Bulletin of the World Health Organization

Beyond fragmentation and towards universal coverage: insights from Ghana, South Africa and the United Republic of Tanzania

Diane McIntyre, Bertha Garshong, Gemini Mtei, Filip Meheus, Michael Thiede, James Akazili, Mariam Ally, Moses Aikins, Jo-Ann Mulligan, Jane Goudge

Volume 86, Number 11, November 2008, 871-876

Table 1. Analytic overview of health systems in Ghana, South Africa and the United Republic of Tanzania

Ghana
Revenue collection
Source of funds There is significant donor funding, accounting for about 20% of total health-care funding.
The burden of domestic funding is on companies and households, but households ultimately bear the major burden.
There are some exemptions from contributions (e.g. the lowest income group does not pay income tax; children aged less than 18 years are exempt from national health insurance contributions if both parents have paid their premiums; and children aged less than 5 years and the elderly aged more than 70 years do not have to pay user fees. Pregnant women do not have to pay for certain services, and there is no fee for leprosy and TB treatment). User fee waivers apply to indigent people, but it has been difficult to clearly define and identify this group.
Contribution mechanisms General tax revenue is generated from personal income tax (11%), company tax (15.4%), VAT (25.4%), petroleum tax (18.3%), import tax (16.5%), earmarked tax for national health insurance (5.1%) and a range of other taxes accounting for 8%.
Personal income tax is structured progressively with low-income earners being exempt and the marginal tax rate ranging from 5% for the lowest income taxpayers to 28% for the highest income taxpayers.
VAT is charge at 15% (10% for general government revenue, 2.5% as an earmarked tax for education and 2.5% as an earmarked tax for health insurance).
NHI scheme:
For formal sector workers, a payroll deduction of 2.5% is transferred to the NHI fund as part of their contribution to the Social Security and National Insurance Trust (SSNIT) fund.
Theoretically, contributions by those outside the formal sector are supposed to be graduated according to income such that low-income groups pay a premium of 7.20 Ghanaian cedi (GH¢) or US$ 8 while those with the highest income pay a premium of GH¢ 48.00 or US$ 53. In reality, a flat premium payment of GH¢ 7.20 per annum is charged due to the difficulty of categorizing people into different socioeconomic groups.
Out-of-pocket payment:
User fees are not differentiated according to income in Ghana.
The majority of people pay out-of-pocket for their health care needs in public and private health facilities, pharmacies and traditional healers.
Collecting organization Taxes are collected by three main bodies in Ghana: the Internal Revenue Service collects personal and company income tax; the VAT secretariat collects domestic VAT, excise duties and part of the NHI levy. The Customs, Excise and Preventive Service collects import duties, import VAT, petroleum tax and part of the NHI levy. All of these taxes are then pooled by the Revenue Agency Governing Board of the Ministry of Finance and Economic Planning.
Health insurance contributions are made by both formal and informal sector workers. Formal sector workers contribute via SSNIT, a body that manages retirement funds. These funds are sent to the DMHIS according to the number of formal workers/ SSNIT contributors that a scheme registers. Those outside the formal sector pay their contributions directly to their respective DMHIS.

Risk pooling
Coverage and composition of risk pools The NHI scheme has been implemented through a network of DMHISs. Each district has a scheme, with the larger districts (in metropolitan areas) having more than one. There are already 138 DMHISs in the country. By December 2007, 55% of the population were registered under the NHI scheme, although only 44% of the population had received their membership cards due to administrative problems. Although some of the poor have been enrolled in the NHI scheme through government subsidies, the majority of members are from higher income groups.
Even though legislation makes provision for setting up private insurance schemes, they cover less than 1% of the population.
The majority of those not covered by NHI use public sector health facilities and pay user fees and a small number pay out-of-pocket to access health services from the private sector.
Allocation mechanisms There is no risk-equalization between the individual DMHIS at present. The NHI scheme secretariat merely allocates funds to DMHISs based on the number of SSNIT registered members as well as indigent members that have been registered.
Taxes are centrally collected and allocated to regional and district levels using a needs-based resource allocation formula.

