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Hospitals collapsing from unpaid insurance claims

Mon, 7 Jun 2010 Source: Sodzi-Tettey, Sodzi

Let us give credit to President Mills for isolating the national health insurance for special mention in his second state of the nation address. Let us question his Excellency for failing to assure us that proposed reforms in the legal and regulatory framework of the health insurance will be the panacea to the hydra headed challenges currently facing the scheme.

After visiting four hospitals in four districts and two regions, the severe challenges of delayed reimbursement and its crippling effects on health service delivery are no longer deniable. Of the four hospitals, three have experienced varying periods of delayed reimbursement ranging from four to seven months. Their ability to maintain minimal quality of care is seriously compromised. In some cases, thanks mainly to the policy of cash and carry which continues in mortuary services, there is hope from the dead. These hospitals are now relying heavily on the dead for survival.


Hospital administrators and medical superintendents are tense, sitting on tenter hooks as suppliers are reportedly moving away from supplying the hospitals “because they don’t pay and all our capital is locked up. The mark ups we put on the prices of the drugs do not even compensate for the outrageous delay.” Some suppliers therefore have opted to supply private hospitals on a purely cash and carry basis.


In other hospitals, allowances due health workers have been outstanding for over eight months seriously raising industrial tensions to unbearable limits. “Morale is very low currently, from the highest person in the hospital to the lowest. Infact nothing is being done about it. It is very bad,” confided a doctor. A labour leader confessed, “Some of our members even took loans against some of these allowances. Can you imagine what is happening over these seven months that they haven’t been paid?” While administrators plead for patience from labor leaders, they draw attention to the peculiar challenges faced by hospitals that have a sizable portion of the staff being paid from the hospital’s internally generated funds.


“Last year by this time the Scheme owed us 4 billion old cedis. Today, they owe us 7 billion cedis. Can this be called an improvement in the system?” lamented one administrator. But perhaps, it is the impact on the medical supplies and the quality of health care delivery that are most troubling. “These days, we have to go shopping for drugs and infusions as we can’t buy our full supplies. Just last week, I was in Kumasi where after copious begging, I managed to secure a few infusions to bring here. There was nothing.” An administrator in the Brong Ahafo Region complained bitterly.


A frustrated medical superintendent blurted out, “It is all work work work. No money! The insurance is not paying us. We can’t purchase drugs. What we are doing is that after seeing the patient, we write a prescription for them to go and buy the drugs from the street. It is very bad.” Another hospital was owed 9 billion cedis but seemed to be managing well. Their secret? “We have a well resourced credit union from which we borrow money when the situation becomes unbearable. Can you believe that last year around December 2009 after we borrowed the money, a sister hospital in turn borrowed 17, 000 GH¢ from us to pay the salaries of their non-mechanized staff and to solve other financial problems they were facing? I am really disappointed in the management of the scheme. I thought things were going to improve, instead it continues to deteriorate.”

This issue of patients now being issued prescriptions in the absence of drugs is certainly gaining popularity if a reader’s letter in the Daily Graphic from the Sunyani government hospital is anything to go by.


Meanwhile, a student’s dissertation conducted in two districts in the Upper East region in 2008 clearly establishes a yawning gap between the total reimbursement rate and the total timely reimbursement rate. While the total reimbursement rate which measured the total reimbursement paid by the end of 2008 was in excess of 80%, the timely reimbursement rate which measured the rate at which claims submitted on time were paid on time was less than 40%. The main issue appears to be the significant observed increment in the amount of claims reimbursed by the schemes to the facilities on the adoption of the diagnostic related groupings as a method of billing. This is compounded by the bureaucratic processes involved in securing additional funds from NHIA after a scheme suffers financial distress. Other issues pertain to the capacity of staff submitting and processing claims, impaired ability to use computer software for processing claims, challenges with record keeping etc.


Amidst these known facts, it appears government’s efforts have thus far simply focused on centralizing authority within the NHIA through an amendment of the NHIS Act. The Authority itself has concerned itself with clinical audits, exposure of alleged fraud and attempts to discipline apparently erring scheme and service providers. As laudable as these measures are, let none kid themselves into believing that fraud is solely or mainly what is accounting for all the challenges in the system. It is also not correct to think that many of the hospitals that are owed huge amounts don’t deserve it. Since May 2008 when a new billing method was adopted by the NHIA, the study conducted in the Upper East region has for example revealed a fourfold increment in the claims made by hospitals even after vetting and subsequent deductions by the claims managers.


Where it has been proven after clinical audits that service has been rendered, it is imperative that the NHIS pays up in the absence of its ability to prove fraud and soon too if the facilities are not to collapse. It is crucial also to be guided by the legislative instrument that enjoins the scheme to reimburse submitted bills within four weeks of their submission whatever the auditing processes are. It is also crucial at this point judging from the newspaper rejoinder jointly issued by five hospitals in the Ketu North and Ketu South districts to probe the details of the clinical auditing processes. As these hospitals allege, are audits being conducted and sanctions being applied without giving service providers the opportunity to respond to audit findings? This if true certainly runs against administrative and auditing principles not to mention the grain of natural justice.


Add to these the 59 mainly rural-based health facilities under the Christian Health Association of Ghana (CHAG) that are owed a total of one hundred and forty billion, four hundred and sixty six million, two hundred and ninety five thousand in old cedis (GH¢14,046,629.50) in four-five months of arrears. The clearly outlined sequelae include bank overdrafts, increased costs of service provision and “an acute critical shortage of drugs, medical and surgical supplies for service delivery…” Additionally there is the stark reminder that if the payment of salaries were solely based on insurance reimbursements, the entire health system would have ground to a halt by now.

This is ample warning if nothing at all that all is not well with the current funding system. By all means, amend the law if necessary and conduct clinical audits but to what end really if not to improve service delivery? In the Ketu North district today, the only hospital in the whole district is currently out of the scheme for reasons that may be considered justified or not depending on one’s perspective. It is either the hospital that has withdrawn from the scheme or the NHIA that has sanctioned it. While the scheme and the providers squabble, what happens to the thousands of people in the Ketu North and South Districts who only yesterday relied heavily on health insurance to meet their health care costs? By suspending the five facilities in both districts, is the NHIA calling into question its own claims vetting team that has for years built a harmonious working relationship between claims officers, district health officials and service providers?


The current impending implosion characterized by difficulties in acquiring basic drugs and infusions cannot be the way forward and the sooner something definite and concrete happened to reverse the trend, the better it would be. It is possible to adopt these definite measures devoid of perceived intimidation and threats. If urgent steps are not taken to reverse the despondency and utter helplessness that seems to have engulfed many hospitals and healthcare workers, service delivery may actually grind to a halt way before government’s one time premium payment becomes a reality.


Perhaps, the painful words of one hospital administrator best sum up the despondency. “Everyday, I am promised again that money is coming. I am hoping for the best but from experience, I have leant to expect the worst”


Sodzi Sodzi-Tettey ________________________________________

Columnist: Sodzi-Tettey, Sodzi