With large-scale investments in infrastructure, expanding insurance coverage, and an increasing role for private investors, Ghana’s health care sector is evolving rapidly. The country has done well in addressing pressing health care issues over the past few decades, though there is still work to be done on areas including communicable diseases, infant care and maternal health. However, the growing incidence of non-communicable diseases presents a new range of challenges. With government resources limited, there is growing scope for the private sector to participate in the construction, management, consultancy and financing aspects of health care.
Development Goals
The health care system is overseen by two main agencies. The Ministry of Health (MoH) is responsible for policy-making as well as evaluation and monitoring, while the Ghana Health Service (GHS) is charged with implementing and administering health services across the country.
Over the past decades, Ghana’s health care priorities have been to expand towards universal coverage and to improve the key indicators of general health, including reducing preventable mortality and increasing life expectancy. There has been substantial progress: while it does fall short of performance in developed countries, Ghana has some of the better health indicators seen in Africa.
As of 2015 the average life expectancy at birth was 62.4 years, according to the World Health Organisation (WHO) – 61 years for men and 63.9 years for women. This represents a significant improvement from an average 57.2 years in 2000, when life expectancy was 55.9 years for men and 58.6 for women.
WHO data also show that Ghana is making significant strides in meeting the UN’s Millennium Development Goals (MDGs). The under-five mortality rate has fallen from 128 per 1000 live births in 1990 to 61.6 in 2015, while maternal mortality has fallen from 760 per 100,000 live births to 319 in the same period.
Deaths from HIV/AIDS have fallen from 89.1 per 100,000 people in 2000 to 40.8 in 2012, the latest year for which figures were available. Deaths from malaria fell from 98.7 per 100,000 people in 2000 to 68.7 in 2013, and deaths due to tuberculosis among HIV-negative people fell from 30 per 100,000 people to just 4.4 in 2013. Some 71% of births are now attended by trained medical personnel – by comparison, the figure stands at 35% in Nigeria and 59% in Senegal – and 98% of infants receive a full three doses of hepatitis B vaccination.
Fighting Disease
Ghana has made great strides in tackling communicable diseases over the past two decades, with a falling incidence of infectious diseases such as tuberculosis. Fatality rates from malaria, usually categorised as communicable despite being transmitted by mosquitoes rather than through human contact, have also dropped thanks to programmes led by the government and international partners. According to the WHO, overall mortality rates from such diseases have fallen from 718.9 per 100,000 people in 2000 to 476 per 100,000 in 2012. Challenges nonetheless remain. By 2015 Ghana still fell short of progress on a number of MDGs, including reducing the under-five mortality rate, expanding access to retroviral drugs, the maternal mortality rate and reductions in the incidence of malaria.
Meanwhile, like many developing countries, Ghana is seeing a rise in the incidence of non-communicable diseases (NCDs), such as cancer, diabetes and cardiovascular disease. Cancers are now the fourth most prevalent cause of death in Ghana, with around 16,000 new cases per year, according to Ajediran Bello, head of the Physiotherapy Department of the University of Ghana. Estimates on the prevalence of diabetes vary widely. The International Diabetes Federation Africa puts the figure at around 1.9% of the adult population, while local organisations say there could be several million diabetics in Ghana when undiagnosed cases are taken into account. “Similar to many tropical emerging markets, Ghana has a double disease burden, with both infectious diseases and non-communicable disease,” Dr Elikem Tamaklo, managing director of the private Nyaho Medical Centre, told OBG. “Infectious diseases are declining, but not as much as we would like them to, while NCDs grow.” As the mix changes, he adds, stakeholders must align to ensure that the challenges are managed. “They can seem quite daunting, and this is a compelling reason for public-private partnerships (PPPs), as neither the public nor the private sector can do it on their own. PPPs are necessary not just from a financial angle but also from a public health angle.”
Budget Allocation
Between 2013 and 2015, health care received around 33% of the amount allotted to social services, according to the “Budget Highlights 2016” report published by the professional services company PwC. Ghana’s 2016 budget allocated GHS3.39bn ($874.6m) to the health sector, up 10% on 2015, with around 37% of the funds allocated to social services, according to PwC.
