Financing health services in Ghana: policy implications of selected approaches with reference to the Ashanti Region
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Date
1997-07-07
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Abstract
“Good health” pilots “economic development” since economic development is a planning process requiring people of a sound mind which can only be found in sound bodies both of which are the manifestations of “good health”.
Eager to achieve rapid economic development, early governments of developing countries saw the way forward in a supply-led approach of “free health services” to all citizens as a holistic measure to ensure good health Experience has shown that this policy led to inefficiency in resource utilization and allocation in the health services sector.
A demand-led approach emerged over the years as a way of correcting the inefficiency of resource use and allocation, aimed at treating “health services” as any other normal good in the market. Cost-sharing policies, particularly proposed by the Economic Recovery Programme (ERP) embarked upon in Ghana, were seen as just one mild step in this demand led approach. But the critics think otherwise; that cost-sharing in the health sector is a policy without a human face, since a demand led approach basically allows for free operation of market forces and decision making in this setting based on rationality and perfect knowledge of the market. Ironically, it is when one is in dire need of health, services that ability to be rational and access to knowledge are at their lowest; hence the rejection of the demand-led approach.
It is on this background that the study was set with objectives to:
- Review the major health financing polices in Ghana since independence;
- Examine the tears of the critics that the current health financing policies personified by user charges, drug revolving fund (cash and carry) are inappropriate, particularly pricing out the low income sector of the Ghanaian population; and
- Suggest the nature that future health financing policies should take.
The first objective was perceived from a national dimension, while the second objective was examined using the Ashanti Region as a case study. The third objective was therefore achieved by inference from the second objective including a suggested area of future research.
The method employed to achieve the objectives was to use secondary data for the history of health financing policies and to use field surveys in the Ashanti Region, by categorizing the various health service providers, and randomly sampling these and consumers for study. Six out of the eighteen districts in the Ashanti Region were sampled for the study. The results of the analysis revealed that:
1. The lowest income category are willing to pay for health services especially where the cost of services included the full complement of prescribed drugs. Availability of the doctor and the drugs was the bottom line determinants of willingness to pay.
2. Cost of drugs is the major component of both health provision and consumption.
3. The payment mechanism impacted utilization (dampening effect) more than cost considerations perse.
4. Distribution of health services and resources, continue to be biased in favour of the urban centres while curative medicine continue to attract more budgetary allocation than preventive care.
5. The equal payment system for drugs by both the rich and the poor at the government-owned health facilities further widens the income gap.
In the light of these revelations, future health financing policies must among others, consider:
1. Allocation of more resources to preventive medicine, promotive and educative programmes;
2. Private providers should be encouraged to cater for the urban health needs while the government concentrates on the urban poor and the rural areas.
3. An area requiring further research is how to institute discriminate pricing for health services rendered to the top and the lowest income brackets.
Description
A thesis submitted to the Board of Postgraduate Studies, Kwame Nkrumah University of Science and Technology, Kumasi, in partial fulfilment of the requirement for the award of the Degree of Master of Science in National Development Policy and Planning, 1997