A Study Into The Financial Sustainability of Offinso Mutual Health

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A Study into the Financial Sustainability of Offinso Mutual Health
Insurance Scheme

+ofi &wusu ,e-oah
1.
/&S0S +&R/01&1A
2
1.School of 2usiness) S"iritan 3ni4ersit5 6ollege) !.&.2o7 111) 08isu) Ashanti) 9hana.
2.&ffinso /utual :ealth Insurance Sche;e) !. &. 2&<. %=1 &ffinso) Ashanti 9hana
.0-;ail of the corres"onding author> Sir?o5wa5o@g;ail.co;

Abstract
It is widel5 recogniAed that a strong financial -ase is a "rereBuisite for an effecti4e health care deli4er5 s5ste;.
6urrentl5) 9o4ern;ents in su--Saharan Africa are facing serious financial constraints in their atte;"ts to "ro4ide
-asic health ser4ices to their "eo"le A-e?ah-N?ru;ah) et.al 2**9#. Che "ur"ose of this research was to
deter;ine> the adeBuac5 of funding of &ffinso :ealth insurance sche;eD the relationshi" -etween re4enue trends
and clai;s ;anage;ent fro; 2**6 to 2*11D and ;easures "ut in "lace to ensure the financial sustaina-ilit5 of
the sche;e. In doing so the funding adeBuac5) re4enue trend and clai;s "a5;ent fro; 2**6 to 2*11) and
financial sustaina-ilit5 strategies of &ffinso health insurance sche;e was e7a;ined. Che research was -oth
descri"ti4e and causal. Che research strateg5 was sur4e5 and single case holistic. Che research "hiloso"h5 was
-oth "ositi4is; and inter"reti4is;. Che research also used -oth deducti4e and inducti4e a""roach. 1ata was
anal5sed using Buantitati4e techniBues li?e ;ean) freBuenc5) correlation) standard de4iation) and others. Che unit
of anal5sis was staff of &ffinso :ealth Insurance Sche;e. Che total "o"ulation siAe of 2* was used. In addition
e7tract fro; the financial records of the sche;e was also used. No s"ecific sa;"ling techniBue was used since
data was collected fro; the entire "o"ulation. It was found out that the sche;e is not adeBuatel5 fundedD there is
a highl5 "ositi4e relationshi" -etween re4enue and clai;s "a5;ent and that clai;s "a5;ent consu;es
su-stantial "ortion of total re4enueD the sche;e has adeBuate defensi4e strategiesD there is "oor "rudent fund
;anage;entD and inadeBuate sourcing strategies. 9enerall5 the sche;e ;a5 -e facing financial sustaina-ilit5
"ro-le;s in the long run as e4idenced in the research findings.
Keywords: AdeBuac5 of funding) Financial sustaina-ilit5) /utual health insurance) &ffinso.

1. Introduction
/an5 low-and ;iddle-inco;e countries rel5 hea4il5 on "atientsE out-of-"oc?et health "a5;ents to finance their
health care s5ste;s <u et al. 2**7#. According to the Forld :ealth &rganisation F:&#) e;"irical e4idence
indicates that out-of-"oc?et health "a5;ent is the least efficient and ;ost ineBuita-le ;eans of financing health
care and "re4ents "eo"le fro; see?ing ;edical care and ;a5 e7acer-ate "o4ert5 F:&) 2***#.Chere is a
growing ;o4e;ent) glo-all5 and in the Africa region) to reduce financial -arriers to Bualit5 health care generall5)
-ut with "articular e;"hasis on high "riorit5 ser4ices and 4ulnera-le grou"s Fitter and 9arshong) 2**9#.
:ealth insurance sche;es are increasingl5 recogniAed as a tool to finance health care "ro4ision in
de4elo"ing countries and has the "otential to increase utiliAation and -etter "rotect "eo"le against catastro"hic#
health e7"enses and address issues of eBuit5 F:&) 2***#. :ealth financing s5ste;s through general ta7ation or
through the de4elo";ent of social health insurance are generall5 recogniAed to -e "owerful ;ethods to achie4e
uni4ersal co4erage with adeBuate financial "rotection for all against healthcare costs 9o-ah and Giang) 2*11#.
/an5 African countries including 9hana) Rwanda) CanAania) +en5a and Nigeria are e7"eri;enting with a
4ariet5 of co;"rehensi4e) social health insurance sche;es that co;-ine -oth "ri4ate and "u-lic-funding
arrange;ents 6arrin et al. 2**$D Fitter and 9arshong) 2**9#.
It is widel5 recognised that a strong financial -ase is a "rereBuisite for an effecti4e health care deli4er5
s5ste;. 6urrentl5) 9o4ern;ents in su--Saharan Africa are facing serious financial constraints in their atte;"ts to
"ro4ide -asic health ser4ices to their "eo"le A-e?ah-N?ru;ah) et.al 2**9#. F:& 2*1*# added that in 9hana
there are sustaina-ilit5 concerns with res"ect to the national :ealth Insurance sche;e. Che financial
sustaina-ilit5 of the N:IS in 9hana is threatened -5 a nu;-er of factors. Chese factors include> Chere see; to
-e "ro4ider incenti4es to o4er-"rescri-eD 'er5 generous -enefit "ac?age to co4er 9(H disease -urdenD Ineffecti4e
referral s5ste; due to which "atients are a-le to see? care fro; higher le4el facilitiesD and 3nder-de4elo"ed
;onitoring s5ste;s within the N:IS. Chese concerns are "artl5 addressed -5 the fact that the N:IS re4enue is
;ore sta-le due to ear ;ar?ed ta7 re4enue and that there are "otential rich clients left to -e co4ered. Che share of
"aid enrolees has increased along with the decline in the I6ash and 6arr5I "a5;ent in all the regions and the
N:IS re4enue is a do;inant contri-utor to hos"ital re4enues F:&) 2*1*#.

1.1. Problem Statement
It is widel5 recogniAed that a strong financial -ase is a "rereBuisite for an effecti4e health care deli4er5 s5ste;.
6urrentl5) 9o4ern;ents in su--Saharan Africa are facing serious financial constraints in their atte;"ts to "ro4ide
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-asic health ser4ices to their "eo"le A-e?ah-N?ru;ah) et.al 2**9#. Chis i;"lies that a countr5 cannot achie4e
Bualit5 health care for its "eo"le if it cannot achie4e financial sustaina-ilit5. :owe4er) financial sustaina-ilit5
co;es with sources of funding. 2ut the issue is not onl5 entirel5 a-out sources of funding -ut the adeBuac5 of
the funds to su""ort clai; "a5;ents and other i;"ortant e7"enditure. Chis stud5 therefore sought to deter;ine
the adeBuac5 of funding the &ffinso /utual :ealth insurance Sche;e.
Che second "ro-le; that has contri-uted to the conduct of this research is that a lot of concerns ha4e
-een raised a;ong 9hanaians as to the re4enue "ositions of the National :ealth Insurance sche;es. /anagers of
the sche;e ha4e often co;"lained a-out lac? of re4enue to "a5 insurance clai;s. Added to this has -een the
accusation ;eted out to ser4ice "ro4iders o4er high insurance clai;s. /an5 9hanaians -elief that these ser4ice
"ro4iders deli-eratel5 increased their tariffs 8ust to de;and higher clai;s. It has often -een said that this
-eha4iour was one of the ;ain dri4ing force that necessitated the introduction of ca"itation grant in Ashanti
region. Chis stud5 therefore sought to find out the relationshi" -etween re4enue trends and clai;s "a5;ent
trends of &ffinso :ealth Insurance sche;e fro; 2**6 to 2*11.
Gastl5) a lot of "eo"le ha4e dou-ted the financial sustaina-ilit5 of the health insurance sche;e in 9hana.
/an5 ha4e e4en "redicted the i;;inent colla"se of the sche;e if strategies are not "ut in "lace to ensure it
sustaina-ilit5. Che onus therefore lies on /anagers of National :ealth Insurance Sche;e to ado"t a
co;"rehensi4e financial sustaina-ilit5 strateg5 to sa4e the sche;e fro; colla"sing. Chis stud5 therefore sought
find out the ;easures "ut in "lace -5 /anagers of &ffinso :ealth Insurance Sche;e to ensure its financial
sustaina-ilit5.

1.2. esearch Ob!ecti"es.
Fro; the re4iew of the "ro-le; state;ent) the following research o-8ecti4es ha4e -een deduced>
i. Co deter;ine the adeBuac5 of funding for &ffinso /utual :ealth Insurance Sche;e.
ii. Co deter;ine the relationshi" -etween re4enue trend and clai;s "a5;ent trend fro; 2**6 to 2*11
iii. Co deter;ine ;easures "ut in "lace to ensure financial sustaina-ilit5 of the sche;e.

1.=. esearch #uestions.
In line with the a-o4e research o-8ecti4es) the following research Buestions will -e as?ed>
i. :ow adeBuate are the funding for &ffinso :ealth Insurance Sche;eJ
ii. Fhat is the relationshi" -etween re4enue trends and clai;s "a5;ents trends of &ffinso :ealth
Insurance Sche;e fro; 2**6 to 2*11J
iii. Fhat ;easures has /anagers of &ffinso :ealth Insurance Sche;e "ut in "lace to ensure its financial
Sustaina-ilit5J

$.%. &iterature e"iew.
$.1. 'ature of Insurance.
Che ter; insurance descri-es an5 ;easure ta?en for "rotection against ris?s. Fhen insurance ta?es the for; of a
contract in an insurance "olic5) it is su-8ect to reBuire;ents in statutes) court decisions and the regulations of an
ad;inistrati4e agenc5 e;"owered with the authorit5 to direct and su"er4ise the i;"le;entation of "articular
legislati4e acts Seddoh) et.al) 2*11#. According to Free 1ictionar5.co; 2*11#) insurance is a contract where-5)
for a s"ecified consideration) one "art5 underta?es to co;"ensate the other for a loss relating to a "articular
su-8ect as a result of the occurrence of designated haAards. Seddoh) et.al 2*11# added that in an insurance
contract) one "art5) the insured) "a5s a s"ecified a;ount of ;one5) called a "re;iu;) to another "art5) the insurer.
Che insurer) in turn) agrees to co;"ensate the insured for s"ecific future losses. Ag5e"ong) et.al 2**9# agreed
and added that the losses co4ered are listed in the contract) and the contract is called a "olic5. Che two
reBuire;ents of a contract for a s"ecified consideration and a "re;iu; for co;"ensation for s"ecific future
losses against a "olic5 are a significant "art in deter;ining the e7act nature of the insurance transaction agreed
Seddoh) et.al) 2*11#.
It is a fact that insurance is -ased on a willingness to "a5 "re;iu;s in return for access to ?nown
-enefits on de;and. 2eatie) et.al 199$# noted two s5ste;s of "re;iu; "a5;ent> the household or indi4idual
le4el. Che "re;iu;s ;a5 also -e "aid -5 or on -ehalf of s"ecific indi4iduals in the "o"ulation. In ;an5
"u-lications Kcontri-utionE and K"re;iu;Eare used interchangea-l5 Ag5a"ong and Ad8ei) 2**$#.
According to Seddoh) et.al 2*11#) this is technicall5 "ro-le;atic as Kcontri-utionsE do not "ro4ide the sa;e le4el
of e7"ectations in a "re;iu;-"a5ing insurance. In its ;ost -asic e7"lanation) Kcontri-utionsE ;a5 confer
;e;-ershi" on the contri-utor to -enefits under a s"onsored insurance. Chis does not translate into holding a
"olic5 -ased on a contract) though an5 "erson contri-uting to a s"onsored insurance that is instituted under
legislation cannot -e denied the right of -enefits identified) "ro4ided the ser4ice is a4aila-le Seddoh) et.al) 2*11#.

