NHIS financial sustainability hinges on 3 key factors 

Dr Lydia Dsane-Selby, CEO NHIA
  • Timely release of funds by gov’t
  • Stemming rising medicine price
  • Keeping economic growth on track

The financial sustainability of the National Health Insurance Scheme (NHIS) would be under serious threat if measures are not put in place to check timely release of funds by the finance ministry, rising medicine price and anticipated slow growth of the economy the Chief Executive Officer (CEO) of National Health Insurance Authority (NHIA), Dr. Lydia Dsane-Selby has said.

According to her, some urgent steps need to be taken collectively to mitigate and strengthen the National Health Insurance Scheme to help achieve the expected outcome. A sustainability test conducted by her office revealed that, currently, the scheme is sustainable but is faced with these three major challenges some of which measures have been put in place by the Ministry of Health to address.

Speaking at the virtual CEOs one-on-one series organised by the Ghana National Chamber of Pharmacy, Dr. Lydia Dsane-Selby said: “We have just built an actuarial model, putting in various scenarios to see how financially sustainable we are. I can tell you that most of the scenarios say we are financially sustainable. I think it is about how we implement our own policies. There are some key factors that may affect sustainability.

One is obviously the timely release of funds from the ministry of finance. Also, to make sure that the country’s economic growth is on the rise because the National Health Insurance Levy (NHIL) is tied to how the economy is doing. Another key factor is the rate of increase in medicine prices.

We put in three or four scenarios and realized that if medicine prices continue to escalate at the level they are now, then the scheme is not sustainable; this is something we have to address. A costing exercise has been done for services which is ready to be disseminated. The ministry has also introduced a framework for contracting in the bid to halt the rapid escalation of medicine prices.

I understand from the WHO we have some of the highest medicine prices in the world and some of the highest escalation of medicine prices and if we don’t address it, the scheme is really not sustainable.”

From this test conducted by the NHIA, the NHIS would be facing some difficult times in the near future as some of the scenario’s mention are not explicitly under government control due to global dynamics at play, as a result, the effect of the pandemic on the global economy.

With the global challenge in supply chains, it would be difficult to hold back the escalating prices of medicines. Due to supply chain challenges the cost of molecular formulation on the globe is on the rise. Some pharmaceutical giants have also been asked by the home governments to feed them before attending to foreign requests. For example, it has been documented that the price of paracetamol – a common and cheap drug for pain relief – has seen about a 300 percent increase in 12 months and there is no clear indication of a halt in the rising price.

Senior Advisor to the Finance Minister, Dr. Samuel Ashong has said, according to the ministry’s projections the nation’s economy might get back to “some semblance of normalcy” in the next three years.

From his analysis, the impact of COVID-19 has not only been dire but continues to exert pressures that may collapse the economy if strong measures like the introduction and adjustment of taxes are not taken immediately.

In addition to the above, government workers have been told not to expect huge salary increases in the coming years due to the tight budget the state has to run owing to the impact of COVID-19 on its revenue and expenditure streams.

This year’s budget has been one of the toughest ever drafted in the history of the country as the expenditure demands far outweigh expected revenue inflows. Apart from that, government does not have enough to cater for some mandatory obligations and would have to largely resort to borrowing.

Interest payment on the country’s debt has become the biggest expenditure item on government’s books—surpassing the amount set aside to pay public sector workers’ salaries and pensions. According to the 2021 budget statement, government will spend GH¢35.9 billion as interest payments, whereas workers’ compensation is expected to amount to GH¢30.3 billion.

From the analysis above, government is anticipating slow growth and as pension and salaries are not expected to see huge increases, it means the NHIL which gets huge funding from pension funds from the Social Security and National Insurance Trust (SSNIT) would face some difficult times.

It would also be difficult to certainly say that funds from the finance ministry to the NHIA would be timely simply because if the authority was challenged in receiving funds from the ministry in goods times little hope can be glimmered in the hard times ahead.

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