Embed Size (px)
Citation preview
Document o f The World Bank
FOR OFFICIAL USE ONLY
Report No: 39 198-GH
PROJECT APPRAISAL DOCUMENT
O N A
PROPOSED CREDIT
IN THE AMOUNT OF SDR 10 MILLION (US$15 .O MILLION EQUIVALENT)
TO THE
REPUBLIC OF GHANA
FOR A
HEALTH INSURANCE PROJECT May 22,2007
Human Development I1 Africa Region
This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
Pub
lic D
iscl
osur
e A
utho
rized
CURRENCY EQUIVALENTS
(Exchange Rate Effective April 24,2007)
CAS C H A G C I D A DA DANIDA DMHIS D P FAA FM FY GDP GIMPA G F A T M GHS
GNOST
GoG GPRS I GPRS I1 GTZ IASC I C T ID IDA I L O IFC IT ITES JICA M&E MDA MDGs M O H
CurrencyUnit = Cedi 9,345Cedi = US$1
US$1.51326 = SDR1
FISCAL YEAR January 1 - December 31
ABBREVIATIONS AND ACRONYMS
Country Assistance Strategy Christian Health Association o f Ghana Canadian International Development Agency Designated Account Danish International Development Agency District Mutual Health Insurance Scheme Development Partner Financial Administration Act Financial Management Fiscal Year Gross Domestic Product Ghana Institute of Management and Public Administration Global Fund to Fight AIDS, Tuberculosis and Malaria Ghana Health Service Ghana Health Service’s National Health Insurance Scheme Oversight and Support Team Government o f Ghana Ghana Poverty Reduction Strategy for 2003-05 Ghana Poverty Reduction Strategy for 2006-09 German Agency for Technical Cooperation Inter-Agency Steering Committee Information and Communication Technology Identity Card International Development Association United Nations International Labor Organization International Finance Corporation Information Technology Infomat ion Technology Enabled Services Japan International Cooperation Agency Monitoring and Evaluation Ministries, Departments and Agencies Millennium Development Goals Ministry o f Health
FOR OFFICIAL USE ONLY
N C B N H I C NHIF N H I S PPA PPME PRSC RBM RNE SDR SOE SSNIT TA TOR UN UNAIDS UNICEF UNDP UNFPA U P S USAID V A T WHO
National Competitive Bidding National Health Insurance Council National Health Insurance Fund National Health Insurance Scheme Public Procurement Act Policy, Planning, Monitoring and Evaluation Poverty Reduction Support Credit Ro l l Back Malaria Royal Netherlands Embassy Special Drawing Rights Statement o f Expenses Social Security and National Insurance Trust Technical Assistance Terms o f Reference The United Nations The Joint United Nations Program on H IV /A IDS The United Nations Childrens Fund The United Nations Development Program The United Nations Population Fund Uninterruptible Power Supply United States Agency for International Development Value Added Tax The World Health Organization
Vice President: Obiageli Katryn Ezekwesili Country Director: Mats Karlsson
Sector Manager: Eva Jarawan Task Team Leader: Alexander S. Preker
This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. I t s contents may not otherwise be disclosed without World Bank authorization
GHANA Health Insurance Project
CONTENTS Page
A . STRATEGIC CONTEXT AND RATIONALE .................................................................... 1 Country and sector issues .................................................................................................... 1
Rationale for Bank involvement ......................................................................................... 4
Higher-level objectives to which the project contributes ................................................... 5
Lending instrument ............................................................................................................. 5 Project development objective and key indicators .............................................................. 5
Project components ............................................................................................................. 6
Lessons learned and reflected in the Project design ........................................................... 8
Alternatives considered and reasons for rejection .............................................................. 9
1 . 2 . 3.
B . PROJECT DESCRIPTION .................................................................................................... 5 1 . 2 . 3 . 4 . 5.
C . IMPLEMENTATION ........................................................................................................... 10 1 . 2 . 3 .
Partnership arrangements .................................................................................................. 10
Institutional and implementation arrangements ................................................................ 10
Monitoring and evaluation o f outcomeshesults ................................................................ 11 4 . Sustainability ..................................................................................................................... 11
Credit conditions and covenants ....................................................................................... 13
5 . 6 .
Critical r isks and possible controversial aspects ............................................................... 12
D . APPRAISAL SUMMARY .................................................................................................... 14 1 . Economic and financial analyses .................................................................................... 4 . 14
2 . Technical ........................................................................................................................... 14
3 . Fiduciary ........................................................................................................................... 15
4 . Social ................................................................................................................................. 15 5 . Environment.. .................................................................................................................... 16
6 . Safeguard policies ............................................................................................................. 16
7 . Policy exceptions and readiness ........................................................................................ 16
Annex 1: Country and Sector Program Background .............................................................. 17
Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ................. 29
Annex 3: Results Framework and Monitoring ........................................................................ 32
Annex 4: Detailed Project Description ...................................................................................... 35
Annex 5: Project Costs ............................................................................................................... 41
Annex 6: Implementation Arrangements ................................................................................. 42
Annex 7: Financial Management and Disbursement Arrangements ..................................... 45
Annex 8: Procurement Arrangements ...................................................................................... 54
Annex 9: Economic and Financial Analysis ............................................................................. 61
Annex 10: Safeguard Policy Issues ............................................................................................ 64
Annex 11: Project Processing .................................................................................................... 65
Annex 12: Documents in the Project File ................................................................................. 67
Annex 13: Statement of Loans and Credits .............................................................................. 68
Annex 14: Country at a Glance ................................................................................................. 70
Annex 15: Map IBRD 33411 ...................................................................................................... 73
GHANA
Date: M a y 22, 2007 Country Director: Mats Karlsson
Project ID: P101852 Lending Instrument: Specific Investment Loan
Sector Manager: Eva Jarawan
HEALTH INSURANCE PROJECT
Team Leader: Alexander S. Preker Sectors: Compulsory Health Finance
Themes: Administrative and c iv i l service reform (P) Environmental screening category: C
(1 00%)
PROJECT APPRAISAL DOCUMENT
Source B ORROWER/RECIPIENT INTERNATIONAL DEVELOPMENT AS SOCIATION Total:
AFRICA REGION
Local Foreign Total 0.0 0.0 0.0 5.0 10.0 15.0
5.0 10.0 15.0
AFTH2
FY Annual Cumulative
2008 2009 2010 201 1 2012 2013 0 0 0.8 3.2 3 .O 3.0 3.0 2.0 0.8 4.0 7.0 10.0 13.0 15.0
Borrower: Republic o f Ghana Responsible Agency: National Health Insurance Council Accra, Ghana Tel: 233 21 244 730 Estimated disbursements (Bank FY/US$m)
Re$ PAD D. 7. [ ] Yes [XI N o
Have these been approved by Bank management? [ 1 Yes 1 N o I s approval for any policy exception sought from the Board? Does the project include any critical risks rated “substantial” or “high”?
[ ] Yes [XI N o
Re$ PAD C.5. Does the project meet the Regional criteria for readiness for implementation?
[XI Yes [ ] No
Re$ PAD D. 7. Project Development Objective: Re$ PAD B.2., Technical Annex 3
[XI Yes [ ] N o
The overall project development objective i s to strengthen the financial and operational management o f the National Health Insurance Scheme by improving the: (i) policy adaptation and implementation capacity o f the National Health Insurance Council in addressing ongoing core pol icy issues related to contribution collection, risk equalization and provider payment mechanisms; and (ii) the purchasing function o f the District Mutual Health Insurance Schemes and the billing h c t i o n o f the Providers. Project Description: Re$ PAD B.3., Technical Annex 4
Component A: Enabling Environment for N H I S Implementation ($2.05 million)
This component o f the project wil l strengthen policy adaptation and implementation capacity o f the National Health Insurance Scheme in the following areas:
A.l. Stakeholder coordination A.2. Project management and sustainability A.3. Communication strategy to manage public expectations A.4. Standardizing fee schedules and medicines lists A.5. Performance based provider payment mechanisms and other policy adaptations A.6. Development o f related projects for donor support A.7. System for conducting routine audits and controlling for fraud and abuse
Component B: Financial and Operational Management Tools ($8.6 million)
This component o f the project wil l improve the purchasing fbnction o f the DMHISs and the billing function o f the Providers by moving the billing and claims process from a paper- based to an electronic-based system. Specifically, i t will strengthen the “front-office” and “back-office” o f the Providers so that they wil l be able to carry out fbnctions such as eligibility determination, tracking patients, bulk billing, and other standard accounting and financial management functions. The activities will attempt to standardize the Provider interface so that the DMHISs do not have to deal with multiple inconsistent Provider interfaces. The project wi l l support development and implementation o f the Provider interface in the following areas:
B.l. Providers’ needs analyses and strategies for business process tools B.2. Network development, hardware, and alternative energy solutions B.3. Software and systems integration
I Component C : Financial and Operational Management Training ($4.35 million)
This component will improve the sk i l ls in health insurance administration for staff working for the MOH, NHIC, DMHISs, and the Providers. This component will strengthen the actuarial analysis capacity of the N H I C Secretariat, technical capacity o f the DMHISs and Providers to operate the insurance systems, financial management o f premiums, payment mechanisms, liquidity, utilization and other related management activities needed to secure the long-term financial sustainability o f the health insurance system, The Project will support training and capacity building in the following areas:
C.l. Needs assessment and strategy development C.2. Management training C.3. Training in I C T Network Operations C.4. Training for internal actuarial analysis and other core analysis sk i l ls C.5. Financial management training
Which safeguard policies are triggered, if any? Re$ PAD D. 6, Technical Annex 10 N o safeguard policies were triggered by the project. Significant non-standard conditions, if any (Re$ PAD C. 6), for: Board presentation: None
Credit effectiveness:
(i) The Project Implementation Manual has been adopted, in form and substance satisfactory
(ii) The Recipient and the N H I C have concluded a subsidiary agreement providing for the to the Bank.
transfer o f Credit funds to the NHIC and the implementation o f the Project by the NHIC.
Dated Covenants: I
(i) Finalization o f the appointment o f financial and procurement auditors to be made within six months o f effectiveness.
Covenants Applicable to Project Implementation:
(i) The Recipient shall maintain, at all times during the implementation o f the Project, a positive five year forward looking actuarial balance on the N H I S .
(ii) Provider beneficiaries who will receive training and equipment from the project wil l enter into a Memorandum o f Understanding with the N H I C that they wil l set aside sufficient finds to allow for maintenance, replacement and future upgrading o f depreciated stock under the project and comply with the monitoring indicators.
(iii) Not later than November 1 o f each year during the implementation o f the Project, the Recipient shall cause N H I C to prepare and furnish to the Bank an annual work plan, in form and substance acceptable to the Association, detailing the eligible activities and expenditures under the Project for the following Fiscal Year, and which shall inform the Annual Program o f Work o f the MOH.
A. STRATEGIC CONTEXT AND RATIONALE
1. Country and sector issues
1. In recent years, Ghana has experienced relative macroeconomic stability and high real GDP growth. GDP growth averaged 6.2 percent between 2005 and 2006, compared to the previous twenty-year average o f 4.5 percent. The government’s commitment to prudent fiscal policies has helped lay the foundation for Ghana’s current economic performance. This includes strong fundamentals such as high public and private investment levels, sound export performance, increased remittances to Ghana, declining fiscal deficits and moderate inflation.
2. Following the period o f economic slowdown from 1975 to 1984, the government o f Ghana (GoG) formulated a set o f fiscal policies, outlined in i t s f irst Poverty Reduction Strategy (GPRS I) for 2003-05, which emphasized sustainable, equitable growth and poverty reduction. The most recent Poverty Reduction Strategy for 2006-09 (GPRS 11) builds on the country’s current macroeconomic stability and high economic growth rates to focus on developing Ghana into a middle-income country by 20 15.
1.1. Health Insurance Context
3. A cash-and-carry system o f user charges was instituted in 1982 after budgetary financing for the Ghana Health Service (GHS) started to deteriorate in tandem with Ghana’s economic performance. The cash-and-carry system created a policy o f direct charges, which was intended to discourage patients from using unnecessary health services while generating more revenues to finance the health system. While the cash-and-carry system was able to direct a new source o f financing to the public health sector, contributing to 16.5 percent o f the total public health services in 2003, i t had serious impacts on usage. A sign o f how drastic the effect o f the cash- and-carry system had on health care usage came in 1985. In 1985, when user charges were f i r s t substantially increased, outpatient v is i ts in hospitals dropped from 4.5 mi l l ion to 1.6 million. The direct user charges meant that the poor and vulnerable faced additional financial barriers or were exposed to financial risks when seeking health care. I t i s also thought to have contributed to worsening health indicators. Infant mortality rates increased from 57 to 64 per 1,000 live births and under-5 child mortality rates increased from 108 to 11 1 per 1,000 children from 1998 to 2003 (Ghana Ministry o f Health 2006). In addition, wide discrepancies persist in health indicators across socioeconomic and regional groups. For example, the infant-mortality rate per 1,000 l ive births in 2003 varied from 33 in Greater Accra to 105 in Upper West Region (Ghana Ministry o f Health 2006).
4. The GoG i s committed to reaching the Abuja target o f spending 15 percent o f the government budget on health. In 2006, the GoG spent approximately 13 percent o f i t s budget on health but as a percentage o f total health spending, this remained low. In the past few years, the public share o f total health expenditures decreased from 35.5 percent in 1999 to 31.8 percent in 2003, reaching a level o f 1.4 percent o f GDP while total health care expenditures were around 4.5 percent o f GDP in 2003 (World Bank 2006). The National Health Insurance Act was introduced in an effort to reduce financial barriers to access while ensuring that public expenditures on the health sector remained consistent with the growth-driven macroeconomic and fiscal policy.
1
5. The National Health Insurance Act established:
0 The National Health Insurance Scheme (NHIS) as a system to provide basic health services for Ghana’s residents through District Mutual Health Insurance Schemes (DMHISs) or other private health insurance schemes
0 The National Health Insurance Council (NHIC) as a regulatory body overseeing the NHIS
0 The National Health Insurance Fund (NHIF) to provide a subsidy to the DMHISs, reinsure the DMHISs against random fluctuations, cover the cost o f health care for indigents, and support programs that improve access to health services.
1.2. Health Insurance Policy Issues
6. Since 2003, the GoG has been working to implement the N H I S . Currently, District Mutual Health Insurance Schemes are operating in al l districts with 38 percent o f the population registered. The N H I C has set a target o f reaching 55 percent insurance coverage for 2007, which may be optimistic given the problems the N H I S has so far faced in i t s implementation. Implementation o f any insurance system wil l be complex. For the N H I S , several issues ranging from broad policy decisions to detailed implementation arrangements have hampered the process. The following describes key policy issues that require technical assistance:
0 Poor coordination among stakeholders and lack o f concrete governance arrangements and responsibilities for NHIS implementation. Actions taken by the NHIC affect the operations and policies o f other key N H I S stakeholders such as the health care providers (referred to in the PAD as “Providers”), which comprise the Ghana Health Service (GHS), the teaching hospitals, health service providers from other GoG ministries (e.g. military and police hospitals), the Christian Health Association o f Ghana (CHAG), private Providers, and other Providers. However, there has been limited coordination both among the providers and between the providers and the N H I C in resolving key pol icy and implementation issues (see Technical Annex 1). This has led to: (i) gaps between the Information and Communication Technology (ICT) planned by the NHIC and the different Information Technology (IT) employed by Providers; (ii) cost-shifting risks due to the split financing arrangements between the Ministry o f Health (MOH) and the NHIC; (iii) fragmented tari f f schedules and non-standardized medicines l ists which limit Providers’ control over their main cost drivers; (iv) weak Provider performance incentives; (v) and difficulties phasing out the MOH subsidies for the uninsured “exempt” who seek health care services.
Challenges to maintaining financial sustainability of the NHIS. Many existing N H I S policies were determined in order to implement the scheme quickly and encourage enrollment. As a consequence, the premiums were set with regard to income levels and are not actuarially based; There are no disincentives in place to prevent excessive use o f health care services; The benefits package includes 95 percent o f a l l illnesses, and the exemption policy creates incentives for greater enrollment o f exempt than non-exempt categories o f the population. There are social welfare gains from the current revenue collection, benefits package, and exemption policies. However, these policies further strain the financial sustainability o f the NHIS. Already, some o f the fully operational DMHISs are running
2
deficits. Based on estimates by the International Labor Organization (ILO), the NHIF actuarial balance should remain positive for the f i rst few years o f implementation and may continue to do so through 2025 as long as Ghana maintains i t s strong economic growth, and the enrollment o f the exempt does not increase beyond the expansion o f subsidies to the exempt (see Technical Annex 9).
Poor management of public expectations of NHIS. NHIS viability i s influenced by public approval. The N H I C has focused primarily on increasing public awareness o f the N H I S in order to encourage registration. However, implementation constraints and limited public outreach have contributed to poor public understanding o f how the system works, thereby engendering negative public opinion about the NHIS. According to the GHS, patients have started to use unnecessary services and demand services not covered by the insurance system, demonstrating their lack o f understanding o f the N H I S . At the same time, negative media coverage i s resulting from the N H I C constraints to implementation. The N H I C has to improve i t s public relations to respond effectively to public complaints while managing expectations.
Difficulties providing effective coverage for the poor and “exempt” indigents. Although the purpose o f the N H I S i s to provide a pro-poor alternative to the cash-and-carry system, there are s t i l l problems with identifying and registering indigents who are: (i)“exempt” from coverage; (ii) registering poor informal sector workers who may s t i l l find the income-based premium levels too high; (iii) finding a financially sustainable solution for subsidizing the “exempt” groups; (iv) and phasing out the MOH exemptions policy.
1.3. Implementation Issues for DMHISs and Providers
7. implementation delays and negative public opinion o f the NHIS.
Both the DMHISs and the Providers have faced constraints that have contributed to
0 Delays and inconsistencies in issuing Health Insurance Identity cards to those who are registered. Although nearly 7.8 mil l ion people have registered with the NHIS , only about 4.2 mi l l ion have received their Health Insurance Identity (ID) cards. Health Insurance ID cards allow N H I S registered members to exercise their entitlements covered under the benefits package. The N H I S lack o f administrative capacity i s the main source o f the delays, limiting the number o f registered members who can access their entitled services. These delays are contributing to public opinion that reform has been slow and ineffective. To address these problems, the N H I C i s building an I C T Network Platform. This platform wil l include a solution to accelerate the production, distribution, and processing o f Health Insurance ID cards that have one format and can be portable across the DMHISs. I t s design also provides for the future introduction o f the National ID card as a means o f additional verification.
Inadequate technical tools for processing and reimbursing claims. Similar to the financial management problems in other sectors, Ghana’s accounting, recording, and reporting systems are paper-based. The paper-based system i s slow and has contributed to significant delays for Providers to accurately bill DMHISs and for DMHISs to reimburse Providers. From a review o f provider reimbursement rates in two regions, the average time taken for Providers to submit claims i s 4 weeks and to receive payments from the DMHISs i s
3
2.5 months. In addition, only about 40 to 60 percent o f the amount o f the bills submitted by Providers was reimbursed. The paper-based system also makes i t difficult to profile the trends in the claims made by Providers in order to check outliers for potential fraudulent activity. This further delays the time taken to process insurance information and can reduce data accuracy. The N H I C I C T Network Platform has started to address this problem with provisions for technical hardware, and the GHS i s developing a software package to handle billing and patient records keeping. However, the planned hardware and software packages have not been designed with coordination between the Providers and the N H I C and may be inadequate and incompatible.