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$.$. easons for Health Insurance.
:ealth insurance ;a5 -e organised either as a "ri4ate sector "urchased insurance -5 indi4iduals hedging against
the ris?s and ad4erse effect of ill-health or as social health insurance. !ri4ate health insurance is usuall5 issued as
a "roduct -5 general insurance agencies or a dedicated health insurance co;"an5 along the general definition
and e7"ectations of a generic insurance fra;ewor? Seddoh) et.al) 2*11#. Fhile there is no standard definition of
Social :ealth Insurance S:I#) it can generall5 -e "ercei4ed as La financial "rotection ;echanis;) for health
care) through health ris? sharing and fund "ooling for a larger grou" of "o"ulationM F:& 2**=) "(#. Che
definition is o-4iousl5 inadeBuate in distinguishing S:I fro; other for;s of insurance as all insurance including
"ri4ate ones share ris? and "ool funds in cross su-sid5. A -asic contrast in our 4iew -etween S:I and "ri4ate
insurance is that Social :ealth Insurance -uilds on the "re;ise that the "oor are not inco;e credit worth5 and
uninsura-le through "ri4ate ;echanis;s. It -eco;es generall5 i;"erati4e that the "oor are su""orted through
social solidarit5 ;echanis;s Seddoh) et.al) 2*11#. Chis "rocess transfor;s social ca"ital through the
"o"ulationEs own financial contri-utions to a ;utual organisation o4er which the5 ha4e direct ;anage;ent
control res"onsi-ilities and into safet5 net s5ste;s in antici"ation of care during a health e4ent. 9o4ern;ent ;a5
"artici"ate to su""ort access to a ;ini;u; "ac?age of health ser4ices) chea"er drugs or e4en "ro4iding financial
su-sidies -ut has no direct "artici"ation in ;anaging the sche;e. Fhile "ri4ate insurance is an indi4idual
"urchase) social health insurance is a conscious co;;unit5 ris? "ooling Seddoh) et.al) 2*11#. Chere are 4arious
reasons for introducing Social :ealth Insurance in de4elo"ing countries. Che often-stated reason is i;"ro4ing
health financing gi4en the increasing e4idence of a direct relationshi" -etween how a health s5ste; is financed
and the "erfor;ance of its functions and achie4e;ent of its goals !re?er and 6arrin) 2**%#. 1uring the 19$*s)
user fees -eca;e widel5 i;"le;ented throughout the de4elo"ing world at the "oint of recei4ing health care
ser4ices Seddoh) et.al) 2*11#.
In 19$( the 2a;a?o Initiati4e) ado"ted as a glo-al "olic5 su""orting user fees) ad4ocated for cost
sharing and co;;unit5 "artici"ation to increase the sustaina-ilit5 and Bualit5 of health ser4ices. Che le4el of
fees differ fro; "atient grou"s) a""lied to different ser4ices and charged at different le4els -etween "u-lic and
"ri4ate facilities or "ri;ar5 le4el and hos"ital le4els to co4er all or "art of the cost of ser4ices "ro4ided 9ilson
and Ra"heal5 2**$#. Che Forld 2an? 8ustified the rationale for charging user fees as "ro4iding the additional
re4enue that could -e used to i;"ro4e efficienc5 and eBuit5D reduce fri4olous de;and and encourage the use of
low cost "ri;ar5 health care ser4ices Forld 2an? 2**%#. As an eBuit5 issue) 4arious studies ha4e drawn
attention to the wea?nesses and i;"act of user fees on the "oorest "eo"le in de4elo"ing countries. Che "oorer the
countr5) the larger the share of health costs which is ;et -5 households through out-of-"oc?et e7"enditures. Chis
can -e as ;uch as 66H of total health costs in low-inco;e countries) =6H in u""er ;iddle-inco;e countries)
and 2*H in de4elo"ed countries) as a weighted a4erage across the "o"ulation Seddoh) et.al) 2*11#. 9ilson 1997#
also argued that user fees generall5 affect ser4ice utiliAation negati4el5) a ;a8or financial -arrier to accessD
su""ress de;and and increase ineBuities in access -etween the rich and "oor) and ur-an and rural "o"ulations.
04idence fro; +en5a and CanAania suggests that due to user fees) the rich tend to consu;e ;ore "u-licl5
financed hos"ital care "er ca"ita than the "oor. Chis i;"lies that the rich recei4e a dis"ro"ortionate share of
go4ern;ent su-sidies 9riffin and Shaw) 199(#. Another health financing factor "ro;"ting the need for
insurance is dwindling do;estic resource allocation to health. 6ontri-uting factors include> a Kdecline in health
s"ending caused -5 a decline in go4ern;ent re4enues as a share of 91!D growth of the "ri4ate and infor;al
sectors where ta7 co;"liance was lowerD a shrin?ing of traditional ta7 -ases such as state-owned enter"risesD and
"ressures for ta7 cut fro; a "o"ulation e7"eriencing declines in real inco;eE Fagstaff and /oreno-Serra 2**9#.
Co this) one ;a5 add a dwindling e7ternal aid flow. Che target of allocating *.7H of de4elo"ed countr5 9NI as
&fficial 1e4elo";ent Assistance &1A# to de4elo"ing countries has not -een ;et. Cotal net &1A fro; the 22-
;e;-er countries of the &061 1e4elo";ent Assistance 6o;;ittee 1A6#) the worldEs ;a8or donors) in 2**$)
was 3SN 119.$ -illion. Chis re"resents *.=*H of ;e;-ersE co;-ined gross national inco;e 9NI# Seddoh) et.al)
2*11#. As of ;id-2**() de-t cancellation co;;it;ents under the :ighl5 Inde-ted !oor 6ountries initiati4e were
under-funded -5 a""ro7i;atel5 3SN 12.= -illion. Chis has "ro;"ted a series of reactions and co;;it;ents -5
heads of states. In 2***) go4ern;ents in Africa agreed to allocate at least 1(H of their annual national -udgets to
fund the health sector Seddoh) et.al) 2*11#. Che co;;it;ent was reaffir;ed in the /a"uto 1eclaration. Recent
resolutions F:&) 2**(# ha4e shown that the co;;it;ents are -eco;ing difficult to achie4e -ecause of low
do;estic and e7ternal resource ;o-ilisation. In /a5 2**() the fift5-eighth Forld :ealth Asse;-l5 ado"ted a
resolution F:& 2**(# urging ;e;-er states to consider using alternati4e ;echanis;s of resource ;o-ilisation
including social health insurance. /an5 countries are also -eginning to e;-race uni4ersal health co4erage 3:6#
as a 4ia-le financing ;echanis;. 3:6 is defined -5 the Forld :ealth &rganisation F:&# as Laccess to ?e5
"ro;oti4e) "re4enti4e) curati4e and reha-ilitati4e health inter4entions for all at an afforda-le cost) there-5
achie4ing eBuit5 in access.M Although ;odels for 3:6 4ar5 fro; one countr5 to another) go4ern;ents are
reorganising their national health s5ste;s to share health costs ;ore eBuita-l5 across the "o"ulation and its life
c5cle) instead of concentrating the -urden on then few who face catastro"hic illness in an5 gi4en 5ear F:&)
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2**(#.
Fith increasing funding ga"s and di;inishing ?nown sources of funding and the dri4e for uni4ersal
co4erage) Social :ealth Insurance S:I# -eco;es a""ealing. It is seen as a wa5 of re;o4ing the i;"act of health
e7"enditure on the "oor) "rotecting health s"ending in the health sector and facilitating increases in health
resource a4aila-ilit5. It also holds the "otential for "ro;oting a ;ore efficient health s5ste; Seddoh) et.al)
2*11#. 9i4en these reasons) the o-8ecti4es for go4ern;ents "ursuing an insurance "olic5 ;a5 -e su;;arised as>
;o-ilise additional non-go4ern;ental resources and transfer so;e or all of the cost of care to those who can
afford to "a5D change the source and "attern of "ro4ider "a5;ents and related incenti4es to ?ee" down costs
within health sche;es so as to slow down cost growth ratesD i;"ro4e technical efficienc5 -5 se"arating the
financing and "ro4ision of ser4ices) there-5 introducing co;"etiti4e ;echanis;s into the health sectorD and
e7"and access to health ser4ices -5 transferring resources fro; those who can afford insurance to the "oor
Seddoh) et.al) 2*11#.

1.(. 'ature of Financin) determines *y+e of Insurance.
It is a fact that insurance is -ased on a willingness to "a5 "re;iu;s in return for access to ?nown -enefits on
de;and. 2eatie) et.al 199$# noted two s5ste;s of "re;iu; "a5;ent> the household or indi4idual le4el. Che
"re;iu;s ;a5 also -e "aid -5 or on -ehalf of s"ecific indi4iduals in the "o"ulation. In ;an5 "u-lications
Kcontri-utionE and K"re;iu;Eare used interchangea-l5 Ag5a"ong and Ad8ei) 2**$#. According to Seddoh) et.al
2*11#) this is technicall5 "ro-le;atic as Kcontri-utionsE do not "ro4ide the sa;e le4el of e7"ectations in a
"re;iu;-"a5ing insurance. In its ;ost -asic e7"lanation) Kcontri-utionsE ;a5 confer ;e;-ershi" on the
contri-utor to -enefits under a s"onsored insurance. Chis does not translate into holding a "olic5 -ased on a
contract) though an5 "erson contri-uting to a s"onsored insurance that is instituted under legislation cannot -e
denied the right of -enefits identified) "ro4ided the ser4ice is a4aila-le Seddoh) et.al) 2*11#. !re;iu;s) on the
other hand) are ris?--ased deter;ined fees that are "aid against a contract "olic5 which is held and redee;a-le
under laws of s"ecific "erfor;ance. It is indi4idualised and ris?-assessed. In the a""ro"riate use of the ter;
K"re;iu;)E there is a "rinci"le of a-ilit5 to "a5 for desira-le -enefits that naturall5 segregates and ;a5 lead to
ad4erse selection. Che indi4idual has a choice and different insurance co;"anies co;"ete on the "rice and
"ac?age offered i-id#. Gewis 2**7# o-ser4es another deter;inant "articularl5 on how "re;iu; le4els relati4e
to inco;e and the "re;iu; "rices relati4e to ;edical e7"enditures affect the "ro-a-ilit5 of "urchasing health
insurance. Che inco;e -rac?et of indi4iduals dis"oses the; towards -u5ing or not -u5ing health insurance. Che
co;"le7it5 of the "olic5 -ought will correlate directl5 with the a;ount of dis"osa-le inco;e. Che free health
insurance ;ar?et therefore has a -uilt-in ;echanis; for ad4erse selection and accounts for the "ro-a-ilit5 of
;oral haAards i-id#. Social :ealth Insurance sche;es -5 their nature atte;"t to guard against ad4erse selection)
or discri;ination on the -asis of status or disease condition 2eatie) et.al) 199$#. In ArhinfulEs "a"er) Social
health insurance should also guard against a-use and ;oral haAards Arhinful) 2**=#.
A "re;iu; -5 nature discri;inates on the -asis of -oth status or disease condition and inde7 for ris?s
of ;oral haAard. !re;iu; thus ;a5 -e an ina""ro"riate ter; to e;"lo5 under Social :ealth Insurance where
there is no defined insurance "olic5 or le4els of contractual -enefits. !a5;ents under Social :ealth Insurance
;a5 -e -etter referred to as Kcontri-utionsE. 9i4en the different s5ste;s of esta-lishing an insurance fund) it is
i;"ortant to distinguish language that is used to e7"ress the; rather than a si;"listic classification -etween
"ri4ate and social health insurance Seddoh) et.al) 2*11#. For instance) Gewis 2**7# identified an alternati4e to
"re;iu; -ased insurance s5ste;s. Chis is a ;i7ed financing arrange;ent that includes ta7--ased re4enue
allocation -5 go4ern;ents as a co;"onent of the resource en4elo"e under :ealth Insurance. It ;a5 -e adduced
in our o"inion that the success of ta7--ased re4enue allocation insurance relies on the efficienc5 of the ta7
s5ste; and "olitical discretion. In antici"ation of the resources to -e ;o-ilised) the -enefit "ac?age ;a5 -e
restricted and can -e issued in legislation or statute. Chis ;a5 -e an inclusi4e) e7clusi4e or -oth an inclusi4e and
e7clusi4e list. It) howe4er) is not a guarantee that the -enefit "ac?age ;a5 -e a4aila-le on de;and. Fhere
insurance is "redo;inantl5 ta7--ased and contri-utions do not translate into rights to deter;ine the nature of the
-enefits or the go4ernance of the sche;e such as in ;utual health insurance sche;es) it is ;ore a""ro"riate in
our o"inion to refer to it as 9o4ern;ent Issued :ealth Insurance 9I:I# Seddoh) et.al) 2*11#.
Seddoh) et.al 2*11# distinguishes -etween the two on the -asis that a Social :ealth InsuranceS:I#
should ha4e a fir; -asis in ;e;-ershi" decisions in the ;anage;ent of the sche;e and its sco"e of o"erations.
9o4ern;ent ;a5 "artici"ate -5 "ro4iding resource su-sid5) facilitate the transaction en4iron;ent and regulate it
to "rotect the citiAenEs right) -ut ;a5 not ha4e a right to legislate awa5 the decision-;a?ing authorit5 of the
sche;e ;anager or the -enefits of the ;e;-ers. A 9o4ern;ent Issued :ealth Insurance 9I:I# ;a5 -e
regulated li?e "ri4ate or social insurance) -ut the5 are 4er5 different. Che reci"ients of go4ern;ent insurance do
not ha4e to "a5 "re;iu;s) and do not recei4e the sa;e le4el of co4erage a4aila-le under "ri4ate insurance
"olicies. Che regulation of the insurance sche;e ;a5 -e gi4en to an ad;inistrati4e agenc5 e;"owered with the
authorit5 to direct and su"er4ise the i;"le;entation of the "articular health insurance legislati4e acts. Chese
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agencies are go4ern;ent -odies that ;a5 -e called co;;issions) cor"orations) -oards) de"art;ents) authorities
or -5 si;ilar references. In a 9o4ern;ent Issued :ealth Insurance 9I:I# go4ern;ent is the sole decision ;a?er
in relation to the ;anage;ent) sco"e of o"eration) le4el of contri-utions and the -enefits of the ;e;-ers
Seddoh) et.al) 2*11#. According to the; 9o4ern;ent Issued :ealth Insuranceis "redo;inantl5 a ta7--ased
insurance and contri-utions do not translate into rights of holding a redee;a-le "olic5 on de;and -ut "ro4ide
;e;-ershi" access to ser4ices a4aila-le within a defined -enefit "ac?age Seddoh) et.al) 2*11#. Chere is alwa5s
a "ossi-ilit5 that go4ern;ent can legiti;atel5 ta?e awa5 an5 or all as"ects of the sche;e and -enefit -5 the
legislature. :owe4er) in law and under a 9o4ern;ent Issued :ealth Insurance 9I:I#) if legislature issues
insurance and it re;ains in force) it cannot refuse it to a "erson who Bualifies for it Seddoh) et.al) 2*11#.