Of this total, GHS1.61bn ($416.2m) – excluding a number of capital expenditures – was allocated directly from government funds to the MoH, split between GHS1.61bn ($415.4m) for staff compensation and GHS3.67m ($946,860) for goods and services. A further GHS33m ($8.5m) was allocated for capital expenditures (capex).
By the end of the first half of the year, 64% of the employee compensation budget had been released, all of which had been spent, whereas only 43% of the goods and services budget had been released, of which 26% had been spent; in the case of capex, 93% of the budget remained unspent.
Expense Projections
The expenditure outlook for the next three years is laid out in the “Guidelines for the Preparation of the 2017-19 Budget”, published by the Ministry of Finance and Economic Planning in June 2016 to help investors and development partners gauge what lies ahead for the sector. These guidelines establish expenditure ceilings for each area of public health care spending.
For 2017 the government has set a ceiling of GHS1.82bn ($468.8m) for direct government funds to the MoH, split between GHS1.74bn ($488.9m) in wages and salaries, GHS45.64m ($11.8m) in goods and services, and GHS33m ($8.5m) in capex. The capex will be allocated from Annual Budget Funding Amount, which is derived from Ghana’s oil revenues and allocated to priority sectors.
In addition, the MoH will have a ceiling of GHS1.46bn ($376.9m) of internally generated funds (IGFs) to allocate. IGFs come from sources including patient charges and health insurance payments. IGFs will provisionally be allocated to goods and services worth GHS1.24bn ($318.9m), wages and salaries worth GHS140.73m ($36.3m), and capex worth GHS83.83m ($21.6m), establishing a closer link between usage of the health care system and purchases of medicines and equipment. Development partners are also expected to contribute GHS405.48m ($104.6m) in 2017, with GHS324.38m ($83.7m) going to capex and GHS81.1m ($20.9m) for goods and services.
In 2018 the MoH budget ceiling has provisionally been set at GHS4.14bn ($1.1bn), with GHS2bn ($516m) coming from direct government funds. Of the government allocation, GHS1.88bn ($484.5m) would go to wages, GHS71.61m ($18.5m) to capex, and GHS45.55m ($11.7m) to goods and services. A further GHS2.15bn ($553.7m) is expected to come from IGFs – GHS1.69bn ($436m) – and development partners with GHS455.3m ($117.5m).
For 2019, the provisional ceiling is GHS4.64bn ($1.2bn), with GHS2.2bn ($567.9m) coming from government funds, GHS1.19bn ($307.3m) from IGFs, GHS493.3m ($127.3m) from development partners. Of the money allocated by the government, some GHS2.07bn ($533m) is expected to go to staff costs, GHS59.32m ($15.3m) to goods and services, and GHS75.97m ($19.6m) to capex.
Policy Priorities
In its review of the 2016 budget, PwC highlighted several priority areas identified by the government, particularly in infrastructure and staffing. Among these were the construction of a range of hospitals and health facilities, including the 600-bed University of Ghana Teaching Hospital (UGTH) and expansions at the 420-bed Ridge Hospital and the Upper West Regional Hospital. Two other goals are to reduce the doctor-to-population ratio from 1:9000 to 1:7500, implying the recruitment of 600 new doctors, and reducing the midwife-to-population ratio from 1:1350 to 1:1300, meaning 600 new midwives must be recruited. The government has also committed to increasing the number of ambulance stations nationwide to 370 from 130 – a 185% rise – and to reviewing the Ghana National Plan of Action in response to UN Security Council Resolution 1325, which pertains to women, peace and security.
On the financing side, there is also a focus on “capitation”, or health care payment arrangements, in the Volta, Upper East and Upper West Regions. The government aims to improve the sustainability of health care financing, particularly by strengthening the National Health Insurance Scheme (NHIS), which has been stretched in recent years.
NHIS
One of the most significant developments in Ghana’s health sector is the rollout of the NHIS, which was launched in 2005 with the eventual goal of providing universal coverage to both residents and visitors. The scheme is financed from a range of sources, including the National Health Insurance Levy, a 2.5% levy on goods and services collected as part of value-added tax; 2.5 percentage points of Social Security and National Insurance Trust (SSNIT) contributions; return on National Health Insurance Fund (NHIF) investments; premiums paid by subscribers in the informal sector; and central government funding. Annual premiums range from GHS7.20 ($1.86) to GHS48 ($12.38). However, approximately 70% of those currently covered by the scheme do not pay any premiums, either because they belong to an exempted group – such as children and the elderly – or because they automatically make contributions through the SSNIT via their payroll.
