EFFECT OF THE NATIONAL HEALTH INSURANCE SCHEME (NHIS)ON THE FINANCIAL PERFORMANCE OF HEALTH INSTITUTIONS: ACASE STUDY OF BOAKYE DANKWA MEMORIAL HOSPITAL ASHANTI

REGION

A PROJECT WORK PRESENTED BY:

ATTA ADADE JUNIOR

(ACT05090266)

DECLARATION

I hereby declare that this submission is my own work towards theHigh National Diploma and that, to the best of my knowledge, it

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contains neither material previously published by another personnor material which has been accepted for the award of any otherdegree, except where due acknowledgement has been made in thetext.

……………………………………………………………..

DATEATTA ADADE JUNIOR

(STUDENT)

I hereby declare that the preparation and presentation of thisproject work was supervised in accordance with the guidelines onsupervision of project work laid down by Kumasi Polytechnic.

……………………………………………………………..

DATEMR. BOADU AYEBOAFO

(SUPERVISOR)

I declare that a copy of the project has been submitted forinstitutional use.

…………………………….....………………………………

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DATEMR. ISHAQ KYEI-BROBBEY

(HEAD OF DEPARTMENT)

Table of ContentsDECLARATION.........................................................ii

CHAPTER ONE..........................................................1BACKGROUND OF THE STUDY..............................................1

1.1 INTRODUCTION.....................................................11.2 STATEMENT OF THE PROBLEM.........................................2

1.3 PURPOSE OF THE STUDY.............................................31.4 RESEARCH QUESTIONS...............................................4

1.5 SIGNIFICANCE OF THE STUDY........................................41.6 LIMITATION OF THE STUDY..........................................4

1.7 SCOPE OF THE STUDY...............................................51.8 ORGANISTION OF THE STUDY.........................................5

CHAPTER TWO..........................................................6LITERATURE REVIEW....................................................6

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2.1 INTRODUCTION.....................................................62.2 HISTORICAL BACKGROUND............................................6

2.3 INSURANCE-WHAT DOES IT MEAN?.....................................72.4 HEALTH-WHAT DOES IT MEAN?........................................8

2.5 HEALTH INSURANCE-WHAT IS IT?.....................................82.5.1 Types of Health Insurance......................................9

2.5.2 Objectives of Health Insurance.................................92.6 OVERVIEW OF THE NATIONAL HEALTH INSURANCE SCHEME................10

2.6.1 Objectives of the Scheme:.....................................102.6.2 Ownership and Administration of the Scheme....................11

2.6.3 Membership, Coverage and Benefit Package......................132.6.4 Financial Contribution........................................13

2.6.5 Fund Management...............................................14CHAPTER THREE.......................................................15

METHODOLOGY.........................................................153.1 INTRODUCTION....................................................15

3.2 RESEARCH DESIGN.................................................153.3 METHODS AND INSTRUMENTS.........................................15

3.4 ADMINISTRATION OF INSTRUMENT AND METHODS........................16CHAPTER FOUR........................................................18

DATA ANALYSIS.......................................................184.1 INTRODUCTION....................................................18

4.2 BACKGROUND OF THE HOSPITAL......................................184.2.1 The Vision of the NCHS........................................18

4.2.2 The Goal of the NCHS..........................................194.2.3 Catchment Area Basic Characteristics..........................19

4.3 NATIONAL HEALTH INSURANCE COVERAGE..............................194.3.1 Monitoring of Beneficiary Patients............................21

4.4 DISEASE INCIDENCE IN THE DISTRICT...............................21

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4.5 CONTRIBUTION OF THE SCHEME TO FINANCIAL PERFORMANCE.............224.5.1 Revenue Expenditure Trend of the Institution..................22

CHAPTER FIVE........................................................24SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS.................24

5.1 INTRODUCTION....................................................245.2 KEY FINDINGS OF THE STUDY.......................................24

5.3 CONCLUSION......................................................255.4 RECOMMENDATIONS.................................................25

References..........................................................26

List of Tables and Figures

Figure 1: NHIS Status for 2011......................................20Table 2: Causes of OPD Morbidity from 2009 – 2011...................21

Table 3: IGF by Category for 2011...................................22Figure 2: Income and Expenditure Pattern from 2009 – 2011...........23

Appendix............................................................26

CHAPTER ONEBACKGROUND OF THE STUDY

1.1 INTRODUCTIONThe National Health Insurance Scheme (NHIS) was establish under

Act 650 of 2003 by the Government of Ghana to provide basic

healthcare services to persons resident in the country through

mutual and private health insurance schemes. The District Mutual,

Private Mutual and Private Commercial Schemes are regulated by

the National Health Insurance Council (NHIC). The object of the

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NHIC is to secure the implementation of the national health

insurance policy that ensures access to basic healthcare services

to all residents of Ghana. The Council has the following

objectives:

Register, license and regulate health insurance schemes

Supervise the operation of health insurance schemes

Grant accreditation to healthcare providers

Perform other functions conferred upon it under Act 650 and

Regulations 1809

The NHIS derives its funds from;

The premiums paid by its subscribers.