0 Insufficient administrative, managerial, and technical human capacity. Ghana’s health insurance system wil l require skilled labor for the DMHISs and the Providers to manage and administer the new health insurance system. Ghana has a shortage o f workers with the necessary ski l ls for running a health insurance system. The implementation o f the N H I S has introduced extra administrative overhead in health facilities. In addition to the insufficient technical tools, Providers are too understaffed to handle the increased workload due to requirements for claims processing. When the N H I C introduces i t s I C T Network Platform and the Providers start to develop their IT solutions, managers and administrators in the DMHISs and the Providers will also need to employ technical know-how. The decentralized nature o f the insurance system wil l require this knowledge set at both the district and central levels.
2. Rationale for Bank involvement
8. The Bank already has a significant involvement in health policy in Ghana. Expanding this involvement to include health financing pol icy i s important for several reasons. First, the Bank i s committed to helping client countries address poverty and achieve the Millennium Development Goals (MDGs). Although the share o f public expenditure allocated to the health sector has increased, spending on health care in Ghana, in absolute terms, remains very low. More and better spending in targeted programs will be critical to achieving the MDGs. Yet options for funding health care through general revenues are limited. Contributory health insurance provides additional financial resources, a method o f improving risk management, and a way to target the poor through selective premium subsidies.
9. Second, the Bank i s committed to supporting countries that pursue good fiscal policies that promote growth and avoid corruption. This i s important for overall economic development but also because ultimately i t i s economic growth that will lead to higher incomes, better health, and more resources devoted to health care. The introduction o f contributory health insurance has serious implications for the tax burden on low-income groups, labor market costs, and international competitiveness. The extensive experience o f the international community in all these areas could be helphl to the GoG in designing a health insurance system that wil l respond to both economic and health policy objectives.
10. Finally, the conclusions o f past analytical reports published by the Bank and the I L O outline the need for reforms to address a range o f critical issues in accountability, management capacity, and governance. The project offers an opportunity to provide needed support in these areas.
4
3. Higher-level objectives to which the project contributes
1 1. The project contributes to the government’s higher development goals o f macroeconomic stability, prudent fiscal management, human resource development, and promotion o f good governance, as outlined in the GPRS 11. Strengthening financial management o f the N H I S will be critical to securing a sustainable source o f fimding for the health sector and ensuring that the new health insurance system operates within the fiscal space allocated to the health sector. This underlying development goal o f the proposed Health Insurance Project reflects the priorities o f the latest Ghana County Assistance Strategy (CAS Report No. 27838-GHY 2004), which are aligned with the pillars o f the GPRS I. This project addresses specific constraints that were emphasized in the MOH Sector Strategic Plan for 2007-11 and the 2007 Annual Program o f Work. Increasing coverage o f the population under the National Health Insurance Scheme i s also part o f Ghana’s efforts to achieve the health MDGs. In addition, the benefits package under the N H I S covers treatment o f malaria, which i s in l ine with the M O H Ro l l Back Malaria (RBM) Strategic Plan o f 2000, the MDGs, and the Bank Malaria Global Strategy and Booster program.
B. PROJECT DESCRIPTION
1. Lending instrument
12. The project i s to be supported through an International Development Association (IDA) credit o f US$lS.O mi l l ion equivalent. The lending instrument used i s a Specific Investment Loan, which will be implemented over five years.
2. Project development objective and key indicators
13. The overall project development objective i s to strengthen the financial and operational management o f the National Health Insurance Scheme by improving: (i) the policy adaptation and implementation capacity o f the National Health Insurance Council in addressing ongoing core pol icy issues related to contribution collection, r i s k equalization, and provider payment mechanisms; and (ii) the purchasing function o f the District Mutual Health Insurance Schemes, and the billing fimction o f the Providers. This wil l be achieved by the introduction o f financial and operational management tools and training that wi l l allow the NHIC, the DMHISs, and the Providers to improve their financial management efficiency. The key indicators that will be used to measure improvements in the policy environment and administrative processes related to health insurance are listed in Annex 3.
14. The beneficiaries o f the Health Insurance Project are: (i) the National Health Insurance Council, which wil l have improved processes for management oversight o f the National Health Insurance Scheme and therefore greater control over the financial balance; (ii) the District Mutual Health Insurance Schemes which wil l have streamlined mechanisms for local level administration; and (iii) the Providers including the GHS, the teaching hospitals, the CHAG, the health service providers from other ministries, and other providers which will have improved financial management and administrative mechanisms to improve their overall management performance.
5
3. Project components
15. The following activities wil l be supported under this Project (see Annex 4):
Component A: Enablinp Environment for NHIS Implementation ($2.05 million)
16. capacity o f the National Health Insurance Council in the following areas:
This component o f the Project wil l strengthen the policy adaptation and implementation
A. 1. Stakeholder coordination
0 Activities include carrying out workshops, meetings and other activities to promote coordination among the institutions involved in the oversight and implementation o f the M I S , including the provision o f technical advisory assistance to strengthen the functioning o f the Inter-Agency Steering Committee (IASC).
A.2. Proiect manapement and sustainability
0 Activities include the provision o f technical advisory assistance to the N H I C to develop i t s capacity in project management, procurement, and financial management.
A.3. Communication strategy to manage public expectations
0 Activities include the development and implementation o f a communication strategy to increase the awareness of, and channel feedback from, stakeholders and the public concerning health insurance system changes and processes, including the design o f a performance reward program for the Providers and the DMHISs.
A.4. Standardizinp fee schedules and medicines lists
Activities include the standardization o f fee schedules and medicines lists o f the NHIS , including the carrying out o f costing studies and monitoring and evaluation o f the cost structure and pharmaceutical utilization to inform future price adjustments.
AS. Performance-based provider payment mechanisms and other policy adaptations
Activities include development o f performance-based health care provider payment mechanisms and other policy adaptations to support the implementation o f such mechanisms.
A.6. Development o f related projects for donor support
0 Activities include carrying out workshops, meetings, and other activities to promote coordination o f the activities o f donor agencies supporting the N H I S .
A.7. System for conducting routine audits and controlling for fraud and abuse
Activities include development o f routine auditing and case disposition policies and systems to help the NHIC, the DMHISs, and the Providers prevent, identify, and handle instances o f health insurance fi-aud and abuse.
6
Component B: Financial and Operational Management Tools (S8.6 million)
17. This component o f the Project will improve the purchasing function o f the DMHISs and the billing function o f the Providers by moving the billing and claims process from a paper-based to electronic-based system. Specifically, i t wil l strengthen the “front-office” and “back-office” o f the Providers so that they wil l be able to carry out h c t i o n s such as eligibility determination, tracking patients, bulk billing, and other standard accounting and financial management functions. The activities will attempt to standardize the Providers’ interface so that the DMHISs do not have to deal with multiple inconsistent Providers’ interfaces. The Project will support development and implementation o f the Provider interface in the following areas:
B. 1. Providers’ needs analyses and strategies for business process tools
Activities include carrying out a rapid needs assessment and developing I C T strategic plans for the Providers to fill technical gaps and optimize the Providers’ interface with the N H I C ICT Network Platform.
B.2. Network development, hardware, and alternative energv solutions
0 Activities include implementation o f the I C T strategic plans o f the Providers by equipping them with necessary technical hardware, network connectivity, and alternative energy generating sources, as wel l as introductory staff training, technical support, and maintenance.
B.3. Software and systems integration
Activities include development, licensing, and installation o f software for the integration o f the Providers’ front-office and back-office systems, including introductory staff training, technical support, and maintenance.
Component C: Financial and Operational Management Training (S4.35 million)
18. This component wil l improve the ski l ls in health insurance administration for staff working for the MOH, NHIC, DMHISs, and the Providers. This component will strengthen the actuarial analysis capacity o f the N H I C Secretariat, technical capacity o f the DMHISs and Providers to operate the insurance systems, financial management o f premiums, payment mechanisms, liquidity, utilization and other related management activities needed to secure the long-term financial sustainability o f the health insurance system. The Project wil l support training and capacity building in the following areas:
C. 1. Needs assessment and strategy development
Activities include carrying out an assessment o f the technical and managerial capacity o f the NHIC, the DMHISs and the Providers, and developing a capacity-upgrading training strategy and program to address these capacity constraints.
7
C.2. Management training
0 Activities include provision o f management education and training for senior staff in the MOH, the NHIC, the DMHIS, and the Providers in accordance with the training strategy and program developed under subcomponent C. 1 o f the Project.
C.3. Training in I C T Network Operations
Activities include training o f core ICT teams to provide continuing support to the Providers in the use o f the N H I C I C T Network Platform and the Providers’ I C T tools in accordance with the training strategy and program developed under subcomponent C.1 o f the Project.
C.4. Training for internal actuarial analysis and other core analysis ski l ls
0 Activities include development o f the capacity o f the NHIC, the DMHISs, and the Providers in data collection and monitoring for health care utilization, and development o f the N H I C capacity in actuarial analysis, both in accordance with the training strategy and program developed under subcomponent C. 1 o f the Project.
(2.5. Financial manapement training
0 Activities include provision o f financial management training for staff in the MOH, the NHIC, the DMHISs, and the Providers in accordance with the training strategy and program developed under subcomponent C. 1 o f the Project.
4. Lessons learned and reflected in the Project design
19. The Project draws on the experience already gained in implementing health financing and insurance reforms in the Africa Region and lessons learned from the Country Assistance Strategy and the Independent Evaluations Group o f the Bank on implementation capacity constraints in Ghana. The CAS highlights some applicable lessons from i t s review o f implementation from the previous Ghana CAS and the Operations and Evaluations Department Work and Client Surveys. I t emphasized the need to incorporate multisectoral approaches, decentralize strengthened responses, carry out critical diagnostics, ensure sustainability, strengthen relationships with DPs, and improve Bank communication with clients. These specific lessons from the CAS are incorporated in the Project components.
20. The Project design also addressed problems associated with the absorption o f Information and Communication Technologies by systems with limited human capacity. Human capacity can be a limiting factor for successhl introduction o f new technologies. Each component incorporates activities for managing changes associated with the business processes resulting f iom the introduction o f the new technologies. Also, part o f the Component C objective is to directly improve DMHIS and the Provider staff capacity to effectively understand the role o f the new technologies and their uses in improving insurance business processes.
8
5. Alternatives considered and reasons for rejection
21. Three major pol icy alternatives were considered: (i) developing a powerful single purchaser under the N H I S ; (ii) letting the N H I C solve i t s own problems, while the Bank and the other development partners focus on strengthening the underlying health system as they have been doing; and (iii) reconsidering the overall approach to health care financing in Ghana (i.e., abandoning the health insurance model). These alternatives have been actively debated by both the government and other stakeholders. A decision was made to focus on strengthening the new health insurance system rather than opt for other solutions based on the following rationale:
(i) Transferring more o f the overall health budget through the N H I S would give the DMHISs more purchasing power over the Providers. This policy option has been discussed but not pursued for two reasons. Since the Ministry o f Health i s still supporting the cost o f fixed overhead and labor, the DMHISs can focus their attention on the main cost drivers over which they have some control. The DMHISs wil l want to have eventual control over at least labor and possibly even capital expenditures that could be covered through the reimbursement schedule. The current arrangement i s therefore a safer way to get the NHIS up and running.
(ii) The N H I C i s struggling with implementation o f the N H I S and has so far not received extensive support fkom external sources. Both the GoG and the N H I C have asked for such support. I t would be appropriate for the Bank and other DPs to respond to this appeal.
(iii) The N H I S i s an ongoing high priority for the GoG in addressing poverty issues and securing a sustainable source o f h d i n g that i s less dependent on donor aid and relieves binding constraints on fiscal space. Returning to a policy that would eliminate health insurance as a major source o f funding for the health sector i s not supported by the current government and therefore not a viable policy alternative for the Bank to support at this time.
22. also considered:
In terms o f the specific implementation arrangements, several alternative choices were
The GHS and M O H were considered as possible agencies that could implement the Project instead o f the NHIC, because the beneficiaries wil l include the GHS. However, the GHS and the M O H teaching hospitals are not the only beneficiaries. Other beneficiaries include the CHAG, health service providers from other ministries, and other providers. Also, the N H I C has taken the lead in the early stages o f implementation o f the N H I S . Maintaining the N H I C as the implementing agency ensures a more fluid interface between the N H I C I C T Network Platform and the Providers’ operational and financial management tools and training program. However, there is a need for a strong coordinated implementation arrangement, which would be governed by the Inter-Agency Steering Committee led by the MOH.
0 A Technical Assistance (TA) loan was considered instead o f a Specific Investment Loan because the Project requires significant technical assistance in making policy reform and administrative decisions. Given the significant I C T developments that will be required over
9
the next few years, the Specific Investment Loan was considered to be a more appropriate instrument.
C. IMPLEMENTATION
1. Partnership arrangements
23. The Annual Program o f Work for the Ministry o f Health provides the policy framework under which the DPs can support the NHIS in a coordinated way, in parallel to the support provided by the Bank (see Annex 4). The Project wil l support a needs assessment and elaboration o f strategic plans for financial and operational management by each o f the major provider groups (MOH teaching hospitals, GHS, CHAG, and other providers). This will allow identification o f financing gaps that could also be supported in a coordinated way by the DPs. Currently, the DPs that have indicated an interest in providing support for the N H I S include the ILO, the Royal Netherlands Embassy (RNE), and the Danish International Development Agency (DANIDA). The ILO has been providing an actuarial analysis o f the health insurance budget as wel l as technical assistance in strengthening actuarial analysis capacity for the NHIC. DANIDA wil l examine the implications o f the N H I S on the poor. The RNE i s preparing for the allocation o f fhnding to support further capacity building and technical advice in developing the interface for private providers. The United States Agency for International Development (USAID) wil l conduct a follow-up survey on utilization o f health services under the N H I S . Other DPs that are willing and able to support the N H I S wi l l be invited to contribute to the program over time. The Credit will provide specific support for the N H I C to coordinate the activities supported by the DPs that become involved in the health insurance sector during the course o f the Project.
2. Institutional and implementation arrangements
24. The Ministry o f Health exercises a general policy oversight responsibility for the parastatal agencies such as the N H I C and the GHS. A high-level Inter-Agency Steering Committee (IASC) already exists to ensure coordination among the various semi-autonomous agencies and private sector providers that make up Ghana’s pluralistic health sector. The IASC, chaired by an M O H representative, meets once or twice a year to discuss issues o f strategic importance to the health sector. Other members o f the IASC include representatives from the NHIC, the GHS, the CHAG, teaching hospitals, health service providers from other ministries, and other providers.
25. The IASC wil l be responsible for overseeing the broad strategic pol icy adaptations that will be supported by the Project, related to recommendations made by the technical groups working on Project policy development subcomponents.
26. The N H I C will be the main implementing agency with overall responsibility for the management o f the Health Insurance Project. The Providers, which are majority represented by the GHS and CHAG, are the primary beneficiaries o f the Project. The GHS, CHAG, and other key providers have established the Ghana Health Service’s National Health Insurance Scheme Oversight and Support Team (GNOST) Team to coordinate Providers’ implementation o f the N H I S . Under the oversight o f the NHIC, the Providers wi l l contribute to the development o f the Providers’ Needs Assessment and ICT strategy (Component B). However, the N H I C wil l maintain responsibility for procuring consultants and goods for Component B.
10
27. The Ghana Institute o f Management and Public Administration (GIMPA), or another training institution such as the K o f i Annan Centre for IT, the Ghana medical school, public health school, and business school will, under the oversight o f the NHIC, develop a curriculum and provide training for the major areas described under Component C. GIMPA currently provides a health administration and management training course for the GHS.
28. These arrangements were chosen because the MOH has overall responsibility for sector policy development and oversight, while the N H I C i s the lead government institution with responsibility for the implementation o f the NHIS, and delivery o f services is the responsibility o f the GHS and other providers.
3. Monitoring and evaluation of outcomes/results
29. Monitoring and evaluation (M&E) o f the Project wil l be embedded in the various Project components. The M&E team at the N H I C wil l be responsible for developing a common evaluation framework for the entire Project. The team wil l determine reporting formats and frequency. I t collects, consolidates, and disseminates lessons learned with relevant stakeholders and ensures stakeholder feedback i s captured in Project implementation and in the development o f a results framework.
30. The N H I C wil l present quarterly reports reflecting M&E findings to the Bank as part o f interim financial reports, which also comprise financial and procurement reports. Overall comprehensive annual progress reports on the entire Health Insurance Program, including results from funding and support from the NHIF, IDA, and DPs, wi l l also be submitted to the Bank and inform the annual Health Summit. A comprehensive mid-term review will be undertaken at the end o f the third year o f implementation.
4. Sustainability
31. The GoG i s committed to the Health Insurance Project and continues to emphasize its reform and implementation agenda. In addition, the GoG has shown significant commitment to preparing the ground for implementing insurance reforms through:
0 The approval o f the National Health Insurance Act 650. 0 The implementation o f revenue collection mechanisms which have been established
through a National Health Insurance Levy which i s a 2.5 percent consumption tax, mandatory payroll deductions o f 2.5 percent o f the 17.5 percent Social Security and National Insurance Trust (SSNIT) contributions for formal sector workers and graduated premiums for the informal sector. District Mutual Health Insurance Schemes are operating in all districts with an overall coverage o f 38 percent o f the population registered. A majority o f those registered belong to the “exempt group,” including children under 18, the elderly (over 70), and indigents, which are identified by the DMHIS. Indigents represent 2.1 percent o f those registered, exceeding the 0.5 percent target. The N H I S agenda outlined in the M O H 2007 Program o f Work. The issuance o f a tender for the N H I S I C T Network Platform. The development o f the N H I C Strategic Business Plan.
0
11
32. addressing issues that have arisen, such as:
On the basis o f the experience o f the N H I S so far, the N H I C and MOH are now
0 The need for a legal and administrative review to fine-tune legislation and processes to strengthen further the incorporation o f the poor into the N H I S and access to healthcare by mothers and children, particularly for children under five years old.
0 Reviewing business processes to speed up the billing cycle (which this Project i s designed to address).
0 Working more closely with the DPs to mobilize funding for capacity building and technical assistance.
33. The Project has built in ongoing training and capacity building to ensure the continued effective operation o f the ICT and understanding among Providers o f the requirements o f the N H I S . Actuarial analysis capacity has been built in to support the long-term sustainability o f the NHIS itself, by projecting the financial needs o f the system under various scenarios. Beneficiary organizations within the Providers will be required to demonstrate the financial sustainability o f the financial and operational management tools and training that wi l l be supported under their I C T and training strategies that the N H I C will prepare before receiving financing for the tools and training under the Project.
5. Critical risks and possible controversial aspects
34. to reduce negative impact on the Project:
The following matrix summarizes some critical r isks and mitigating steps and conditions
Risk Management Matr ix
Risks
Delay or lack o f coordination in implementing the ICT Network Platform.
Political pressure to divert National Health Insurance Funds to general MOH budgets.