Members of the NHIS can obtain treatment at any registered hospital or clinic, and one supposed benefit of the registration process is that providers must meet minimum standards of practice, raising quality of care. Membership of the scheme rose to 11.3m people in 2015, around 42% of Ghana’s population, with 40,000 renewing or registering membership on a daily basis. That year, a total of 31m visits were made to registered facilities under the scheme.
A further government policy commitment is to improve the functioning of the NHIS, which still suffers from a lack of resources in some areas. Reimbursements are at times significantly below the cost of provision, which has led some providers in the public sector to find other revenue streams to cover the shortfall, for example by running mortuary services for local communities or seeking charitable donations. In other cases, payments from the NHIS can take long periods to process. As a consequence of such issues, many private providers have not registered with the scheme, and its impact on private sector growth has been limited.
Private Sector
Private health care is fairly well-established in Ghana, and the segment is expected to continue to grow in the coming years as Ghanaians seek quality care. Investors are hopeful that the government will foster more PPPs in the health sector, harnessing the capacity, expertise and financial clout of private and foreign companies to deliver on health care goals. “Increasing expectations in quality health outcomes and the growing population highlights the inability of the public sector to fully meet the demands of the market,” Tamaklo told OBG. “The private sector saw this need and has started to address it.” Tamaklo sees opportunities for international players to form partnerships with Ghana-based health care providers, including financial and technical support. To date, much of the international attention on health has focused on supporting the public sector.
Opportunities for the private sector go beyond providing higher-quality services and swifter care for better-off Ghanaians and expatriates. Ghana’s use of PPPs could be extended in the health care sector, with private providers helping extend coverage.
There are also a number of underserved segments into which private provision could expand. “I believe there are still opportunities in the general areas of medical and surgical provision, both on an outpatient and inpatient basis,” David Pickering, hospital director at private operator Lister Hospital and Fertility Services, told OBG. He said there is a shortage of intensive care units and high-dependency beds across the entire health care provision in Ghana, as well as in some sub-specialist service areas such as renal dialysis, endoscopy and coronary care. “There is also a shortage of emergency facilities and the associated emergency ambulance services, but this has traditionally been a difficult area of provision for the private sector because of the difficulty in acquiring payment, whether insured or self-pay, in an emergency situation,” he added. “Of course, costs are extremely high for emergency provision.”
Private health provision at present is largely focused on general medicine, providing primary and secondary care for both outpatients and inpatients. Private tertiary and specialist care are still fairly small concerns. Tamaklo says the government should improve the investment environment for private health care providers, and work more closely with them; previously private and public were considered as separate systems, rather than compatible and mutually-reinforcing elements of the heath care sector.
Eye Hospital
In September 2016 Alex Segbefia, the then-minister of health, inaugurated the new $2m Specialist Indian Eye Hospital in Accra, the first opened by Dr Agarwal’s Group of Eye Hospitals, which is an Indian company operating globally. The hospital is an example of foreign private-sector investors moving to fill a gap in Ghana’s health provision.
The minister said that around 1% of the Ghanaian population are blind and a further 3% considered visually impaired, but that only 90 ophthalmologists work across the country, with half of them in Accra.
The Agarwal Group has said it intends to make the hospital central to the development of eye care in Ghana, with an aim of attracting medical tourists to the country. The growth of private health insurance, as well as disposable income, is likely to help boost the private sector. Currently, around half the patients using private health care have their costs covered by their employer or private insurance schemes, while 50% pay out of pocket, compared to an 80:20 split in a mature health care market, Pickering told OBG.
Regulation
The regulation of private providers has been a challenge in the past, with a range of official bodies charged with regulation, and a convention of light-touch approaches to registration meaning that quality was not always guaranteed.
The private sector is officially regulated by the Ghana Private Hospitals and Maternity Homes Board, which is responsible for registering, regulating and inspecting private hospitals and maternity homes. However, inspections are reportedly rare, and high-quality private providers keen to update their certification express frustration, saying that lines of regulatory responsibility are often blurred.
