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Ghana’s Health Care Financing: From Hospital Fees Act 1971 to NHIS

Declines in government spending on health leading to shortages of medicines and supplies and deteriorating quality of health care forced the government to come out with the Hospital Fees Act of 1971, Act 387.

Ghana after independence in 1957 introduced a health care financing with a tax-funded system that provided free public health care services to all residents.

Due to its unsustainability low user fees were established for hospital services to discourage unnecessary use, locally recover some costs and generate provider performance incentives.

Declines in government spending on health leading to shortages of medicines and supplies and deteriorating quality of health care forced the government to come out with the Hospital Fees Act of 1971, Act 387.

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Under the Act Individuals receiving hospital services are required to pay the prescribed basic fees, except for services and individuals explicitly exempted by the Act or any regulations made under it.

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General Exemptions from Hospital Fees were made to— (a) any person certified in writing by a medical officer to be unable to pay those fees on the ground of poverty; (b) any person suffering from such disease or condition as may be prescribed; (c) any pupil or student receiving full-time education in a recognised institution; (d) any prescribed class of persons working or studying within the Health Service; (e) any person requested by the medical officer concerned to attend or come to a hospital for admission for the purpose of teaching; (f) any person for the time being in lawful custody; (g) any certified psychiatric patient; (h) any other prescribed class of persons.


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The Law stated clearly that no fees shall be paid in respect of services rendered in a hospital to— (a) any person certified in writing by a medical officer to be unable to pay those fees on the ground of poverty; (b) any person suffering from such disease or condition as may be prescribed; (c) any pupil or student receiving full-time education in a recognised institution; (d) any prescribed class of persons working or studying within the Health Service; (e) any person requested by the medical officer concerned to attend or come to a hospital for admission for the purpose of teaching; (f) any person for the time being in lawful custody; (g) any certified psychiatric patient; (h) any other prescribed class of persons.

It also provided exemptions for the following: (1) in respect of any medical examination or report required by any department of state, or in connection with the official duties of any employee of a department of state, or in connection with the entry of any person into a department of state or his departure therefrom.

(2) any person receiving medical attention in a hospital in respect of any medical report relating to him.

(3) any person in respect of any prescribed laboratory examination carried out on him during out-patient attendance.

With the introduction of the structural adjustment reforms in 1983, the PNDC under Flt Lt Rawlings raised and expanded user fees for public health care services in a system that became known as “cash and carry.” The user fee system improved operating revenues for some facilities, but it was poorly regulated, inconsistently implemented, and found to have worsened access to care for the poor.


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The highly unpopular “cash and carry” system finally gave in to the National Health Insurance Scheme (NHIS) under President J. A. Kuffour in 2003 with the enactment of Act 650.

The object of the NHIS 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 a visit to this country and to provide access to healthcare services to the persons covered by the Scheme.

Introduced as a consequence of the deleterious effects of user fees, one of the primary goals of Ghana’s NHIS is to increase the affordability and utilization of drugs and health services in general, and among the poor and most vulnerable populations in particular

The NHIS Law does not make it a crime to stay outside the scheme. It is strictly voluntary.  Interested individuals must go in person to a District NHIS office, complete registration, and pay a small registration fee meant to cover the photo ID and administrative expenses of registration.

The categories of persons exempted from the payment of contributions under the Scheme include: (a) a child; (b) a person in need of ante-natal, delivery and post-natal healthcare services; (c) a person with mental disorder; (d) a person classified by the Minister responsible for Social Welfare as an indigent; (e) categories of differently-abled persons determined by the Minister responsible for Social Welfare; (f) pensioners of the Social Security and National Insurance Trust; (g) contributors to the Social Security and National Insurance Trust; (h) a person above seventy years of age; and (i) other categories prescribed by the Minister.

According to health observers, the government’s objective to increase access to the formal healthcare sector through health insurance is commendable as prior to the establishment of the NHIS, many people died because they did not have money to pay for their healthcare needs when they were taken ill.

The NHIS Act 2003, Act 650, has eclipsed the Hospital Fees Act of 1971 to the extent that anyone attempting to enjoy exemptions under the 1971 Act will be disappointed at any health facility in the country.

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