Ladies and Gentlemen of the press, you have been invited to this press conference this morning so we can share our thoughts with you on the delayed reimbursement of Health Service Providers for services rendered to insured clients and make recommendations for the sustainability of the NHIS.
According to the NHIA, as of March 2015, the claims indebtedness for 2014 stood at GHC 456.4 million. The Hon. Finance Minister, Mr. Seth Terkper rejected accusations that his outfit was to be blamed for the indebtedness to hospitals and other service providers. He told Parliament on 4th March 2015, that those statutory payments including arrears of 2013 and 2014 amounting to a little of over one billion Ghana Cedis had been released to the NHIA.
The Chief Executive Officer of the NHIA Mr. Sylvester Mensah, on 20th February 2015, promised to pay all 2014 arrears by the close of March 2015. Today is 21st April 2015, twenty one days after his own deadline, but the indebtedness still persists. The PSGH calls on the CEO of the NHIA to redeem his promise to service providers now. Service providers under the NHIS have suffered for far too long, and this is having a serious negative impact on the pharmaceutical sector.
2.0 BACKGROUND :
In recent times, there have been widespread nationwide agitations by service providers in both public and private sectors over delayed reimbursement for services provided to NHIS clients. Arrears to providers cover about eight (8) to ten (10) months on the average. These agitations in some cases have led to the complete withdrawal of services to insured clients or out-of- pocket payments or co-payments.
These developments if allowed to continue will defeat the purpose of the establishment of the National Health Insurance Authority (NHIA) and the National Health Insurance Scheme (NHIS).
According to Section 2(a) and 2(b) of the National Health Insurance Act 2012, ACT 852, the object of the NHIA is to “attain universal health insurance coverage in relation to (a) persons resident in the country, and (b) persons not resident in the country but who are on visit to this country and to provide access to healthcare services to the persons covered by the scheme”.
The NHIS as established by Section 26(2) of ACT 852 is to “provide financial access to the basic healthcare services specified under section 30 for residents of the country ”.
2.1 UNFULFILLED PROMISES BY OFFICIALS OF THE NHIA:
Many a time, promises by officials of the NHIA to redeem these indebtedness are not fulfilled. For example as mentioned previously, on 20th February 2015, the CEO of the NHIA, Mr. Sylvester Mensah promised to pay all 2014 arrears to service providers by the close of March, 2015. He said on Joy News “we are working seriously with the Ministry of Finance to get some funds and we are very hopeful”. Today is 21st April, 2015 and many providers have still not been reimbursed for services rendered since 1st June, 2014. Is the NHIA being fair to service providers? Why is it so?
2.2 CONTRADICTORY INFORMATION ON NATIONAL HEALTH INSURANCE LEVY (NHIL) ARREARS OWED THE NHIA:
One issue that is a source of worry to the PSGH is the contradictory information on arrears owed NHIA by the Ministry of Finance.
The Honourable Minister of Finance stated in Parliament on 4th March 2015 that his Ministry could not be blamed for the indebtedness to health service providers because those statutory payments including arrears due the NHIA in 2013 and 2014 had been paid up to January 2015; this he said amounted to a little over 1 billion Ghana Cedis.
However, the CEO of the NHIA disputed it claiming that the arrears information provided by the Minister was inaccurate. So who should we believe? Is it the Hon. Minister or CEO of the NHIA?
With due deference to these two important officials of Government, the PSGH finds the altercation between them reprehensible and calls on them to cross check and validate all information on the National Health Insurance Levy (NHIL) and National Health Insurance Fund (NHIF) before putting it in the public domain. What the good people of Ghana need is credible information on the taxes they pay and what they are used for. The PSGH is asking for nothing more than transparency, probity and accountability in the NHIL tax collection and use. Data from the NHIA indicates that the NHIL constitutes about 94% of the whole NHIF. The question on the lips of many pharmacists is that, if these two key officials of government even dispute the quantum of arrears, then is there any immediate hope of the arrears being redeemed?