$.,. Health Insurance in -hana .onte/t. -hana0s health financin) conte/t: the 'ational Health Insurance
Scheme.
Co address financial constraints for the "oor and i;"ro4e eBuit5 in access to care) 9hana "assed a National
:ealth Insurance law in 2**= 9&9 2**=#) ;andating the esta-lish;ent of 1istrict-wide ;utual health
insurance sche;es 1/:IS# henceforth called sche;es# Jehu-A""iah) 2*11#. 9o-ah and Giang 2*11# added
that 9hanaEs National :ealth Insurance Sche;e N:IS# is a fusion of the traditional Social :ealth Insurance and
/utual :ealth Insurance and ad;inistered "eri"herall5 through 1%( district-wide ;utual health insurance
sche;es with a central s5ste; at the national le4el to collect for;al sector contri-utions. Che sche;e is designed
to "ro;ote social health "rotection through ris? eBualiAation) cross su-sidiAation) solidarit5) eBuit5 and Bualit5
care. Che :ealth Insurance law Acts 6(*# allows for the esta-lish;ent and o"eration of three t5"es of health
insurance sche;es in 9hana na;el5> 1istrict /utual :ealth Insurance Sche;es 1/:IS#) !ri4ate 6o;;ercial
:ealth Insurance Sche;es !6:IS# and !ri4ate /utual :ealth Insurance Sche;es !/:IS#. :owe4er) it is onl5
the 1:/IS that shall -e "ro4ided with su-sid5 fro; the National :ealth Insurance Fund 9&9)
2**=#.0nrol;ent in 1/:IS is legall5 ;andator5 -ut is facing non-co;"liance) as it is a social "olic5 that is
difficult to enforce) gi4en the large infor;al sector for which there is no data-ase and the need for for;al sector
wor?ers SSNIC contri-utors# to 4oluntaril5 "a5 a registration fee to -e enrolled /&: 2**9#. Che National
:ealth Insurance Authorit5 N:IA# ;andates a "re-defined -enefits "ac?age that co4ers 9(H of the disease
-urden in 9hana. Ser4ices co4ered include out"atient consultations) essential drugs) in"atient care and shared
acco;;odation) ;aternit5 care nor;al and caesarean deli4er5#) e5e care) dental care and e;ergenc5 care. Che
1/:IS contracts accredited "ro4iders "u-lic) "ri4ate and church--ased# to deli4er ser4ices to its ;e;-ers and
rei;-urses the; after su-;ission of clai;s for ser4ices. Chis s5ste; se"arates the "urchasing and "ro4ision
functions across different sta?eholders to increase trans"arenc5. 6urrentl5 the N:IS rei;-urses "ro4iders -ased
on the 9hana 1iagnostic Related 9rou"ings 9-1R9s# and fee for- ser4ice FFS# for ;edicines using a
;edicines tariff list /&: 2**9#.At the centraliAed le4el) the N:IS is regulated -5 the N:IA which also "la5s a
?e5 role in guiding ;anage;ent of the National :ealth Insurance Fund N:IF#. Re4enues fro; the N:IF are
used to "ro4ide a reinsurance ;echanis; for the 1istrict /utual :ealth Insurance Sche;es 1/:IS# and
"re;iu;s for e7e;"t grou"s Jehu-A""iah) 2*11#.

$.1. Health .are Financin).
Financing health care to ensure eBuit5 has do;inate the agenda of "olic5 ;a?ers worldwide OForld :ealth
&rganisation F:&#) 2**(#. !olic5 ;a?ersE worldwide has recognised the i;"ortance of eBuita-le health
s5ste; in achie4ing ;illenniu; de4elo";ent goals and that sustaina-le health care financing is critical for
health s5ste; "erfor;ance and for achie4ing uni4ersal co4erage OFreed;an) et.al) 2**(P. 6onseBuentl5) ;an5
low inco;e countries are considering how to refor; their health financing s5ste;s in a wa5 that "ro;otes eBuit5
and efficienc5 6hu;a and &?ungu) 2*11#. In 2**() the ($th Forld :ealth Asse;-l5 called for health s5ste;s
to ;o4e towards uni4ersal co4erage) where all indi4iduals ha4e access to Q?e5 "ro;oti4e) "re4enti4e) curati4e
and reha-ilitati4e health inter4entions for all at an afforda-le cost) there-5 achie4ing eBuit5 in accessQ. It urged
;e;-er states to ensure that health financing s5ste;s incor"orate an ele;ent of "re-"a5;ent and ris? "ooling
OF:&) 2**(P. 0Buita-le 3ni4ersal health s5ste;s can -e achie4ed not onl5 on the -asis of eBuita-le health care
deli4er5 -ut also eBuita-le health care financing. 0Buita-le health care financing can -e achie4ed onl5 when
health care "a5;ents are christened on a-ilit5 to "a5. Chis i;"lies that there ;ust e7ist so;e for; of social
financial "rotection for the "oor and 4ulnera-le in the for; of ris? and inco;e cross-su-sidies that is) fro; the
health5 to the ill and wealth5 to the "oor# 6hu;a and &?ungu) 2*11#. 0Buita-le deli4er5 of health ser4ices
ensures that "eo"le -enefit fro; health ser4ices according to need for care /cInt5re) 2**7#. Res"onding to the
F:& call) the (6th session of the regional co;;ittee for health in Africa urged ;e;-er states to strengthen
their national "re"aid health financing s5ste;s) to de4elo" co;"rehensi4e health financing "olicies and strategic
"lans and to -uild ca"acit5 for generating) disse;inating and using e4idence fro; health financing in decision
;a?ing. Che5 also called on the Forld :ealth &rganiAation F:&# to "ro4ide su""ort to fair and sustaina-le
financing and to identif5 financing a""roaches ;ost suita-le for the African region OF:&. 2**6P. :ealth
'ol.() No.1() 2*1%

6
financing s5ste;s ha4e three ;ain co;"onents. Chese are re4enue collection) "ooling and "urchasing O+utAin)
2**1P. Re4enue collection refers to the "rocess -5 which health s5ste;s recei4e ;one5 fro; households and
organiAations. !ooling refers to the accu;ulation and ;anage;ent of re4enues to ensure that the ris? of "a5ing
for health care is -orne -5 all the ;e;-ers of the "ool and not -5 each contri-utor indi4iduall5. It e;-odies the
insurance function within a health s5ste;. !ooling can -e e7"licit or i;"licit> e7"licit) when "eo"le ?nowingl5
su-scri-e to a health insurance sche;eD and i;"licit) where contri-utions are through ta7 re4enue O+utAin) 2**1P.
!urchasing is the "rocess -5 which "ooled funds are "aid to "ro4iders in order to deli4er a set of health
inter4entions. It in4ol4es the transfer of "ooled resources to ser4ice "ro4iders on -ehalf of the "o"ulation for
which the funds are "ooled O+otAin) 2**1P. !urchasing can -e strategic or "assi4e OF:&) 2***P> strategic
"urchasing in4ol4es a continuous search for the -est wa5s to ;a7i;ise health s5ste;s "erfor;ance -5 deciding
which inter4entions should -e "urchased) while "assi4e "urchasing i;"lies following a "re-deter;ined -udget or
si;"l5 "a5ing -ills when "resented. Strategic "urchasing is -est for uni4ersal co4erage. In ;ost cases) "ooling
and "urchasing are i;"le;ented -5 the sa;e organisation. 1e"ending on how the5 are designed) "a5;ent
;echanis;s can influence "ro4ider -eha4iour O+utAin) 2**1PD the5 can act as incenti4eRdisincenti4es to
"ro4iders. Achie4ing uni4ersal co4erage will de"end on the e7tent to which countries co;-ine these functions to
ensure there is eBuita-le and efficient re4enue generation) the e7tent to which financing s5ste;s encourage
cross-su-sidisation and the degree in which health s5ste;s "ro4ide or "urchase effecti4e health ser4ices for the
"o"ulation OF:&) 2**(P.

