Financial Protection against Catastrophic Health Expenditures among Ghanaian Households

Abstract

Out-of-pocket payments for healthcare in low and middle income countries have potentially catastrophic consequences for vulnerable households. These can lead to vicious cycles of impoverishment and debt. Ghana introduced the National Health Insurance Scheme (NHIS) to protect Ghanaian residents from the financial consequences of health and illness shocks. This thesis contributes to the discussion on the economic consequences of high Out-of-Pocket (OOP) payments for health care. The sixth round of the Ghana Living Standards Survey, collected over the period between August 2012 and August 2013 from a nationally representative sample of 16,772 households was used as the main data set. A probit model was used to predict enrollment in NHIS. Also, catastrophic health expenditures (defined as out-of-pocket health expenditures exceeding set thresholds and causing economic suffering to the household) were further adjusted by concentration indices that indicate whether the distribution of these payments are different between the rich and the poor. Health Expenditures are deemed Catastrophic when they go beyond the set threshold at which the livelihood of a household is adversely affected causing them to become poor or poorer. The catastrophic expenditures were then regressed on a number of household socio-economic factors to determine factors that predict the incurrence of such expenditures. The analyses showed that only 1.1% of Ghanaian households incurred catastrophic health expenditures. On average, these payments have low intensity of 0.001% (in excess of the catastrophic threshold – 10% of household expenditure being the proportion beyond which a household may become impoverished or deeper impoverished by out-of-pocket health expenditures). The regression results showed that households that have insurance coverage are found to be 2.4 percentage points less likely to incur catastrophic health expenditures than households without health insurance. However, the burden of such payments is found to be heavier on poorer households. Thus, NHIS was found to offer some financial protection against catastrophic health expenditures among Ghanaian households. Education on the indispensability of the NHIS to sustenance of livelihood should be intensified among the poor and the very poor in Ghana, Keywords: Catastrophic health expenditure, health insurance, impoverishment, Ghana