2.5% of the National Health Insurance Levy.

2.5% of the Social Security and National Insurance Trust

(SSNIT) deducted from the formal sector.

Funds from the Government of Ghana (GoG) to be allocated by

Parliament and returns from investment.

One can register with the NHIS through an agent of the NHIS in

the community District NHIS office. Children less than 18 years

of age whose parents or guardians are contributors are not

required to pay premiums. Children in this category have to

register to obtain coverage. Full time students over 18 years of

age are required to pay the minimum premium of GHC 7.20 to enjoy

benefits. Those who are neither in Tertiary institutions nor are

contributions to Social Security are registered in the informal

sector.

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The elderly is covered under the NHIS. Residents 70 years and

over are exempted from payment of contribution. People in this

category should register to enjoy NHIS benefits. The Very Poor

(Indigent) is covered under the NHIS. A person is classified as

Indigent and exempted from payment of premium if she/he meets the

following;

Does not have any visible sources of income.

Does not have a fixed place of residence.

Does not live with a person who is employed.

A pensioner under SSNIT Scheme is not required to pay any

contribution to NHIS. If the spouse is not a SSNIT pensioner, 70

years of age or over 70 years, nor current SSNIT contributor,

she/he must pay a premium set for the informal sector.

The informal sector worker (self-employed) pays the informal

sector rates (at least GHC 7.20, max GHC48) to register to

receive healthcare coverage by NHIS.

One might ask of the advantages of the NHIS to its members. The

advantages include:

Members do not pay cash at the point of care.

The problem of converting assets to cash especially in case

of catastrophic illnesses can be avoided.

Furthermore, portability allows a NHIS member to access

services outside his/her district scheme.

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There are exclusions in the NHIS. These exclusions are mostly

specialist cases such as cancers except cervical and breast

cancers and dialysis for chronic renal failure. HIV/AIDS is not

covered but associated opportunistic illnesses like diarrhea,

tuberculosis, etc. are covered. In a situation where prescribed

drugs are out of stock, it is a member responsibility to visit

additional NHIS accredited pharmacies until the prescription can

be filled.

1.2 STATEMENT OF THE PROBLEMIt is presumed that the National Health Insurance Scheme (NHIS)

is having a negative effect on the financial performance of

Health Institutions. The primary objective of the NHIS is to

provide quality basic healthcare to all residents at the least

cost. As with any Non profit making organization (NPO), Health

Institutions will use a combination of financial and non-

financial objectives in order to achieve the aim of the NHIS.

Besides the introduction of the NHIS, health institutions were

using the cash and carry system. This is where patients were made

to make payments before services were rendered to them. With the

introduction of the NHIS, the health institution provides

services to patients before payment is made to the health

institution by the scheme. This usually causes delay in the

payment of monies by the scheme to the health institution. This

is because, documents to prove payment have to pass through a

bureaucratic process.

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The delay by the scheme to the institution makes it difficult to

mobilize enough funds to administer its internal operations,

which makes patients to directly buy drugs at the pharmacies.

Also as a result of the delay in payment, the health institutions

purchase drugs outside on credit basis from suppliers which

increase their gearing ratio (Debt component). At times as a

result, suppliers feel reluctant in supplying drugs and other

services.

In addition, staffs are not well financially motivated because

the institutions do not have sufficient funds to boost their

moral. The cash and carry system was a major source of the

finance to the health institutions and had a positive impact on

its financial performance. Therefore its critical examination is

crucial to determine the possible effects the NHIS on the

financial performance of health services. There is therefore the

need to know why there is a delay in the payment of monies to the

health services.

1. Are these actions deliberate?

2. What factors account for this inability to refund on time?

3. Are the lapses on the part of the health institutions or on

NHIS?

The negative effects are in most health institutions in Ghana, of

which has caused the researcher to find out the causes and how

the problems can be minimized if not eliminated.