Ghana’s electricity crisis will constrain use o f technology.
Rating
H
M
M
Mitigation
The N H I C issued tender documents in M a y 2006 and i s near to announcing the winning contracting firm. Policy and technical oversight o f the NHIS will be organized through the IASC and technical committee. A team already in place deals with the provider implementation o f the NHIS, called the Ghana Health Service’s National Health Insurance Scheme Oversight and Support Team (GNOST).
Public support i s subject to improve with the planned targets to increase registration to more than 55 percent. Also, a covenant i s designed to prevent not more than 5 percent o f the NHIF to be applied to budgetary shortfalls.
The Project components for strategy development will examine the country’s energy constraints and consider back-up energy solutions or alternative energy solutions, such as solar panels, as part o f i t s analysis o f technological constraints.
12
Political barriers to making unpopular but necessary changes to benefits, premiums, or exemptions.
Lack o f flexibility o f planned IT to incorporate policy changes such as reforms to provider payment mechanism.
Technological obsolescence and failures.
Cost-sharing problem among key stakeholders
Lack o f internal technical capacity
M
S
M
Communications strategy and technical assistance for policy reform wil l be designed to incorporate public sensitivities to reform.
An I C T Strategc Plan for the Providers (component C) will ensure that the hardware and software platform that will be introduced i s sufficiently broad to be able to accommodate future changes.
I C T technology has stabilized considerably during recent years, and PC-based networks are fairly standard throughout the world. By choosing a standard business environment, the r i sk o f technological obsolescence i s greatly reduced.
The NHIS has already committed a substantial fund to build an effective I C T platform. Additional resources provided by the Project would complement existing commitment by the Recipient.
The Project will support extensive I C T and management training to strengthen the capacity o f the MOH, NHIC, DMHISs, and Providers.
Ratings: H= high; S = substantial; M = modest; N = negligible.
6. Credit conditions and covenants
35. resolved:
I t was agreed at negotiations that the following conditions and covenants will be
Effectiveness conditions
(i) The Project Implementation Manual has been adopted, in form and substance satisfactory
(ii) The Recipient and the N H I C have concluded a subsidiary agreement providing for the to the Bank.
transfer o f Credit hnds to the N H I C and the implementation o f the Project by the NHIC.
Financial Covenants
(i) Quarterly progress reports including procurement, physical, and financial progress wil l be
(ii) Annual audit reports wil l be prepared and submitted to the Bank by June 30 o f each year. prepared and sent to the Bank no later than 45 days from the end o f each quarter.
Dated Covenants
(i) Finalization o f the appointment o f financial and procurement auditors to be made within six months o f effectiveness.
13
Covenants Applicable to Project Implementation
(i) The Recipient shall maintain, at a l l times during the implementation o f the Project, a positive five-year forward-looking actuarial balance on the N H I S .
(ii) Provider beneficiaries who wil l receive training and equipment from the project wil l enter into a Memorandum o f Understanding with the N H I C that they wil l set aside sufficient funds to allow for maintenance, replacement, and fbture upgrading o f depreciated stock under the project and comply with the monitoring indicators.
(iii) N o later than November 1 o f each year during the implementation o f the Project, the Recipient shall cause N H I C to prepare and hrnish to the Bank an annual work plan, in form and substance acceptable to the Association, detailing the eligible activities and expenditures under the Project for the following Fiscal Year, and which shall inform the Annual Program o f Work o f the MOH.
D. APPRAISAL SUMMARY
1. Economic and financial analyses
36. The Health Insurance Project i s expected i yield significant socioeconomic and financial returns for Ghana, including a financially sustainable, revenue-generating National Health Insurance Scheme, a modernized health system; and broad social benefits from fiscal protection from illness for the poor, improved governance, and increased use o f health services.
37. The Project will have a financial impact on the DMHISs and the Providers. With a functioning health insurance system, the DMHISs wil l be better able to retain or increase their registered members and maintain or increase their premium collections. With the capital investments directed mostly toward Providers, i t i s expected that Providers wi l l be able to increase their cost recovery from improved administrative processes. The Cape Coast regional hospital i s an example o f a health service provider that is technically equipped and wired to process insurance information electronically. I t experiences claims recovery rates o f nearly 95 percent and a billing cycle time o f 6 weeks. This contrasts to the 2-region study in which GHS providers had claims recovery rates o f about 40-60 percent and a billing cycle time o f over 2 months.
2. Technical
38. The investments in financial and operational management tools and training through both the N H I C I C T Network Platform and the Health Insurance Project are designed to address the bottlenecks in the National Health Insurance Scheme. Addressing these bottlenecks will accelerate the process for Providers to receive reimbursements for services claimed. Providers, however, have experienced similar delays in billing the DMHISs because o f the amount o f paperwork that i t entails. Hospitals that have taken their own steps to develop their IT systems in response to the NHIS have shown considerable improvements in cost recovery. However, gaps st i l l exist for hospitals that do not have the resources to invest in their own systems.
39. In addition, investments in hardware often cannot be absorbed without simultaneous investment in human capacity. The Health Insurance Project will support training to develop the
14
human capacity o f the DMHISs and Providers to strengthen the management and administration o f the health insurance and I C T systems.
3. Fiduciary
40. A Financial Management (FM) assessment o f the accounting unit o f the NHIC was undertaken in accordance with the Financial Management Practices Manual issued by the Financial Management Board on November 3, 2005. The objective o f the assessment was to determine whether the N H I C has acceptable financial management arrangements, which will ensure that: (i) funds are used only for the intended purposes in an efficient and economical way; (ii) timely, accurate, and reliable periodic financial reports are prepared; and (iii) the entity’s assets are safeguarded.
41. The assessment was undertaken by a Bank FM team and included interviews with key staff persons responsible for financial management in the NHIC, as wel l as the use o f standard FM Assessment Questionnaires. The assessment also draws on earlier work carried out under various projects in Ghana. The assessment was carried out fully cognizant o f the fact that the Bank would use the institution’s systems if the systems met the Bank’s minimum requirements for FM in Bank assisted projects.
42. The initial conclusion o f the financial management assessment was that the accounting unit o f the N H I C did not have adequate systems in place to satisfy the minimum financial management requirements o f the Bank for purposes o f implementing the proposed Health Insurance Project. The assessment therefore listed a number o f actions to be implemented by the NHIC, to upgrade their FM systems in order to attain the Bank’s minimum requirements for FM. The bulk o f these actions have since been completed, and the FM arrangements now in place meet the Bank’s minimum requirements for FM in Bank-assisted projects.
43. All procurement activities under the Project wi l l be carried out by the NHIC. The procurement function i s staffed by one procurement specialist with extensive knowledge and training in Bank’s procurement procedures, including procurement planning and management of the procurement cycle. The other staff member i s a secretary.
44. The key issues and risks concerning procurement have been identified and include: (i) familiarity with the Bank procurement guidelines limited to only one staff member; and (ii) lack o f proj ect management and coordination capacity.
45. The above FM and procurement issues will be addressed by: (i) preparation o f a Project Implementation Manual, which describes the organizational structure for implementing the Project, including a section on procurement, and will support the wider institutional development o f the N H I S ; (ii) a project launch workshop for key N H I S staff, including the tender committee; (iii) setting o f standard processing times; and (iv) appointment o f two additional staff members (at least one having knowledge and experience in Bank financed procurement).
4. Social
46. The Project has significant potential to provide social benefits to improving access to health care, increasing financial protection from illness, strengthening the Ghana Health Service, and modernizing the health system. DANIDA i s developing an assessment o f the impact o f the
15
NHIS on the poor. The original mutual health insurance system was based on a system o f social capital. Efforts would be made to preserve this aspect under the new health insurance system.
5. Environment
47. N o environmental and social safeguard issues are associated with the Project. The Project focuses on strengthening financial management with activities on training and computerization o f existing health care facilities. Depending on the needs analysis o f the health care facilities, there may also be procurement for back-up generators and solar panels for the health care facilities.
The environmental category for this Project i s a C.
6. Safeguard policies
Safeguard Policies Triggered by the Project Yes N o Environmental Assessment (OP/BP 4.01) [I [ XI Natural Habitats (OP/BP 4.04) [I [ XI Pest Management (OP 4.09) 11 [ XI Cultural Property (OPN 11.03, being revised as OP 4.1 1) [ XI Involuntary Resettlement (OP/BP 4.12) [I [ XI Indigenous Peoples (OP/BP 4.10) [I [ XI Forests (OP/BP 4.36) [I [ XI Safety o f Dams (OP/BP 4.37) 11 [ XI Projects in Disputed Areas (OPBP 7.60)* [I [ XI Projects on International Waterways (OP/BP 7.50) [I [ XI
[I
7. Policy exceptions and readiness
48. There are no policy exceptions. The Project complies with Bank policies, including environmental and social safeguard policies. The N H I C has developed manuals for financial management and procurement. The Project Implementation Manual wil l be completed before effectiveness.
* By supporting the project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas
16
Annex 1 : Country and Sector Program Background GHANA: Health Insurance Project
A. Country Background
1. In recent years, Ghana has experienced relative macroeconomic stability and high real GDP growth. GDP growth averaged 6.2 percent between 2005 and 2006, compared to the previous 20-year average o f 4.5 percent. The commitment by the government o f Ghana (GoG) to prudent fiscal policies has helped lay the foundation for Ghana’s current economic performance. This includes strong fundamentals such as high public and private investment levels, sound export performance, increasing remittances to Ghana, declining fiscal deficits and moderate inflation.
2. Following the period o f economic slowdown o f 1975-84, the GoG formulated a set o f fiscal policies, outlined in its GPRS I for 2003-05, which emphasized sustainable, equitable growth and poverty reduction. The most recent GPRS I1 builds on the country’s current macroeconomic stability and high economic growth rates to focus on developing Ghana into a middle-income country by 20 1 5.
3. Despite the clear improvements in economic growth, progress in public health care expenditures and health indicators has been slower. The GoG i s committed to reaching the Abuja target o f spending 15 percent o f the government budget on health. In 2006, the GoG spent approximately 13 percent o f i t s budget on health but as a percentage o f total spending, this remains low. In the past few years, the public share o f total health expenditures decreased, from 35.5 percent in 1999 to 31.8 percent in 2003, reaching a level o f 1.4 percent o f GDP. Total health care expenditures were around 4.5 percent o f GDP in 2003 (World Bank 2006).
4. The cash-and-carry system o f paying for health care at the point o f service created financial barriers for the poor to access health services, which i s thought to have contributed to the worsening health indicators such as the infant and under-5 child mortality rates. Infant mortality rates increased from 57 to 64 per 1,000 l ive births and under-5 child mortality rates increased from 108 to 111 per 1,000 children from 1998 to 2003 (Ghana Ministry o f Health 2006). A leading source o f under-5 mortality rates i s malaria, which accounts for 26 percent o f childhood deaths. In addition, wide discrepancies persist in health indicators across socioeconomic and regional groups. For example, infant-mortality rate per 1,000 l ive births in 2003 varied from 33 in Greater Accra to 105 in Upper West Region (Ghana Ministry o f Health 2006).
5. To reduce the barriers to accessing health care, the GoG i s implementing the National Health Insurance Scheme (NHIS). The Project wi l l support the GoG’s N H I S by strengthening the policy, financial and administrative capacity o f Ghana’s health care providers vis-a-vis the N H I S . This Project addresses specific constraints that were emphasized by the Ministry o f Health (MOH) in i t s Sector Strategic Plan for 2007-11 and the 2007 Annual Program o f Work. I t falls directly under GRSP I1 focus on human resource development and good governance. I t also supports the Country Assistance Strategy (CAS) as well as the Bank’s priorities for the Millennium Development Goals, the 14th replenishment for the International Development Association (IDA) and the Malaria Global Strategy and Booster Program.
17
B. Health Insurance Context
6. The cash-and-carry system was instituted in 1982 after budgetary financing for the GHS started to deteriorate in tandem with Ghana’s economic performance. The cash-and-carry system created a policy o f direct charges, intended to discourage patients from using health services needlessly, while generating more revenues to finance the health system. W h i l e the cash-and-carry system was able to direct a new source o f financing to the public health sector, contributing 16.5 percent to total public health services in 2003, i t had serious impacts on usage. A s ign o f how drastic an effect the cash-and-carry system had on health care usage came in 1985. In 1985, when user charges were first increased substantially, outpatient visits in hospitals dropped from 4.5 mil l ion to 1.6 million. The direct user charges meant that the poor and vulnerable faced additional financial barriers or were exposed to financial r isks when seeking health care.
7. Because o f this failure to secure adequate financing for health care, a voluntary mutual health insurance movement started in Ghana during the early 1990s with encouragement from the Ministry o f Health and support from donors such as Memisa Medicus Mundi, the World Health Organization (WHO), the Danish International Development Agency (DANIDA), and the United States Agency for International Development (USAID). The mutual health insurance movement was so successful that by 2002, there were 159 Mutual Health Insurance Organizations in 67 districts across al l regions in Ghana. Such community initiatives began to bridge the large gap in social protection between people covered by formal schemes and those with no protection against the cost o f i l lness or who were exposed to the impoverishing effects o f user charges. Although a detailed impact evaluation has not been conducted on the mutual health insurance movement in Ghana, i t is thought that the better-run organizations made a significant contribution to financial protection and access to health services for the poor.
8. The experience o f Ghana’s Mutual Health Insurance Schemes was the basis for the national model for expanding insurance coverage to larger segments o f the population. In 2003, the Ghanaian Parliament approved the National Health Insurance Act, and in 2004 the National Health Insurance Scheme (NHIS) was officially launched. Introducing the N H I S was part o f a broader policy to improve access to health care for the poor, provide protection for its citizens against preventable and manageable diseases such as malaria and HIV/AIDS, and improve financial sustainability o f the health system. In particular, the N H I S was intended to eliminate the cash-and-carry system o f user-fees which was limiting access to health services for the poor.
9. The act i s also consistent with international recommendations for “scaling up” community financing to the national level through the development o f the DMHISs and a National Health Insurance Fund (NHIF) which are designed to: (i) increase well-targeted subsidies to pay the premiums o f low-income populations; (ii) expand the insurance pool and the use o f reinsurance to protect against expenditure fluctuations; (iii) strengthen the management capacity o f local schemes through technical support and; (iv) strengthen l i n k s between formal financing and Providers (World Bank 2005).
10. Scaling up the Mutual Health Insurance Schemes into the National Health Insurance Scheme i s not without its detractors. Much o f the success o f the mutual health insurance movement was ascribed to the community involvement and social underpinnings such as the use o f community networks, cultural cohesion, and shared social experiences. However, critics
18
question whether or not the N H I S could preserve the spirit o f community involvement through its scaling up o f the Mutual Health Insurance Schemes. In addition, there is little experience with social health insurance systems in low-income country contexts because SHI relies heavily on financial contributions from public or formal sector workers. Ghana, l i ke most low-income countries, has a large informal sector. W h i l e no health financing system i s perfect, the experience with social health insurance in both developed and developing countries has highlighted common strengths and weaknesses, some o f which have manifested in Ghana’s N H I S policy and implementation constraints.
B.l. The National Health Insurance Act 650
1 1. The National Health Insurance Act 650 secured
. . .the provision o f basic health care services to persons resident in the country through mutual and health insurance schemes: to put in place a body to register, license, and regulate health insurance schemes and to accredit and monitor health care providers operating under health insurance schemes; to establish a National Health Insurance Fund that will provide subsidy to licensed district mutual health insurance schemes; to impose health insurance levy and to provide for purposes connected with those. (2003)
12. Under the act, the National Health Insurance Council was established to provide the overall governance structure for the health insurance system. Its objectives are to secure implementation o f a national health insurance policy that ensures access to basic health care for a l l residents. The N H I C has 15 members from various interest groups o f society, including a chairperson and an executive secretary. The N H I C members are appointed by the President o f the Republic o f Ghana in consultation with the Council o f State. Although the N H I C discharges i t s fhct ions through a health insurance administration and committees as deemed appropriate, i t i s required to comply with health policy directives issued by the Minister o f Health.
13. National Health Insurance Act 650:
Three types o f health insurance schemes are legally permitted to be established under the
a a
a
District mutual health insurance schemes; Private commercial health insurance schemes; and Private mutual health insurance schemes.
14. The act specifies the qualifications o f mutual health insurance organizations that are allowed to operate in Ghana, rules regarding registration and licensing, scope o f responsibilities, restrictions, and sanctions. A District Mutual Health Insurance Scheme (DMHIS) was established in each district in the country. DMHISs are responsible for establishing a district administration, enrolling and maintaining membership, collecting contributions from people who can pay, applying a means test to determine who i s indigent, and administering subsidies received from the NHIF for the indigent. Anyone in Ghana can enroll with a private commercial health insurance scheme or private mutual health insurance scheme instead o f joining the local DMHISs. The private commercial health insurance schemes are established under the Companies Code 1963 (Act 179) and required to comply with relevant provisions o f the Insurance Law o f 1989 (P.N.D.C.L. 227). Private commercial or private mutual health insurance schemes are not eligible for a subsidy for the indigent under the NHIF.
19
15. The Act specifies the operating principles o f registered health insurance schemes: establishment o f a governing body, scheme management (including financial management, reporting requirements, and audits), staffing, membership registration, identification and termination, and specification o f the benefits package. Upon registration with a health insurance scheme, members are issued a health insurance identity card. Other noteworthy operating provisions under the Act include procedures for hearing and settling complaints, accrediting health care providers, monitoring the quality o f service providers, safeguards to prevent excessive use or abuse o f benefits, a schedule for settling outstanding payment to providers, and inspection procedures. Each health insurance scheme i s required to comply with directives from the N H I C and may be required to appoint an actuary if there are reasonable grounds to think that a particular scheme has contravened the provisions o f the Act or related regulations made under the Act.
16. The Act also established a National Health Insurance Fund. The purpose o f the NHIF i s to provide a subsidy to the DMHISs that offer the minimum health care benefits stipulated by the Act, reinsure the district funds against random fluctuations, cover the cost o f health care for indigents, and support programs that improve access to health services. The NHIF wil l be financed through a health insurance levy, 2.5 percentage points o f the social security and pensions scheme funds, transfers from the state budget allocated to the NHIF by Parliament, returns on investments made by the NHIC, and voluntary contributions to the NHIF (grants, donations, gifts, and other sources o f financing). The N H I C may, by regulation, modify these sources o f funding to keep pace with developments in the health insurance industry. Monies for the NHIF are held in bank accounts approved by the Accountant-General. Transfers from the NHIF to the DMHISs are approved annually by Parliament. The NHIF i s managed by the NHIC. This includes liquidity management, investing temporary surpluses, maintaining appropriate accounts, submitting annual reports, and conducting regular audits o f i t s financial activities.
17. The Act established a National Health Insurance Levy o f 2.5 percent on goods and services produced in Ghana or imported from the outside. Schedule I, Part I o f the Act specifies goods and services that are exempt from the levy such as medical supplies and services, mosquito nets, goods used by the disabled, water, education, livestock, agricultural products, food, fishing equipment, land, buildings, construction, electricity, transport, postal services, certain machinery (agricultural, industry, mining, and railways/trams), crude oil, financial services, printed matter (books, newspapers), and transfers o f going concerns.