$.2. Fundin) Health Insurance Scheme in -hana.
Che sche;e is financed -5 a National :ealth Insurance Ge45 N:IG# of 2.(H ta7 on selected goods and ser4ices)
a 2.(H Social Securit5 and National Insurance Crust SSNIC# deductions fro; the for;al sector) "re;iu;s fro;
the infor;al sector and go4ern;ent -udget allocations 9o-ah and Giang) 2*11#. Che infor;al sector annual
"re;iu; was set -5 national regulation -etween 9:S7.2*-9:S%$.* a""ro7i;atel5 3SN(.*- 3SN=%.*# "er
"erson -ased on assessed inco;e and a-ilit5 to "a5. No coinsurance) co"a5;ent) or deducti-le is reBuired at the
"oint of ser4ice. Chere e7ist a National :ealth Insurance Fund N:IF#) financed fro; the N:IG) SSNIC
deduction fro; the for;al sector e;"lo5ees) funds allocated to the sche;e -5 !arlia;ent) returns on
in4est;ents ;ade -5 the National :ealth Insurance 6ouncil N:I6# and others including grants) donations) gifts
;ade to the fund 9o-ah and Giang) 2*11#. Che N:IF "ro4ides funds for reinsurance to the 1/:IS) su-sid5 or
outright "re-"a5;ent for the core "oor and 4ulnera-le who do not ha4e the a-ilit5 to "a5 and to su""ort
"rogra;s that i;"ro4e access to health ser4ices. Che N:IG accounted for a-out 61.(H and 61.*H of total
inco;e of the N:IS in 2**$ and 2**9 res"ecti4el5. For;al sector contri-utions ;ade u" 16.9H and 1(.6H
while the infor;al sector "re;iu; constituted onl5 (.*H and =.$ H res"ecti4el5 N:IA) 2*1*#.
9o-ah and Giang 2*11# added that 6hildren under 1$ 5ears) adults 7* 5ears and a-o4e) for;al sector
e;"lo5ees contri-uting to the Social Securit5 and National Insurance Crust SSNIC#) and indigents are e7e;"ted
fro; "a5ing annual "re;iu;s. In Jul5 2**$) the 9o4ern;ent of 9hana announced a free ;aternal care "olic5
e7e;"ting all "regnant wo;en fro; "a5ing "re;iu; and "rocessing fees. Che "ac?age was to i;"ro4e access to
s?illed attendance at deli4er5 to hel" reduce ;aternal and child ;ortalit5 rates and to i;"ro4e attain;ent of
/19s % and (. /others ha4e access to the full "ac?age of antenatal) deli4eries and "ostnatal care at accredited
health facilities free of charge N:IA) 2**$D /&:) 2**9#. As of 2**9) the e7e;"t grou" constituted 7*.6H of
the total registrants) co;"rising of> children under 1$ 5ears %9.%%H#) aged a-o4e 7* 5ears 6.67H#) SSNIC
contri-utors 6.1*H#) "regnant wo;en (.(%H#) indigents 2.=2H# and SSNIC "ensioners *.(=H#.Cotal non-
"a5ing ;e;-er accounted for a-out 6(H N:IA) 2*1*#.
Ada;-a undated# added that the National :ealth Insurance Authorit5 N:IA# ;andates a "re-defined
-enefits "ac?age that co4ers 9(H of the disease -urden in 9hana. Ser4ices co4ered include out"atient
consultations) essential drugs) in"atient care and shared acco;;odation) ;aternit5 care nor;al and caesarean
deli4er5#) e5e care) dental care and e;ergenc5 care. Che 1/:IS contracts accredited "ro4iders "u-lic) "ri4ate
and church--ased# to deli4er ser4ices to its ;e;-ers and rei;-urses the; after su-;ission of clai;s for ser4ices.
Chis s5ste; se"arates the "urchasing and "ro4ision functions across different sta?eholders to increase
trans"arenc5. 6urrentl5 the N:IS rei;-urses "ro4iders -ased on the 9hana 1iagnostic Related 9rou"ings 9-
1R9s# and fee-for-ser4ice FFS# for ;edicines using a ;edicines tariff list /inistr5 of :ealth) 2**9#.

$.3. Accreditation of Pro"iders.
In order to "ro4ide the -asic "ac?age of ser4ices) the N:IS co4ers -oth "u-lic and "ri4ate health care "ro4iders
at all le4els of the health s5ste;) su-8ect to their accreditation -5 the N:IA. At "resent all "u-lic and 6hristian
:ealth Association of 9hana 6:A9# facilities a-out %***# ha4e -een gi4en a "ro4isional accreditation and
1((1 "ri4ate "ro4iders including hos"itals and clinics) ;aternit5 ho;es) "har;acies) licensed che;ical sho"s
and diagnostic facilities# ha4e -een accredited to "ro4ide ser4ice and to ;a?e the ser4ice ;ore easil5 accessi-le
to -eneficiaries N:IA) 2**9#. Che National :ealth Insurance Sche;e Act) 2**= Act 6(*# ;andates the N:IA
'ol.() No.1() 2*1%

7
to accredit ser4ice "ro4iders -efore the5 can "ro4ide ser4ice to N:IS ;e;-ers. Che "ri;ar5 goal is to ensure
that healthcare ser4ices offered to card -earing ;e;-ers are of good Bualit5. In "ursuance of this) ins"ection of
the first and second -atches of health facilities was carried out in 2**9. In 2*1*) a third -atch of 91( facilities
was ins"ected out of which $%9 were accredited. Cotal accredited health facilities as at =1st 1ece;-er 2*1* were
2)6%7.6lai;s are ;ade -5 ser4ice "ro4iders and then su-;itted to the district sche;es for "a5;ent using the
9hana-1iagnosis Related 9rou" 9-1R9# rates for ser4ices and Fee-For-Ser4ice FFS# for ;edicines.
1iscussions are ongoing to design) "ilot and e4aluate a "er ca"ita ca"itation# "ro4ider "a5;ent s5ste; for
"ri;ar5 care under the National :ealth Insurance Sche;e ai;ed at i;"ro4ingD cost contain;ent) control cost
escalation -5 sharing ris? -etween sche;es) "ro4iders and su-scri-ers) and i;"ro4ing efficienc5 through ;ore
rational use of health resources N:IA) 2*1*#.

$.4. Pro"ider Payment Mechanisms
:ealth insurance is a wa5 of "re-"a5ing for the health ser4ices used -5 residents. In health insurance) "a5;ents
;ade are s"read o4er the su-scri-ers and o4er ti;e in the for; of so;e agreed regular contri-ution. Ser4ices are
"ro4ided according to need A;arte5fio and ,an?ah) 3ndated#.Che5 added that i;"ortant issues to address in
setting u" an effecti4e and efficient health insurance s5ste; are> :ow ;one5 is collected fro; residents and
"ooled to "a5 for ser4icesD Fhat ser4ices are co4ered -5 the insurance or the -enefit "ac?ageD :ow these
ser4ices are "urchased or "aid for on -ehalf of the citiAens who are "art of the insurance sche;eD also ?nown as
the "ro4ider "a5;ent ;ethod i-id#.
Che !ro4ider "a5;ent ;ethod is therefore LChe ;echanis; used to transfer funds fro; the "urchaser
of health care ser4ices to the "ro4iders.M Chere are se4eral different ;ethods that can -e used to "a5 "ro4iders
under a health insurance sche;e. Chese include Fee for ser4ice this is often ite;iAed#) 1iagnostic Related
9rou"ings 1R9# and 6a"itation N:IA) 2*1*#.
Chere is no one "erfect ;ethod and each ;ethod has ad4antages and disad4antages. C5"icall5 therefore
;ost successful health insurance sche;es use a co;-ination of ;ethods. 0ach ;ethod has ad4antages and
disad4antages) and a s?ilful ;i7 of ;ethods ta?ing into account each uniBue countr5 conte7t) including
econo;ics and histor5 is the -est a""roach. 0ffecti4el5 and efficientl5 ;anaged health insurance sche;es
therefore "ro4ide often for a ;i7 of "ro4ider "a5;ent ;ethods) in a wa5 that allows the ad4antages and
disad4antages of the different ;ethods to -alance each other Ile and 9arr) 2*12#.
6urrent "ro4ider "a5;ent ;ethods actuall5 in use in 9hana currentl5 are> Ite;iAed Fee for ser4ice FFS#
for non-insured clients for -oth ser4ices and ;edicinesD 1iagnosis Related 9rou"ings 1R9# for insured clients
Ser4ices onl5#D and Ite;iAed Fee for ser4ice FFS# to "a5 for ;edicines for insured clients
A;arte5fio and ,an?ah) undated#. A;arte5fio and ,an?ah 3ndated# e7"lain these as follows>

$.5. .laims Mana)ement.
According to N:IA 2*1*#) rei;-urse;ent to accredited health care "ro4iders i;"ro4ed tre;endousl5 during
the 5ear under re4iew. Funds were released to district Sche;es for "a5;ent of clai;s on ti;el5 -asis. N:IA
"laced ad4ertisersE announce;ent in the dailies re;inding "ro4iders to su-;it their clai;s for "ro;"t
rei;-urse;ent and infor;ing the; of fund transfers to the 4arious sche;es with who; the5 ha4e signed ser4ice
contract. Chus) the issue of dela5ed rei;-urse;ent resulting in withdrawal of health care ser4ice to N:IS clients
-eca;e a thing of the "ast i-id#. Se4eral challenges ha4e -een identified with clai;s ;anage;ent within the
N:IS. Chere ha4e -een dela5s in the su-;ission of clai;s -5 so;e ser4ice "ro4iders) which is freBuentl5
occasioned -5 inadeBuate ca"acit5 within health facilities in the "re"aration of clai;s 9o-ah and Giang 2*11#.
Che district sche;e offices also do not ha4e adeBuate ca"acit5 to 4et clai;s effecti4el5. Co ensure ti;el5
"a5;ent of clai;s to "ro4iders) N:IS will i;"le;ent a clai;s ;anage;ent s5ste; that is co;"lete with a
rules--ased engine and wor?flow ;anage;ent software. Co su""ort the ;igration to electronic "rocessing) the
current clai;s ;odule used at the sche;es will -e enhanced to ;a?e it ;ore user-friendl5 N:IA 2*1*#. Che
"ilot for this enhanced ;odule has -een co;"lete in three sche;es in the 9reater Accra Region and rollout to the
other regions will -e co;"leted -5 Jul5 2*11 i-id#. Che N:IS intends to centraliAe clai;s at three Aones Ile
and 9arr) 2*12#. Chis initiati4e is e7"ected to -ring efficienc5 and effecti4eness in the "rocessing of clai;s
N:IA) 2*1*#.

$.1%. Financial Sustainability Strate)y.
Financial sustaina-ilit5 of the sche;e re;ains a -ig challenge to ;anage;ent gi4en the increasing de;and for
health insurance and its conseBuent increase in health care ser4ice utilisation Seddoh) et.al) 2*11#. It is "ro8ected
that without an5 additional sources of funding to the current sources) the N:IF ris?s of di""ing down -5 the
close of 5ear 2*16. Chere is therefore the need to secure additional sources of funding for the sche;e while
i;"le;enting cost contain;ent strategies to ;ini;ise o"erational cost N:IA) 2*1*#. It has -eing disco4ered
that Sustaina-ilit5 and cost contain;ent are ;a8or issues that confront the ;anage;ent of National :ealth
'ol.() No.1() 2*1%

$
Insurance sche;es in 9hana N:IA) 2*1*#.!ursuant to ensuring financial sustaina-ilit5) a 6linical Audit
1i4ision was set u" to e;-ar? on regular clai;s 4erification e7ercises to assure "ro4ision of Bualit5 health care
ser4ices and to ;ini;iAe financial lea?ages resulting fro; "ro4ider-side ;oral haAards N:IA) 2*1*#. Che
internal audit de"art;ent was also u"graded to a di4ision to e;"ower it to effecti4el5 ;onitor the financial and
o"erational "rocesses within the N:IS. Che acti4ities of these two di4isions ha4e contri-uted i;;ensel5 to the
reduction in financial lea?ages and strengthening of internal controls. Che5 ha4e also contri-uted to the
sti;ulation of -eha4ioural change a;ong health care "ro4iders and sche;es officials. !ro4iders and sche;e
officials who were found to ha4e a-used the s5ste; were sanctioned. Che free ;aternal health "olic5 was
re4iewed in order to in8ect so;e sanit5 into the s5ste;. An ultra-;odern clai;s "rocessing centre was
esta-lished to "rocess clai;s e;anating fro; the teaching and regional hos"itals. Che 5ear under re4iew also
witnessed the co;;ence;ent of initiati4es to introduce ca"itation as an additional "ro4ider "a5;ent ;echanis;
to allow "ro4iders and su-scri-ers to share the ris?s associated with the "ro4ision and utilisation of health care
ser4ices at the health facilities N:IA) 2*1*#. Chree areas ha4e -een identified for addressing the sustaina-ilit5
issue. Chese are defensi4e) "rudent fund ;anage;ent and sourcing strategies N:IA) 2*1*#.