However, in moves that are supported by many established health care providers, the government has moved to tighten enforcement. The new Health Facilities Regulatory Agency, established in 2015, is implementing re-registration of hospitals to ensure minimum standards are being met and that medical procedures meet requirements. This is already squeezing some less-scrupulous outfits out of business. However, the monitoring of outcomes is still rolling out, meaning there is still some way to go in developing a robust and holistic regulatory system.
Cost
Among the biggest challenges facing the health sector, both public and private, is rising costs. The fall in the Ghanaian cedi in recent years has raised the cost of imports, including that of medical equipment and medicines; nearly all such equipment is imported, as are around 92% of drugs, according to Tamaklo. As demand for paid health services is highly price-sensitive, this can have an effect on public health, as people defer costly treatments. It also puts pressure on the margins of private providers that are less able to pass costs on to their clients.
Even this potentially challenging environment, however, can create significant opportunities for the private sector, from health care providers to consultancy firms and technology companies. “It’s a huge challenge, but at the same time it’s an opportunity, because it forces the health care industry to be innovative, to bring in technology to reduce costs, to bring in governance structures to run hospitals well,” Tamaklo told OBG. “There’s a great opportunity for companies to come to Ghana and form partnerships with both the public and private sectors.”
Infrastructure
Expanding health care infrastructure has been a top priority for the MoH in recent years, which has made substantial investments in a range of hospital and clinic construction projects.
The first phase of the $217m, 650-bed UGTH is due to open in January 2017. This one-stop medical facility will have a range of specialist units including accident and emergency, maternity, radiology and an orthopaedic centre, as well as laboratories and an in-patient medical training centre.
Sheba Medical Centre of Israel is providing medical consultancy services for the project, including the training of doctors, nurses and pharmacists. The hospital will be fully operational by mid-2017. The project is being developed in two phases, and is funded partly though a loan provided by the Israeli government. The second phase of the project is expected to start after the hospital begins its operations, and will add 400 beds, dedicated heart, cancer and rehabilitation centres, as well as a dialysis unit.
One aim of the development is to provide first-class care for Ghanaians in their home country, so that fewer feel the need to travel abroad for care. Over the longer term, the UGTH could also become a centre for inbound medical tourism, Kwesi Amissah-Arthur, the then-vice-president, has said.
Another major hospital due to open in 2017 is the new Upper West Regional Hospital in Wa, one of the government’s flagship development projects. The hospital is considered a key component of the socio-economic development of one of Ghana’s poorest and most remote regions. The 160-bed hospital replaces an older, less well-equipped facility, and is part-financed by Euroget, an Egyptian construction company focused on health care facilities.
In September 2016 the government signed contracts with Austrian health care company VAMED Engineering for the construction of five district hospitals in the Volta Region and five polyclinics in Greater Accra. The projects are part of the government’s infrastructure development programme and are expected to be delivered in two to three years.
Ridge Hospital
Accra’s centrally-located Ridge Hospital is in the process of being expanded and upgraded in a $250m project funded by the US EXIM Bank and HSBC. The development will add a new 420-bed building, a treatment block and a modern maternity ward, becoming what is planned to be one of the most advanced hospitals in West Africa. The project is essential to maintaining high-quality hospital services in the capital, as the current hospital is overstretched due to growing patient numbers.
When it is eventually completed, the hospital will have 600 beds and 12 operating theatres, an ICU unit, and the capacity to handle obstetrics, gynaecology and dental treatment. In March 2016 the Canada-based charity World Spine Care signed a memorandum of understanding with Ridge Hospital and Ghana Health Service for the establishment of a spinal care clinic at the hospital.
The Ridge Hospital project was due to be completed in 2016, but after delays the first phase is now slated to be finished in early 2017. The development has not been without controversy, with some criticising its relatively high cost, but the revamped hospital has the potential to be a regional example.
Outlook
Ghana’s health care priorities for the coming years are clearly laid out: continuing the fight against communicable diseases and achieving the MDGs, a focus on tackling rising NCDs, expanding key infrastructure programmes, better regulation of providers and pushing towards universal insurance coverage. Substantial investments in hospitals and clinics, with the private sector playing an active role, bode well for achieving the government’s goals.
Read More from OBG