18. The Act specifies the administrative, financial, and other provisions for the NHIC. This includes appointment o f the Executive Secretary o f the Council, an internal auditor, and other staff. The Act establishes administrative units to carry out specific duties (registration, licensing, planning, monitoring, evaluation, administration, management support, training, and hnd management and investment). The N H I C i s responsible for maintaining appropriate accounts, submitting annual reports, and conducting regular audits o f i t s financial activities. This section o f the Act describes offences by registered schemes and contributors as wel l as associated penalties.
19. Finally, the National Health Insurance Act specifies the scope o f regulations that wil l be implemented under legislative instruments. This includes: registration and licensing o f DMHISs; reports to be submitted to the NHIC; matters relating to the Health Insurance ID cards; mode o f payment by contributors; qualifications o f managers and principal officers; financial deposits;
20
matters related to health care benefits; means tests for indigents; accreditation o f health care providers; procedures for resolving disputes; matters related to suspension and termination of members; matters related to quality assurance; payment o f tar i f fs to health care providers and health institutions; grants o f subsidies from the NHIF; matters related to accounts o f District Mutual Health Insurance Schemes; minimum health care benefits; forms, imposition o f fees for a license; conditions for variation and revocation o f a license; terms and conditions for issue o f a license; and exemption from the National Health Insurance Levy payable under the Act.
B.2. Health Insurance Policy Issues
20. But certain pol icy issues remain, which wil l require technical assistance to resolve:
Since 2003 the GoG has been working to implement the National Health Insurance Act.
Poor coordination among stakeholders, and lack of concrete governance arrangements and responsibilities for NHIS implementation. Actions taken by the N H I C affect the operations and policies o f the Providers, which comprise the Ghana Health Service (GHS), the teaching hospitals, the Christian Health Association o f Ghana (CHAG), health service providers from other ministries, and other health service providers. However, there has been limited coordination, both among the Providers and between the Providers and the N H I C in resolving key policy and implementation issues. This has led to: (i) gaps between the I C T Network Platform planned by the N H I C and the different software systems currently used by Providers; (ii) cost-shifting risks due to the split financing arrangements between the M O H and NHIC; (iii) fragmented tariff schedules and non-standardized medicines l i s ts which limit Providers’ control over their main cost drivers; weak provider performance incentives and; (iv) difficulties phasing out M O H subsidies for the uninsured “exempt” who seek health care services.
Challenges to maintaining financial sustainability of the NHIS. Several aspects o f the N H I S were determined in order to implement the N H I S quickly and encourage enrollment. As a consequence, the premiums were set with regard to income levels and are not actuarially based. There are no disincentives in place to prevent excessive use o f health care; the benefits package comprises 95 percent o f all illnesses, and the exemption policy creates incentives for greater enrollment o f exempt than nonexempt. There are social welfare gains from the current revenue collection, benefits package, and exemption policies. However, these policies further strain the financial sustainability o f the N H I S . Already, some o f the district-level schemes that are fully operational run deficits. These deficits are in part due to the delays in transferring funds from the NHIF to the DMHISs to cover large exempt members. Based on initial I L O estimates, the NHIF actuarial balance should remain positive for the first few years o f implementation and may continue to do so through 2015 as long as Ghana maintains its strong economic growth, and the enrollment o f the exempt does not increase beyond the expansion o f subsidies to the exempt (see Technical Annex 9).
0 Limits on capital investment. The National Health Insurance Act puts restrictions on the level o f resources that can be used for capital investments. At present, the resources required to set up the new health insurance system have already exceeded the mandated capital investment limits, constraining the implementation o f the NHIS.
21
0 Limited power under the NHIS to influence quality of care as a health purchaser. The N H I S was designed to replace approximately 20 percent o f total public health spending. This limits the ability o f the DMHIS as a purchaser o f health services to influence Ghana’s overall health system performance. One o f the public opinion metrics for judging the success o f the N H I S is based on noticeable improvements in the health system. There i s a r i s k that even though the N H I S wil l not be able to significantly influence the quality o f care, i t may be deemed a failure if the overall health system shows no improvements. Improving quality o f care should strengthen public confidence in the viability o f the scheme and therefore increase voluntary public enrollment and participation in the NHIS. However, many factors outside o f the control o f the DMHISs limit i t s influence on quality o f care such as inadequate human resource numbers, distribution, and skill mix. There i s also inadequate essential basic equipment, tools, supplies and infrastructure and poor provider attitudes to clients and lack o f customer focus. The DMHISs could positively influence the overall health system performance by becoming a larger and more efficient purchaser o f health services.
0 Poor management of public expectations o f NHIS. The viability o f the N H I S i s influenced by public approval. The N H I S has focused primarily on increasing public awareness o f the NHIS in order to encourage registration. However, implementation constraints and limited public outreach have contributed to poor public understanding o f how the system works and negative public opinion about the N H I S . According to the GHS, patients have started to use services needlessly and demand services not covered by the insurance system, demonstrating their lack o f understanding o f the N H I S . At the same time, there i s negative media coverage resulting from the N H I S implementation constraints. The NHIS has to formulate i t s communication strategy in order to effectively respond to public complaints while managing expectations.
Problems with current provider payment mechanism. Providers are paid on a fee-for- service basis which places the financial risk on the insurance scheme and complicates the ability to control excess or false services claimed. As a short-term solution, the GHS i s piloting a close ended payment system o f a flat fee rate for uncomplicated Out-Patient Department visits at Primary Health Care facilities. However, in the long term, the provider payment mechanism needs to move toward a system that can handle demand risks such as a capitated fee per episode and Diagnostic Related Group charges for inpatient care that can contain costs while improving provider incentives.
Non-standardized fee schedule. The GHS, C H A G and other providers have different fee schedules, which: (i) causes conhsion and leads to delays in reimbursements; (ii) increases the potential for billing errors and; (iii) has implications for the costs that Providers can recover from the N H I S . The GHS and C H A G are conducting a set o f costing studies to determine a uniform tariff schedule for Providers and reforming the provider payment mechanism to follow and make claims for the M I S . The results o f the study wil l inform the N H I C work in diagnosis-related pricing. Standardized prices for reimbursement through the N H I S need to be agreed upon by both the NHIC and the Providers. Because the cost o f services i s subject to changes with rising medical inflation, the process for negotiating hture fee schedules needs to be clear.
22
0 Difficulties phasing out MOH exemptions for indigents. In every region, but most acutely in the three northern regions, unpaid exemptions bi l ls have crippled Providers and revolving funds have ground to a halt. As a result, institutions cannot pay for the stocks o f essential medicines and supplies needed to deliver services. The facilities urgently need reimbursements from the MOH for al l exemption backlogs. Ideally, the exempt should be covered under the N H I S . However identifying and registering the exempt has been a challenge for the DMHISs. For that reason, to ensure protection o f the exempt group the MOH is s t i l l providing some exemptions alongside the NHIS , but in the long term the two will be incompatible. A clear pol icy direction from the M O H i s therefore urgently needed to integrate exemptions into the NHIS.
The Essential Medicines List and National Health Insurance Medicines List are not synchronized. The l i s t o f medicines covered by the National Health Insurance Medicines L i s t i s different from the Essential Medicines L i s t that is widely used by Ghana’s health care providers. Pharmaceuticals are a big part o f health costs. During the era o f Mutual Health Insurance Schemes and before the NHIS was established, medicines accounted for between 50 and 60 percent o f insurance payments to Providers. Resolving the l i s ts needs to be done with regard to Providers’ cost recovery and N H I C cost containment goals. The conflict between the two lists creates an additional administrative burden for Providers. DMHIS managers are familiar primarily with the National Health Insurance Medicines List which i s not readily available to Providers. Reconciling the two l ists causes delays in reimbursements to Providers. The GHS and N H I S are currently working to meld the two l ists into a single, usable version. Clear processes for negotiating the cost o f medicines will have to be delineated to accommodate new medicines and changes in costs.
Weak gate-keeping system. The current gate-keeping system used by Providers i s ineffective in directing patients toward the appropriate level o f care. This i s overburdening the Providers and potentially causing excess utilization o f health care services. All regions need an inventory o f Providers, their locations and services offered as well as their classification within the referral system.
B.3. Health Insurance Implementation Issues
21. Currently DMHIS operate in all districts with an overall coverage o f 38 percent o f the population registered. A majority o f those registered belong to the “exempt group”, including children under 18, the elderly (over 70), and indigents, which are identified by the DMHISs. During i t s early stages o f implementation, the N H I S faces a number o f constraints:
Inadequate technical tools lead to delays in reimbursing Providers for services claimed. Similar to the financial management problems in other sectors, Ghana’s accounting, recording and reporting systems are paper-based. The paper-based system is slow and has contributed to significant delays in reimbursing Providers for the services billed to the DMHISs. From a review of provider reimbursement in two regions, the average time taken for Providers to receive payments from the DMHISs i s 2.5 months. The paper-based system also makes i t difficult to profile the trends in the claims made by Providers in order to check outliers for potential fraudulent activity.
23
0 Difficulties in identifying and registering indigents. Indigents can jo in the N H I S with premiums subsidized from the NHIF. However, indigents are not registering for health insurance for many reasons, such as a lack o f public awareness o f the insurance system, the long distances to travel to registration points, or a negative perception o f the N H I S . In addition, the current method for identifying indigents through means testing, by the DMHISs in collaboration with communities, i s vague. As described in a MOH report, there is also the possibility for abuse in the process for registering indigents. Premium collectors may be placed in a position to accept bribes for registering unqualified individuals as indigents. Also, the DMHISs have incentives to enroll members in the exempt category since they are paid a premium o f 80,000 cedis ($) per person annually from the NHIF, which i s higher than the premium received from poor informal sector workers (See Annex Table 1).
Annex Table 1: NHIS Premium Rates, 2005 Name of Group Definition
Indigent Adults who are unemployed and do not receive any identifiable and constant support f rom elsewhere for survival.
Adults who are unemployed but receive identifiable and consistent financial support f rom sources o f l o w income. Adults who are employed but receive l o w returns for their efforts and are unable to meet their basic needs.
Very Poor
Poor
Middle Income Adults who are employed and able to meet their basic needs.
Adults who are able to meet their basic needs and some o f their wants.
Adults who are able to meet their needs and most o f their wants.
R ich
Very R ich
Minimum Premium Per Year (cedis)
Free
$72,000
$72,000
$180,000
$480,000
$480,000
Source: Ghana Ministry o f Health 2006.
0 Difficulties in registering the informal sector. According to the ILO, 75 percent o f the total population belongs to the informal sector. However, registration o f people from the informal sector has been slow, representing only 16 percent o f total registered members. Membership from this group i s currently voluntary with plans to transition to compulsory registration (See Annex Table 2). An additional cause for limited uptake may be a result o f premium costs that are too high for poor informal sector workers. Many in the informal sector who are expected to pay the requisite premiums may be considered poor but not indigent. Poor informal sector workers may not be able to afford the premiums or qualify for the premium subsidies for the indigent. As a consequence, the insurance program may unintentionally exclude poor informal sector workers.
24
Note: Total number o f registered individuals excludes those from informal sector who have made partial payments. Source: National Health Insurance Council, 2007.
Region
Ashanti
0 Delays and inconsistencies in issuing health insurance I D cards to registered individuals. The lack o f administrative capacity in the D M H I S s has caused delays in the issuance o f Hea l th Insurance ID cards for N H I S members. Hea l th Insurance ID cards a l low N H I S registered members to c la im their entitlements under the insurance package. As a result o f these ID card delays, the number o f registered members who can use their entit led services has been l im i ted (See Annex Table 3). Th is lack o f access to entitled services as a result o f the ID card delays i s contr ibut ing to the perception that re fo rm has been too s low and ineffective.
Estimated YO o f population who YO of registered YO o f population population are registered with ID Cards with ID cards
3.924.425 44% 48% 21%
, Note: The registered population includes informal sector workers who have partially paid their premiums. Source: National Health Insurance Council, 2007.
0 Insufficient administrative, managerial, and technical human capacity. Ghana’s health insurance system wil l require ski l led managerial and administrative personnel. W h e n the NHIC ro l l s out i ts ICT N e t w o r k Platform, D M H I S managers and administrators wil l require additional technical knowledge to navigate it. The decentralized nature o f the insurance system will require employ ing this knowledge set at both the district levels for the D M H I S s and the central level, at the NHIC Secretariat. Ghana has a shortage o f workers with the necessary skil ls f o r running a heal th insurance system and wil l have to recruit and train managers and administrators in these technical skills.
25
0 Challenges faced in integrating priority heath programs under the defined benefits package. The benefits package i s comprehensive, covering al l GHS services with few exceptions (such as prosthetics and cosmetic surgery). A large part o f utilization i s for preventable diseases, most o f them covered under the minimum benefits package. The high utilization for preventable diseases such as malaria, which accounts for 44 percent o f reported outpatient visits, means that much o f the financial strain on the insurance system comes from treatment o f preventable diseases. Thus, there i s significant scope to improve the financial situation o f the NHIF by integrating an aggressive disease prevention program into the NHIS which would align with the direction o f the 2007-1 1 Health Sector Program o f Work.
B.4. Provider Implementation Issues
0 Inadequate technical tools lead to delays in accurately billing the DMHISs. Like the administrative problems in the DMHISs, Providers’ accounting, recording, and reporting systems are paperAbased. This lengthens the processing time for insurance information and can reduce data accuracy. In a study o f health facilities in two regions, it was found that i t took Providers four weeks to submit bills to the DMHISs. The N H I C I C T Network Platform has started to address this problem with provisions for technical hardware, and the GHS i s developing a software package to handle billing and keeping patients records. However, the planned hardware and software packages are inadequate and wil l not properly address the administrative requirements o f al l Providers.
0 Insufficient administrative, managerial, and technical human capacity. The introduction o f the NHIS has created extra administrative overhead in health facilities. Insured clients have higher utilization yet the health system remains under-funded and under-resourced with no change in essential equipment, tools, and supplies to meet the increased workload. In addition to the insufficient technical tools, Providers are too understaffed to handle the increased workload due to requirements for claims processing. However, as the claims processing system moves toward an I C T solution, the Providers wil l face a technical human capacity constraint. Administrators wil l need additional training to facilitate the claims processing for the NHIS on their I C T platform.
Negative provider attitudes and practices. Negative provider attitudes and practices such as illegal fee collection and potentially deliberate delays in seeing insured clients have become more evident. Provider attitudes toward clients in the public sector need to be addressed by intensive efforts to sensitize i t s staff toward the health insurance system. The GHS should also carefi l ly explore ways o f rewarding and establishing incentive systems for Providers.
C. Rationale for World Bank involvement
22. The GoG has requested assistance from the World Bank Group to support the implementation o f the National Health Insurance Scheme, part o f the government’s strategy to meet national health and equity goals. The Health Insurance Project will strengthen the governance o f the NHIS implementation and the financial and operational management capacity o f the NHIC, DMHISs, and Providers.
26
23. The N H I C i s developing an Information and Communication Technology (ICT) Network Platform for the Council Secretariat and DMHISs. Though extensive, the anticipated design does not take into consideration the full needs o f the Providers who face similar processing constraints as the DMHISs. The Project wil l complement the N H I C I C T Network Platform with activities to address the I C T capacity requirements o f the Providers. The Project also focuses on improving the efficiency, transparency, accountability, and responsiveness o f both the Providers and the DMHISs to the health and financially related needs o f the population. Additional resources wil l be used to strengthen financial policies within the NHIS by providing technical support to develop a strategy for the management o f their financial resources and governance arrangements, as well as revise the actuarial models and member premiums.
24. The Project wi l l assist Ghana in providing accessible health care and financial protection for i t s low-income and poor populations. In contributing to the N H I S aims, the Project wi l l also help the Ministry o f Health as i t works to modernize the national public health system. The success o f the Project wil l have an impact beyond the health sector. The capacity built through the management and technical training components wil l have a lasting effect on the overall governance o f the system as the GoG tries to build more efficient, accountable, responsive, and transparent mechanisms. This Project i s consistent with the GoG’s fiscal policies, efforts to strengthen transparency and accountability in public expenditure management, maintaining constant health spending, and ensuring that scarce public money is targeted to vulnerable groups and spent on priority health services.
25. This Project emphasizes multiagency engagement and systems approach at national and sub-national levels, as well as partnerships with private health actors. This i s relevant because the Project requires coordination among the MOH, the NHIC, the DMHISs, the GHS, public and private health care providers, and public training institutions.
26. The Project wil l contribute to economic and fiscal analysis in the core area o f public expenditure reform. In particular, it complements other ongoing reviews o f the macroeconomic context and public finance. The Project complements areas o f engagement o f the other DPs, such as the ILO which has worked with the NHIC to strengthen i t s actuarial analysis capabilities. The Project builds on previous work in areas o f health financing, I C T policy, governance, and stewardship . 27. The Project provides an opportunity to support the GoG in implementing recommendations set out in previous pol icy reviews, notably the 2005 Economic and Sector Work on Mutual Health Organizations in Ghana and annual health sector reviews.
C.1. Higher-level objectives to which the Project contributes
28. The Project contributes to the government’s higher development goals o f macroeconomic stability, prudent fiscal management, human resource development, and good governance, as outlined in the GPRS 11. The Project addresses human development by increasing health insurance coverage throughout the population, and governance by introducing organizational and technical instruments to strengthen accountability, transparency, and governance o f the NHIC, the DMHISs, and the Providers.
29. Strengthening financial management and maintaining a medium-term actuarial balance (five-year minimum) under the new health insurance scheme wil l be critical to securing a
27
sustainable source o f hnding for the health sector and ensuring that the new health insurance system operates within the fiscal space allocated to the health sector. The underlying development goals o f the Project reflect the priorities o f the latest Ghana County Assistance Strategy (CAS Report No. 27838-GH, 2004), which are aligned with the pillars o f the GPRS I.
30. The GPRS I1 states that the key priority o f the GoG i s the acceleration o f Ghana’s economic growth in order to become a middle-income country by 2015. The N H I S addresses specific health pol icy objectives outlined in the GPRS 11, which are to: (i) bridge the equity gap to accessing quality health and nutrition services; (ii) ensure sustainable financing arrangements to protect the poor; and (iii) enhance efficiency o f service delivery.
3 1. The World Bank 14th Replenishment o f IDA resources (IDA 14) i s a key supporter o f the Millennium Development Goals, to which Ghana has subscribed. Increasing coverage o f the population under the N H I S i s part o f Ghana’s efforts to achieve the health MDGs which include: (i) reducing the under-five mortality by two thirds; (ii) reducing the maternal mortality ratio by three quarters; and (iii) halting and reversing the spread o f HIV/AIDS and malaria by 2015. The benefits package under the N H I S covers treatment o f malaria, which is in line with the MOH’s Rol l Back Malaria (RBM) Strategic Plan in 2000, the MDGs, and the World Bank Malaria Global Strategy and Booster program.
32. The conclusions o f past analytical reports published by the Bank and the ILO outline the need for reforms to address issues o f accountability, capacity, and governance. These studies validate the rationale and choice o f instruments and activities that wil l be undertaken by the Project.