3.0 EFFECT OF THE DELAY IN REIMBURSEMENT OF CLAIMS ON THE PHARMACEUTICAL SECTOR:
The Pharmaceutical Sector is probably the hardest hit by the undue delay in claims payment to providers by the NHIA. The sector includes local pharmaceutical manufacturers, pharmaceutical importers and distributors, hospital pharmacies and community pharmacies. Some of the effects include the ff:
i) Most of the pharmaceutical companies are faced with cash flow challenges and are unable to meet their financial obligations to their suppliers resulting in termination of import and distribution agreements, at best credit facilities amended to strictly cash or letter of credit (LC) business.
ii) Pharmaceutical companies are defaulting in loan repayments to their bankers and some have had their assets and other collaterals seized by their banks.
iii) Pharmaceutical companies in order to survive are now resorting to borrowing from the secondary financial institutions at a very high interest rates of between six (6) to eight (8) per cent per month to sustain their business operations; because most primary financial institutions like the banks are not interested in financing their businesses.
iv) Pharmaceutical importers are being subjected to exchange rate risk which is very unpredictable under the current economic conditions. For example if medicines were supplied to a health institution in February 2014 when the exchange rate was about GHC2.3 to 1 USD and payments are received in February 2015, when the exchange rate is GHC3.60 to 1USD, then the value of payment received has fallen by approximately 60%; which is not recoverable.
These developments have led to the shortage of many essential medicines in the country since the supply of these medicines are done by the private sector. It has also led to the near collapse and in some cases the complete collapse of some businesses in the pharmaceutical sector.
4.0 CAUSES OF DELAY IN REIMBURSEMENT OF CLAIMS TO SERVICE PROVIDERS:
The PSGH has identified many causes which have contributed to the delay in reimbursement to service providers. These include:
4.1 FUNDING OF NON-CORE AND NON-URGENT NHIS ACTIVITIES BY THE NHIA:
Notwithstanding the provisions of Act 852, PSGH is very unhappy about the situation whereby the NHIA does not find money to pay providers whose claims have been outstanding for about 8 to 10 months; but finds money to fund some non-core and non-urgent activities e.g. furnishing of Head Office Annex, Biometric registration of clients, putting up a building at Pantang Health Training School etc.
On Monday, April 13, 2015 the NHIA published in the Daily Graphic, some building projects undertaken by the NHIA from the NHIF from 2007. These are as follows:
2007: NHIA commenced financing of the accident and emergency centre at KATH and completed in 2009.
2008: NHIA commenced building of Head Office Building and completed in 2010
2010: NHIA commenced building of Regional offices and completed in 2012
2013: NHIA commenced Head Office Annex for completion in 2015.
The question on the lips of many service providers is what is the cost of each of these projects in absolute figures?
As stated in the National Health Insurance Fund Allocation 2015 document, the following projects are currently ongoing:
PROJECT: AMOUNT ALLOCATED, GHC (MIL)
Furnishing of Head Office Annex 3.75
Construction of District NHIA Offices 25.00
Instant Biometric ID card and Authentication system 68.00
Printing of new standardized prescription forms for health facilities 10.00
Construction of buildings in the following facilities: 15.00
*Akatsi District Hospital
*Pantang Health Training School
*Sampa Health Training School
*Hohoe Midwifery Training School
*Korle Bu Per-Operative facility
Support for Allied Health Profession Project 5.00
Archival System and Document Digitization System 10.00
Sensitization, publicity, tools and corporate social responsibility 5. 00
The PSGH is not saying that the activities and projects listed above are not important. They are all important. However priority ought to be given to the payment of claims arrears because that is the main purpose of the tax payers’ contribution to the NHIL.
The PSGH has also noted that some MOH and GHS activities which should be budgeted for and funded by the MOH have been captured for funding by the NHIA as follows:
I. Vaccination GHC 3.00
II. Cancer screening (prostate, cervical and breast) GHC 1.00
III. Sickle cell screening GHC 1.00
IV. Support to ARV GHC 5.00
V. Ambulance Service GHC 5. 00
TOTAL GHC 15.00
One wonders why the MOH/GHS does not capture these activities under the MOH budgetary allocation but has decided to off load them for funding by the NHIA. If funding these activities will not affect reimbursement of service providers the PSGH has no objection. The PSGH needs clarification from the NHIA.