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1.3 PURPOSE OF THE STUDYThere is an assumption that the NHIS is having a negative effect

on the financial performance of health institutions. The purpose

of the study is to find out whether this assumption is true, the

factors responsible for this canker by looking at the financial

performance of health institutions and come out with suggestions

and recommendations to guide the management of health

institutions to improve on its financial performance. This

objective forms the basis for the research questions that provide

support for the main point of the study.

1.4 RESEARCH QUESTIONSAn analysis of the above stated purpose and review of the

literature, the following research questions were appropriate to

form the focus of the study:

1. What can management do to reduce or eliminate the negative

effect of NHIS on the financial performance on the health

institutions?

2. What can the registrar of the NHIS do to reduce this

problem?

3. What factor accounts for the delay in payments of monies by

the NHIS to the health institutions?

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1.5 SIGNIFICANCE OF THE STUDYThe purpose of the research is that, the information provided

would help the management and the beneficiaries of NHIS as well

as the general public aware of how the system operates and how

the problem associated with the negative effects on the financial

of health institutions would be reduced if not eliminated.

It is hoped that, this study will bring to light the extent of

the negative effects the NHIS has on the financial performance of

the health institutions, the result on its general operations and

long term survival. The study is also expected to contribute to

academic knowledge and possibly lead to another research on the

problem.

1.6 LIMITATION OF THE STUDYCertain weakness of the study could influence the results or its

purpose but which the research had little or no control. The

extent to which data collected could give a reliable picture

about the study would depend on a large extent on the validity of

the questionnaires and objectives of the respondents. It is

inappropriate to use one health institutions to form an opinion

since every health institution has its own internal policies and

even different methods of financial operations. The results and

recommendation may not be applicable to all health institutions.

1.7 SCOPE OF THE STUDYThere cannot be a research without a problem. The researcher

encountered some problem in terms of access to information sincexi

some respondent were reluctant to give out information for fear

of divulging, especially workers of health institutions who were

approached, movement from one institutions to another in search

of information was difficult. The researcher therefore could not

get all necessary information for the study. The research was

therefore limited to the Boakye Dankwa Memorial Hospital Ashanti

Region. The main focus is on the effect of NHIS on the financial

performance of health institutions.

1.8 ORGANISTION OF THE STUDYThe research study has been grouped into five (5).

Chapter one deals with the background of the study, statement of

the problem, purpose of the study, significance of the study and

research questions. Other aspects of the chapter are organization

and limitation of the study. Chapter two deals with the

literature review. Chapter three is on methodology which

describes the research design, the population and sample

procedures, instrumentation and data collection procedures of the

study. In chapter four, result and discussion of the findings are

presented. Finally in chapter five, summary of findings

conclusions and recommendations to end the study.

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CHAPTER TWOLITERATURE REVIEW

2.1 INTRODUCTIONThis chapter covers the review of literature on the National

Health Insurance scheme in Ghana. It begins with the general

background of health insurance pursues to review the Ghana

government perception of the schemes operation, and ends with the

current literature relevant to this study.

2.2 HISTORICAL BACKGROUNDLike Africa economies in general, African’s health care sector

has undergone dramatic changes in the post independence years.

Many countries began independence with welfare states that

provided health care on a free or at least heavily subsidized

basis to user of public health services, but these services were

rarely available to people outside urban areas and mining

enclaves. However, real public sector per capital expenditure in

the health sector has been declining in many African countries

since the late 1970’s. One of the main impacts of the economies

crisis of the 1970’s and 1980’s on the social and welfare sectors

such as health was the reduction of state subside to these areas

in an effort to cut deficit levels.

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Another aspect of the policy to reduce budget deficit was the

introduction of the user fee at public health care institutions

to recover some of the cost of running such institutions. The

circumstance that made implementing such cost recovery system

favorable include, rundown public services, the complaints of

health care providers, competitions from private sources of

service provision and increasing cost of assets to care of

acceptable quality as well as external pressure on conditionally

(Crease and Kutzon 1995), cited by Chris Atim. The mutual health

organizations began to spread in response to the health care

sector crisis and more specifically because of, the following

four factors:

a) The introduction of user fee at existing publicly provided

health facilities.

b) The introduction of such fees in the context of generally

unacceptable quality of public services which reinforce

people willingness to pay for better quality health care.

c) The rise of alternative private sources of health care

provision, frequently associated with good quality.

d) Finally, the general democratization and development of

civil society in the last decade. (Chris Atim 1998)

By 1980’s, ninety (90) developing countries were studied. Forty

(40) were using one or more forms of insurance to provide medical

services. (Zschook D. K. 1982 cited in Arhin D. C. 1995).