$.1%.1. 6efensi"e Strate)y:
1e4elo"ing cost contain;ent ;easures to ;ini;ise lea?ages N:IA) 2*1*#. Chese will include>0sta-lishing and
o"erational 6onsolidated !re;iu; Account to centraliAe "re;iu; "a5;ent into two designated accountsD
Intensif5ing 6linical Audits in colla-oration with "ro4ider grou"sD Introducing and "iloting 6a"itation as an
alternati4e "a5;ent ;echanis;D 6olla-orating with "ro4iders and su-scri-ers to enforce the gate?ee"er "olic5
of the /inistr5 of :ealthD Gin?ing treat;ent to diagnosis to i;"ro4e rational use of ;edicinesD I;"le;enting
unifor; "rescri"tion for;s to "ro;ote rational "rescri-ingD and 3sing ;5ster5 sho""ing to identif5
inefficiencies and a-use in the entire N:IS s5ste; for redress N:IA) 2*1*#.It is also ?nown that o4er 27H of
the sche;eEs ;edicines cost is attri-uta-le to anti-;alarial ;edicines. For e7a;"le) in 2**9 the sche;e s"ent
o4er 9:S (1 ;illion on anti-;alarial ;edicines alone. Che N:IS will therefore liaise with the 9lo-al
FundR/alaria 6ontrol !rogra; office in order to -enefit fro; the Afforda-le /edicines Facilit5 T /alaria
A/F;# "rogra;. Sa4ings fro; A/F; is "ro8ected to -e o4er (*H annuall5 N:IA) 2*1*#.

$.1%.$. Prudent fund mana)ement:
Fund /anage;ent and In4est;ent will -e strengthened to ensure that N:IA funds are 8udiciousl5 ;anaged to
generate o"ti;al returns on in4est;ents N:IA) 2*1*#. &ne strategic in4est;ent initiati4e will -e the
de4elo";ent and ;aintenance of an o"ti;al asset allocation s5ste;) through tactical asset ti;ing and su"erior
in4est;ent selection. Chis is -ecause -etween $*H and 9*H of the "erfor;ance of the "ortfolio is deter;ined -5
the ;i7 of in4est;ent assets held in the "ortfolio. Additionall5) the N:IS will de4elo" a ro-ust in4est;ent
research tea; to continuall5 re4iew the in4est;ent en4iron;ent) econo;ic "olicies and ca"ital ;ar?et
e7"ectations for o"ti;al in4est;ent decision ;a?ing. N:IS will also identif5 and include in the "ortfolio)
alternati4e in4est;ents with 4er5 low or negati4el5 correlated returns. Chis is ai;ed at di4ersif5ing awa5
uns5ste;atic ris?s) for higher ris? ad8usted in4est;ent returns N:IA) 2*1*#.

$.1%.(. Sourcin) Strate)y:
According to N:IA 2*1*#) the sourcing strategies that can -e ado"ted include> 1#.See?ing additional funding
through "olic5.Che a""roach is to further di4ersif5 our sources of funds -5 securing additional sta-le sources of
funds) and colla-orate with sta?eholders to increase the 4alue deri4ed fro; these sources. Sources to -e
considered include "etro-che;ical le45) Ksin ta7E) 1'GA) N:IG increaseD 2#. Re4iew "re;iu;s. Since the5 were
set in 2**%) "re;iu;s ha4e not -een re4iewed. &ne of the strategies that the N:IS will see? to ado"t is to
re4iew u"wards the N:IS "re;iu;D =#. Internall5-dri4en fundraising acti4ities. Chis acti4it5 would -e treated as
ad-hoc "rogra;s ai;ed at raising funds for s"ecific "ur"oses and acti4itiesD and %#. Su""ort fro; de4elo";ent
"artners. Che N:IS will continue to welco;e su""ort fro; 1e4elo";ent !artners 1!#. For e7a;"le) the :ealth
Insurance !ro8ect :I!# is e7"ected to ;aintain su""ort for the strengthening of the "urchasing "olicies and
;echanis;) and the integrated clai;s ;anage;ent s5ste;s. According to :F6 2an? 2**%#) there is so;e
;arginalisation in sourcing finance in 9hana. Chis "ro-le; is co;"ounded -5 the fact that onl5 few infor;al
su""ort e7ist -5 wa5 of -usiness angels which affect so;e co;"anies a-ilit5 to ado"t ;odern technolog5
3NI1&) 2*12#. Che 3NI1& 2*12# and :F6 2an? 2**%# assertions "oint to the inherent challenges in
de4ising effecti4e and efficient sourcing strategies. 2ani 2**=# "ointed out that onl5 few S;all and /ediu;
Scale 2usinesses S/0s# are financed fro; co;;ercial -an? loans) go4ern;ent assistant "rogra;s or other
infor;alSources.

$.11. .once+tual Framewor7 of the Study.
Fro; the a-o4e literature re4iew the Authors ha4e deduced the following conce"tual fra;ewor? as a -asis for
'ol.() No.1() 2*1%

1*
(. Method.
Chis section co4ered the ;ethodolog5 of the research and the organisational "rofile of the case stud5 as
"resented -elow>

(.1. esearch 6esi)n.
Chis research was -oth descri"ti4e) and causal. According to Ro-son 2**2#) Ro-son 2**2# stated that the
o-8ect of descri"ti4e research is to K"ortra5 an accurate "rofile of "ersons) e4ents or situationsEE. Chis research is
descri"ti4e -ecause it see?s to "rofile the adeBuac5 of funding and the financial sustaina-ilit5 of &ffinso /utual
:ealth Insurance sche;e. Studies that esta-lish causal relationshi" -etween two 4aria-les ;a5 -e ter;ed
e7"lanator5 studies Saunders) et.al) 2**7#. Chis studies is also causal e7"lanator5 studies# -ecause it sought to
esta-lish the relationshi" -etween re4enue trends and clai;s "a5;ent trends of &ffinso /utual :ealth Insurance
Sche;e. Che research strateg5 used was single case stud5 holistic. Chis research also used deducti4e a""roach in
;eeting research o-8ecti4e two) and inducti4e a""roach in ;eeting research o-8ecti4e one. Chis ;eans that the
research "hiloso"h5 is -oth "ositi4is; and inter"reti4is;.
Che "o"ulation of the stud5 was ;ade u" of the staff of &ffinso /utual :ealth Insurance Sche;e. Chis
according to the /anager of the sche;e is 2*. Chis ;eans that the unit of anal5sis are the indi4idual "er;anent
staff of the sche;e.

(.$. Sam+lin) and Sam+lin) *echni8ue.
Sa;"ling ;eans the selection of a "art of a grou" or an aggregate with a 4iew to o-taining infor;ation a-out the
whole Saunders et.al) 2**7#. According to Saunders et.al 2**7#) for a "o"ulation of (*) a sa;"le siAe of %%
should -e used to achie4e a (H ;argin of error. :owe4er) -ecause the "o"ulation is 2*) it is "rudent to collect
data fro; the entire "o"ulation. Since data was collected fro; the entire wor?force) no s"ecific sa;"ling
techniBue was used. Chis was due to the fact that there was no sa;"ling.

(.(. Sources of 6ata.
Che ;ain sources of data were -oth "ri;ar5 and secondar5 sources. !ri;ar5 source is the collection of Kfirst
hand Kinfor;ation fro; the e;"lo5ees directl5. In other words) "ri;ar5 data is data which is collected originall5
for current in4estigation. !ri;ar5 data can -e collected through instru;ents such as o-ser4ation) inter4iew)
Buestionnaire) focus grou") and others Saunders) et.al) 2**7#. For this thesis data was collected using
Buestionnaire. Uuestions on the Buestionnaire were used in answering research Buestions one and two.
Secondar5 source on the other hand is data alread5 collected -5 another organiAation or unit for a different
"ur"oseD it is then retrie4ed -5 the ;ar?eter for another "ur"ose. In other words) secondar5 data is a data which
has alread5 -een collected -5 an agenc5 or indi4idual and is a4aila-le in a "u-lished for;. It alwa5s has to -e
restructured -efore used. Secondar5 data alread5 e7ist in accessi-le for;. 07a;"le include re"orts) sales records)
;edia accounts) 8ournals) censuses such as "o"ulation census) e;"lo5;ent census) and go4ern;ent census#)
acade;ic sur4e5s) in4oices) recei"ts) 4ouchers) intranet and internet) etc i-id#. Che secondar5 source of data for
this research was re4enue re"orts and clai;s re"ort of &ffinso /utual :ealth insurance sche;e for the "eriods
2**6 to 2*11. Che data collected here was used in answering the second research Buestion.

(.,. 6ata .ollection and Instrument.
Che data collection instru;ent used was Buestionnaire. Che structured Buestionnaires were con4enientl5
distri-uted a;ong the "er;anent wor?ers of the sche;e. Since the researcher was a wor?er of the co;"an5) it
was eas5 getting access to the e;"lo5ees and ad;inistering the Buestionnaire to the;. Che researcher
ad;inistered the Buestionnaire "ersonall5. Che Buestionnaire was de4elo"ed using the Gi?ert scale techniBue.
Che Buestionnaire co;"rised of 19 Buestions arranged in a ta-ular for;. Ca-ular 1 co;"rised ( state;ents
testing funding adeBuac5 of &ffinso /utual :ealth Insurance Sche;e. Ca-ular 2 contained 7 state;ents testing
defensi4e ;easures. Also ta-ular = contained = state;ents testing "rudent fund ;anage;ent strateg5. Gastl5)
ta-le % contained % state;ents testing sourcing strateg5. For the "ur"ose of this stud5) onl5 "er;anent
e;"lo5ees were gi4en Buestionnaires to fill.

(.1. 6ata Analysis *echni8ue.
Che stud5 used Buantitati4e ;ethods to re"ort the findings. Che Buantitati4e "hase hel"ed the researcher to
generate descri"ti4e and inferential statistics necessar5 to ;a?e deductions on how &ffinso /utual :ealth
Insurance sche;e is financed. After a careful re4iew and cleaning of the collected data) the closed ended
Buestions were coded and entered into a code-oo? fro; where the5 were ?e5ed into a co;"uter using /icrosoft
07cel. Anal5sis was carried out -5 t5"ical statistical functions in the 07cel. Functions used for anal5sis in this
stud5 were li?e ;ean) standard de4iation) freBuenc5) "ercentages) confidence le4el) ;edian) and correlation.
FreBuenc5 ta-les and -ar gra"hs incor"orating "ercentages were used anal5sing "ersonal data of res"ondents.
'ol.() No.1() 2*1%

11
Uuantitati4e anal5sis used central tendenc5 ;easure which was a-le to calculate ;eans on scores on li?ert scale.
Che descri"ti4e statistical tools on the li?ert scale were used to ;easure adeBuac5 of funding) relationshi"
-etween re4enue and clai;s "a5;ents) and financial sustaina-ilit5 ;easures.6orrelation coefficient was used to
deter;ine the strength of association -etween re4enue and clai;s "a5;ents.Che (-"oint li?ert scale state;ents
were coded as followsD ( strongl5 agree#) % agree#) = neutral#) 2 disagree#) and 1 strongl5 disagree#.If a
res"ondent indicate Ldisagree or strongl5 disagreeM it ;eans that the res"ondent disagree with the state;ent as
stated) thus agreeing with the negation of the state;ent. Chis ;eans that if a "articular construct records ;ean
figure of 1) it does not ;ean that such a construct is the least relati4e to other construct in order of agree;ent or
"riorit5. :owe4er) what it ;eans is that such construct is the highest relati4e to other constructs with ;ean
figures -elow = in order of agree;ent with the negation of the construct as stated in the Buestionnaire. Che
i;"lication of this for this stud5 is that all constructs with ;ean figures -elow = are constructs that res"ondents
do not agree with the researcher as stated -ut agree with the negation of the sa;e construct which were not
stated. 6onstructs with ;ean figures a-o4e = are constructs that res"ondents agree with the researcher as were
stated. Cherefore) it is these constructs that can -e ran? in order of agree;ent whiles constructs with ;ean
figures -elow = can -e ran? in order of agree;ent with the negation of the constructs. Che ;ean on a (-"oint
li?ert scale is =.** with a standard de4iation S1# of 1.($) standard error of ;ean S0/# of *.71) and a
coefficient of 4ariation of (2.67H. &n a fi4e "oint li?ert scale there is a 9( "ercent confidence le4el that the
;ean figure ranges -etween 2.=1 and =.61. Chese statistics on the (-"oint li?ert scale was used as the -ench;ar?
for data anal5sis.

