government does not make payments for like 12 months, so they are no longer going to supply. As for consultation, you train the doctor, so he will talk and give you prescription, but as for where you get the medication, that will be your problem.

It was not sustainable from the word go, but it looked good. As we went along, the faults started showing and that is where we are now. So, really, I don’t know what Nigeria can learn, but they can at least not make the same mistakes we are making. I think the government cannot carry everybody; let those that can pay do so.

So, maybe Nigeria should not make the same mistake as Ghana in thinking it can support health insurance with taxes, and very low premiums. I think they should determine the premiums actuarially. Healthcare is expensive, I do not know about Nigeria but in Ghana, everything is imported, which makes healthcare very expensive. This makes it difficult to sustain it. If we are able to get an industry that produces some of the drugs, then it will be a different ball game. But, as long as we are importing everything and we don’t want to pay realistic premiums for it, there is no way it will work, and the state cannot carry everybody.

Our tax system is poor. Since it is not wide enough, we end up taxing the same formal sector people and it does not help much. I think Nigeria should not make the same mistake. For me, I still believe the two-tier approach will be better because, at least it is working with pensions. There is even a third one, which is optional, the Providence Fund. The first two are statutory, while the third is optional. If we put the same approach to health, we will get results. I do not know what Nigeria will learn from this, but at least, do not make the same mistakes. Again, on the healthcare provider side, we need people to control cost from that side it is not easy. We cannot keep increasing premiums, so costs need to be controlled at that side. However, if you look at the NHIS, you do not control the cost so much that you end up compromising quality. That has to be controlled as well.