Utilization of healthcare services and renewal of health insurance membership: evidence of adverse selection in Ghana

Stephen Kwasi Opoku Duku,Francis Asenso-Boadi,Edward Nketiah-Amponsah,Daniel Kojo Arhinful

doi:10.1186/s13561-016-0122-6

Abstract

BackgroundUtilization of healthcare in Ghana’s novel National Health Insurance Scheme (NHIS) has been increasing since inception with associated high claims bill which threatens the scheme’s financial sustainability. This paper investigates the presence of adverse selection by assessing the effect of healthcare utilization and frequency of use on NHIS renewal.MethodRoutine enrolment and utilization data from 2008 to 2013 in two regions in Ghana was analyzed. Pearson Chi-square test was performed to test if the proportion of insured who utilize healthcare in a particular year and renew membership the following year is significantly different from those who utilize healthcare and drop-out. Logistic regressions were estimated to examine the relationship between healthcare utilization and frequency of use in previous year and NHIS renewal in current year.ResultsWe found evidence suggestive of the presence of adverse selection in the NHIS. Majority of insured who utilized healthcare renewed their membership whiles most of those who did not utilize healthcare dropped out. The likelihood of renewal was significantly higher for those who utilize healthcare than those who did not and also higher for those who make more health facility visits.ConclusionThe NHIS claims bill is high because high risk individuals who self-select into the scheme makes more health facility visits and creates financial sustainability problems. Policy makers should adopt pragmatic ways of enforcing mandatory enrolment so that low risk individuals remain enrolled; and sustainable ways of increasing revenue whiles ensuring that the societal objectives of the scheme are not compromised.

Highlights

Utilization of healthcare in Ghana’s novel National Health Insurance Scheme (NHIS) has been increasing since inception with associated high claims bill which threatens the scheme’s financial sustainability
Our analysis of the effect of previous utilization of healthcare and frequency of usage by the insured on the decision to renew membership using NHIS routine data (2008 – 2013) provides evidence of the presence of adverse selection in Ghana’s NHIS
The existence of adverse selection in the NHIS has the potential of creating financial sustainability problems since high risk individuals who self-select into the scheme demand more healthcare services and increases the claims bill

Summary

Introduction

Utilization of healthcare in Ghana’s novel National Health Insurance Scheme (NHIS) has been increasing since inception with associated high claims bill which threatens the scheme’s financial sustainability. Over the past two to three decades, many sub-Saharan African (SSA) countries have found it increasingly difficult to mobilize sufficient funds for financing health care for the poor and vulnerable in society. Duku et al Health Economics Review (2016) 6:43 enrolment coverages, poor quality of healthcare services, inefficient provider payment mechanisms, high claims bill, moral hazard and adverse selection which have the potential of eroding the gains made [2, 3]. In 2004, Ghana started full implementation of the National Health Insurance Scheme (NHIS). The NHIS was established with the aim of making quality healthcare accessible and affordable to all people living in Ghana, the poor and vulnerable. Active membership decreased to 8,163,714 in 2010 and increased to 8,885,757 in 2012, an increase of 8 % over the 2011 figure of 8,227,823 and representing 35 % of the Ghanaian population [4]

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Results

Discussion

Conclusion