Purchasing
Benefit package The benefit package of the NHIS is quite comprehensive, covering outpatient and inpatient services at accredited facilities, as well as the community-based health planning services. The benefit package is the same for all DMHISs.
Those using publicly and user-fee funded services also have access to a comprehensive range of services, which is primarily limited by the ability-to-pay user fees.
Provider payment mechanisms Public and some not-for-profit private (e.g. Christian Health Association of Ghana) facilities are allocated budgets and staff are paid salaries.
The DMHISs pay providers on a fee-for-service basis.
Private for-profit practitioners are paid on a fee-for-service basis, through out-of-pocket payments.
Provision There is an extensive and well-distributed network of public sector primary health facilities in all 10 regions of Ghana. There are 2 teaching hospitals, 9 regional hospitals, and several district hospitals. Hospitals are less well-distributed, with specialist services being heavily concentrated in the south of the country and in the urban areas.
There are a relatively small number of private for-profit health facilities, mainly concentrated in the two big cities of Kumasi and Accra, which serve the wealthiest groups.
Human resources in the health sector is a challenge. The number of health professionals working in the public health sector is very low relative to the population it serves (e.g. there are about 10 000 people per doctor, 1 587 people per nurse and 14 286 people per pharmacist in the public sector). Nevertheless, the majority of health care professionals work in the public sector.

South Africa
Revenue collection
Source of funds There is very little donor funding in South Africa (< 1% of total health care funding).
Domestic funding – burden placed both on companies and individuals, but households ultimately bear most of the burden of funding health care services (through tax, insurance contributions and out-of-pocket payments).
Some are not expected to contribute (e.g. the lowest income groups do not have to pay tax; pregnant women, children aged less than 6 years, the disabled and the elderly do not have to pay user fees at government facilities).
Contribution mechanisms General tax revenue is generated from personal income tax (30% of total tax revenue); VAT (28%); company tax (23%) and a range of other taxes and levies (fuel levy, excise duties, customs duties, estate tax – combined accounting for 19%).
Personal income tax is structured progressively with low-income earners being exempt and the marginal tax rate ranging from 25% for the lowest income taxpayers to 40% for the highest income taxpayers.
Company tax is charged at a flat rate of 29%,VAT is charged at 14%, but many basic foods are exempt from VAT.
Private voluntary health insurance (called medical schemes):
Community-rated contributions to schemes; often shared between employers and employees (but percentage share varies across companies).
Very few medical schemes relate contributions to income level; contributions are generally a flat rate linked to a specific benefit package (so contributions are differentiated by benefit package, not income level).
Out-of-pocket payments:
User fees at public sector hospitals (there are no fees for primary health care services) are differentiated according to income level – the poor are exempt from fees (but there are difficulties in proving eligibility for exemptions) and there are three other income categories with very low fees for the lowest income groups. There are limited incentives to collect fees (as the facility doesn’t benefit from fee revenue) so many facilities do not apply fee schedules rigidly and place many patients in the lowest fee category.
Some low-income workers, who are not members of medical schemes, use private general practitioners and retail pharmacies and pay on an out-of-pocket basis.
The biggest share of out-of-pocket payments is attributable to medical scheme members, either in the form of co-payments or on services that are not covered under the benefit package. Co-payments are flat amounts or a percentage of the total bill.
Collecting organizations Tax collected by the South African Revenue Service, which has recently improved tax collection mechanisms (identifying those not complying) and revenue collected has increased dramatically.
Health insurance contributions collected directly from members (often employer and employee payroll contributions) by more than 120 medical schemes. Each scheme has a board of trustees that has oversight of the schemes activities. There have been considerable efforts to improve the skills of trustees and to ensure that they represent the members’ interests.

