An Analysis of Health Financial Protection in Ghana

Abstract Background Ghana introduced a state sponsored health insurance in 2005. The objectives of risk sharing through a prepaid mechanism was integral to the design, aimed at addressing the inequities in financial protection. Progress, however, has been predictably slow and complicated. The Scheme coexists alongside out-of-pocket spending, resulting in the persistence of catastrophic health expenditures and impoverishment. This study adds to the comparative literature on health financial protection in Ghana. Methods This study analysed data from Round 7 of the Ghana Living Standards Survey using ADePT. Out-of-pocket spending was used as the indicator for living standards. We estimated different headcount thresholds and concentration index for catastrophic health expenditure. Consumption was estimated to determine the poverty headcount and poverty gap. The distributive effect of health care expenditures on the different income quintiles was estimated to determine progressivity of health financing sources. Results Six percent of the households incurred catastrophic expenditures. The out-of-pocket health payments share reduced with total household resources. Those in the lowest quintile allocated a higher share of their total expenditures to health. This impoverished a significant proportion. The richer households had a higher share of health consumption. Therefore, the financing share rose the higher the quintile rank. The total redistributive effect of the expenditure on insurance, total expenditure on health and total payments showed an increase in income inequality between households. Expenditures on insurance and total health showed overall higher inequality for the bottom 25% and 50% of the population. Conclusion The results highlighted multiple technical challenges related to the implementation of policies and interventions on health financial protection. Ghana can leverage its Scheme to strengthen implementation of its current health financing policies and create opportunities for investments in pro-poor interventions and actions. Other supporting social protection strategies and policies can help reinforce the ability and flexibility of poor households to cope with the uncertainties of health expenditures.