Using fiscal policies to address inequalities in the healthcare sector

The cost of healthcare has been on the increase all over the world. Globally, healthcare expenditure has been projected to reach US$8.7 trillion by 2020. Ghana seems to be on track with an average of 8.6% of government’s allocation to the sector. Though this figure seems commendable, yet it is below the 15% as part of the Abuja Declaration.

Over the years, government’s allocations to the sector have gone primarily into the payment of compensation of arrears, employee salaries, and building non-functioning health facilities in the urban areas with little going into infrastructure and other capital projects. Like in many countries, healthcare financing has been a mix between government’s support, user fees as well as dedicated taxes. It has been said that the current financing mix is not enough to allow the NHIS to meet its full obligation and thus the managers of the scheme have called for additional taxes to augment the scheme.

 

Accessibility and Affordability

Access and affordability remain key challenges in Ghana’s healthcare system. The disproportionate number of health facilities in the urban areas, primarily in Greater Accra and the Ashanti regions, underscore health coverage for those living in the more rural regions such as in the Upper East Region. According to the Ghana Health Service, only 60% of the people in the latter region are within an 8km radius of a health facility.

The lack of NHIS coverage nationwide continues to pose a threat to the poor. As at 2017, 41% of the 28 million Ghanaians were covered under scheme. Those not covered spend more user fees, particularly the poor who spend a greater percentage of their income on health. This phenomenon, known as catastrophic healthcare spending, explains how families can be pushed further into poverty when not covered by insurance though the cost for signing up to the scheme is small compared to pay for the cost of healthcare at the point of delivery. This is reflected in the out-of- pocket expenditure per capita of $29, the equivalent of GHC 120, which for those living below the poverty line is a catastrophic amount. Due to the challenges associated with the NHIS, some companies and middle class Ghanaians are having to fall on private mutual health insurance for their healthcare needs leaving the poor and the working class to rely on ill-functioning NHIS scheme.

 

Resource Deficiencies and Inequalities

The recent completion of new hospitals in Greater Accra have brought into question why planned facilities such as the Wa Hospital, in the Upper West Region, Nsawkaw Hospital, in the Brong Ahafo Region, and the Salaga Hospital, in the Northern Region, are awaiting completion. Hospitals that are unable to operate because of a shortage of medical equipment and supplies not only keep the doors closed in some hospitals but further discourage compliance with clinical guidelines in critical conditions.

Regardless of the quantity of health facilities, attention must be paid to the resource shortages which are damaging in hospitals.

Human resource capital, which includes doctors, nurses, midwives and other technical staff, also faces a critical deficiency with the doctor to patient ratio at 1 to 8000, well below the international threshold of 3.45 to 1000. The reason for the shortage being the training and deployment of health professionals to the understaffed areas, and the lack of incentives for them to stay. It was recently reported that none of the newly trained doctors chose to serve in the three northern regions.

 

Increasing Quantity with Quality in Mind

Providing an effective, efficient and sustainable healthcare system for all that address all the challenges requires an approach that meets three conditions: Availability, Accessibility, and Acceptability.

Availability means an adequate supply of health workers, who have the required competencies to match the health needs of the population; an adequate supply of medical supplies in stock at every health facility; each meeting the needs of the community. Accessibility refers to the equitable distribution across urban and rural areas ensuring access to the under-served populations regardless of income bracket. Acceptability would ensure the ability of all health professionals and facilities, regardless of location to treat all patients with dignity and promote a demand for services. These cannot be attained automatically. They must be engineered to happen.

 

Fiscal Policies to Address in Inequalities in the Healthcare Sector

According to a study conducted by Oxfam Ghana, it was found out that tax exemptions and deductions to multinational firms in Ghana amount to an average of US$1.3 billion year which year represents two-thirds of the education budget and 80% of the health budget. This means that the funding gap in the healthcare budget can be addressed if the government can look at the unsustainable tax exemptions given to multinational corporations operating in the country.

The study also identified tax dodgy practices like tax evasion, avoidance and illicit flows by corporations and individuals as widespread. Though they are very hard to quantify, data suggest that Ghana loses 2% to illicit flows through trade mispricing alone.  Tax dodging by rich individuals also amounts to huge amounts of money, with many not even being registered for taxpaying.

In conclusion, government can use fiscal policies and measures (by taxing the rich and spending it on the poor) to address the inequalities in the healthcare sector. This can be done without having to borrow from donor partners nor introduce any further new taxes. Rolling back on tax exemptions to multinationals alone can fund Ghana’s healthcare funding deficit and bring about descent health for all is an essential component of the sustainable development goals.

 

 

Hilary Luna Enos-Edu is with CUTS International Ghana. CUTS Ghana is a research and advocacy public policy think tank which works in the areas of consumer protection and education, governance, economic regulation, trade and development, regional integration, competition policy and law, etc. CUTS can be contacted through | Office: +233-30-224-5652 | Email: accra@cuts.org,