Implementing the national health insurance ...

...let's start with the doctors

Unlike the cash and carry system, the national health insurance is an important step toward preventing death from curable diseases because it ensures that all Ghanaian residents, regardless of income, have access to health care. However, like any policy, there are unintended consequences to the national health insurance that need to be addressed. One such consequence is the increase in the patient population in the already overcrowded public hospitals. Failure to address such a problem reduces the ability of the national health insurance to improve access to health care.

For a given number of doctors in the public health care sector, the introduction of a national health insurance automatically increases the number of patients per doctor in the public sector. Such an increase is likely to affect quality, in the form of long waiting period for treatment in the outpatient and overcrowding in the inpatient of public hospitals. The obvious solution is to train more doctors. However, training more doctors will not necessarily solve the problem because experience tells us that there is no guarantee that the all newly trained doctors will stay in Ghana or even if they do there is no guarantee that they will stay in the public sector.


Even though a significant number of doctors work in both the private and public sectors, the large number of patients per doctor only exists in the public sector. The public sector then does not only compete for doctors with the health care sectors abroad it also faces competition with the domestic private health care sector, which has a smaller number of patients per doctor. Thus a payment scheme with an incentive mechanism to motivate the doctors in the public sector and to attract doctors from the private to public sector appears to be a reasonable solution to consider.


Currently doctors in the public sector are salaried meaning that a doctor receives a fixed payment for a given period regardless of the number of patients treated. Under such payment scheme, a doctor is better off when the number of patients treated is small than when it is large. This payment scheme is similar to the managed care system in the United States. Under that system, doctors receive a fixed payment (depending on the diagnostic related group and other factors) for a period of time. The purpose is to encourage doctors to minimize cost by reducing ‘unnecessary’ hospital utilization. Such a payment scheme is relevant in a system where there is a small number of patients per doctor and so doctors might have the incentive to provide unnecessary care. In a health care system like that of Ghana where doctors are overwhelmed by the large number of patients, a payment scheme similar to managed care does not provide the right incentives to elicit the socially efficient behaviour from doctors.


Here is a proposal. Replace the salary scheme with a fee for service payment scheme. Under the fee for service payment scheme, the doctor receives a payment from the government for each case treated and so is better off when she/he is able to treat a large number of patients. Doctors are more likely to perceive the large number of patients as an opportunity rather than a personal burden at the cost of his/her leisure. Such a perception is likely to attract doctors in the private sector to the public sector. Using the fee for service payment scheme does not necessarily mean higher payment to doctors. Doctors receive a base monthly income that is much below the current salary but receive additional payments for each treatment. Thus doctors who treat more patients receive more payment than those who treat fewer patients. The successful implementation of the fee for service scheme however can increase the number of patients treated and the number of doctors in the public sector and so may require an increase in the budget allocated to doctors. Note that the source of this budgetary increase is different from the traditional increase in doctors’ salary.


Traditionally, increase in the doctors’ salary has been inflationary because it has not been based on a change in the amount of services provided and so it often prompts other trade unions to demand higher wages as well. Presently, health care workers want their salaries linked to that of doctors so that any increase in doctors’ salary automatically increases those of other health care workers. Holding output constant, increasing wages lead to inflation and do not improve welfare in the long run. Under the fee for service scheme, however, any possible increase in the aggregate payment to doctors results from an increase in services provided and so is efficient. In the future, the fee paid per treatment may only increase conditional on an increase in the aggregate services provided. Of course this might induce doctors to reduce services in order to negotiate for higher fee. Such a strategy, however, would require the collusion of doctors, which will be difficult if not impossible under the fee for service scheme where individual doctors are better off with a high volume of services. Besides, a conditional increase in the fee is less inflationary because it minimizes any link between doctors’ income and those of other health care workers or other workers in the public sector.


Obviously the fee for service payment scheme could also induce some socially inefficient behaviour from the doctors. For example, because the fee for service payment scheme gives more income to doctors who treat more cases, it could create some incentive for doctors to report fake treatments to increase their income and/or reduce the quality of care in order to increase the number of treatments. These are legitimate concerns that need to be taken into account when implementing the fee for service payment scheme.

In order to minimize such socially inefficient behaviour from doctors, the implementation of the fee for service payment scheme would require a good patient record system in a centralized database managed by the Ministry of Health, a requirement that is now feasible in our computer age and is currently being used in the education sector. The adoption of the centralized database system in the education sector now allows the ministry to allocate students to the various senior secondary schools all over the country and we all know how that has reduced corruption and increased efficiency. Besides, Ghana has been able to administer two elections successfully based on a centralized database system. Similarly, firms in the private sector such as the mobile phone companies use a centralized database system to monitor their customers. All these have been done despite the irregular and often unreliable supply of electricity. Thus, the infrastructure required for a centralized database system exists and can be utilized by the health care sector to record information on patients.


A good database system in the health care sector requires that every Ghanaian resident enrolled in the national health insurance to have an identification number. For each visit to the doctor, the database should have information on patients’ identification number, age, address, diagnostics, identification number of physician, physician specialty, procedure, procedure dates, date and time of admission and discharge (in the case of inpatient) etc. Such a record simply involves transferring or replacing the hard copied patient hospital record onto the computer. As tedious that this approach of storing patients’ records may seem, it is easier than the traditional approach, much cheaper to maintain and more efficient in providing the data required for research, which in turn is crucial for the evaluation and improvement of the health care sector.


So how can a good patient record help reduce socially inefficient behaviour from doctors? The record provides the data required for research into individual doctors’ behaviour. In this way, any behaviour pattern of malpractice such as misdiagnosis and fake record of treatment would be revealed. Such research could be done annually to identify and discipline doctors engaged in malpractices and at the same time identify and reward those with the best behaviour. In order to prevent politicisation of such research the government could outsource it to independent research institutions. In fact, doctors in the private sector could also be required to add patient records to the database. To encourage better behaviour from physicians the government could introduce prestigious awards at both the national and regional levels, such as ‘the best physician of the year in the public sector’ and ‘the best physician of the year in the private sector’. The recipients of such awards benefit in terms of good reputation and hence an increase in the number of patients likely to seek treatment from them which in turn implies higher income.


To conclude, a successful implementation of the national health insurance requires fundamental changes to the health care system and the physician payment scheme is only one of them.