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Concept of the Social Health Insurance: Analytical Overview

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The wealth of a nation is often said to lie in the health of its people and it is for this reason that health and healthcare related issues hold much relevance in every nation’s top priorities. That aside, a clear declaration in article 25 of the 1948 Universal Declaration of Human Rights states that, all people are entitled to a standard of living, adequate for healthcare and that includes medical care and the right to protection even in the event of illness or disability(UN, 1948). The aim of every government in the provision of healthcare has always been to ensure its people have access to not only the best of healthcare services, but affordable healthcare as well. Hence, it comes as no surprise when the ultimate goal of health care systems is to ensure the financial protection of the people against the cost of illness (WHO, 2000).

The desire of the world to attain healthcare for all, started with a call from the World Health Assembly in 2005, for all countries, especially developing countries which often tend to have large inequalities in healthcare access, to move towards a universal healthcare coverage(UHC) (Carrin & James, 2004). According to the World Health Organization (WHO), about one hundred (100) million people worldwide fall into extreme poverty yearly in an attempt to access healthcare and another one hundred and fifty (150) million people stand the risk of catastrophic health expenditure as a result of accessing health care (WHO, 2010).

A household can be said to be experiencing catastrophic health expenditure when it’s out-of-pocket spending on healthcare exceeds a certain share of the household’s income (40% as defined by the WHO) leading to an indication that, this household would suffer the burden of disease (Ekman, 2007). Impoverishing healthcare expenditure on the other hand is simply when a household is forced to live below the poverty line as defined by the WHO, in attempts to access healthcare (WHO, 2005).

Catastrophic spending has been known to occur across all income levels, but the most vulnerable to experience this are households in low-income earning states and especially in low-income countries (Xu et al., 2007). People of low and middle-income countries have been realized to have the highest levels of out-of-pocket payments putting them directly in the line of being the most probable to experience financial distress as a result of healthcare. As it stands, about 5.6 billion people in low and middle-income countries pay up to fifty per cent (50%) of their healthcare expenses from out-of-pocket (Ezat Wan Puteh & Almualm, 2017).

One way the achievement of universal healthcare coverage is possible is when governments provide social interventions to help cushion the poor and vulnerable in society who are most at risk of being unable to access healthcare. Countries introduce health insurance programs as a means of reducing the financial burden on individuals during the process of accessing healthcare, by pooling funds and distributing the risk of unforeseen health events (Carapinha, Ross-Degnan, Desta, & Wagner, 2011). Insurances come in many types and different compositions and the most commonly practiced types across the world are the; social, national and community based health insurance schemes/policies (Gottret & Schieber, 2006).

The social health insurance is one popular insurance policy introduced in most countries. Many stakeholders have agreed the social health insurance is one effective way especially for low-income countries to implement health insurance systems(Carrin & James, 2004) and consider the social health insurance a strategic tool for attaining universal health care by offering financial protection (Mathauer, Schmidt, & Wenyaa, 2008). Most African countries are currently edging towards the adaptation and implementation of various kinds of health insurance programs. However, the lack of political commitment, coupled with inadequate financial resources, tends to make this desire by the countries a hard aim to achieve(Appiah, 2012).

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The social health insurance policy in place in Ghana was introduced in the year 2003 to complement the community based health services planning program (CHPS) initiative in place. This community based health services planning program was aimed at closing the geographical gap to access to healthcare that existed in many parts of the country. As the only form of social intervention in place at the time, the CHPS initiative was aimed at changing the focus of primary healthcare and family planning services, from the central or district level care, to providing these services at convenient community locations and doorstep of the citizenry (Nyonator, Awoonor-Williams, Phillips, Jones, & Miller, 2005).

The National Health Insurance Scheme (NHIS), as the social health insurance scheme was to be called, was introduced by the government as the foremost policy to progressively close the barriers to access of healthcare and also to serve as a social risk protection program(Nyonator, Ofosu, Segbafah, & d’Almeida, 2014). This scheme was also introduced to phase out the out-of-pocket (OOP) financing scheme in practice across the country during that era. The “cash and carry system”, as it was popularly called, was a system where the patients fully financed (paid 100%) the cost of their healthcare including medication and user fees from out-of-pocket. This was to help healthcare providers raise funds and also to discourage the unnecessary use of healthcare services (Dalinjong & Laar, 2012). This however led to a sharp decrease of about sixty-six per cent (66%) in outpatient visits across the country due to the poor shunning away from the use of healthcare services (Hsiao & Shaw, 2007).

In spite of the successful implementation of the scheme, it has been under constant pressure and immense struggle especially for finances for its sustainability. Sustainability of a healthcare system or a healthcare intervention refers to the ability of the system or intervention to meet its mandate and serve the purpose for which it exists in the light of having ample resources to meet its obligations (Braithwaite et al., 2017). Ghana’s health system like many others in the world is faced by many challenges including; the double burden of both communicable and non-communicable diseases at the same time, prevalence of some chronic conditions, the continuous emergence of new health technologies and especially the inadequate availability of funds for the healthcare sector.