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ILO also in a 1990 survey of 28 African countries found that

whiles countries like Ghana had virtually no social security or

social partnership scheme in the health care sector, others like

Gabon, Kenya, Tunisia, Cape Verde and Egypt had public health

services combined with classical social insurance. (ILO 1993

cited byYao-Dablu K.K.).

In Vogel (1990 b), he defined health insurance, ‘as the formal

pool of funds held by third party or by the provider in the case

of health maintenance organizations’.

It can also be defined as a health plan to provide health care

service for people in an area in exchange for payment of a

premium.

In Ghana, the National Health Insurance Scheme was established

under Act 650 of 2003 by the Government of Ghana to provide basic

health care service to persons resident in the country through

mutual and private health insurance schemes.

2.3 INSURANCE-WHAT DOES IT MEAN?Insurance may be defined as, ‘a formal social device for reducing

risk by transferring the risk of several individual entities to

an insurer’. The insurer agrees for a consideration, to assume to

a specific extent, the losses suffered by the insured (Handbook

on National Health Insurance). It can also be defined as a system

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of cover for risk or uncertain event by prior sharing of the

expected cost among many individuals.

The International Labour Organization (ILO) also defines

insurance as being the reduction or elimination of the uncertain

risk of loss for the individual or household by combining a large

number of similar exposed individual or household who are

included in a common fund that make good the loss cost to anyone

member. (ILO 1996). The main purpose of insurance is to

compensate the insured if he incurs a loss in relation to what

has been insured. Insurance is operated by collecting regular

contributions called the premium from person’s who take up

insurance policies with an insurance company. Any insured person

who incurs a loss is then indemnified by the insurance company.

Insurance is thus based on the principle of pooling of risk.

Several people contribute to a common fund out of which those who

incur losses are compensated. Insurance in this way lightens the

burden of risk that would have fallen on one person.

2.4 HEALTH-WHAT DOES IT MEAN?According to the World Health Organization’s (WHO) definition,

‘health is a complete state of physical, mental and social well-

being, and not only the absence of illness or infirmity’. This

means, the entire human system must be free from any form of

short comings not necessarily illness or infirmity but also

mentally and socially sound. It is therefore very important for

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care to be taken against anything that could pose a problem to

the human health, because human life without health is valueless.

2.5 HEALTH INSURANCE-WHAT IS IT?According to the handbook on the National Health Insurance

Scheme, Health Insurance is an insurance method which provides

members of a defined group of community with protection against

cost of medical treatment resulting from sickness bodily injury.

The insured, under a health insurance scheme, exchange for

premium payment, passes on the cost of his/her medical expenses

incurred within the agreed health benefit package to the

insurance scheme for payment. Health Insurance can be organized

in many different ways with different implications. For the

organization and delivery of health service at a minimum, it is a

means of paying for health care and of ensuring access to service

by providing a mechanism for sharing a risk of incurring medical

expenditure among different individuals. This definition implies

that:

a) There must be a financial cost ties to the use of health

service and

b) People are able and willing to use the insured health

services when they perceive themselves to be sick.

The latter point reflects the importance of physical access to

services of acceptable qualities. To be effectively insured,

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therefore implies both financial protection and access to

desirable health services. (Joseph Kutzin 1996).

2.5.1 Types of Health InsuranceThere are two main core types of health insurance; these are

social and private actuarial health insurance schemes. There are

variations of these two types. Social health insurance schemes

include community based schemes and employee based scheme. Other

forms of the private actuarial health insurance arrangements are

Health Maintenance Organizations (HMO’s) and Preferred Provider

Organization (PPO’s). Both are types of private health insurance

scheme which came into preeminence in the United States during

the 80’s. (Donaldson and Gerard, 1993) cited by Yao-Dablu K.K.

i. Social Health Insurance

Social health insurance systems pay for health services through a

health fund. The most common system for contribution is the

payroll system, with contributions from both employer and

employees. Contributions are based on ability to pay and access

to service depends on reed. The health fund is usually

independent government, but works within a tight frame-work of

regulations. It is normal under social health insurance for

entitlement to services to be listed in details, and for

contribution rate to be set at level intended to ensure that

these entitlements can be met.