Risk pooling
Coverage and composition of risk pools Medical schemes cover less than 14% of the population and include high- and middle-income formal sector workers and sometimes their dependents. There is risk pooling within individual schemes in relation to the PMB package (see page C), but most schemes have individual ‘medical savings accounts’ for primary care services. There are more than 100 medical schemes, and each scheme has a number of benefit packages, so there is considerable fragmentation into many small risk pools.
The remaining 86% of the population is largely dependent on tax-funded health services, and comprises low-income formal sector workers, informal sector workers, the unemployed and the poor. A small part of this population pay out-of-pocket to purchase primary care services in the private sector, but are entirely dependent on the public sector for hospital services. Therefore, there is a very large risk pool through tax funding as anyone who needs care and is unable to pay will receive an exemption (liberally applied).
There is no risk pooling between the tax-funded pool and the medical schemes. The public-private mix is the main equity challenge: while schemes cover less than 14% of the population about 60% of funds are in the private sector.
Allocation mechanisms At present, there is no risk-equalization between individual medical schemes, although it is planned, and so it will increase pooling between individual schemes. However, this will not address the lack of pooling between the tax and medical schemes environments.
Tax funds are centrally collected. Funds are allocated from central government to provinces (for all sectors) using a needs-based formula and then each province has autonomy to decide on how it will allocate these funds to individual sectors (e.g. health and education) – i.e. South Africa has a ‘fiscal federal’ system.

Purchasing
Benefit package Those using tax-funded health services have a relatively comprehensive benefit package. No set of services are specified; instead South Africans have access to a full range of health services from those provided at primary care clinics through to those provided at highly specialized hospitals. Certain very expensive services (such as dialysis and organ transplantation) are implicitly ‘rationed’ through resource constraints.
All medical schemes have to cover services in the PMB package, which includes inpatient care, certain specialist services and care for most chronic conditions. Each scheme offers different benefit options, which include the PMB and various other services. While schemes may not charge co-payments on services in the PMB, there are considerable co-payments on other services and large out-of-pocket payments for care outside the benefit package.
Provider payment mechanisms Public sector facilities are allocated budgets and staff are paid salaries.
Private providers are paid on a fee-for-service basis. Some general practitioners have accepted capitation payments from medical schemes that serve lower income groups. There are a few private primary health care ‘clinics’ where staff are paid on a salary basis. Most private hospitals bill on a fee-for-service basis, but some have agreed to per diem payments with a limited number of schemes.
Provision There is an extensive and well-distributed network of public sector primary health care facilities. Hospitals are less well-distributed (there is an average of 400 people per public hospital bed), with specialist services being heavily concentrated in certain provinces. The number of health professionals working in the public health sector is very low relative to the population it serves (e.g. there are about 4 200 people per general doctor, 10 800 people per specialist, 620 people per nurse and 22 900 people per pharmacist in the public sector).
The private health sector is very large but is heavily concentrated in the large metropolitan areas. There are 3 very large private hospital groups (there is an average of 190 people per private hospital bed). The majority of health care professionals work in the private sector, despite serving the minority of the population (e.g. there are about 590 people per general doctor, 470 people per specialist, 100 people per nurse and 1 800 people per pharmacist in the private sector).

United Republic of Tanzania
Revenue collection
Source of funds Donors account for about 23% of total health care resources and nongovernmental organizations account for 5%.
Households bear a large burden of total health care financing. Exemptions for priority groups, e.g. under-fives, pregnant women, the poor and those with selected illnesses.
Contribution mechanisms General tax revenue is generated from: international trade/import and export duties (45% of total tax revenue); VAT (16%); personal income tax (14%); company tax (10%); and a range of other taxes and levies (excise duties, other domestic taxes and charges, other income tax – combined accounting for 15%).
Personal income tax is structured progressively with zero tax for low-income earners [i.e. those with yearly incomes of less than 960 000 Tanzanian shillings (Tsh) per annual]. The marginal tax rate ranges from 18.5% for the lowest-income taxpayers to 30% for the highest-income tax payers.
Company tax is charged at a flat rate of 30% of company profits.
VAT is charged at 20%, but a number of items are exempt from VAT.
Compulsory prepayment schemes:
The NHI fund is compulsory for all public servants. The contribution rate is 6% of salaries, which is shared equally between the employer and the employee.
For private employees, there is a compulsory contribution of 20% of their salary to the NSSF. This contribution is shared equally between the employee and employer. NSSF has recently introduced a Social Health Insurance Benefit as part of its benefit package.
Voluntary prepayment schemes:
There is limited private voluntary insurance for formal sector employees, accounting for 3% of total health care financing.
A form of community-based health insurance, the CHF was introduced in all districts on the advice of The World Bank and under the directive of the Ministry of Health and Social Welfare. Contributions to these schemes, usually flat rates, are decided by the community and vary from one council to another. Revenues from members’ contributions are matched by a 100% grant from the government.
Out-of-pocket payments:
User fees exist in all public facilities (from primary to referral level). Fees are differentiated by level of care, with low fees at primary level and higher at referral level.
Those covered by prepayment schemes do not pay user fees, except for services outside the benefit package.
User fee exemptions include: children aged less than 5 years; pregnant women; selected diseases/conditions. There are fee waivers for the poor, but implementation is weak.
Out-of-pocket payments are also made to private primary care providers.
Collecting organizations Tax is collected by the Tanzanian Revenue Authority.
Health insurance contributions are collected directly by either the NHI fund or the NSSF. Each has boards, which oversee the operation of the funds.
CHF contributions are collected at facility level and are kept in a CHF account which is managed by the district council.
User fees are collected by health facilities and deposited into the CHF account for primary health care facilities and into the health services fund for hospitals.