28
Annex 2: Major Related Projects Financed by the Bank and/or other Agencies GHANA: Health Insurance Project
Bank-financed Project
Second Health and Population Project . closed
Credit 2193-GH 1991-98 SDR 19.5 million
Health Sector Support Project - closed Credit 2994-GH 1998-2002
Public Sector Management Reform - :losed
Credit
U S $12.2 million 1999-2003
41DS Response Project (GARFUSD) - :losed
Credit IDA-34580 2002-05 US $24.8 million
Second Health Sector Program Support Project - ongoing
CR - 373 1 2003-07 Credit US$57.6 million Grant US% 32.4 mill ion
Poverty Reduction Support Credit Project - closed
2003-04 Credit US$ 88 million Grant US$37 million
IDA - 37970
Latest supervision Project Status Report Ratings (Bank financed
project Implementation
Progress S
HS
U
MS
MS
S
nly) Development
Objective S
HS
U
S
Sector Issue
The objective was to: (i) improve quality and coverage of health services and; (ii) increase availability and access to family planning services by addressing primary health care services in three northern regions and support government sector priorities with policy, institutional and program changes, and improved public expenditures. The objective was to assist GoG in reforming health sector with implementation o f Medium- Term Health Strategy and Program of Work 1997-2001 through a Sector-wide Apporach. The program outlined a framework for achieving far-reaching decentralized planning and financial management and placed emphasis on integration o f services, capacity, and institutional develonment The objective was to improve efficiency, effectiveness, and quality of public services in Ghana. I t was expected to improve Ghana's overall fiscal performance in the medium term. The objectives of the Project were: (i) redefining the role and functions o f the state; (ii) designing appropriate institutions and systems to implement this role; and (iii) rationalizing the existing structure and systems to meet the new design. The objective was to intensify multisectoral activities designed to combat the spread o f HIVIAIDS and reduce i ts impact on those alreadv infected bv financing interventions outsidk the MOH mandate. The objective i s to support the GoG efforts towardthe 2002-06 MOH Program o f Work to improve the health status o f the population while reducing the geographic, socioeconomic, and gender inequalities in health outcomes by financing a portion o f the combined GoG and external assistance budgets for policy development and operational program activities, including ongoing service delivery and new initiatives. A series o f three PRSCs was designed in 2003 in line with the policy framework o f the GPRS and focusing on three broad areas: (i) the promotion o f growth, income and employment; (ii) improvements in the delivery o f services for human development; and (iii) the strengthening of governance and public sector management. The second :omponent o f PRSC-I was based on the third and fourth pillars of the GPRS, incorporating neasures aimed at improving service delivery in :ducation, health, and social protection.
29
Second Poverty Reduction Support Credit Project - closed
IDA - 39570 200W5 Credit US$ 85 million Grant US$40 million
Multisectoral HIV/AIDS Project - ongoing
CR4125 -GH 2006-10 US$20 million
S
Economic Management Capacity Building - ongoing
CR 4124-GH 2006-10 US$25 million
S
Third Poverty Reduction Support Credit Project - closed
Fourth Poverty Reduction Support Credit - ongoing
2006-09 US% 140 million
US$ 125 million
CR 4186-GH
S
Fifth Poverty Reduction Support Credit - Pipeline
S
eGhana Project - ongoing
CR 36672-GH 2007-12 US $40 million
See PRSC I
The development goals are to: (i) reduce new infections among vulnerable groups and the general population; (ii) mitigate the impact o f the epidemic on the health and socioeconomic systems as well as infected and affected persons; and (iii) promote healthy lifestyles, especially in the area of sexual and reproductive health. T h e Project aims at supporting the government in defining and performing its role as a facilitator of economic development. T h e Project seeks to establish a level playing field in the finance sector, focusing upon outcomes rather than establishing new institutions, together with a clear policy to improve the efficiency of public sector management for enhanced service delivery. See PRSC I
T h e PRSC-4 funded the implementation o f the GPRS I1 focuses on three components: (i) accelerated private sector-led growth; (ii) vigorous human resource development; and (iii) good governance and civic responsibility. The PRSC-4 also focuses on cross-cutting issues related to private sector development and the strengthening of institutions, ranging from issues related to governance, public sector reform, decentralization, and public financial management. The PRSC-5 i s part of the support for GPRS 11, maintaining core focus described in PRSC-4. PRSC-5 also focuses on welfare and poverty indicators that allow an assessment of whether poverty reduction objectives are being achieved. Activities parallel to the Health Insurance Project include work on poverty indicators, improving health service delivery to achieve the MDGs and public expenditure management. The Project aims to support Ghana’s ICT and ITES sectors through: (i) providing technical assistance in developing an enabling environment for ITES business; (ii) supporting small and medium enterprises in the ICT and ITES sector and; (iii) conducting feasibility assessments for developing e-government applications. This includes promoting the use o f Public Private Partnerships. As the Ghana ICT Directorate i s starting to develop its standards, the NHIC will start to collaborate to consider integrating government ICT standards as well as Public Private Partnership options for ICT investment.
30
Nutrition and Malaria Project - Pipeline
US $25 million
I L HS =highly satisfactory; S = satisfactory; E highly unsatisfactory.
T h e Health Insurance Project team has been collaborating closely with the Nutrition and Malaria Project team which i s developing a Specific Investment Loan to target pregnant women and children less than two years o f age through nutrition and malaria interventions.
IFC Activities
Scancom US$40 million
Sector Issue
Loan to upgrade and expand the Scancom GSM network, which operates under the name, Areeba.
I 2005 I Ghana Institute o f Management and Public Administration
Through the Global Business School Network, IFC supports the Ghana Institute o f Management and Public Administration. I t has assisted in developing 11 new MBA course modules consistent with four global standards. The training portion o f the Project will continue to build on the ongoing development o f GIMPA educational programs.
I Other Development Agencies
UN Agencies, especially UNICEF, UNDP, UNFPA, UNAIDS and WHO with financial support from DFID ($12.5m), USAID ($7m), FWE ($2m), JICA ($lm), CIDA ($400,000), EU($300,000), GTZ ($300,000) and DANIDA ($200,000)
GFATM ($23rn)
ILO
DANIDA
USAID
Sector Issues
Multilateral support for HIV/AIDS activities and the Ghana Health Fund.
Support for RBM Partnership
T h e ILO i s continuing its assistance in providing analyses and training in actuarial sciences for the NHIC.
DANIDA has focused i ts involvement with the insurance system through technical assistance on MOH exemptions policies and continuing i ts collaboration with insurance schemes in 25 districts in strengthening their capacity especially with regard to the NHIS. USAID has been involved with the mutual health organizations and has recently conducted a baseline analysis o f the effect o f insurance on utilization.
31
Annex 3: Results Framework and Monitoring GHANA: Health Insurance Project
Intermediate Outcomes
Results Framework
Intermediate Outcome Indicators
Strengthen the financial and operational management o f the National Health Insurance Scheme.
Indicators % o f total claims ($) that are not pa id within statutory time period (30 days) due to vetting delays caused by suspected error, abuse, and fraud.
A. Strengthened pol icy adaptation and implementation capacity within the National Health Insurance System.
Policies adapted and plans for implementation developed to address: contribution collection, r isk equalization, and provider payment mechanism.
Use o f Project Outcome Information
Shows the administration o f the Provider interface i s functioning such that Providers are correctly recovering more o f the costs b i l led to the DMHISs, while the NHIC i s reducing fraud and abuse.
Use o f Intermediate Outcome Monitoring
Demonstrates capacity to engage in dynamic pol icy adaptation and implementation needed to run an effective health insurance fund.
Components B and C: Tools and Training to Improve Financial and Operational Management Processes
B. Tools
Improved purchasing function o f DMHISs.
Improved billing by Providers.
C. Training
Improved staff skills in health insurance administration for staff working in the NHIC, DMHISs and Providers.
%/,ftotal number o f bills submitted by beneficiary Providers that are submitted electronically.
YO o f total number o f electronically submitted bills that are pa id to beneficiary Providers within the statutory time period (30 days).
% o f total number o f registered members whose entitlement to benefits can be validated through electronic verification by beneficiary Providers.
Human resources training p lan developed and executed
Demonstrates effective business processes and management.
Demonstrates human resource personnel in key positions have management capacity.
32
Arrangements for results monitoring
1. Monitoring and evaluation (M&E) o f the Health Insurance Project wil l be embedded in the various Project components. The M&E team at the N H I C wil l be responsible for developing a common evaluation framework for the entire program. I t will: (i) determine reporting format and frequency; (ii) collect, consolidate, and disseminate lessons learned with relevant stakeholders and (iii) ensure stakeholder feedback i s captured in Project implementation and in the development o f a results framework.
2. The N H I C i s developing a Policy, Planning, Monitoring, and Evaluation (PPME) Department that will monitor data and evaluate the performance o f the National Health Insurance Scheme. As part o f i t s data collection, i t wi l l build i t s capacity to monitor indicators for the Project. The GHS has started to collect data on the time taken for Providers to bill DMHISs, time taken for Providers to receive submitted claims, and percentage o f claims recovered. The N H I C wil l work with the PPME Department o f the Ghana Health Service and other providers to measure the impact o f changes in provider processes. However, through the implementation o f the Project, the N H I C PPME team should become capable o f collecting data on i t s claim processing times as wel l as i t s revenues lost due to errors, fraud, and abuse during the claims processing cycle. The NHIC, with support from the ILO, have actuarial analyses that show a positive balance for the medium term.
3. Instruments for monitoring wil l be aided by the implementation o f component activities. The planned I C T wil l provide a computerized system for tracking indicators such as the Providers’ cost recovery rates, and the time period for completing the entire claims submission and processing cycle. The training component wil l enable Scheme and Provider staff to actively monitor and evaluate these indicators.
4. The N H I C will present quarterly reports on M&E findings to the Bank, as part o f interim financial reports that also comprise o f financial and procurement reports. Overall comprehensive annual progress reports on the entire Health Insurance Program, including results from finding and support from the NHIF, IDA, and DPs, wi l l also be submitted to the Bank and inform the annual Health Summit. A comprehensive mid-term review will be undertaken at the end o f the third year o f implementation.
33
Arrangements for results monitoring
Project Outcome Indicators
% o f total claims not pa id within statutory time period due to vetting delays caused by suspected error, abuse, and fraud.
Intermediate Outcome Indicators
Policies adapted and plans for implementation developed to address: contribution collection, r isk equalization, and provider payment mechanism.
% o f total bills submitted by beneficiary Providers that are submitted electronically.
% o f electronically submitted bills that are pa id to Providers within the statutory time period (30 days).
% o f registered members who can validate their entitlement to benefits through electronic verification.
Human resources training p lan developed and executed
Baseline
30%
0'
0%
0%
0%
0
Ta - YR1
- 30%
-
0
- 0%
0%
0%
0
- YR2
- 30%
-
0
- 0%
0%
0%
0
113
- 35%
40%
40%
3
Y R 4
- 20%
-
113
- 60%
65%
65%
3
- YR5
- 15%
-
- 213
- 70%
80%
80%
3
Data Frequency
and Reports
Month ly
Annual
Month ly
Month ly
Month ly
Annual
ollection and Data
Collection Instruments DMHISs process records
Annual assessment in N H I C reporting
DMHISs process records
DMHISs process records
DMHISs process records
Inputs f rom Providers
.eporting Responsibility
for Data Collection
N H I C
N H I C
NHIC
NHIC
NHIC
NHIC
' This refers to the number o f new policies in the described focus areas that have been promulgated according to the relevant policy-making processes, including review by the I A S C and approval f r o m parliament.
34
Annex 4: Detailed Project Description
GHANA: Health Insurance Project
1. This Project complements the efforts o f the MOH, the teaching hospitals, the N H I S , the GHS , health service providers from other ministries, the CHAG, other providers, and other Development Partners (DPs) to implement the National Health Insurance Scheme. The combined efforts o f these groups cover the following broad categories: pol icy development, financial and operational management tools, and training. The GoG i s already financing a large share o f the development and upgrading o f the management and implementation capacity o f the health insurance system. The N H I C i s redesigning i t s financial and operational management and introducing an I C T Network Solution for the DMHISs to facilitate claims processing and ID card distribution. Project support wi l l focus on the interface between the Providers and the N H I C I C T Network Platform.
2. The following describe the components to be funded by the Bank credit:
Component A: Enabling Environment for N H I S Implementation ($2.05 million)
3. This Project component wi l l strengthen N H I S capacity to adapt and implement the policies needed to run an effective health insurance scheme. Outstanding pol icy issues (see technical annex 1) wi l l receive technical assistance through the following activities:
A.l. Stakeholder coordination
4. The Inter-Agency Steering Committee (IASC), chaired by an M O H representative and including representation from the key NHIS stakeholders which include the N H I C , District Mutual Health Insurance Schemes, GHS, teaching hospitals, CHAG, providers from other ministries, and other key providers, is involved in the oversight and implementation o f the N H I S . This subcomponent wil l support coordination workshops, meetings, and other IASC activities. The output o f this subcomponent wil l be the basis for further pol icy development, providing clear policies to address constraints to contribution collection, risk equalization, the current provider payment mechanism, and so on.
A.2. Project management and sustainability
5. This subcomponent will finance activities to manage the Project funds. Support wil l be provided to the N H I C in the areas o f project management, financial management, and procurement.
A.3. Communication strategy to manage public expectations
6. Successful implementation and sustainability o f the NHIS i s contingent on public and Provider support. The N H I C needs to effectively communicate i t s activities, sensitize the public and Providers to new processes, and respond to any negative public perception o f the N H I S . An ongoing national campaign to increase public awareness and encourage registration with the NHIS exists. However, the persistent setbacks in rol l ing out the NHIS , manifested primarily by the delays in issuing Health Insurance ID cards, has contributed to negative public perception and health service provider attitudes toward the NHIS. This subcomponent wi l l complement the ongoing public awareness campaign through the development o f a strategy that allows the N H I C to sensitize the public and Providers to the changes in the insurance system, make the public
35
aware o f the benefits from activities that the N H I C i s undertaking through the ICT Network Platform and Health Insurance Project, and reassure the public and Providers given current constraints while providing a responsive channel for the them to voice their concerns about implementation o f the N H I S . In addition to managing public expectations, the communication strategy will design a performance reward program to build in an additional incentive for DMHISs and Providers to increase compliance with the N H I S . An Awards Program will be introduced to recognize and reward high performers (DMHISs and Providers) and to demonstrate “best practices” in improving health insurance benefits administration. The outcome o f the awards will be highly publicized through press conferences and seminars to disseminate lessons learned to other DMHISs and Providers.
A.4. Standardizing fee schedules and medicines lists
7. This subcomponent will provide technical assistance as the Providers, DMHISs, and the N H I C work to resolve the inconsistencies in the fee schedules and medicines l i s ts with regard to cost recovery. The process o f standardizing service and pharmaceutical costs wi l l require detailed costing studies and formal price negotiations between the Providers and the NHIC. Continual monitoring and evaluation o f the cost structure and pharmaceutical utilization will be required to inform hture price adjustments in the fee schedules and medicines lists. The resulting negotiations in price determination will complement the high-level governance coordination activities because the technical teams from the Providers and the NHIC wil l need to reach a consensus on appropriate pricing. Technical assistance wil l be provided to assist the ongoing costing studies, and monitoring and evaluation o f the cost structure and utilization o f pharmaceuticals. The primary output would be a standardized fee schedule and medicines l i s t that wil l be subject to annual review and revision, and disseminated to Providers and DMHISs.
A.5. Performance-based provider payment mechanisms and other policy adaptations
8. This subcomponent wil l provide technical assistance in developing performance-based payment mechanisms and in addressing policy constraints in purchasing practices as they arise during the course o f the Project. The development o f a performance-based payment mechanism that incorporates provider incentives to control costs without compromising quality or productivity requires further analysis and design work. The potential long-term optimal mechanism may require transitioning fkom the current fee-for-service to a diagnosis-related group (DRG), capitation, or other type o f payment mechanism. Additional support will be provided to conduct studies on the desired provider payment mechanism, while building N H I C internal capacity to make future pol icy adjustments to the provider payment mechanisms (PPM) and other relevant pol icy issues.
A.6. Development o f related projects for donor support
9. In addition to Bank financing, the M I S will require additional support from other DPs. Several DPs have been actively involved in supporting the N H I S at the level o f the DMHISs and private providers. This subcomponent wi l l provide support in holding workshops, meetings, and other activities for coordination o f such parallel donor activities.
A.7. System for conducting routine audits and controlling for fraud and abuse
10. This subcomponent will provide additional technical assistance for the N H I C to: (i) engage in routine auditing; (ii) identify cases o f fraud and abuse; (iii) adjudicate cases in which
36
Providers intentionally made false claims on the system; and (iv) adjust policies to prevent future incidents in areas in which potential for abuse has been recognized.
Component B: Financial and Operational Management Tools ($8.6 million)
11. This component o f the Project will improve the DMHISs purchasing function and the Providers billing fknction by introducing new and more efficient business processes by moving the patient authentication, billing, and claims processing from a paper-based to an electronic- based system. Specifically, i t will strengthen the Providers’ “front-office” and “back-office” functions so that they wil l be able to more efficiently carry out activities such as eligibility determination, tracking patients, bulk billing, and other standard accounting and financial management h c t i o n s . The activities wi l l attempt to standardize the Provider interface so that the DMHISs do not have to deal with multiple inconsistent Provider interfaces. The Project wil l support development and implementation o f the Provider interface in the following areas:
B.l. Providers’ needs analyses and strategies for business process tools
12. Moving from a paper-based to an electronic system o f billing requires a change in both business processes and the tools used by Providers in interfacing with the heath insurance system. The Project wil l support a rapid needs assessment and elaboration o f strategic I C T plans for the DMHISs and each o f the major provider groups. The Ghana Health Service, Christian Health Association o f Ghana, and other providers have developed software programs separate from the NHIC I C T Network Platform. This component wi l l examine the Providers’ systems, capacity, and needs to assess the gaps between the systems and the N H I C I C T Network Platform, to determine what technical solution (hardware, software, network development, and back-up energy solutions) can be used to fill those gaps and optimize their interface. Needs assessments and I C T strategic plans for each o f the Providers including the teaching hospitals, GHS, CHAG, and other providers will be developed to outline a specific procurement plan to fill the technical gaps for Providers to interface with the N H I S . The strategic plans will be developed such that they take into consideration the constraints o f Ghana’s limited I C T and energy infrastructure, ongoing projects to widen ICT in other GoG MDAs, and the potential for future changes in NHIS policy which may affect the data requirements for the provider interface. Specifically, the following will be considered:
The transfer o f data between Providers and between Providers and the DMHISs wil l be prone to disruption given the country’s communications and energy infrastructure constraints. The strategy wil l provide a solution that works around these constraints. The strategy may need to recommend the use o f back-up or alternative energy solutions to maintain the energy source for the computers. A strategy wil l have to determine appropriate financing for the solution including a possible arrangement with solar panel manufacturers that could support low-cost financing for health care providers. A portion o f the credit can be used to finance the procurement o f alternative energy solutions. The GoG with support from the e-Ghana project i s designing an interoperability framework, a shared portal infrastructure, and a shared common workf low automation system. The strategy should make provision for interoperability with the planned I C T infrastructure o f other MDAs. Future changes in policy will influence the data requirements o f the I C T infrastructure. For example, key pol icy issues such as the provider payment mechanism have yet to be finalized. The data needs for a future provider payment mechanism wil l differ from those o f the current fee-for-service mechanism requiring flexibility to be built into the planned I T solution.