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2.5.2 Objectives of Health InsuranceHealth insurance schemes are a mechanism for mobilizing community

resources to share in the financing of both local health

services. In addition to serving as a financing mechanism, health

insurances schemes aim to achieve the following objectives:

a) Improving access; schemes seek to increase access to health

care for those who have some capacity to pay but who may not

be able to pay user fee for each visit by a family member.

b) Improve quality; health insurance scheme can contribute to

quality health care which makes people ready to pay for the

health care. Health insurance schemes could make a

significant impact on the quality of health care through

their contractual relations with health care providers.

(Stephen Musau 1999).

c) Schemes seek to increase the efficiency in the allocation

and use of available resource through improved accounting,

financial management and utilization management tools. This

enables more accurate identification of inflows and uses of

funds, which in turn helps prevent fraud and abuse of the

system.

d) Equity; schemes attempt to make health service more

equitable. Health insurance can narrow the disparity in

health services available to those who have health care and

those who do not by scheduling premiums or membership

payment to coincide with the seasonal availability of

people’s income, often related to harvest.

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2.6 OVERVIEW OF THE NATIONAL HEALTH INSURANCE SCHEMEFollowing the introduction of the fee for service (cash and

carry) system into Ghana’s health sector in the 1980’s, many

patients began to have difficulty with paying for their health

care especially admission cost. As a result, many did not go to

the hospital until it was too late or their illness had advanced

to a more complicated phase. Others who were admitted and treated

subsequently absconded without paying for their treatment. Many

individuals quite simply could not afford to pay for their care.

The population therefore had reduced access to hospital services

and in turn, this had a negative impact on the financial

performance of hospitals(Chris Atim, March 2000).

2.6.1 Objectives of the Scheme:The main objective of the scheme as in its initial project

document was to reduce the cost per individual hospital

admission, thus making service accessible to all within the

country. In the scheme’s report of 1998, these same objectives

were restated.

1. To encourage the people to pall their financial resources

together to cater for their hospitalization bills.

2. To improve the country’s population economic accessibility

to curative care by making health delivery more accessible

and affordable

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Although not explicitly stated as an objective, it is clear that

improving the scheme would also lead to more reliable revenue for

the hospital by at least reducing bad debt and attracting more

clients. (Chris Atim, March 2000)

2.6.2 Ownership and Administration of the SchemeIn terms of the typology of mutual health schemes emerging in

Ghana, the country has no direct role in its management and

policy making. The scheme has in effect run as it was another

department of the hospital with its staff and management

subordinate to the hospital management. As a result, the scheme

enjoys no separate legal status as a corporate body and therefore

has no need for a separate constitution. There are however rules

and regulations governing membership and access to its services

(which are described as scheme policies). These are revised

annually before the registration exercise and circulated within

the community.

The rules (those relating to 1998/1999) state that, membership is

by entire family unless it is in the case of an individual living

alone. Children born after the annual registration can be

registered within forty (40) days after delivery and membership

is not transferable. The organization chart of the scheme

reinforce the point that the scheme is not separate from the

hospital and it is not controlled by the country, though some key

persons in the country are present at the top level of the

structure . (Chris Atim, March 2000).xxi

The scheme is administered through five (5) main hierarchical

units. These are Field workers, Zonal coordinators, District

coordinator, Insurance Management Team (IMT) and Insurance

Advisory Board (IAB).

i. Field Workers

In each zone, there are people who carry out the registration and

education of the people on the scheme. They are selected by the

management of the scheme. They are to possess at least a JHS or

Middle School Living Certificate. They should be able to write

and interpret records. Their remuneration is on commission basis;

that is depending on the premium collected.

ii. Zonal Coordinator

For the purpose of effective management of the scheme, districts

have been developed into zones. Each zone had coordinators with

one of them as their leader. Their selection is similar to that

of the field workers but they are expected to have experience in

leadership and be people of high moral character and proven

integrity. They coordinate the activities at the zonal level and

act as liaison officer between the district coordinators, field

workers and the country.

iii. District Coordinator

He is the link between the insurance management team, zonal

coordinators and field workers. He is to conduct educational

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fora, coordinate all scheme activities on the field and to

supervise zonal coordinators and audit record sheet and accounts

of the field workers. He also seeks to the welfare of the

insured, conducting checks to prevent impersonation and

investigate all cases reported to him. He reports to the manager

of the scheme. He should possess at least a higher secondary

school certificate and has undergone in-service training in

management and administration.

iv. Insurance Management Team

The IMT is the decision making body of the scheme. It is composed

of the manager, the district coordinator and his assistant,

district director of medical service, the district health service

administrator and medical nursing administrators.