Risk pooling
Coverage and composition of risk pools CHF covers residents of rural areas (where 80% of the population lives) but covers less than 1% of the total population. Each council operates their CHF in isolation, which limits the extent of risk pooling.
NHI fund covers public employees and their dependants (not exceeding 5 per member). This scheme covers around 5% of the total population.
The NSSF is a recent development and covers less than 1% of the population. By targeting private sector workers, the potential scope of coverage is much larger.
The majority of the population (low-income formal sector workers, informal sector workers, the unemployed and the poor) is dependent on health services which are funded through tax revenue and user fees, particularly at hospital level (some pay out-of-pocket for primary care in the private sector).
Allocation mechanisms Tax funds are centrally collected. Allocation between sectors is based on government priorities, which include education, health and infrastructure. A needs-based resource allocation formula guides allocations to districts for primary health care and district hospitals. Regional authorities are allocated funds for regional hospitals.
There is no risk equalization between the different prepayment financing schemes or between the two mandatory schemes (although there is some discussion about the latter).

Purchasing
Benefit package The government, through tax revenue, subsidizes all services provided by public facilities.
The NHI fund covers both inpatient and outpatient care in its benefit package, but has spending limits. Public facilities are the main providers of services to NHI fund beneficiaries, comprising about 86% of total accredited health facilities (although they account for only 50% of the benefit payments). While blanket accreditation has been provided to all public health facilities, private facilities need to apply individually.
The CHFs only cover services at primary level facilities. A few councils have managed to expand coverage to include hospital level services.
Provider payment mechanisms NHI fund: Providers are paid on a fee-for-service basis, within 60 days of submitting a bill. Payments to public hospitals are deposited into the Health Service Fund, while those for primary care facilities are paid to the CHF and are used according to the district health plan.
NSSF and private voluntary insurance reimburse on a fee-for-service basis.
Public facilities prepare budgets, which are compiled by the district/council management. There are frequently delays in disbursement of funds.
In the case of CHFs, accredited non-government facilities are supposed to claim the actual costs incurred in treating CHF members (cost-recovery fee-for-service).
Provision Government remains the main provider of health services and owns about 64% of all health facilities. About 87% of all facilities are dispensaries; health centres and hospitals account for about 9% and 4%, respectively. About 45% of the population live within 1 km of a health facility, 72% within 5 km and 93% within 10 km.
Nongovernmental organizations and private facilities account for about 17% and 15% of health facilities respectively. Private facilities are mostly located in urban areas.
Government is the main employer of health workers. Overall, 65% of the 54 200 health workers in 2002 were located in the public sector, 22% in private not-for-profit and 14% in private-for-profit sectors.
The estimated ratios of currently active professionals per 100 000 population, are approximately 40 for nurses, 3 for physicians and 25 for all medical cadres (i.e. medical officers, assistant medical officers and clinical officers).

CHF, Community Health Fund; DMHIS, District Mutual Health Insurance scheme; NHI, National Health Insurance; NSSF, National Social Security Fund; PMB, prescribed minimum benefit; SSNIT, Social Security and National Insurance Trust; VAT, value added tax.

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