Who pays for health care in Ghana?

Financial protection against the cost of unforeseen ill health has become a global concern as expressed in the 2005 World Health Assembly resolution (WHA58.33), which urges its member states to "plan the transition to universal coverage of their citizens". An important element of financial risk protection is to distribute health care financing fairly in relation to ability to pay. The distribution of health care financing burden across socio-economic groups has been estimated for European countries, the USA and Asia. Until recently there was no such analysis in Africa and this paper seeks to contribute to filling this gap. It presents the first comprehensive analysis of the distribution of health care financing in relation to ability to pay in Ghana.

Secondary data from the Ghana Living Standard Survey (GLSS) 2005/2006 were used. This was triangulated with data from the Ministry of Finance and other relevant sources, and further complemented with primary household data collected in six districts. We implored standard methodologies (including Kakwani index and test for dominance) for assessing progressivity in health care financing in this paper.

Ghana's health care financing system is generally progressive. The progressivity of health financing is driven largely by the overall progressivity of taxes, which account for close to 50% of health care funding. The national health insurance (NHI) levy (part of VAT) is mildly progressive and formal sector NHI payroll deductions are also progressive. However, informal sector NHI contributions were found to be regressive. Out-of-pocket payments, which account for 45% of funding, are regressive form of health payment to households.

For Ghana to attain adequate financial risk protection and ultimately achieve universal coverage, it needs to extend pre-payment cover to all in the informal sector, possibly through funding their contributions entirely from tax, and address other issues affecting the expansion of the National Health Insurance. Furthermore, the pre-payment funding pool for health care needs to grow so budgetary allocation to the health sector can be enhanced.