Could Cost Sharing Sustain the Ghana National Health Insurance Scheme?

Could Cost Sharing Sustain the Ghana National Health Insurance Scheme?
Jun 09, 2022

By: Anthony Afful-Dadzie, Eric Afful-Dadzie & Seth Mensah

The University of Ghana Business School (UGBS) has a strategic goal to establish an environment that fosters revolutionary and policy relevant research for development. Prof Anthony Afful-Dadzie, an Associate Professor and Head of the Department of Operations and Management Information Systems at UGBS has collaborated with other researchers to undertake an investigation on whether cost sharing can sustain the Ghana National Health Insurance Scheme. In their paper, the researchers note that people in developing countries typically live below the average poverty line and thus see health insurance as a basic necessity. Consequently, many developing countries have various health insurance schemes to cater for the health needs of their people. The researchers note that a growing challenge facing such schemes is the issue of sustainability. Such has been the fate of the Ghana National Health Insurance Scheme (NHIS) which was established in 2003 to replace the then repressive out-of-pocket payment system. The NHIS has been in deficit since 2009 which threatens its survival. As a result, a number of interventions have been proposed, one of which is cost sharing.

Prof. Afful-Dadzie and his team of researchers argue that cost sharing, where a subscriber pays a portion of his/her total medical cost, can be considered as a form of an indirect tax tied to utilization – the more a subscriber utilizes the insurance benefit package, the more tax the subscriber pays – and thus can serve as an indirect control measure on utilization and claim cost. With this in mind, the researchers set out to determine the optimal cost sharing rate which when employed could help sustain the NHIS financially without negatively affecting enrolment.

To begin with, Prof Afful-Dadzie and his team collected 1814 responses across Ghana from a carefully designed questionnaire on various cost sharing rates and people’s willingness to use the NHIS given the cost sharing rate.

Their analysis revealed that a 5% cost sharing rate would have kept the scheme in surplus between 2007 and 2015. In addition, the 5% cost sharing rate would have led to virtually no change in enrolment and would have reduced utilization rate by about 15%. To put it in simple terms, the thought of an NHIS subscriber paying GHS5 out of a total medical bill of GHS100 would have been sufficient to keep the scheme in surplus. Intuitively, this happens because the fear of paying out the cost sharing amount helps to reduce wasteful utilization of the NHIS scheme in addition to benefiting from the cost sharing amount paid by the subscriber in the event of use. 

Interestingly perhaps, the researchers also found that women in general have higher enrolment and utilizes health insurance more than men when under cost sharing.

The full research can be retrieved from:

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