37
The strategy will also develop a minimum set o f standards for Providers. The investment needs o f the Providers will exceed the proposed Project finances. The strategy needs to propose alternative sources o f capital to incorporate more Providers. A public-private partnership strategy wil l be explored, potentially allowing private investments in Provider I T infrastructure. Integration o f change management support wil l be provided through seminars and workshops to induce Providers and DMHISs to introduce technological changes. This wil l be integrated with the activities outlined in the communication strategy (Component A) and the training program (Component C). Following the end o f the five-year implementation period o f the Project, the beneficiary Providers wil l need to maintain, replace, and make future upgrades in the depreciated stock o f hardware and software received under this Project. An incentive plan for the Providers to do so wil l be designed in this strategy.
B.2. Network development, hardware, and alternative energy solutions
13. While the N H I C ICT Network solution intends to provide a wide area network solution for Providers to connect to the DMHISs, large providers such as the regional hospitals wil l s t i l l need to establish internal connectivity. Following the development o f Provider strategic I C T plans, larger providers wil l be wired for local connectivity. This subcomponent will finance any work that Providers will need for site preparation, configuration, set-up, logistics, installation as well as related introductory training, technical support, and maintenance. In addition to network development, this activity wil l finance the provision o f hardware and back-up or alternative energy solutions as provisioned by the strategic plans for the beneficiary Providers. The N H I C I C T Network tender currently provisions only one computer per provider. However, given the varying size o f health care providers, in many cases this will be insufficient for them to take full advantage o f the I C T possibilities for improving their front- and back-office functions. Following the Providers’ needs assessments and strategic plans for hardware, computers, wiring, other hardware, and alternative energy solutions wil l be procured under this subcomponent.
B.3. Software and systems integration
14. The N H I C I C T Network Platform on which this project wil l be built takes due account o f the fact that the National Identification Authority and I C T projects wi l l be integrated. Software that addresses front- and back-office activities such as patient registration and authentication, insurance billing, receipts collection, financial management, and data collection for analysis o f utilization and pharmaceutical costs wil l be developed and set up according to standards outlined in the Provider Strategy. This Project will finance the cost o f development or licensing o f software, installation, related software technical support, and initial training.
Component C: Financial and Operational Management Training ($4.35 million)
15. This component will strengthen ski l ls in health insurance administration for staff working in the NHIS, Providers, and MOH. Training would build the actuarial analysis capacity o f the NHIC, financial management o f premiums, payment mechanisms, liquidity management, utilization management, ICT administration, and other related activities needed to strengthen the financial and operational management o f the health insurance system.
16. The Project would support training and capacity building in the following areas:
38
C.l. Needs assessment and strategy development
17. An assessment o f the existing technical and managerial capacity o f staff in the Providers, DMHISs, and N H I C will be the f i rst step in developing a training strategy and program. This activity wil l provide financing for consultancy services to assess: (i) the existing capacity o f staff in al l the beneficiary groups including the MOH, NHIC, Providers, and DMHISs; (ii) the training needs for staff to handle the new operational and financial management processes; (iii) the existing training arrangements o f the N H I C and the GHS and; (iv) the identification o f key senior level positions in the MOH, NHIC, Providers, and DMHISs that wil l require high-level management training. This will involve how to utilize the training capacity o f GIMPA and the K o f i Annan Centre for Information Technology or another training institution and how to maintain staff competency in insurance management and administration. A strategy will be developed to determine how to utilize the educational resources to address these staff constraints.
C.2. Management training
18. To address the managerial shortages and ski l l mix, key managerial staff from Providers and DMHISs wil l receive management training, focusing on leadership, health policy, and insurance. Managers in key high-level positions within the NHIC, DMHISs, Providers, and M O H may require international leadership and management training that wil l be financed by this activity. For other levels o f management, the Project wil l also finance a management training program to be organized by GIMPA or another training institution. In accordance with the training strategy, GIMPA or another training institution will design and implement curriculum to train the managers in key positions through seminars, workshops, and certification programs. This activity wi l l also support the hiring o f one or two fill-time training coordinators who will work with GIMPA or another training institution in executing the training program.
C.3. Training in I C T Network Operations
19. The NHIC I C T Network Platform combined with the data requirements for billing will create an additional layer o f complexity for Providers’ staff who are not skilled in processing patient information or unfamiliar with the use o f information technology. This component wi l l train core competent I C T teams that can provide continual support for Providers’ staff to use the I C T Network Platform and provide training for Providers’ administrative staff in the use o f the provider-specific I C T tools described in component B. Following component By Providers’ key staff will receive technical training and a review o f the N H I S compliance requirements wil l be conducted, as needed. This activity will finance the design and implementation o f the training program, in line with the training strategy and coordinated by GIMPA, the K o f i Annan Centre for Information Technology, or another training institution.
C.4. Training for internal actuarial analysis and other core analysis sk i l ls
20. The N H I C needs to acquire a core set o f internal analytical capabilities to inform the development o f policies, in terms o f adjustments to premiums, definition o f the benefits package, and other relevant financial decisions. The core analysis capabilities include: actuarial analysis, analysis o f financial data to track the effects o f payment mechanisms, analysis o f liquidity and asset management, and tracking other variables that influence financial sustainability o f the health insurance system such as utilization o f goods and services among income levels. The results of this analysis wil l be used by the NHIS , MOH, and others to feed back into the policy-
39
making process. recommendations o f the training strategy.
Funding will be provided to implement this activity in l i ne with the
C.5. Financial management training
21. To address the financial management capacity constraints, key financial managers in the MOH, NHIC, and DMHISs, and Providers wil l receive financial management training financed by this activity. The Project wi l l also finance a management training program to be organized by GIMPA or another training institution. In accordance with the training strategy, GIMPA or another training institution wil l design and implement cumculum to train the managers in key positions through seminars, workshops, and certification programs.
40
Annex 5: Project Costs
GHANA: Health Insurance Project
Project Cost by Subcomponent
Component A: Enabling Environment for Implementation ($2.05 m.) A.l. Stakeholder coordination A.2. Project management and sustainability A.3. Communication strategy to manage public expectations A.4. Standardizing fee schedules and medicines l i s t s
A.5. Performance based provider payment mechanisms and other policy adaptations
A.6. Development o f related projects for donor support
A.7. System for conducting routine audits and controlling for fraud and abuse
Component B. Financial and Operational Management Tools ($8.6 m.) B.l. Providers' needs analyses and strategies for business process tools B.2. Network development, hardware and alternative energy solutions B.3. Software and systems integration
Component C. Financial and Operational Management Training ($4.35 m.) C.1. Needs assessment and strategy development C.2. Management training C.3. Training in ICT Network Operations C.4. Training for internal actuarial analysis capacity and other core analysis s k i l l s C.5. Financial management training Total Baseline Cost Physical Contingencies' Price Contingencies
Total Project Costs2 Interest during construction
Front-end Fee
Total Financing Required
Estimated IDA GoG costs Financing Contribution u s u s us
$thousand $thousand $thousand
50,000 50,000 400,000 400,000 400,000 400,000
300,000 300,000
550,000 550,000
100,000 100,000
250,000 250,000
500,000 500,000
7,100,000 7,100,000
1,000,000 1,000,000
150,000 150,000 600,000 600,000
2,700,000 2,700,000 500,000 500,000
400,000 400,000 15,000,000 15,000,000
15,000,000 15,000,000
15,000,000 15,000,000
Contingencies have been built into the component pricing estimates country financing parameters allow for 100% financing o f taxes
41
Annex 6: Implementation Arrangements
GHANA: Health Insurance Project
Overall Coordination and Oversight
1. The Ministry o f Health exercises an overall policy oversight responsibility for al l the parastatal agencies such as the N H I C and GHS that are under i t s direct authority. A high-level Inter-Agency Steering Committee (IASC) already exists to ensure coordination among the various semi-autonomous agencies and private sector providers that make up Ghana’s pluralistic health sector. The IASC, chaired by the Minister o f Heath, meets once or twice a year to discuss issues o f strategic importance to the health sector. Members o f the IASC include representatives from the MOH, the NHIC, the DMHIS, the GHS, the CHAG, the teaching hospitals, key health service providers from other ministries, and other providers.
2. During the course o f the Project, the IASC will be responsible for overseeing the broad strategic policy adaptations that wil l be supported by the Project related to recommendations made by the technical groups working on policy development subcomponents o f the Project.
3. The National Health Insurance Council (NHIC) i s the main implementing agency with overall responsibility for the management o f the Project. The implementation o f the Project wil l be done by the related l ine departments in the NHIC.
4. Health Insurance Project are as follows:
The main functions o f the responsible N H I C Department Directors, with regard to the
Prepare the Project Implementation Manual. Procure goods and services. This wil l require close consultation with the key stakeholders in the Project. Through the technical team, the N H I C Department Directors wil l work closely with the technical experts in the GHS, CHAG, and other providers. Assist consultants and training institutions in collecting key data inputs for the development o f the Providers’ ICT strategies and training programs. Monitor overall progress on implementation on a monthly basis and evaluate Project perfonnance. Serve as the focal point for communication during Bank Supervision missions. Comply with Bank financial management requirements, including compiling and furnishing interim unaudited quarterly financial reports to the Bank. Communicate Project results to the stakeholders, including the IASC, donors, and the general public.
Institutional and implementation arrangements
5. The Providers, which are majority represented by the GHS and CHAG, are the direct Project beneficiaries. The GHS, CHAG, teaching hospitals, and other providers have established the GNOST team to coordinate implementation o f the NHIS on the provider side. Although they are cooperating under the GNOST team, the GHS and the C H A G have separate administrative and management processes. Through oversight by the NHIC, separate needs assessments
42
(Component B) wil l be conducted for the GHS, the C H A G and the other beneficiary providers. Each major group within the Providers will require specific I C T strategic plans that wil l take into consideration the different administrative and management processes o f the provider groups. The N H I C will maintain responsibility for procuring consultants and goods for Component B.
6. GIMPA, or another training institution under the oversight o f the NHIC, will coordinate the management training (Component C) to build the financial management capacity o f the N H I C and the health care providers. GIMPA is a public agency that currently provides a health administration and management training course for the GHS. The training component could build on the current linkages between GIMPA and the GHS to expand training through the network o f health care providers. The K o f i Annan Centre o f Excellence in ICT is a public agency that provides training in ICT. The N H I C will receive support from a training institution such as the K o f i Annan Centre and GIMPA in providing I C T training for administrative staff o f the health care providers (Component C).
7. These arrangements were chosen because the MOH has overall responsibility for pol icy development and oversight o f the sector. The N H I C i s the lead government institution with responsibility for the implementation o f the N H I S . Delivery o f services i s the responsibility o f the GHS and other providers.
Partnership arrangements
8. The Annual Program o f Work for the Ministry o f Health provides the policy framework under which the DPs can support the NHIS in a coordinated way, in parallel to the support provided by the Bank (see Annex Table 4). The Project wil l support a needs assessment and elaboration o f strategic plans for financial and operational management by each o f the major provider groups (teaching hospitals, GHS , CHAG, and others). This will allow identification o f financing gaps that could also be supported in a coordinated way through the DPs. Currently, the DPs that have indicated an interest in providing support for the N H I C include the ILO, RNE, and DANIDA. The ILO has been providing an actuarial analysis o f the health insurance budget as well as technical assistance in strengthening actuarial analysis capacity for the NHIC. DANIDA wil l be examining the implications o f the N H I C on the poor. The RNE are preparing for the allocation o f funding to support further capacity building and technical advice in developing the interface for private providers. Other partners who are willing and able to support the N H I S wi l l be invited to contribute to the program over time. The Credit provides specific support for the N H I C to coordinate i t s work with the DPs who become involved in the health insurance sector during the course o f the Project.
Monitoring and evaluation o f outcomeshesults
9. Monitoring and evaluation (M&E) o f the Project wil l be embedded in the various components o f the Project. The M&E team at the N H I C wil l be responsible for developing a common evaluation framework for the entire program. I t will (i) determine reporting format and frequency; (ii) collect, consolidate, and disseminate lessons learned with relevant stakeholders and; (iii) ensure stakeholder feedback i s captured in Project implementation and in the development o f a results framework. The GHS already has data collection and analysis capacity,
43
which wil l support the M&E o f relevant provider data such as revenues collected and time taken for Providers to submit bills.
10. The NHIC wil l present reports reflecting M&E findings to the Bank on a quarterly basis, as part o f interim financial reports, which also comprise o f financial and procurement reports. Overall comprehensive annual work plans on the entire Health Insurance Program, including results from funding and support from the NHIF, IDA, and DPs, wi l l also be submitted to the Bank by November lSt o f each year in order to inform the annual Health Summit and the MOH’s Annual Program o f Work. The Annual Work Plans will include a budget that details the planned activities and expenditures under the Project as a planning tool for the next fiscal year. A comprehensive mid-term review wil l be undertaken at the end o f the third year o f implementation.
44
Annex 7: Financial Management and Disbursement Arrangements GHANA: Health Insurance Project
A. Executive Summary
1. A Financial Management (FM) assessment o f the accounting unit o f the National Health Insurance Council (NHIC) was undertaken in accordance with the Financial Management Practices Manual issued by the Financial Management Board on November 3, 2005. The objective o f the assessment was to determine whether the N H I C has acceptable financial management arrangements, which will ensure that: (i) fbnds are used only for the intended purposes in an efficient and economical way; (ii) timely, accurate and reliable periodic financial reports are prepared; and (iii) the entity’s assets are safeguarded.
2. The assessment was undertaken by a Bank Financial Management team and included interviews with key staff members responsible for financial management in the NHIC, as well as the use o f standard FM Assessment Questionnaires. The assessment also draws on earlier work carried out under various projects in Ghana. The assessment was carried out in f i l l cognizance o f the fact that the Bank would use the institution’s systems if the systems met the minimum Bank requirements for FM in Bank-assisted projects.
3. The Head o f Finance at the N H I C holds a post graduate degree in finance. H i s deputy i s a part-qualified professional accountant and receives additional support from three other accounting officers. The unit operates a manual accounting system. The system i s not documented in an accounting policies and procedures manual as required by the FAA. The unit depends on the laws establishing the N H I C and FAA for policies and procedures. I t has, however, begun to prepare its own derived policies and procedures manual, which must be completed prior to effectiveness o f the Project.
B. Overview of Program and Implementation Arrangements
4. The overall Project development objective i s to strengthen the financial and operational management o f the National Health Insurance Scheme by improving: (i) the policy adaptation and implementation capacity o f the NHIC; and (ii) the purchasing function o f the N H I C and the DMHIS, and the billing fbnction o f health care providers. The Project will be implemented in collaboration with the MOH, GHS, and other development partners and will comprise the following major components: (a) Enabling Environment for NHIS Implementation; (b) Financial and Operational Management Technology; and (c) Financial and Operational Management Training.
5. The principal Project executing agency will be the NHIC, which wil l have overall responsibility for Project management. The M O H has established an Inter-Agency Steering Committee consisting o f the MOH, NHIC, the GHS, the CHAG, and representatives o f key Providers from other ministries and other providers. Detailed implementation arrangements are summarized in Technical Annex 6.
45
C. Country Issues
Risk
6. The GoG has implemented several reforms in response to the findings o f the Country Financial Accountability Assessment (CFAA) for Ghana, carried out in 2001 and updated in June 2004. Some o f the key actions taken include the enactment of:
Rating Risk Mitigation Condition of Negotiation
Board or Effectiveness
(i) the Financial Administration Act, 2004 in response to the identified weakness of the fragmented legal structures that governed public financial management;
(ii) the Internal Audit Agency Act 684, 2004 to set up modern internal audit in al l GoG departments;
(iii) The Public Procurement Act 663, 2004 to improve the efficiency o f public procurement systems and practices.
(i) Delay in the implementation o f new Financial Administration
7. The enactment o f these laws i s intended to remove weaknesses in the regulatory frameworks for procurement, financial administration and internal audit. I t i s recognized that the implementation o f these regulations and procedures would take time, involve continuous capacity building, and demand greater accountability. Areas o f concern continue to be: (i) enforcement o f the enacted laws; and (ii) effectiveness o f independent oversight.
S
D. Risk Assessment and Mitigation
(ii) Noncompliance o f statutory regulations and non-enforcement o f penalties. (iii) Ministries, Departments, and Agencies (MDAs) may not fully comply with new Internal Audit Agency Act, in the establishment o f internal audit units within their offices.
Overall Inherent Risk
8. The summary risk analysis i s based on ongoing country work and knowledge, as well as the specific assessment o f the financial management unit o f NHIC, the institution that will be responsible for the financial management o f the proposed Project.
H
S
S
GoG has introduced a new comprehensive legal framework for public financial management, the Financial Administration Act, with related regulations for implementation. There i s need for close monitoring to ensure effective implementation o f th is Act.
GoG needs to institute measures (audits) that ensure the systematic review, update and enforcement o f penalties for noncompliance. GoG has passed legislation, Internal Audit Agency Act, for a l l MDAs to establish internal audit function within their offices. Assistance will be provided to strengthen the internal audit o f NHIC to meet the Act’s requirements and for the benefit o f the Project.
46
Risk I Rating I Risk Mitigatioaemarks Condition o f Negotiation
Board or Effectiveness
Funds Flow
to beneficiaries for purchases and services contracted.
(i) Some accounting staff in the M Staff wil l receive training in Bank FM and NHIC accounting unit have no knowledge o f Bank disbursement procedures.
accounts unit may leave, resign, f r o m employment, or be transferred.
disbursement procedures through participation in the periodic Bank FM and disbursement workshops.
(ii) Accounting staff at the NHIC M The NHIC will be required to ensure that qualified staff wi l l be at post at a l l times and to promptly replace staff that may leave. In addition, training will be provided to any staff replacements.
N
N
procedures for processing payment to beneficiaries. This wil l be reflected in the accounting procedures manual to be used under the Project.
(ii) The delays in preparation and submission o f withdrawal applications to the Bank for the releases o f funds.
Regular periodic training will be provided to ensure staff o f the NHIC become familiar with Bank procedures, and submission o f applications to the Bank wil l be monitored for timeliness.
M N
(i) Delays in the submission o f agreed Interim Financial Reports.
(ii) Preparation o f Financial Statements may not properly capture activities to be undertaken by the NHIC under the Project
I
M
I
External Audit Project audit reports likely to be I M I The NHIC will institute mechanisms where the audit I N -
Support wil l be provided by the Project to build overall FM capacity at the NHIC.
submitted late. -
N
Delays in providing requisite information to management and to Bank staff.
Overall Control Risk
program for the relevant year wil l be agreed with Finalization o f auditors prior to year end and monitored to ensure audit compliance. Auditors’ contracts wil l be for a term o f arrangements one year, renewable contingent on t imely completion to be a dated t and submission o f audited re orts. covenant.
M As part o f the capacity building, the Project will N assist the NHIC in acquiring the necessary accounting software to enable i t to perform i t s mandate at an acceptable level.
M
I
47
E. Strengths
The accounting unit o f the N H I C has qualified staff, who are experienced in:
(i) government and insurance accounting, and (ii) operating established policies and procedures o f the Auditor General,
F. Weaknesses and Action Plan
Significant Weaknesses
Accounting policies and procedures are not documented in a policies and procedures manual for staff guidance.