This is particularly due to the fact that, all other public sectors (such as education, railway and transport, agriculture etc.) in the country seem to be competing for the very little financial resources available, hence leading to continuous fiscal unsustainability of the scheme . It is for this reason, coupled with a lot of other policy framework decisions, the scheme always seems to be underfinanced and its sustainability highly questionable. The sustainability of the national health insurance scheme in this context refers to the ability of the scheme to successfully meet its due mandate for which it was established, effectively.

Problem statement

Ghana, being one of the very first sub-Saharan African countries to introduce a social health insurance scheme of some kind has made massive strides in terms of access and quality of health care services. The introduction of the NHIS in Ghana in 2003 has greatly improved health services utilization of the general population. Out-patient visits have increased from about 600,000 visits a year in 2005 (just after the introduction of the NHIS) to about 31,000,000 visits as at the close of the year 2013 (NHIA, 2014) . However, this has not come rather easily, as the scheme has been riddled with a lot of problems threatening its very existence causing it to be on the edge of near collapse a couple of times over the last six years ., as expressed by the Minister of Health in a news item(Citi News Room, 2018).

This thesis seeks to review the sustainability of the National Health Insurance Scheme (NHIS) of Ghana as a social health insurance scheme in place over the last 15 years, but barely functioning and meeting its mandate for which it was established.

Main objective

This thesis seeks to review the possibility and means of sustainability of the NHIS and the prospects of the NHIS in Ghana.

Other Objectives:

  1. Identify the general problems faced by the social health insurance scheme in place
  2. Investigate ways and possible means of ensuring the sustainability of the scheme for posterity


  1. Appiah, B. (2012). Universal Health coverage still rare in Africa Canadian Medical Association Journal, 184(2).
  2. Braithwaite, J., Testa, L., Lamprell, G., Herkes, J., Ludlow, K., McPherson, E., . . . Holt, J. (2017). Built to last? The sustainability of health system improvements, interventions and change strategies: a study protocol for a systematic review. BMJ Open, 7(11), e018568. doi: 10.1136/bmjopen-2017-018568
  3. Carapinha, J. L., Ross-Degnan, D., Desta, A. T., & Wagner, A. K. (2011). Health insurance systems in five Sub-Saharan African countries: medicine benefits and data for decision making. Health Policy, 99(3), 193-202. doi: 10.1016/j.healthpol.2010.11.009
  4. Carrin, G., & James, C. (2004). Reaching universal coverage via social health insurance: key design features in the transition period (WHO Report).
  5. Citi News Room. (2018). NHIS could collapse without new investment – Health Minister. Retrieved 20/01, 2019, from
  6. Dalinjong, P. A., & Laar, A. S. (2012). The national health insurance scheme: perceptions and experiences of health care providers and clients in two districts of Ghana. Health Econ Rev, 2(1), 13. doi: 10.1186/2191-1991-2-13
  7. Ekman, B. (2007). Catastrophic health payments and health insurance: some counterintuitive evidence from one low-income country. Health Policy, 83(2-3), 304-313. doi: 10.1016/j.healthpol.2007.02.004
  8. Ezat Wan Puteh, S., & Almualm, Y. (2017). Catastrophic Health Expenditure among Developing Countries. Health Systems and Policy Research, 04(01). doi: 10.21767/2254-9137.100069
  9. Gottret, P., & Schieber, G. (2006). Health financing revisited: a practitioner’s guide. Washington, DC: The World Bank;.
  10. Hsiao, W., & Shaw, R. (2007). Social Health insurance for Developing Nations. In WBI Development Studies (p. 66). World Bank. doi: 10.1596/
  11. Mathauer, I., Schmidt, J. O., & Wenyaa, M. (2008). Extending social health insurance to the informal sector in Kenya. An assessment of factors affecting demand. Int J Health Plann Manage, 23(1), 51-68. doi: 10.1002/hpm.914
  12. NHIA. (2014). National Health Insurance Authority (NHIA) -2013 Annual Report on the National Health Insurance Scheme Ghana. .
  13. Nyonator, F., Awoonor-Williams, J. K., Phillips, J. F., Jones, T. C., & Miller, R. A. (2005). The Ghana community-based health planning and services initiative for scaling up service delivery innovation. Health Policy Plan, 20(1), 25-34. doi: 10.1093/heapol/czi003
  14. Nyonator, F., Ofosu, A., Segbafah, M., & d’Almeida, S. (2014). Monitoring and Evaluating Progress towards Universal Health Coverage in Ghana. PLoS Med, 11(9). doi: 10.1371/journal.pmed.1001691.g001
  15. UN. (1948). UN General Assembly-Universal Declaration of Human Rights, 10 December 1948, 217 A (III).
  16. WHO. (2000). The world health report 2000 – Health systems: improving performance.
  17. WHO. (2005). Distribution of health payments and catastrophic expenditures Methodology / by Ke Xu. Geneva.
  18. WHO. (2010). World Health report 2010: Health systems financing: the path to universal coverage.
  19. Xu, K., Evans, D. B., Carrin, G., Aguilar-Rivera, A. M., Musgrove, P., & Evans, T. (2007). Protecting households from catastrophic health spending. Health Aff (Millwood), 26(4), 972-983. doi: 10.1377/hlthaff.26.4.972
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Concept of the Social Health Insurance: Analytical Overview. (2022, September 27). Edubirdie. Retrieved March 1, 2024, from
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