(.2. 9thical .onsideration.
&ne 4er5 i;"ortant consideration a researcher ;ust not o4erloo? is the issue of ethics in research Saunders et.al)
2**7#. Che researcher in accordance with this too? ste"s to ;a?e sure that no res"ondent or an5 "artici"ant in
this research wor? was har;ed in an5 wa5. First of all) the researcher a4oided contacting res"ondents on the
-lind side of the ser4ice "ro4iders. Che researcher ;ade sure that a 4er-al "er;ission was sought and the ai;s
and o-8ecti4es of the stud5 ;ade ?nown to the ser4ice "ro4ider as well as the res"ondents through introductor5
state;ent on the Buestionnaire. 2oth ser4ice "ro4iders and res"ondents were also assured of the fact that the
stud5 is onl5 for the "ur"oses of acade;ics and not for an5 other du-ious use. !artici"ants were also not forced
-ut rather encouraged to 4oluntaril5 "artici"ate. Che researcher also ;ade sure that "ersonal or de;ogra"hic
infor;ation were ?e"t confidential.

(.3. :rief Profile of Offinso Mutual Health Insurance Scheme.
Che &ffinso;an :ealth Insurance Sche;e is one of the -ranches of the National :ealth Insurance Sche;e. It is
registered under the National :ealth Insurance Authorit5 of 9hana and located at New &ffinso in the &ffinso
South /unici"alit5 of Ashanti) a townshi" of a-out =6 ?ilo;eters awa5 fro; +u;asi) the ca"ital of Ashanti
Region. Che sche;e ser4es the "eo"le of -oth &ffinso South /unici"alit5 and &ffinso North 1istrict.Che
&ffinso;an :ealth Insurance Sche;e was set u" in the 5ear 2**% in -oth &ffinso /unici"alit5 and &ffinso
North.Che Sche;e was registered as Gi;ited Gia-ilit5 6o;"an5 on the %
th
of /a5 2**( and was issued with
certificate to co;;erce 2usiness on the (
th
/a5) 2**(.Che sche;e was then under the control of si7
;anage;ent tea; engaged -5 the then 2oard of 9o4ernors.In Fe-ruar5 2**9) the 2oard was dissol4ed and
6areta?er 6o;;ittee was for;ed -5 the National :ealth Insurance Authorit5 to ha4e an o4er sight
res"onsi-ilit5 of the sche;e.Che Gegislati4e Instru;ent GI 1$*9# and Act 6(* which esta-lished the sche;e has
since -een re4o?ed and a new Act 2*12 $(2# is in "lace to control the sche;e.
'ol.() No.1() 2*1%

12
,. esults.
%.1. !ersonal data of Res"ondents.
Che "ersonal data of the res"ondents are "resented -elow>
Ca-le 1. !ersonal 1ata of Res"ondents
1e;ogra"hic 'aria-les FreBuenc5 !ercentage
9ender
/ale 16 $*H
Fe;ale % 2*H
Cotal 2* 1**H
Age
26-=( ,ears 16 $*H
=6-%( 5ears % 2*H
Cotal 2* 1**H
0ducational 2ac?ground
1i"lo;a or eBui4alent % 2*H
1st 1egree and /ore 16 $*H
Cotal 2* 1**H
07"erience with the sche;e
=-( 5ears 1( 7(H
a-o4e ( 5ears ( 2(H
Cotal 2* 1**H

Fro; figure %.1) 2* "ercent re"resenting % res"ondents are fe;ales with $* "ercent re"resenting 16 res"ondents
are ;ales. Also) $* "ercent of the res"ondents fall within the age categor5 26-=( with 2* "ercent falling within
=6-%(. In addition) 16 res"ondents ha4e uni4ersit5 Bualification with % of the res"ondents ha4ing so;e tertiar5
education which ;a5 include !ol5technic education) "rofessional Bualification) and training college) a;ong
others. Gastl5) 7( "ercent of the res"ondents ha4e wor?ed with the &/:IS -etween = to ( 5ears with 2(H
indicating that the5 ha4e wor?ed with the sche;e for ( 5ears and a-o4e. Chis clearl5 shows that none of the 2*
res"ondents ha4e wor?ed with the sche;e for less than = 5ears.

,.$. Ade8uacy of Fundin) for Offinso Mutual Health Insurance Scheme
In this section res"ondents were as?ed to indicate the e7tent to which the5 agree or disagree to fi4e state;ents
testing the adeBuac5 of funding of the sche;e. Che results are "resented -elow>

*able $. 6escri+ti"e esults for Ade8uacy of Fundin)
Fundin) Ade8uacy .onstructs ' Mean S6 S9M

;ar.
<S6
$
=
.;
.onfidence
le"el > 51?
&ower @++er
Che sche;e has alwa5s ;et its
re4enue target
2* =.2* 1.*% *.2= 1.*9 =2.6*H 2.7% =.66
Che sche;e has alwa5s ;et clai;s
"a5;ents ti;el5
2* 2.** *.(1 *.11 *.26 2(.(*H 1.7$ 2.22
Che sche;e is a-le to "a5 all
ad;inistrati4e e7"enses
2* =.2* 1.*1 *.2= 1.*= =1.6$H 2.76 =.6%
Che sche;e is a-le to underta?e
ca"ital intensi4e "ro8ects
2* 2.%* *.=6 *.*$ *.1= 1(.1%H 2.2% 2.(6
Che sche;e o"erates sur"lus -udget
not deficit -udget.
2* =.2* *.6( *.*= *.%= 2*.%%H 2.(( =.%9
A"era)e $.4% %.3$ %.1, %.15 $1.%3? $.,1 (.11

Fro; ta-le 2) onl5 three constructs out of the ( constructs tested recorded ;ean figures a-o4e three. 0ach of
these constructs recorded ;ean figure of =.2*. Chis ;ean figure is 8ust a-o4e the LNeutral res"onseM -ut -elow
the Lagree res"onseM. Chis ;eans that the findings are on ;oderate side not on high side. Chese constructs are
Lthe sche;e has alwa5s ;et its target re4enueM) Lthe sche;e is a-le to "a5 all ad;inistrati4e e7"ensesM) and Lthe
sche;e o"erates sur"lus -udget not deficit -udgetM. Che i;"lication is that the res"ondents agree with the three
constructs testing funding as stated. Che other constructs na;el5> the sche;e has alwa5s ;et clai;s "a5;ents
ti;el5D and the sche;e is a-le to underta?e ca"ital intensi4e "ro8ects recorded ;ean figures of 2.** and 2.%*
res"ecti4el5. Che i;"lication is that the res"ondents do not agree with the two constructs as stated. Chat is Lthe
sche;e has not alwa5s ;et clai;s "a5;ent ti;el5M) Kthe sche;e is not a-le to underta?e ca"ital intensi4e
"ro8ectsM. &n a4erage the entire constructs tested for funding adeBuac5 recorded a ;ean figure of 2.$*. Chis
clearl5 indicates that "er the res"ondentsE res"onses on the adeBuac5 of funding) &ffinso /utual :ealth
Insurance Sche;e funding is not adeBuate to ena-le it carr5 on its acti4ities efficientl5 and effecti4el5. Chere is
'ol.() No.1() 2*1%

1=
9( "ercent confidence le4el that the ;ean figure for the entire constructs tested for funding adeBuac5 is -etween
2.%1 to =.11. Since the ;ean figure for the entire construct is 2.$*) it lies within the confident li;its. Che
i;"lication is that if other researcher tests the sa;e constructs on the sa;e sa;"le) the researcher is 9( "ercent
confident that the findings will lie -etween the confidence li;it of 2.%1 to =.11.

,.(. elationshi+ between e"enue and .laims Payment.
In this section a4aila-le data on total re4enue and clai;s ;anage;ent were used. &nl5 data fro; 2**6 to 2*11
was a4aila-le. Chese data were e7tracted fro; the inco;e state;ent of &ffinso;an :ealth Insurance Sche;e.
Che inco;e state;ent was "re"ared in accordance with the a""ro"riate 9hana National Accounting Standard
9NAS# and the International Financial Re"orting Standards IFRS# and in confor;it5 with the National :ealth
Insurance Act 2**=) Act 6(*) section 99 1-%#) and the National :ealth Insurance Regulation 2**% sec %$. Che
total re4enue and clai; ;anage;ent as e7tracted fro; the inco;e state;ent are "resented -elow>

!er the a-o4e figure 1) total re4enue recei4ed in 2**6 was ;arginall5 higher than actual clai;s to -e "aid.
:owe4er in 2**7) total re4enue and "a5;ents were al;ost eBual with re4enue rising ;arginall5 higher than
clai;s "a5;ents in 2**$ continuing to 2**9. Also) in 2*1* re4enue and "a5;ents were al;ost eBual with
re4enue rising ;arginall5 o4er clai;s in 2*11. Che actual re4enue and clai;s "a5;ents are "resented in ta-le =
-elow>

*able (. 9/tract of total re"enue and claims mana)ement from Offinsoman Health Insurance Scheme
Aear *otal e"enue <-HB= .laims Mana)ement <-HB=
2**6 %26)$*= 2=()9**
2**7 77*)6*9 7**)6$(
2**$ 1)=77)%($ 1)7(6)*(=
2**9 2)177)((2 1)$7*)9$1
2*1* 2)9*%)*16 2)9%()%$9
2*11 %)%$9)%(2 %)*$$)2*7

*able ,. Mean distribution of total re"enue and claims mana)ement
/ean /edian S1
6onfidence le4el @9(H
Gower 3""er
Re4enue 2)*2%)=1( 1)777)(*( 1)(11)*(9 $1()2=$ =)2==)=92
6lai;s /anage;ent 1)9=2)$$6 1)$1=)(17 1)%21)(%( 79()%=% =)*7*)==$

Fro; figure 1 and ta-le =) there is a "ositi4e relationshi" -etween total re4enue and clai;s "a5;ent. Chis ;eans
that -oth the total re4enue cur4e and clai;s "a5;ent ;o4e in the sa;e direction. Che correlation coefficient
-etween total re4enue and clai;s "a5;ent) returned figure of *.9$ which cul;inated into coefficient
deter;ination of *.96 96H#. Chis clearl5 shows a highl5 "ositi4e relationshi" -etween the two 4aria-les
*
(**)***
1)***)***
1)(**)***
2)***)***
2)(**)***
=)***)***
=)(**)***
%)***)***
%)(**)***
()***)***
2**6 2**7 2**$ 2**9 2*1* 2*11
Figure 1. Che relationshi" -etween re4enue and
clai; "a5;ents
Cotal Re4enue 9:S# 6lai;s /anage;ent 9:S#
'ol.() No.1() 2*1%

1%
re4enue target and clai;s "a5;ent#. Che closeness of the relationshi" suggests financial distress. Chat is al;ost
the total re4enue of the sche;e 96H# is s"ent on clai;s "a5;ent lea4ing 4er5 little to co4er for other o4erheads.
Chis assertion can -e confir;ed fro; ta-le %. :ere the ;ean figure for total re4enue and clai;s "a5;ent are
9:B2)*2%)=1( and 9:B1)9=2)$$6 res"ecti4el5. Che ;edian figures are 9:B1)777)(*( and 9:B1)$1=)(17
res"ecti4el5 with standard de4iations of 9:B1)(11)*(9 and 9:B1)%21)(%( res"ecti4el5. Chere is 9( "ercent
confidence le4el that the ;ean figure for the total re4enue falls -etween 9:B$1()2=$ and 9:B=)2==)=92 whiles
that of the clai;s "a5;ent falls -etween 9:B79()%=2 and 9:B=)*7*)==$. Fro; ta-le = the total re4enue
increased -5 $1H) 79H) ($H) ==H) and =(H in 2**7) 2**$) 2**9) 2*1*) and 2*11 res"ecti4el5. Che fact that the
total re4enue was increasing at a decreasing rate shows "ossi-le liBuidit5 "ro-le;s. &n the clai;s "a5;ent the
2**7 figure increased -5 197H of the 2**6 figure. Che 2**$ figure increased -5 1(1H of the 2**7 figure with
2**9 figure increasing -5 onl5 7H of the 2**$ figure. Che 2*1* figure increased -5 (7H on the 2**9 figure with
the 2*11 figure increasing -5 =9H of the 2*1* figure. A co;"arison of the ;arginal re4enue and the ;arginal
cost figures shows that with the e7ce"tion of 2**9 where the re4enue grow ;ore than clai;s "a5;ent) the
clai;s ;anage;ent figures has -een growing ;ore than the re4enue figures. Chis is another e4idence of "ossi-le
financial distress.