What was the purpose for establishing the NHIF? Was it primarily for funding building projects or for funding core NHIS activities including payment of claims?
What the PSGH is saying is that payment of the 2014 claims to service providers should take precedence over the above mentioned and similar projects.
4.2 DELAY IN RELEASE OF NHIL BY MOFEP TO THE NHIA
From analysis of the National Health Insurance Fund Allocation 2015 document, in 2014 GH¢936.12 million NHIL was collected by the MOFEP but only a total of GH¢731 million was released to the NHIA as at 31st December, 2014. From the above, a total of GH¢205.12 million due the NHIA was not released to them in the year 2014.
As at 16th March, 2015 an additional amount of GH¢138.2 million had been released to the NHIA.
4.3 FUNDING GAP
From analysis of the same National Health Insurance Fund Allocation 2015 document, if all the NHIL was released to NHIA by MOFEP, there will still be a funding gap of about GH¢321.48 million for the year 2014.
1. In the short term, we urge government to seek for bailout to clear all outstanding indebtedness to Service Providers under the NHIS.
2. Claims payment ought to be considered a topmost priority of the NHIA which must enjoy the same ranking as payment of monthly salaries to NHIA staff.
3. Until all arrears of providers covering 2014 and the first quarter of 2015 are paid in full the NHIA should stop funding non- urgent and non-core activities and projects.
4. We recommend a direct and prompt transfer of the NHIL from the Ghana Revenue Authority (GRA) into the National Health Insurance Fund.
5. Currently, out of the 17.5% VAT, 2.5% is allocated to NHIL. The PSGH is recommending an increase of the NHIL component from 2.5% to 3.5%. Please note that the PSGH is not recommending the increment of the VAT to 18.5% but is requesting for the increment of the NHIL allocation within the 17.5% VAT.
6. PSGH also recommends that in order to reduce polypharmacy and high medicines expenditure, there must be separation of prescribing and dispensing services.
7. The PSGH recommends that the Ministry of Health should strengthen Drugs and Therapeutic Committees (DTCs) to undertake rational use of medicines ( RUM) activities in the various hospitals to help reduce the expenditure on medicines.
8. Capital investment projects like construction of buildings in three health training schools and two hospitals should be captured by the Capital Investment Management Directorate of the MOH and funded by the MOH; but not by the NHIA.
9. There should be a strong representation of service providers on the NHIA Governing Board to ensure fair representation of providers
10. PSGH recommends the creation of a platform for a dispassionate national stakeholders' forum to discuss and find practical and sustainable solutions to the problems of the scheme.
From the foregoing, the PSGH opines that claims payment to service providers is not considered a top priority by the NHIA. As such the NHIA does not find money to pay providers whose claims have not been paid for eight (8) to ten (10) months now; but finds money to fund non-urgent NHIS activities as well as non-core capital investment projects.
Pharmaceutical businesses are going through very difficult times, suffering from harassment from bankers, suppliers and professional debt collectors and are at the point of near collapse because the NHIA has failed to pay providers their claims for the past eight (8) to ten (10) months. The PSGH therefore calls on the government to urgently seek for bailout to clear all outstanding indebtedness to Service Providers under the NHIS.
The PSGH calls on the CEO of the NHIA to redeem the promise made on 20th February 2015 to service providers that all 2014 arrears will be paid by the close of March 2015. Even though today is 21st April 2015, twenty one clear days after the deadline set by the CEO himself to settle all the arrears, providers will be magnanimous enough to accept the reimbursement.
Finally, we do not know the next patient to fall victim to a denial of service or health commodities for lack of Service Providers. The right to health is a basic and sacred right that will need all to guard, protect and make available and accessible to all our citizens.
The NHIS is a very important national development agenda and all the good people of Ghana must work together for it to succeed.
Thanks for your attention.
Pharm. James Ohemeng Kyei
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