Accounting staff are not trained in Bank financial management and disbursement procedures. The accounting and reporting system wil l need significant overhaul to automate it and to reflect Project activities. Delay in the conduct o f project annual audit by the Auditor General’s office.
Action
Prepare Accounting Policies and Procedures manual for NHIC with detailed f l ow o f funds arrangement for the disbursement o f Credit funds.
Obtain init ial guidance and then participate in ongoing training for key project accounting staff in Bank FM and disbursement procedures. Acquire appropriate accounting software, and design and agree Financial Report Formats, purpose and frequency o f issue to a id management decisions. Prepare TOR for annual financial audit o f the Project - consideration to be made to “extending” mandate o f existing auditors (if any) to include Project activities.
Responsible Person
NHIC Head o f Finance
NHIC accounting staff
NHIC finance dept
NHIC in consultation with the Auditor General
Recommended Target Completion date Prior to effectiveness (as part o f the Project Implementation Manual). This action has been completed.
Ongoing starting during preparation
During the l i fe o f the Project
Six months after effectiveness
G. Implementing Entity
9. The N H I C will be the main implementing institution with collaboration from the Ministry o f Health, Ghana Health Service, other health service Providers (private and public) and the District Mutual Health Insurance Schemes. The Accounting Unit o f the NHIC, under i t s Head o f Finance, wil l have responsibility for maintaining the accounting records and books o f the Project.
H. Project Financial Management
10. Financial management o f the Project wi l l be undertaken by the NHIC, who will install a streamlined system with appropriate and sufficient internal controls to manage Project transactions and reporting obligations.
48
1 1. The policies, rules and procedures specified to implement Project and institutional objectives wi l l be documented in a Financial Management Manual to be prepared by the N H I C (which will form part o f the Project Implementation Manual). The financial management manual wil l cover among other issues:
a) Budgeting and forecasting procedures b) Records specification and support documentation c) Major transaction cycles and authorization procedures d) Chart o f accounts and account coding structure e) Financial reporting processes f ) Fund disbursement and replenishment procedures g) Flow o f funds to beneficiaries and payments to service providers.
12. The Head o f Finance at the N H I C holds a post graduate degree in Finance. H i s deputy i s a part-qualified professional accountant and receives additional support from three other accounting officers. The unit operates a manual accounting system. The system was not documented in an accounting policies and procedures manual as required by the Financial Administration Act (FAA). The unit was depending on the Laws establishing the Council and FAA for policies and procedures. I t has, however, since prepared o f i t s own Financial Management Manual, which the Bank team will review for adequacy and suitability for o f managing both the institution’s day to day operations, and the new Project.
The N H I C wil l prepare quarterly reports as a basis for project FM monitoring and control.
I. Budgeting
13. Financial Management activities for each year will commence with the determination o f Project activities to be carried out and eligible expenditures to be financed during the year (Le. the annual work plan and budget). Cost estimates would be determined by the implementation units within the N H I C in accordance with existing budgeting procedures, as modified to incorporate Project activities. Budget monitoring wil l be achieved through regular quarterly review o f actual performance against targets, with remedial action taken where appropriate.
J. Accounting System
14. The Accounting Unit, under the Finance Division o f the NHIC, has responsibility for maintaining the accounting records and books o f the agency. The unit operates a manual accounting system, which i s complemented through the use o f Excel for reporting. I t i s expected that as part o f the capacity building o f the NHIC, a more conventional accounting software can be introduced to improve record keeping and accounting. This could be achieved through the extension o f the main government NHIC I C T Network Platform to the N H I C Secretariat or the adoption o f a stand-alone system that would enhance the autonomy o f the organization. The Project will continue to use the manual system and report in Excel, while a comprehensive Management Information System i s developed as part o f the proposed Project.
15. With regard to Bank accounting and disbursement procedures, staff o f the N H I C will be encouraged to participate in regular training provided through partner institutions in Africa such
49
as the Ghana Institute o f Management and Public Administration and other management institutes.
16. All accounting and control procedures will be documented in the Financial Management Manual, which will be regularly updated. Accounting wil l be based on standard double-entry bookkeeping and comply with international accounting standards.
K. Flow of Funds
17. programs/activities identified and included in the approved national budget.
The GoG periodically releases funds, through the treasury system, to MDAs to execute
18. Under the Project, the N H I C wil l establish a Designated Account with a commercial bank acceptable to the IDA. The account will be maintained in U.S. dollars. An initial advance wil l be disbursed into the account on request and will be subject to compliance with conditions specified in the Disbursement Letter.
19. Implementing departments wi l l execute their respective budgets as approved with respect to Project activities falling under their control and periodically ask the N H I C to pay for authorized transactions to contractors, suppliers, and service providers. To facilitate timely processing o f al l requests, the N H I C will issue instructions in the Financial Management Manual to al l implementing departments, highlighting the necessary steps and supporting documentation required to enable payments on approved transactions.
20. Bank in accordance with Bank disbursement guidelines and policies.
The N H I C accounting team will be responsible for making replenishment requests to the
L. Financial Reporting and Monitoring
21. The N H I C produces periodic financial reports for management. Some customizing may be required to make the financial reports f i l l y compliant with the information requirements o f the Bank. The Bank requires basic information on:
0
0
0
0
0
Total project expenditures by component/subcomponent and activity Total project expenditure by expenditure category Total financial contribution from each donor/cofinancier Total financial contribution by the GoG Schedule o f assets by location, and so on.
22. prepared in accordance with International Accounting Standards.
This information wil l be produced quarterly and annually in a set o f financial statements
23. The Project w i l l prepare quarterly unaudited interim financial reports, highlighting quarterly performance in the areas o f finance, procurement, and Project progress. The financial management system put in place should be capable o f generating the interim financial reports, which will integrate the following elements:
50
Quarterly Financial Report
24. The Quarterly Financial Report would consist o f a statement o f cash receipts by sources and expenditures by main expenditure classifications for the period and cumulatively to the reporting date as well as cash balances o f the Project, and supporting schedules comparing actual and budgeted expenditures.
Quarterly Physical Progress Report
25. The Quarterly Physical Progress Report would include narrative information on outputs and output indicators and link financial information with physical progress, and would report on issues requiring attention.
Quarterly Procurement Management Report
26. The Quarterly Procurement Management Report would compare procurement performance against the plan agreed at negotiations and appropriately updated at the end o f each quarter. The report should also provide information on complaints by bidders, unsatisfactory performance by contractors, and contractual disputes, if any.
27. The N H I C will be responsible for preparing and submitting these reports to the Bank within 45 days o f the end o f each quarter. The contents and format o f the reports were agreed at negotiation. In additional to quarterly reporting, the Recipient wi l l provide an Annual Work Plan that details the Project’s planned budgetary expenditures for the following fiscal year no later than November lSt o f the year. The timing and substance o f the Annual Work Plan are such that i t will be used as a planning tool for the Project, the NHIC and for the M O H as it will inform the MOH’s Annual Program o f Work and the Annual Health Summit.
M. Disbursement Arrangement and Methods
28. The proceeds o f the credit would be disbursed over a five-year period. Transaction-based disbursement will be used by the Project, with a provision for conversion to Report-based disbursement, should financial reporting ability meet the requirements for that type o f reporting during implementation. A period o f four months after closing date would be allowed to make disbursements for expenditures incurred up to the closing date o f the Credit. Proceeds from the IDA Credit would be 100 percent allocated to eligible goods, consultants’ services, and training.
Designated Account
29. Per above, the NHIC wil l maintain a Designated Account (DA), at a commercial bank acceptable to the Bank. The DA will be maintained in U.S. dollars. Upon Credit effectiveness, a sum o f money, being the DA ceiling, in U. S. dollars, will be deposited in the DA by the Bank, upon receipt o f the relevant withdrawal application. The amount o f the init ial deposit and further details o f the operation o f the DA wil l be specified in a Disbursement Letter to be issued separately. Further deposits would be made into this account against withdrawal applications supported by appropriate documentation. The financial resources made available through the DA will be used only for agreed Project activities o f implementing entities.
51
Statements of Expenditures
30. Disbursements for all expenditures would be against hll documentation, except for items o f expenditures under contracts below: (i) US$200,000 equivalent each, for consulting firms; (ii) US$50,000 for individual consultants; (iii) US$200,000 equivalent for Goods; and (iv) training, for which disbursements would be based on Statements o f Expenditures. Supporting documentation for SOEs would be retained by the accounting unit o f the N H I C for review by Bank missions and external auditors as appropriate.
Direct Payments
31. The Bank may make direct payments to a third party (i.e. consultants, contractors, and suppliers) at the request o f the Recipient in a prescribed format to the Bank for eligible expenditures incurred under the Project. The N H I C i s expected to use this method o f disbursement.
All eligible goods, consultants’ services including audits, training and operating costs for the project, excluding sub- grants Sub-Grants Total
Special Commitments
32. The Bank may make payments to a third party for eligible expenditures under Special Commitment entered into, in writing, at the Recipient’s request and on terms and conditions agreed between the Bank and the Recipient (in this instance, the NHIC).
Amount of the Credit (USD) Percentage of expenditures to be financed (inclusive of
taxes) 15,000,000 100%
0 15.000.000 100%
33. The IDA credit will be disbursed over a period o f 5 years with a closing date o f December 30,2012. The proposed allocation o f the credit in the legal agreement i s shown in the table below:
N. Auditing Arrangements
34. Independent qualified auditors engaged on terms acceptable to the IDA would carry out the annual financial audit o f the Project in accordance with international auditing standards. The financial auditors would be in place within six months o f the Project’s effective date. I t is recognized that i t i s the responsibility o f the Auditor General o f Ghana to audit these government entities. As a result, the selection o f the independent auditors will be done in collaboration with the Auditor General. One report covering al l Project activities wil l suffice.
35. The auditor’s reports and opinions, including the Management Letter and management response on the annual Financial Statements would be kmished to the Bank within six months
52
o f the close o f the fiscal year audited. Efforts will be made to use the entity’s current auditors (if any), provided that their qualifications and TORS (existing or modified) meet Bank requirements.
0. Action plan
(i) Open the DA in an acceptable commercial bank before effectiveness. (ii) Confirm Project audit arrangements within six months o f effectiveness. (iii) Enrol l in a training course held at Country Office on Bank FM and Disbursement
procedures within six months o f effectiveness.
P. Conditionalities
Effectiveness conditions
(i)The Project Implementation Manual (including the Financial Management Manual) has been adopted, in form and substance satisfactory to the Bank.
Q. Financial covenants
(i) Quarterly progress reports including procurement, physical and financial progress wil l be
(ii) Annual audit reports wil l be prepared and submitted to the Bank by June 30 o f each year. prepared and sent to the Bank no later than 45 days from the end o f each quarter.
R. Dated covenants
(i) Finalization o f the appointment o f auditors to be made within six months o f effectiveness.
S. Supervision Plan
36. During the first year o f Project implementation, intensive Bank supervision wil l be required to ensure that the Project FM arrangements are in place and h c t i o n i n g . The f i rst supervision mission after effectiveness wil l take the form o f an FM specialist’s visit to the N H I C to review progress in implementing the FM Action Plan. Thereafter, there wi l l be a minimum o f two supervision missions per year, plus quarterly desk reviews o f interim financial reports.
T. Conclusion
37. minimum requirements for financial management under O P B P 10.02.
The proposed FM arrangements for the Project to be managed by the N H I C meet the
53
Annex 8: Procurement Arrangements GHANA: Health Insurance Project
A. General
1. The Bank carried out a Country Procurement Assessment Review (CPAR) in 2003 and submitted it to the GoG on June 30, 2003. The main findings o f the CPAR include: (i) lack o f a comprehensive legal framework; (ii) use o f a merit point system for evaluating bids for works contracts; (iii) use o f “bracketing” for evaluating bids for works contracts; (iv) excessive use o f a single source; (v) repetitive use o f same f i r m s under selective tendering procedures; (vi) lack o f procurement planning; (vii) poor record keeping; (viii) weak oversight o f procurement; (ix) poor contract management; (x) poor stores management; (xi) weak procurement capacity; and (xii) weak budget commitment control leading to contract payment arrears. The CPAR contained an Action Plan and other recommendations for improvements in public procurement.
2. The legal and institutional framework for procurement in Ghana has substantially improved. The Parliament o f Ghana approved the Public Procurement Bill on December 18, 2003, and the President signed i t into a Public Procurement Act on December 31, 2003. Preparation o f the bill began in 2000 and was presented to Parliament in November 2002. The Parliamentary Accounts Committee invited public input in March 2003 and received comments from a broad cross-section o f stakeholders, including the Bank. The Bill was widely discussed in the media, in round table conferences, and in meetings with the Parliamentary Accounts Committee. The final version o f the Public Procurement Act (PPA) has been assessed as a good UNICTRAL-based procurement law.
3. The Act includes most o f the features o f good public procurement practice: (i) effective and wide advertising o f upcoming procurement opportunities; (ii) public opening o f bids; (iii) predisclosure o f all relevant information including transparent and clear bid evaluation and contract award procedures; (iv) clear responsibilities and accountabilities for decision making with segregated executive and oversight responsibilities; and (v) an enforceable right o f review for bidders when public entities breach the rules. The PPA i s comprehensive and covers al l procurement in the public sector (Central Management Agencies, Ministries, Departments and Agencies and in Metropolitan, Municipal and District Assemblies as well as parastatal organizations and State-Owned Enterprises).
4. The PPA created the Public Procurement Board, an autonomous regulator empowered to set rules and oversee public procurement practices by al l public sector bodies. In turn, the Public Procurement Board has issued standard bidding documents and set rules for open, competitive procurement across government, developed a website to enable posting o f bid notices and contract awards and other procurement documents. All the same, challenges remain in several areas such as dissemination o f regulations, training o f GoG staff and the private sector, establishment o f procurement plans tied into the budgeting process, and audits o f main spending entities. Progress is being monitored under the PRSC for Ghana and through annual P F M reviews under PEFA methodology.
54
Procurement for the proposed Project would be carried out in accordance with the Bank “Guidelines: Procurement under IBRD Loans and IDA Credits” dated M a y 2004; and the “Guidelines: Selection and Employment o f Consultants by World Bank Borrowers” dated M a y 2004, and the provisions stipulated in the Financing Agreement. For procurement o f goods that are below the I C B thresholds, National Competitive Bidding (NCB) procedures and Standard Bidding Documents found acceptable to the Bank shall apply. In recognition o f the quality of the legal framework, procedures in the Ghana Public Procurement Act (PPA) would be used for N C B procurement. The standard documents for the procurement o f goods can be used provided that: (i) the standard documents are used for N C B without prequalification only as they do not incorporate clear provisions on the prequalification o f bidders; (ii) margin o f preference i s not applicable; and (iii) bidders are given a minimum o f 30 days to submit bids from the date o f availability o f the bidding documents; (iv) foreign bidders are not excluded from participating in the bidding process; and (v) where required by the set thresholds and procurement methods, concurrent No-Objections are sought from the Bank after internal clearances have been obtained in response to the PPA.
5. The various items under different expenditure categories are described in general below. For each contract to be financed by the Credit, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are agreed between the Recipient and the Bank in the Procurement Plan. The Procurement Plan will be updated at least annually or as required to reflect the actual Project implementation needs and improvements in institutional capacity.
6. Procurement o f Works: N o procurement o f works i s planned under this Project.
7. Procurement of Goods: Goods procured under this Project would include: (a) Information and Communications Technologies (ICT), Power Conditioning and Related Implementation Services to support Provider claims processing and eligibility verification systems (i.e., HW/SW/LANs, U P S , solar panels, site prep, configuration, set-up, logistics, installation; introductory training, technical support, maintenance); (b) System integration services/licenses to interface the N H I S system with Provider applications systems; and (c) Teaching and Communications material (Classroom material, books, computers, and practice sofhvare). The main I C T procurement will be done using the Bank SBD for al l ICB. The system integration services/licenses wil l be obtained by direct contracting with the relevant incumbent system f i r m s at the Provider sites and the N H I S incumbent main supplier. Materials will be acquired using the National SBD agreed with or satisfactory to the Bank. A small number (e.g. two) o f all-terrain vehicles will be procured using Shopping to support Project management and implementation.
8. Procurement o f nonconsulting services: None i s anticipated under the Project.
9. Consulting services will be used to provide technical assistance in: (i) policy development, including communications strategy development; (ii) elaboration o f needs assessments and operational business strategies for the Providers; (iii) elaboration o f education and training needs assessments and implementation plans for the MOH, the NHIS, and the Providers; (iv) training program administration; (v) Project management,
Selection o f Consultants:
55
financial management, procurement, implementation; and (vi) the development o f actuarial analysis capacity. Short l is ts o f consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. Auditing Services for annual audits o f the Health Insurance Schemes wil l be procured using the Least Cost Method, as wil l the annual audits o f the Project accounts.
10. Training: The Project would support the cost o f seminars, workshops, working group support, and study tours in support o f Project and Change Management. These wil l be described in Annual Work Plans to be submitted to the Bank for i t s prior review (by March 1 o f the preceding year-and, as appropriate, revised from time to time in agreement with the Bank).
11. Training Programs: Education and Training programs will address: (i) management education for a small number o f MOH, NHIC, DMHIS, and Provider managers; (ii) management training course and seminars for a larger set o f MOH, NHIC, DMHIS, and Provider managers; (iii) financial operations training for MOH, NHIC, DMHIS, and Provider staff; (iv) specialized ICT- related training for selected N H I S and Provider I C T staff. The main I C T contract (under Goods, above) will bundle basic introductory training to NHIC, Provider, and other staff during the installation o f the ICT. To develop, administer, and coordinate, the N H I C wil l partner with a training institution such as GIMPA and the K o f i Annan Centre for Information Technology, which are public agencies and, as appropriate, with the association representing the District Mutual Health Insurance Schemes. The training results will be subject to post review.
12. The procurement procedures and Standard Bidding Documents to be used for each procurement method, as well as model contracts for works and goods procured, wil l be presented in the Project Implementation Manual.
B. Assessment of the agency’s capacity to implement procurement
13. Procurement activities under the project wil l be carried out by the NHIC. The procurement hnct ion i s staffed by one procurement specialist with extensive knowledge and training in World Bank procurement procedures, including procurement planning and management o f the procurement cycle. She is assisted by a secretarial staff member.
14. An assessment o f the capacity o f the agency to implement procurement actions for the Project was carried out by Tsri Apronti, Procurement Specialist, in February 2007. The assessment reviewed the organizational structure for implementing the Project.
15. The key issues and r isks concerning procurement for implementation o f the Project have been identified and include: (i) absence o f manuals and instructions for the handling o f procurement; (ii) familiarity with Bank procurement guidelines limited to only one staff member; and (iii) lack o f project management and coordination capacity. The risk o f delayed procurement implementation i s high.
