National health insurance in Ghana: Politics, adverse selection, and the use of child health services

In August 2003, the Ghanaian Government made history by implementing the first National Health Insurance System (NHIS) in sub-Saharan Africa. Within three years, over half of the country had voluntarily enrolled into the NHIS. This study had three objectives: (1) Qualitatively analyze the political and governance-related dimensions of the development of the NHIS; (2) Analyze the impact of the NHIS on the dynamics of intra-household resource allocation of healthcare to children under 5; (3) Test whether there is evidence that voluntary household enrollment has led to adverse selection in the Ghanaian NHIS. Qualitative methods employed included stakeholder interviews and extensive secondary data analysis using grounded theory. Quantitative analysis, using a two-part model, was conducted using the Nkoranza insurance claims database, which comprised of 64,859 individuals and 7,950 children under the age of five from 17,700 households. Our qualitative analysis finds that the political nature of health reform requires strong institutional mechanisms to safeguard transparency and accountability throughout the policy development process. Thus, we conclude that countries and their development partners must incorporate governance-related activities into their long-term health sector development plans to maximize the impact of public health policy. Our quantitative analysis reveals that while the NHIS does improve equity of resource allocation among sick children, household-level factors unrelated to the cost of medical care, such as opportunity cost, beliefs and attitudes about formal health services, and nonmedical cost of care, remain barriers to care-seeking for children under 5. We assert that insurance is not the silver bullet to improving utilization of child health services: policymakers must also focus on community-level interventions aimed at addressing household-related factors that influence care-seeking behavior. Regarding adverse selection, we find that the child-premium waiver is an important incentive for household enrollment, and has mitigated, but not eliminated, evidence consistent with adverse selection. However, since one of the main objectives of the NHIS was to increase use of necessary care, especially by children, we argue that the presence adverse selection is a largely favorable policy outcome. Future reform efforts must balance the fiscal need to reduce adverse selection with the societal objective to cover vulnerable populations.