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Business News of Wednesday, 30 November 2016


NHIS fund misapplied - Service provider

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One of the critical service providers has blamed the funding crisis facing the National Health Insurance Scheme (NHIS) on mismanagement of funds meant for running the scheme.

According to the provider, if the scheme is run based on international best practices, which the National Health Insurance Authority (NHIA) subscribes to, the scheme would not face financial problems of such alarming proportions.

In a position paper copied to relevant institutions, including the NHIA, which was sighted by The Finder, the service provider said an analysis of total receipts revealed that the scheme recorded surplus in 2014 and 2015.

The Finder learnt that the NHIA have not responded to the position paper.

The service provider stated that, according to the NHIA report for 2014, the authority stated that, international best practices “recommend that between 8% and 12% of total receipts of health insurance funds are earmarked for operational overheads.

It explained that, according to the NHIA financial statements, the total receipts for 2014 was GH¢1.1billion (GH¢1,102.696) while that of 2015 was GH¢1.3billion (GH¢1,385.464).

“In 2014, total revenue stood at approximately GH¢ 1,102.696 million whereas total claims were GH¢887.67 million.

“This gives a surplus, in terms of claims payment, of GH¢215.026 million” it added.

Best practice

According to the service provider, NHIA report for 2015 quoted income of GH¢1.3billion (GH¢1,385.464).

Therefore, an amount of GH¢122 million was earmarked for 8% and 12% of total receipts for operating expenditure.

The National Health Insurance Act 2012 (Act 852) further enjoins the authority to facilitate activities that are in the larger interest of the scheme.

Consequently, the Authority earmarked GH¢37.3m to support District Offices.

Furthermore, the Authority, in consultation with the Health Ministry, proposed to allocate GH¢26 million to support public health and preventive care programmes.

Based on the calculations, using international best practices and statutory allocations, the service provider concluded that there was no funding gap for the year 2014, contrary to NHIA and government statements.

Similarly, it said according to the NHIA report, the total claims for 2015 were GH¢1048.32million as against GH¢1.3billion (GH¢1,385.464) income.

Consequently, in terms of claims payment, there should be a surplus of GH¢350 million.

In view of this, the service provider said an amount of GH¢47.798m and GH¢33.528m would have been spent on district offices and government support respectively for the year 2015.

In this regard, it stated that the total expense - less claims payment -should stand at GH¢247.581 millio, adding that considering that there was a surplus of GH¢350million, the funding gap proposition is not tenable.

Going by the above, the service provider argued that if NHIA applies its income, according to international best practice which the NHIA alludes to, the scheme should not be in arrears to Service Providers for seven months.

Service Providers, under the NHIS, said they are on the verge of returning to cash-and-carry to save their health facilities from shutting down due to huge indebtedness.

According to them, the NHIA is indebted to Service Providers across the country for a minimum of seven months.

On the average, the NHIA pays monthly claims of about GH¢80 million and, therefore, the seven months indebtedness could be in the region of GH¢400 million.

Few of the service providers have, indeed, received payments covering January and April 2016 while others are owed up to December 2015.

What is even more disturbing is that, in some of these cases, the NHIA, sometimes, jumped some of the months and settled the most recent months.

For Instance, in some of the regions, the Authority has not paid December 2015 but has paid January 2016.

The scheme’s indebted, is largely, due to the failure of Ministry of Finance to release, on time, monies collected on behalf of the NHIA.

If the Ministry of Finance releases monies on monthly basis, the scheme could pay service providers on time to avoid the usual indebtedness.