The officer in charge of the scheme is responsible for the day-

to-day management of the scheme. The IMT ensures good

communication and working relationship between the scheme, the

hospital and the other partners. In taking decisions, the IMT

consultation with the Insurance Advisory Board (IAB), the

Hospital Management Team (HMT) and Diocesan Health Officer (DHO)

sit together. The DHO receives report from IMT through Advisory

board.

v. Insurance Advisory Board

It is made up of the key players in a country and opinion leaders

of recognized groups in a country. There is representation on the

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board for the traditional council, the District Chief Executive

and religious groups, educational heads and other equally

recognized groups or leaders in the country. They are

constitutionally obliged to meet ones every month and to advise

on issues concerning the scheme as and when necessary.

2.6.3 Membership, Coverage and Benefit PackageMembership of the scheme is voluntary. It is open to all citizens

of Ghana who are willing to contribute a premium. During a

stipulated period each into fund finance the impatient care of

those members who will fall sick within the year (the insurance

year is from February to January). It is insisted that a whole

family would have to register. This is aimed at reducing the

problem of adverse selection, premium calculation is uniform and

per individual, registration of newly born babies are permissible

at any time during the year but should be done between first

forty(40) days after delivery, membership rates are not so high.

The highest coverage since the inception of the scheme was 33.2%

of the estimated total population in 1993. The scheme provides

financial coverage for the total impatient bill of the registered

members at any hospital that has registered with the scheme; such

bills are considered as inpatient expenses (out-patient

department [OPD] or emergency unit on day of admission)

Exemptions from the scheme include the following;

i. Out-patient treatment.

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ii. Detention at out-patient department for less than twenty

four (24) hours.

iii. Normal deliveries.

iv. Admission with complications resulting from self-induced

abortions.

v. Treatment cost at other health institution (not registered

with the scheme) when referral was at patients request.

vi. Admission for treatment as a result of alcoholism. (Daablu-

Yaw K.K.2000)

2.6.4 Financial ContributionThe scheme charges an annual flat or premium per head

irrespective of age or sex. These premium must be paid during

single registration period lasting two months from September to

October every year, (except in the case of newborn babies who can

be registered any time after birth for up to forty [40] days).

Currently, the premium of newly registered members is Twelve

Ghana Cedis (12.00) while existing members pay Nine Ghana Cedis

(9.00). Other sources of finance are donor support and returns of

investment. The premium over the years depending on the hospital

cost, inflation and utilization levels expected.

2.6.5 Fund ManagementIn order to ensure that funds that are collected once a year are

able to cover the financial commitments of the scheme for the

whole year. The funds collected are invested in government bonds

xxv

and fixed deposits at banks, revenue from these investments help

to cover the health insurance scheme. For instance, revenue from

1997, 1998 financial year formed 8% of the total income that

accrued to the scheme.

i. Provider Payment Mechanism

The scheme pays the provider (Boakye Dankwa Memorial Hospital) on

a fee for service bases. The attending physician or nurse knows

the services performed on the in-patient admission card. If the

inpatient is insured, that insured person would hand over his/her

insurance card to the person in charge of the ward arrival, who

writes the number of insurance card on the hospital admission

card. An account clerk makes regular runs to record (from the

admission card). The details of services performed on the

admitted patients, the number of their insurance card as well.

This information is used by the department to prepare cost

corresponding to the admitted person. A monthly bill summarizing

the cost of care provided to insure in-patient is prepared by the

accounts department and submitted to the insurance manager for

payment.

This bill detail month numbers of in- patients and cost incurred

broken down into the following categories; Laboratory, Drugs, X-

ray, Material and Others.

xxvi

CHAPTER THREE

METHODOLOGY3.1 INTRODUCTION The chapter mainly covers the procedures and the justification

for their adoption. To ensure the collection of reliable and

accurate data for the research work; certain procedures and

methods were adopted. The various methods for data collection can

be described under the following sub-topics

1. Research Design

2. Population and Sampling

3. Methods and Instruments

4. Administration of Instruments

3.2 RESEARCH DESIGNThe research which is a case study of National Health Insurance

Scheme in Boakye Dankwa Memorial Hospital was viewed as something

that needs to be researched into. The researcher decided to

collect and collate data about the insurance scheme. The data

collected would provide a better insight into the operation of

the health insurance scheme from which conclusion could be drawn.xxvii

The data was both quantitative and qualitative in nature.

Quantitative in a sense that numerous instruments such as;

questionnaires and interviews, among others were used to get all

needed information for analysis. Again on the question of

qualitative nature of the data, all possible procedures were

adopted to collect the accurate and reliable source of

information to make generalization of the work possible.