,.(. Financial Sustainability Measures
According to N:IA 2*1*#) there are three =# ;ain ;easures "ut in "lace to ensure the financial sustaina-ilit5
of the sche;e. Chese ;easures are defensi4e strategies) "rudent fund ;anage;ent) and sourcing strateg5. Chese
strategies were therefore used to test the financial sustaina-ilit5 of the &ffinso ;utual health insurance sche;e.
Che results are "resented -elow>
%.=.1. Financial 6efensi"e Strate)y
In this section res"ondents were as?ed to indicate the e7tent to which the5 agree or disagree to se4en state;ents
testing the financial defensi4e strateg5 of the sche;e. Res"ondents were to assess the 7 state;ents using (-"oint
li?ert scale techniBue

*able 1. 6escri+ti"e esults of the 6efensi"e Strate)y
6efensi"e Strate)y .onstructs ' Mean S6 S9M

;ar.
<S6
$
=
.;
.onfidence le"el
> 51?
&ower @++er
Che sche;e has esta-lished and
o"erationaliAes a 6onsolidated
!re;iu; Account.

2*

%.** *.99 *.22 *.9$ 2%.7(H =.(7 %.%=
Che sche;e has intensified 6linical
Audits in colla-oration with "ro4ider
grou"s
2* =.$* *.7= *.16 *.(= 19.12 H =.%$ %.12
Che sche;e has introduced Capitation
as an alternati4e "a5;ent ;echanis;.
2* %.%* 1.21 *.27 1.%7 27.(7H =.$7 %.9=
Che sche;e has enforced the
gate?ee"er "olic5 of the /inistr5 of
:ealth.
2* =.$* 1.=9 *.=1 1.9= =6.(%H =.19 %.%1
Che sche;e has lin?ed treat;ent to
diagnosis to i;"ro4e rational use of
;edicines
2* %.6* 1.=( *.*7 1.$= 29.%2H =.2( (.19
Che sche;e has i;"le;ented unifor;
"rescri"tion for;s to "ro;ote rational
"rescri-ing
2* %.6* 1.=( *.*7 1.$= 29.%2H =.2( (.19
Che sche;e is using mystery shoppers
to identif5 inefficiencies and a-use in
the entire N:IS s5ste; for redress
2* 2.$* *.(% *.*= *.29 19.17H 2.26 =.*%
A"era)e ,.%% 1.%4 %.12 1.$3 $2.13? (.$3 ,.,3

Fro; Ca-le () all the constructs tested ha4e ;ean figures a-o4e = with the e7ce"tion of the use of ;5ster5
sho""ers which recorded a ;ean figure of 2.$*. Chis clearl5 indicates that the sche;e do not use ;5ster5
sho""ers as a defensi4e strateg5. Chis i;"lies that with the e7ce"tion of the use of ;5ster5 sho""ers) the sche;e
uses the other 6 constructs tested as a financial defensi4e strateg5. Four %# of the constructs tested had ;ean
figures a-o4e %. Chese include ha4ing consolidated account) the introduction of ca"itation) the lin?ing of
treat;ent to diagnosis) and the use of unifor; "rescri"tion. Che i;"lication is that the sche;e uses these
'ol.() No.1() 2*1%

1(
constructs ;ore. &n the other hand there were two constructs with ;ean figures a-o4e = -ut -elow %. Chese are
the use of clinical audits and the gate?ee"er "olic5. All the constructs tested had standard de4iation -elow 1.($.
Chat is the res"onses gi4en -5 the res"ondents are closer to the ;ean that is the central tendenc5# than the
closeness of the 4arious res"onses on a fi4e "oint li?ert scale to the ;ean neutral#. Che ;ean figure for the
entire constructs tested for financial defensi4e strateg5 is %.** corres"onding to the weight of the LagreeM
res"onse# with a standard de4iation of 1.*$. Che standard ;ean of error for the entire constructs tested is *.16
with coefficient of 4ariation of 26.(7 "ercent. Chere is a 9( "ercent confidence le4el that the ;ean figure for the
entire constructs tested for financial defensi4e strategies ranges -etween =.27 and %.%7. Che standard ;eans of
error i.e. the standard de4iation of the sa;"ling distri-ution of the ;ean# of *.16 ;eans that the "ro-a-ilit5 that
the sa;"le will not -e a re"resentati4e of the "o"ulation is *.16. Since this "ro-a-ilit5 is low it clearl5 indicates
that the sa;"le is a true re"resentati4e of the "o"ulation. Che a-o4e statistics 8ust goes on to confir; that the
&ffinso /utual :ealth Insurance Sche;e is "rogressi4el5 i;"le;enting the National :ealth Insurance
Authorit5 defensi4e ;echanis; strateg5 as outline in their 2*1* re"ort N:IA) 2*1*#.

,.,. Prudent Fund Mana)ement Strate)y
In this section res"ondents were as?ed to indicate the e7tent to which the5 agree or disagree to = state;ents
testing the "rudent financial ;anage;ent strateg5 of the sche;e. Res"ondents were to assess the state;ent using
li?ertEs scale techniBue.

*able 2. 6escri+ti"e esults of Prudent Fund Mana)ement
Prudent Fund Mana)ement
.onstructs
' Mean S6 S9M

;ar.
<S6
$
=
.;
.onfidence
le"el > 51?
&ower @++er
Che sche;e in4est funds to earn
o"ti;u; returns

2*

2.** *.%9 *.11 *.2% 2%.%9H 1.79 2.21
Che sche;e has in4est;ent
research tea;
2* 1.$* *.(% *.12 *.29 29.$1 1.(6 2.*%
Che sche;e continuall5 ;onitors
the in4est;ent en4iron;ent.
2* 2.** *.%9 *.11 *.2% 2%.%9H 1.79 2.21
A"era)e 1.5( %.11 %.11 %.$2 $2.$2? 1.31 $.11

Fro; Ca-le 6) none of the res"ondents neither strongl5 agree nor agree with the three ;ain constructs
tested for "rudent fund ;anage;ent. In fact eight out of the twent5 res"ondents res"onded LneutralM to the three
constructs tested for "rudent fund ;anage;ent. Che construct the sche;e in4ested funds recorded a ;ean figure
of 2 with the sche;e ha4ing in4est;ent research tea; recording a ;ean figure of 1.$*. Che construct the sche;e
;onitors the in4est;ent reBuire;ent also recorded a ;ean figure of 2. Che entire constructs tested for "rudent
fund ;anage;ent recorded a4erage ;ean figure of 1.9=. Chis clearl5 shows that &ffinso /utual :ealth
insurance sche;e has not "ut in "lace ;easures to ensure "rudent fund ;anage;ent clearl5 de4iating fro; the
N:IA assertion of using "rudent fund ;anage;ent as a strateg5 to ensure the financial sustaina-ilit5 of the
sche;e. Chis lac? of "rudent fund ;anage;ent strateg5 ;a5 -e as a result of the i;"le;entation of a
consolidated "re;iu; account which is ?e"t -5 the N:IA there-5 den5ing the 4arious ;utual health insurance
sche;es the "ri4ilege of ;anaging their own funds.

,.2. Sourcin) Strate)y
:ere res"ondents were as?ed to indicate the e7tent to which the5 agree or disagree to with four %# state;ents
testing the sourcing strateg5 of the sche;e. Che results are "resented -elow>

'ol.() No.1() 2*1%

16
*able 3. 6escri+ti"e esults of Sourcin) Strate)y
Sourcin) Strate)y .onstructs ' Mean S6 S9M
;ar.
<S6
$
=
.;
.onfidence
le"el > 51?
&ower @++er
Che sche;e is colla-orating with
N:IA to see? additional fund through
"olic5

2*

2.7( *.2= *.*( *.*( $.2=H 2.6( 2.$(
Che sche;e is ta?ing ste"s to re4iew
"re;iu;s
2* =.2* 1.*% *.2= 1.*9 =2.6*H 2.7% =.66
Che sche;e has increased it
internall5-dri4en fundraising acti4ities
2* =.6* 1.%* *.=1 1.9( =$.$1H 2.99 %.21
Che sche;e is see?ing su""ort fro;
de4elo";ent "artners through N:IA
2* 2.%* *.76 *.17 *.(7 =1.(1H 2.*7 2.7=
A"era)e $.55 %.42 %.15 %.5$ $3.35? $.21 (.(2

Fro; ta-le 7 onl5 two of the four constructs tested for sourcing strateg5 recorded ;ean figures a-o4e =.
Che re4iew of "re;iu; recorded a ;ean figure of =.2* 8ust a-o4e = with increasing fund raising acti4ities
recording a ;ean figure of =.6*. Che other sourcing strateg5 recorded ;ean figures -elow =. Che a4erage ;ean
of the four constructs tested is 2.99. Chis is *.*1 ;ean "oints -elow the ;ean figure of =. Chis clearl5 indicates
that the res"ondents -elie4e the sche;e is not "utting in "lace the right strategies to secure additional sources of
funding.