3.3 METHODS AND INSTRUMENTSThis sub-topic presents a description of the methods and

instruments employed in this research study to obtain

information. The data and information of this work were obtained

through these methods and instruments;

Interview

Library search

Questionnaire

The methods and instruments listed above had different purposes

to the research work.

The interview approach was aimed at finding out the

responsibilities of managers of the scheme to hospital

administrators of Boakye Dankwa Memorial Hospital in Kumasi on

the performance of the scheme and the possible measure of

improvement.

Library Search also aimed at knowing the option of other writers

as far as the National Health Insurance Scheme is concerned.

xxviii

Finally, the questionnaires are designed to collect primary and

secondary information from the trustees; who are the scheme

administrators (management), the insured; who are the

beneficiaries and the hospital administrators who are the service

providers. This purposed at knowing the different views they hold

on the Health Insurance Scheme as a means of financing health

care.

3.4 ADMINISTRATION OF INSTRUMENT AND METHODS

This sub-topic explains in detail how the below methods and

instruments were administered.

i. Interview

ii. Library search

iii. Questionnaire

i. Interview

The interview was conducted on the individual bases and was

granted by the hospital administrators and beneficiaries. The

length of the interview lasted from 30 to 45 minutes and hand

writing notes were made during the interview. It took almost

three weeks.

xxix

ii. Library Search

Under library search variety of authority book tracks, handbills

and others were consulted. Books related to health and insurance

were used, to know the meaning of health and insurance and then

blending them together.

iii. Questionnaire

On the administration of the questionnaire, questions were

designed for the management of the hospital to obtain the primary

and secondary information as well data.

The questions were aimed at finding their views on the effect of

the scheme (The National Health Insurance Scheme) on the

financial performance of the health institution.

Well structured questions were designed for the hospital

administration. This was to deduce how the introduction of the

National Health Insurance Scheme is making health care accessible

to the population within the catchments area. It was to find out

if there is a future for the health institutions with the

introduction of Health Insurance Scheme. The questionnaire for

the hospital administrator comprised open-ended questions, and

pre-coded questions. Refer to appendix xx. The questionnaires

were left for the administrators to answer at their own

convenient time.

xxx

CHAPTER FOUR

DATA ANALYSIS

4.1 INTRODUCTION

This chapter presents data that were collected from the Boakye

Dankwa Memorial Hospital. The main areas of the chapter include

the background of the hospital, the coverage of NHIS, the disease

incidence in the hospital as well as the financial performance of

the hospital in sequential with the NHIS.

4.2 BACKGROUND OF THE HOSPITAL

Boakye Dankwa Memorial Hospital was established in May 1992 by Dr

Boakye Dankwa. He has been responsible for the infrastructural

development and provision of resources while he employed others

to take care of the managerial and administrative work for the

last twenty (20) years that the hospital has been in existence.

It is located in Kumasi, Dichemso to be precise in the Ashanti

Region.

xxxi

4.2.1 The Mission and Vision of the hospital

“To provide quality and affordable healthcare for all that, leads

to the general well being of all individuals in the Ashanti and

beyond”. This “mission and vision” adheres to the mission

statement of the national health insurance scheme.

4.2.3 Monitoring of Beneficiary Patients

Since there is reimbursement of funds spent on the insured

clients, the management has put in measures to tract patients

that have been provided with the services. The study found that

the main tracking systems are the use of in-patient register and

electronic database of patients attendance.

4.4 DISEASE INCIDENCE IN THE HOSPITAL

In the hospital, the main diseases that are common for three

successive years are malaria, Respiratory tract infections and

Typhoid fever. These three diseases alone account for over 50% of

all OPD cases. This implies that these are the cases mostly

treated by the NHIS. Table 2 shows three top diseases that are

treated mostly under NHIS.

xxxii

Table 1: Causes of OPD Morbidity from 2009 – 20112009 2010 2011

No.Conditi

on

% Conditio

n

% Conditio

n

%

1 Malaria 36.5 Malaria 38.0 Malaria 39.3

2

Respira

tory

tract

infecti

on

8.5

Respirat

ory

tract

infectio

n

9.0

Respirat

ory

tract

infectio

n

9.1

3Typhoid

fever4.5

Typhoid

fever4.9

Typhoid

fever5.3

4 Others 50.5 Others 48.1 Others 46.3

Source: Annual Report, 2011

As indicated in Table 1, malaria continues to increase in both

proportion and absolute figures while all other diseases continue

to increase at a decreasing rate. Malaria increased from 36.5% in

2009 to 39.3% in 2011.

xxxiii

4.5 CONTRIBUTION OF THE SCHEME TO FINANCIAL PERFORMANCE OF THE

HOSPITAL

The introduction of the NHIS has an influence over the financial

performance of the hospital. According to the study, the

existence of the NHIS has improved the financial performance of

the health institution. Table 3 shows the main categories of IGF

for the institution. From Table 3, out of the total IGF, the NHIS

contributes 98.5% while the remaining 1.5% comes for direct

payment for health services.