1. .onclusion and ecommendations.
Che o-8ecti4e of this wor? can -e su;;ed u" as deter;ining the funding adeBuac5 of the &ffinso :ealth
insurance sche;e) relationshi" -etween re4enue and clai;s "a5;ent) and financial sustaina-ilit5 strategies of
the sche;e. Chrough the anal5sis of "re4ious research in the field of financial sustaina-ilit5 of health insurance
sche;es and -5 conducting case stud5 anal5sis with res"ect to the financial sustaina-ilit5 of &ffinso :ealth
Insurance Sche;e) this stud5 has contri-uted to the a4aila-le ?nowledge in the su-8ect area -5 achie4ing the
research o-8ecti4es of this wor?. Che author thus feels that the "ur"ose of this research has -een achie4ed.Che
authors conclude that the &ffinso :ealth Insurance Sche;e ;a5 not -e financiall5 sustaina-le. 2ased on the
stud5 carried out) it was disco4ered that generall5 &ffinso ;utual health insurance sche;e was not adeBuatel5
funded. Chis ;a5 -e due to the fact that the sche;e ;oderatel5 ;et its target re4enue. Chis ;a5 -e as result of
the sche;e ina-ilit5 to generate ;ore funds internall5 and inadeBuate go4ern;ent funding. Also) the sche;e
was not a-le to ;eet its clai; "a5;ents ti;el5. Chis ;a5 -e connected to the fact that the sche;e was
inadeBuatel5 funded and without adeBuate funding it would -e difficult to ;eet "a5;ents ti;el5. /oreo4er) the
sche;e was a-le to ;oderatel5 "a5 its ad;inistrati4e e7"enses -ut was not a-le to underta?e ca"ital "ro8ects. In
generall5) the sche;e ;oderatel5 o"erates sur"lus -udget. Fro; the anal5sis in cha"ter four) it was found out
that fro; 2**6 to 2*11) the re4enue figures of the sche;e ha4e -een growing at a decreasing rate. Chis confir;s
the finding that the sche;e was not adeBuatel5 funded. In addition) it was disco4ered that with the e7ce"tion of
2**9) clai;s "a5;ents ha4e -een growing ;ore than the re4enue figures. Chis was as a result of increased cost
of o"erations which were not ;atching the re4enue inflows. It was also disco4ered that the sche;e was suffering
fro; financial distress. 9enerall5 the sche;e see;s to s"end a-out 96 "ercent of its total re4enue on clai;s
"a5;ent lea4ing onl5 % "ercent for o4erheads and other costs. It was disco4ered that generall5) the sche;e has
"ut in "lace financial defensi4e strategies. So;e of these financial defensi4e strategies that were e;"lo5ed
include the o"erationaliAation of consolidated "re;iu; account) intensification of clinical audits) the
introduction of ca"itation in Ashanti) the enforce;ent of gate?ee"erEs "olic5) the lin?ing of treat;ent to
diagnosis) and the i;"le;entation of unifor; "rescri"tions for;s. :owe4er) it was also disco4ered that the
sche;e was not ;a?ing use of the ;5ster5 sho""er techniBue contrar5 to the N:IA "olic5. 9enerall5) the
sche;e has not "ut in "lace ;easures to ensure "rudent ;anage;ent of funds. It was disco4ered that the sche;e
does not in4est funds to o-tain o"ti;u; returns. Chis ;a5 -e due to the fact that the sche;e does not generate
enough funds fro; which it can in4est sur"luses. Che sche;e does not ha4e in4est;ent research tea; and does
not ;onitor the in4est;ent en4iron;ent. Che sche;e was not a-le to use the "rudent financial ;anage;ent
strategies tested -ecause the sche;e does not control its financial resources. Che sche;e has not "ut in "lace
adeBuate strategies to source for additional funding. In addition) the sche;e has not "ut in ;easures to
colla-orate with the N:IA to see? additional funding through "olic5. Che sche;e has ;oderatel5 ta?ing ste"s to
re4iew "re;iu;. 04en though) the sche;e has ta?en ste"s to increase it internall5-dri4en fund raising acti4ities)
it has not ta?en ste"s to see? financial su""ort fro; de4elo";ent "artners. Chis ;a5 -e due to the fact that the
sche;e is not inde"endent fro; the National :ealth Insurance Authorit5 in Accra and as such ;a5 not -e a-le to
source for funds fro; the de4elo";ent "artners inde"endentl5.
'ol.() No.1() 2*1%

17
Che following are so;e ;anage;ent reco;;endations to the o"erators of &ffinso;an health insurance
sche;e and the National health insurance authorit5. Firstl5) the sche;e should loo? for alternati4e sources of
funding a"art fro; their traditional sources of funding. So;e of these alternati4e sources can include a""ealing
to "hilanthro"ist) "ri4ate -usinesses) and the &ffinso /unici"al Asse;-l5. Secondl5) the National health
insurance authorit5 should "ut in "lace ;easures to ensure the co;"lete decentralisation of the sche;e. Chis will
;a?e &ffinso;an :ealth insurance sche;e -eing a-le to "rudentl5 ;anage its own funds. Also) the sche;e can
loo? at underta?ing ca"ital intensi4e "ro8ects with higher 5ields. For e7a;"le) the sche;e can in4est so;e of its
financial resources in the hos"italit5 industr5) and the financial industr5. Che5 can also loo? into the
esta-lish;ent of their own "har;ac5 that will su""l5 drugs to its custo;ers. /oreo4er) the sche;e should
scrutiniAe its clai; "a5;ents to ensure their accurac5. Che5 should institute "enalt5 "olic5 to "enaliAe ser4ice
"ro4iders who o4er in4oice clai;s. In addition) the sche;e should re4iew its defensi4e strategies to ensure their
continuous efficienc5. Areas where the5 fall short should -e i;"ro4ed. For e7a;"le) the a""lication of ;5ster5
sho""ers as a defensi4e strateg5 should -e e;"lo5ed. Gastl5 -ut not the least) the sche;e should increase its
internall5 fund raising acti4ities. Che sche;e should e;-ar? on registration dri4e to encourage ;ore "eo"le to
renew and 8oin the sche;e. S"ecial registration of identifia-le grou"s e7ceeding a certain Buota ;a5 -e gi4ing
discount.

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1$
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and their i;"lications for enrol;ent in the National :ealth Insurance Sche;e in 9hanaM) :ealth !olic5 and
!lanning Journal) &7ford 3ni4ersit5 !ress in association with Che Gondon School of :5giene and Cro"ical
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the 6ostsM) N#I$ %resentation at #ealth &ummit) No4e;-er) 2*1*) Accra.
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through N:IS>) N#I$ %resentation at #ealth summit) No4e;-er 2**$. Accra.
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=22-=%*.
==. 3nited Nations Industrial 1e4elo";ent &rganiAation 3NI1&# 2**2#. Rural 0nter"rise 1e4elo";ent
Su""ort !ro8ect. 0ntre"reneurial S?ills for grou" -ased S/0s . Crainers /anual. Accra
=%. Fitter) S. and 9arshong) 2. 2**9#) LSo;ething old or so;ething newJ Social health insurance in 9hana.
'MC International #ealth and #uman (i)hts) 'ol. *,No. 2*. !" 96-1*9) O&nlineP A4aila-le>
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nd
Fe-ruar5 2*12
=(. Forld 2an?) 2**%#) L/e;orandu; of the !resident of the International 1e4elo";ent Association and the
International Finance 6or"oration to the 07ecuti4e 1irectors on a 6ountr5 Assistance Strateg5 of the Forld
2an? 9rou" for the Re"u-lic of 9hanaM) Fe-ruar5 2*) !" 2%(-=6*) A4aila-le at>
www.world-an?.orgR9:ANA0<CNRResourcesR6AS9hana."df) Accessed on 2
nd
Fe-ruar5 2*1=.
=6. Forld :ealth &rganiAation. 2***#) L+he World #ealth (eport ,000. :ealth s5ste;s> I;"ro4ing
"erfor;anceM) Forld :ealth &rganiAation) 9ene4a.
=7. Forld :ealth &rganiAation 2**(#) LFift5-eighth Forld :ealth Asse;-l5 Su;;ar5 Record of 6o;;itteesM)
/a5 16-2() 9th !lenar5 /eeting) 6o;;ittee KAE re"ortD F:&) 9ene4a) !" 2*=-26(.
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&ffice for Africa.
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esta-lishing sustaina-le National :ealth Insurance Sche;e> insights fro; 9hanaM) 1e"art;ent of :ealth
S5ste;s Financing :ealth Financing !olic5) Forld :ealth &rganiAation 2*1*) 9ene4a) !! 1-6
%*. <u) +.) 04ans) 1.) 6arrin) 9.) Aguilar-Ri4era) A. /.) /usgro4e) !.) and 04ans) C. 2**7#) L!rotecting
households fro; catastro"hic health s"ending>) Journal of #ealth $ffairs -Millood.) 'ol. ,/,%p 972-9$=.
A4aila-le at htt">RRd7.doi.orgR1*.1=77Rhlthaff.26.%.972) accessed on 2
nd
Fe-ruar5 2*1=

Ac7nowled)ements
Fe than? the Al;ight5 9od for his "rotection and guidance that has ;ade this wor? successful. Fe also
ac?nowledge the su""ort of our lo4ing wi4es/rs 'anessa &wusu ,e-oah and /rs Salo;e5 95aang +or;edoda.
Fe also than? Staff of S"iritan 3ni4ersit5 6ollege in 08isu and &ffinso;an :ealth Insurance Sche;e for their
su""ort. Fe also than? 1r +wa?u 1. +esse5 of the 1e"art;ent of !lanning) +wa;e N?ru;ah 3ni4ersit5 of
Science and Cechnolog5 for his guidance in conducting this stud5.
'ol.() No.1() 2*1%

19
Kofi Owusu Aeboah <:A0$%%,CM:A0$%1%=. :e was -orn at Acherensua in the 2rong Ahafo Region of
9hanaon =1
st
Januar5 19$1. :e has o-tained the following educational Bualifications> Senior :igh School
6ertificate -usiness studies# at Sun5ani Senior :igh School) Sun5ani) 9hana) 199$D 2achelor of Arts "olitical
science with "hiloso"h5#) 3ni4ersit5 of 9hana) Accra) 9hana) 2**%D 9hana Stoc? 07change Securities 6ourse
"ortfolio ;anage;ent and in4est;ent anal5sis#) 9hana stoc? 07change) 2**(D Institute of 6hartered
Accountants-9hana "art-Bualified#) 9hana) 2**9D 6hartered Institute of 2an?ers final le4el#) 9hana) 2**9D
Association of 6hartered 6ertified Accountants final le4el#) 3+) 2*1*D and /2A ;ar?eting#) +wa;e
N?ru;ah 3ni4ersit5 of Science and Cechnolog5 +N3SC#) +u;asi) 9hana) 2*1*./r +ofi &wusu ,e-oah is a
Gecturer of S"iritan 3ni4ersit5 6ollege) 08isu) Ashanti) 9hana) !art-ti;e Ceacher Ideal 6ollege) 2oadi) +u;asi
and also a !ri4ate Research 6onsultant. :e has wor?ed with9hana 0ducation Ser4ice as :istor5 and
9o4ern;ent Ceacher 1ece;-er 2**(-Se"te;-er 2**6#) /inistr5 of ,outh and S"orts as 08isu-Jua-en
/unici"al ,outh 0;"lo5;ent 6oordinator &cto-er 2**6-No4e;-er 2**9#) :F6 2an? 9hana Gtd as Intern
/a5 2*11 T Jul5 2*11#)/eridian !re-3ni4ersit5) +u;asi) 9hana as Gecturer August 2*11-/a5 2*12#) and
!ri;e /otors ltd in +u;asi) 9hana as Finance and Ad;inistration /anager /a5 2*12-&cto-er 2*12#.

Moses Kormedoda <:Sc0DM:A0$%1(=. /r /oses +or;edoda was -orn on 16
th
June 196(.:e o-tained
his>Ceachers 6ert LAM at &ffinso Craining 6ollege) &ffinso) 9hana) 1992D &EGe4el certificate at Nungua Senior
:igh School) Nungua) Accra) 9hana) 1996D A-Ge4el certificate at For?ers 6ollege) +u;asi) 9hana) 1997D:N1
accountanc5# fro; Ca;ale !ol5technic) Ca;ale) 9hana 1999D 2achelor of Science in Ad;inistration
accounting with co;"uting#) 9arden 6it5 3ni4ersit5 6ollege) +en5asi-+u;asi) 9hana) 2*1*D and /2A
finance#) +N3SC) +u;asi) 9hana) 2*1=. :e is currentl5 the /unici"al Accountant of &ffinso /unici"al
:ealth Insurance Sche;e. :e has taught 0nglish) /athe;atics and Social Studies in a nu;-er of -asic schools
including 2awa 2arrac?s Junior :igh School J:S# at Ca;ale) Ci8o J:S also in Ca;ale 199=-1997# and 1uasi
J:S in +u;asi) 9hana 199$-2**%#.

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A Study Into The Financial Sustainability of Offinso Mutual Health

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A Study Into The Financial Sustainability of Offinso Mutual Health

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