Table 3: IGF by Category for 2011Revenue NHIS % Paying Total %

Medicines

217,319.

37

97.7 5,012.

68

2.3

222,332.05

100

Non

Medicine

1,071,07

3.71

98.7 14,317

.91

1.3 1,085,391.

62

100

Total

1,288,39

3.08

98.5 19,330

.59

1.5 1,307,723.

67

100

Source: Annual Report, 2011

The continuous reimbursement of quarterly claims is the major

source of internally generated fund for the institution. The

study established that with improved financial performance, the

institution is able to improve its service delivery. This is

because there is ready fund to run the institutions.

xxxiv

Prior to the establishment of the NHIS, some clients who default

payment for services rendered increased the debt ratio of the

hospitals. However, the current system has reduced and in fact

eliminated defaulters in the system. Though the quarterly claims

sometimes come very late, it has relatively improved the

financial performance of the district.

4.5.1 Revenue Expenditure Trend of the Institution

The financial performance of an institution and for that matter,

health institution is better understood when the expenditure

pattern is compared with the revenue. The institution is not only

doing well in terms of raising funds from the NHIS but equally

performing well in the revenue-expenditure pattern. Figure 2

shows the expenditure and revenue pattern of the district.

xxxv

Figure 2: Income and Expenditure Pattern from 2009 – 2011

0.00

200,000.00

400,000.00

600,000.00

800,000.00

1,000,000.00

1,200,000.00

2009 2010 2011

Amou

nt (G

H¢)

Incom eExpenditure

Source: Annual Report, 2011

As indicated in the figure, from 2009 to 2011 the revenue pattern

has continuously exceeded the expenditure pattern.

xxxvi

CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5.1 INTRODUCTION

This chapter presents the key research findings, the conclusion

and recommendations. The findings are presented in line with the

key components of the research.

5.2 KEY FINDINGS OF THE STUDY

The institution depends much on its internal generated

funds. There was an appreciable increase in revenue

generation from 2010 to 2011. This saw an increase of 24.4%

over 2010 revenue. The revenue trend of the institution has

over the three years exceeded the expenditure level. This

testifies that the NHIS has had a positive effect on the

financial performance of the institution.

There is wide acceptance of the National Health Insurance

Scheme. This is evident by the fact that 99.5% of the

district population has registered with the scheme.

Discussing with the institution revealed that renewal of the

xxxvii

premium has been regular. This has contributed to the

internal generated funds of the institution.

The high proportion of registered members has influenced the

category of clients at the hospital. At the hospital level,

a greater proportion of the clients (97.6%) at the OPD are

registered members of the NHIS.

Though the scheme is doing well in terms of financial

performance, a major challenge is the delay in reimbursement

of quarterly funds. This according to management can be

traced to the national level.

The major disease in the district is malaria. This has been

the leading cause of OPD attendance for the past three

years. Besides being the top cause of OPD attendance, the

incidence is increasing at a high rate.

5.3 CONCLUSION

The introduction of the National Health Insurance Scheme improved

the financial performance of the institution. Sustainability of

good financial performance is contingent on the level of

patronage of the both the NHIS and the hospital. Where there is

poor service delivery at the hospital level, there will be the

tendency to change institution. The NHIS is better than the cash

and carry system in the sense that with the NHIS, the level of

xxxviii

payment defaulters has reduced. Therefore there is some level of

certainty that once services have been rendered to insured

clients will to be reimbursed.

5.4 RECOMMENDATIONS

Based on the findings of the study, the following recommendations

are made to sustain and perhaps improve the financial performance

of the institution.

The institution need to improve the services rendered to

clients. This is to motivate the patronage of the

institution anytime the need arises. According to management

of the institution, furnishing of the waiting rooms at the

hospital, adequate beds and provision of quality drugs are

some of the services that can be improved.

There is the need for the national level to timely release

the quarterly reimbursement to the institutions. This will

ensure timely availability of funds at the institution level

to effectively carry out its services.

xxxix

References

Appendix

xl