56
16. The proposed Action Plan to address the above deficiencies includes:
(i) preparation o f a Project Implementation Manual describing the organizational structure for implementing the Project, including a section on procurement describing the organizational arrangement for procurement management, detailed terms o f references for the staff, the functional relationships and interaction between the Project staff responsible for procurement and the relevant unit for administration and finance, and clear instructions and guidance for the management o f procurement records; (ii) a Project launch workshop for key staff o f the NHIC, including the tender committee. The workshop wil l include sessions on Bank procurement policy as well as the Ghana Public Procurement Act. The focus wil l be to orient key staff on the principles o f good public procurement planning and practice and to discuss the procurement arrangements under the Project; (iii) setting o f standard processing times; and (iv) appointment o f two additional staff members (at least one with knowledge o f and experience in Bank- financed procurement).
17. The assessment shows an “Average Risk.” Bank staff andor independent auditors will carry out annual Procurement Post Reviews, and the risk rating may be revised based on the review findings.
C. Procurement Plan
18. The Recipient, at appraisal, developed a procurement plan for Project implementation, which provides the basis for the procurement methods. This plan was agreed between the Recipient and the Project team on April 16, 2007 and i s available at the World Bank Ghana Office. I t will also be available in the Project database and on the Bank’s external website. The Procurement Plan wil l be updated in agreement with the Project team annually or as required to reflect the actual Project implementation needs and improvements in institutional capacity
D. Frequency of Procurement Supervision.
19. In addition to the prior review supervision to be carried out from Bank offices, the capacity assessment o f the N H I C has recommended a project launch workshop and a minimum o f two supervision missions annually to visit the field to carry out post review o f procurement actions.
E. Details o f the Procurement Arrangements Involving International Competition
1. Goods
(i) L i s t o f contract packages to be procured following I C B and direct contracting:
57
1
Ref. No.
- B.2
- B.3. a
- B.3. b
- B.3.
3 4 6 7 8 9 5
P-Q
no
Contract (Description)
Estimated cost
Procurement Method
Domestic Preference
(yeslno)
Review by
Bank (Prior I Post)
prior
Expected Bid-
Opening Date
Comments
$7,10OK n o ICT, Power Conditioning & Related Implementati o n Services- Provider Claims Processing & Eligibi l i ty Verif ication Systems (H W/S W/LA Ns, Solar Panels, U P S s , site prep; configuration, set-up, logistics, installation; introductory training, technical support, maintenance) Software Integration Services & Licenses- N H I S Interface with Provider Applications Systems IGHS] Software Integration Services & Licenses- N H I S Interface with Provider Applications Systems [Teaching & MOD Hospitals] Software
ICB
direct contract no n o prior $400K Apr. 2008
direct contract no no $200K
$300K
prior Apr. 2008
no prior direct contract Apr. 2008 no
58
Integration Services & Licenses- N H I S Interface with Provider Applications Systems rCHAGl
3
Software Integration Services & Licenses- N H I S Interface with Provider Applications Systems [Pharmacies other Private Sector]
4
$1 OOK direct contract( s)
$250K
1
QCBS
no Apr. 2008 -r (ii) ICB contracts estimated to cost above $200,000 per contract and al l direct contracting wil l be subject to prior review by the Bank.
2. Consulting Services
(i) List o f consulting assignments with short-list o f international f i rms.
1
Ref. No.
A.3.a
A.4
A. 5
Description of Assignment
TA - National Health Insurance Communication s Strategy Development, M&E TA - Standardized Fee Schedule and Medicines L i s t Development, M&E TA - Provider Payment Mechanism Development,
Estimated cost
Selection Method
$300K T $550K T
5
Review by Bank (Prior I Post)
prior
prior
prior
Proposals Submission
Date Feb. 2008
May. 2008 7 59
I M&E C.3.a I Training
Programs - Data & ICT Management for NHIS Senior
C.3.b
c.4
$800K
Managers Training Programs - Data & I C T Management for NHIS Technical Staff TA and Training Programs - Actuarial
I Analysis c.5 I Training I $400K
$600K
$500K
Courses and Seminars - Internal Financial Management Capacity for N H I S Staff
QCBS
QCBS
QCBS
QCBS
prior
prior
prior
prior
Jul. 2008
Jul. 2008
Mar. 2008
Mar. 2008
(ii) Consultancy services estimated to cost above $50,000 per contract for individuals and $200,000 for f i rms and single source selection o f consultants ( f i rms and individuals) will be subject to prior review by the Bank.
(iii) Short-lists composed entirely o f national consultants: short-lists o f consultants for services estimated to cost less than $200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines.
60
Annex 9: Economic and Financial Analysis GHANA: Health Insurance Project
1. The Health Insurance Project i s expected to yield significant socioeconomic and financial returns for Ghana, including: (i) a financially sustainable, revenue-generating National Health Insurance program; (ii) a modernizing health system; and (iii) broad social benefits from fiscal protection from il lness for the poor, improved governance, and increased use o f health services.
2. Because most o f the expected benefits are o f a socioeconomic nature, economic evaluation wil l look separately at the financial impact o f the project on the NHIC, DMHISs, and the Providers. With the capital investments mostly directed toward Providers, i t i s expected that Providers wil l be able to increase their cost recovery from improved administrative processes. For example, Cape Coast regional hospital i s an example o f a hospital that i s technically equipped and wired to process insurance information electronically. They experience claims recovery rates o f nearly 95 percent and a billing cycle time o f six weeks. This contrasts to the two region study in which GHS providers had claims recovery rates o f about 40-60 percent and a billing cycle time o f over 3 months.
3. The following preliminary findings are based on recent actuarial estimates by the ILO. Based on current trends, i t i s expected that total coverage will reach about 50 percent o f the population by 2015. Significant policy steps would need to be taken to accelerate uptake in the coverage rates. The policy development component o f the Project will examine ways to increase this coverage rate.
Graph 1: Expected coverage (2005-15) -% of Total population, insured - % of Informa population. Insured -%of informal population. uninsured - - - % of Total population, uninsured
4. Although the utilization rate for insured populations i s much higher than that o f the uninsured, i t remains very low by international standards. Incentives need to be introduced for the population to use care appropriately but should avoid stringent cost containment policies that might suppress appropriate utilization.
61
kaph 2: Utilization rates
+Insured + Non-Insured +Insured Non4nsured
- - - - 1.2 ...................... ............... I / .....................................................................................................
2003 2004 2005 2001 2041 2008 2wO 2010 2011 2012 2013 YEAR
5. rate, i t i s estimated that the N H I S wi l l sustain a positive actuarial balance over the next 20 years.
Based on current trends, despite the increased anticipated coverage rate and utilization
Graph 3: Development of NHIF Income, Expenditure & Balance (200515)
1 - 10.0W 1 - - - - - - - 1 H EXPENDITURE
I 0 BALANCE
Year ,e"
.......................
.......................
6. Overall, the relative contribution by the GoG to financing health care in Ghana i s expected to decrease over the next few years, thereby reducing pressure on the GoG contribution to the fiscal space allocated to the health sector. Parallel to these trends, the contribution by health insurance and internally generated funds will increase.
62
Graph 4: Contributions
I W %
W%
1 10%
I 1 70%
60%
30%
*ox
*%
10%
10%
0% 2ws 1004 1008 1006 m7 1008 me 10’10 all zoq2 10qs
Year
63
Annex 10: Safeguard Policy Issues GHANA: Health Insurance Project
1. The environmental category assessed for this Project i s C. There are no environmental and social safeguard issues associated with the Project. The Project focuses on strengthening financial management with activities on training and computerization o f existing health care facilities. Depending on the needs analysis o f the health care facilities, there may also be procurement for back-up generators and solar panels for the health care facilities.
Safeguard Policies Triggered by the Project Yes N o Environmental Assessment (OPBP 4.01) [I [ XI Natural Habitats (OP/BP 4.04) [I [ XI Pest Management (OP 4.09) [I [ XI Cultural Property (OPN 1 1.03, being revised as OP 4.1 1) [ XI Involuntary Resettlement (OPBP 4.12) [I [ XI Indigenous Peoples (OPBP 4.10) [I [ XI Forests (OP/BP 4.36) [I [ XI Safety o f Dams (OP/BP 4.37) [ I [ XI Projects in Disputed Areas (OP/BP 7.60)* [I [ XI Projects on International Waterways (OP/BP 7.50) [ I [ XI
[I
' By supporting the project, the Bank does not intend to prejudice the$nal determination of the parties' claims on the disputed areas
64
Annex 11 : Project Processing
GHANA: Health Insurance Project
Planned Actual PCN review October 10,2006 Init ial PID to PIC October 2,2006 Initial ISDS to PIC October 17,2006
Negotiations April 2 1-23,2007 April 2625,2007 BoardlRegional Vice President June 2 1 , 2007 approval Planned date o f effectiveness November 15,2007 Planned date o f mid-term review December 1,2010 Planned closing date December 30,2012
Appraisal April 9-20,2007 April 9-20,2007
Key institutions responsible for preparation o f the Project:
The National Health Insurance Council i s the key government agency for the Project preparation and supervision. They are working with the Ministry o f Health and Ghana Health Service in Project preparation.
Bank staff and consultants who worked on the project included:
Name Title Alexander S. Preker Task Team Leader, Lead Economist Caroline Ly Craig Neal Jonathan Nyamukapa Samuel Bruce-Smith Amadou Tidiane Toure Ferdinand Tsri Apronti Christine Kimes Johanne Angers Basma Ammari Manush Hristov Rahul Agarawal Modupe A. Adebowale Marietou Toure Gregoria Dawson Warren Waters
Consilt ant Sr. Public Sector Specialist
Sr. Financial Management Specialist Financial Management Consultant
Lead Procurement Specialist Procurement Specialist Sr. Operations Officer
Operations Officer Consultant
Counsel Legal Associate
Disbursement Officer Language Program Assistant
Program Assistant Regional Environmental and Safeguards
Advisor
Unit AFTH2 AFTH2 ECHD AFTH2 AFTFM AFTPC AFTPC AFTRL AFTH2 AFTRL LEGAF LEGAF LOAG2 AFTH2 AFTH2 AFTQK
65
Bank hnds expended to date on Project preparation:
1. Bank resources: 101,000 2. Trust funds: 0 3. Total: 101,000
Estimated Approval and Supervision costs:
1. Remaining costs to approval: 30,000 2. Estimated annual supervision cost: 145,000
66
Annex 12: Documents in the Project File GHANA: Health Insurance Project
A. Project Implementation Plan
1. Pre-appraisal Mission Aide Memoir, February 2007 2. Appraisal Mission Aide Memoir, April 2007
B. Bank Staff Assessments
1. Financial Management Assessment Report, March 2007 2. Procurement Assessment Report, February 2007
C. Other
1. The National Health Insurance Act, 2003 2. Mutual Health Insurance in Ghana Review, 2005 3. Ghana Social Trust Project, 2005 4. Draft ILO Health Budget Model, 2007 5. Draft USAID Political and Technical Evaluation o f Ghana National Health Insurance
System, 2006 6. Tender Specifications for NHIC ICT Network Platform, 2006 7. Draft NHIC Strategic Business Plan, 2007 8. Ghana Country Assistance Strategy, 2004 9. Ghana Country Economic Memorandum, 2003 10. Ghana Ministry o f Health Review o f Ghana Health Sector Program o f Work, 2006 1 1. Ghana Ministry o f Health Program o f Work, 2007 12. NHIC Health Insurance Project Financial Management Plan, 2007 13. NHIC Health Insurance Project Procurement Plan, 2007
67
Annex 13: Statement o f Loans and Credits GHANA: Health Insurance Project
Original Amount in US$ Mil l ions
Difference between expected and actual
disbursements
Project ID F Y Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d
PO93610
PO92986
PO88797
PO85006
PO84015
PO81482
PO56256 PO82373
PO50620 PO71 157
PO73649 PO67685
PO50623 PO00968 PO69465
PO00970 PO45188
2007
2006 2006
2006
2005
2005
2005 2004
2004
2004 2003 2002
2002 2001 2000
1999 1998
YGH-eGhana SIL (FY07) GH-Economic Management CB
GH-Multi-Sector HIV/AIDS - M-SHAP (FY06) MSME Initiative
GH-Small Towns Water Sply & Sanit (FY05) GH-Com Based Rural Dev (FYO5) GH-Urban Water S I L (FY05)
GH-Urban Env Sanitation 2 ( FY04)
GH-Edu Sec SIL (FY04) G H Land Administration (FY04)
GH-Health Sec Prgm Supt 2 (FY03) GH-GEF Northern Savanna (FY02)
GH-Road Sec Dev Prgm (FY02) GH-Ag SWCS APL (FYO1) GH-Rural Fin Srvcs S I L (FYOO)
GH-Trade Gateway & Inv S I L (FY99) GH-GEF Forest Biodiversity SIL (FY98)
0.00
0.00 0.00
0.00
0.00
0.00
0.00
0.00 0.00
0.00
0.00 0.00 0.00 0.00 0.00 0.00
0.00
40.00
25.00
20.00
45.00
26.00
60.00 0.00
62.00
78.00 20.51
57.30 0.00
220.00
67.00 5.13
50.50 0.00
0.00 0.00
0.00
0.00 0.00
0.00 0.00
0.00
0.00
0.00 0.00
0.00 0.00 0.00
0.00 0.00
0.00
0.00 0.00
0.00 0.00
0.00 0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 7.90 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
8.90 0.00
39.57 23.24
18.10
43.66 17.66
34.52
88.59
58.01 59.52
14.54
0.75 2.24
45.22
6.02 0.24
19.59 0.3 1
-0.58 0.00 1.06 0.00
2.33 0.00
1.21 0.00
3.14 0.00
3.61 0.00 32.58 0.00
11.63 0.00
17.67 0.00 7.42 0.00
.11.81 0.00 1.85 -0.50
8.45 0.00 -0.82 -0.82
-0.29 -0.40 17.57 9.33
0.3 1 0.00
Total: 0.00 776.44 0.00 16.80 0.00 471.78 95.33 7.61
GHANA STATEMENT OF IFC
Held and Disbursed Portfolio In Millions o f US Dollars
Committed Disbursed
IFC IFC
F Y Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic.
1990 AAIL 0.00 2.55 0.00 0.00 0.00 2.55 0.00 0.00 1998 AEF NCS 0.00 0.00 0.53 0.00 0.00 0.00 0.53 0.00 1997 AEF PTS 0.00 0.00 0.31 0.00 0.00 0.00 0.3 1 0.00 1994 AEF Shangri-la 0.93 0.00 0.00 0.00 0.93 0.00 0.00 0.00 1996 AEF Tacks Farms 0.43 0.00 0.00 0.00 0.37 0.00 0.00 0.00 2006 Barclays Bnk GHA 30.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1989 C A L Bank Ltd 0.00 0.87 0.00 0.00 0.00 0.87 0.00 0.00 2001 Diamond Cement 2.50 0.00 0.00 0.00 2.50 0.00 0.00 0.00 2000 ELAC 0.00 0.10 0.00 0.00 0.00 0.10 0.00 0.00 1991 GHANAL 0.00 0.22 0.00 0.00 0.00 0.22 0.00 0.00
2006 Newmont Ghana 75.00 0.00 0.00 50.00 0.00 0.00 0.00 0.00 2005 Scancom 40.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 2005 School Fin Facil 1.03 0.00 0.00 0.00 0.25 0.00 0.00 0.00
Total portfolio: 149.89 3.74 0.84 50.00 24.05 3.74 0.84 0.00
68
FY Approval Company
Approvals Pending Commitment
Loan Equity Quasi Partic.
2005 Scancom 0.00 0.00 0.00 0.00 2004 Takoradi I1 0.06 0.00 0.00 0.00
Total pending commitment: 0.06 0.00 0.00 0.00
69
Annex 14: Country at a Glance GHANA: Health Insurance Project
POVERTY and SOCIAL Sub-
Saharan Low. Ghana Afr ica Income
2006
GNIpercapita (Atiasmethod, US$) 450 0 .0
Population, mid-year (miiiions) 22.1
GNI (Atlas method, US$ billions)
Average annual growth, 1999-06
Population (Sy 2.2 Laborforce (%) 2.5
~ o s t recent est imate ( la test year 8Vallable, 199s-OS)
Urban population (96oFtotalpopulation) 48 Life eqectancyat birth ()ears) 57
Childmalnutrition(%ofchiidmnunder5) 22 Access to an improvedwatersource (%ofpopulation) Literacy (960 Fpopulation age By Gross primary enrollment (%of schooi-age population)
Poverty (% OF population belo wnationalpo veflyline) 40
Infant mortality (per fOOOlive births) 68
75 58 88
Male 90 Female 87
KEY ECONOMIC RATIOS and LONG-TERM TRENDS
1986 1996
GDP (US$ billions) 4.5 6.5 Gross capital formation1GDP 9.6 20.0 Eqorts of goods and services/GDP a.7 24.5 Gross domestic SavingsiGDP 6.6 118 Gross national SavingsiGDP 5.4 17.6
Current account balanceiGDP -5.8 -2.4
Total debtiGDP 49.8 85.1 Total debt serviceieQorts 23.6 23.9 Present value ofdebt1GDP Present value ofdebtleqotts
Interest paymentslGDP 0.7 0 9
741 745 552
2 3 2 3
35 48
29 56
93 99 87
no
2004
89 27 9 34 5 8 0
26 4
-2 7 0 7
79 3 6 7
27 0 67 4
2,353 580
2364
t 9 2.3
30 59 80 39 75 62 x14 1 n 99
2006
x1.7 29.6 30.4 n .5 27.1
-7.1
1986-86 1996-06 2004 2006 2006.09 (everage annuaigroMh) GDP 4 5 4 6 5 8 58 5 8 GDP percapita 17 2 3 3 6 37 4 2 Eqorts of goods and services 8 2 4 8 3 5 4 0 3 7
I Development dlamond.
I Life eqectancy ~
I
j GNI Gross
capita enrollment
I
per w a r y
I 1
Access to improvedwatersource
-Ghana Lo wincome group
Trade
I Indebtedness
-Ghana Lowincome group
STRUCTURE o f the ECONOMY
(%oFGDP) Agnculture Industry
Services
Househo Id finei consumption expenditure General gov't final consumption evenditure Imports of goods and services
Manufactunng
(average annualgrouth) Agnculture Industry
Services
Household final consumption eqenditure General gov't final consumption emenditure Gross capital formation Imports of goods and SBNICBS
Manufacturing
1986 1996
449 388 6 7 243 115 9 3
384 369
840 763 9 4 121 8 6 329
1986.96 1996.06
2 0 4 4 3 6 4 6
-30 4 0 7 8 4 7
4 1 4 3 5 4 5 6 3 9 3 7 6 8 4 7
2004
37 9 24 7 85
37 4
76 0 6 0 54 4
2004
7 5 5 1 6 5 4 5
2 7 159 125 4 5
2006
38 8 24 6 8 6
36 6
74 1 154
49 5
2006
6 1 6 7 7 0 5 4
8 2 -2 1 8 1 7 3
,GroWth o f capi ta l and GDP (%)
03 04 05
-GCF -GDP
Growth of export8 and lmporta (%)
2o T
Note:2005 data are preliminaryestimates. This tablewas producedfrom theDeveiopment Economics LDB database. 'Thediamonds showfourkeyindicators in thecountry(in bold) comparedMthits Incomegoupaverage. ~dataaremissing,thediamondMll
be incomplete.
70
Ghana '
PRICES andGOVERNMENT F I N A N C E
D o m e s t i c p r i ces (%change) Consumer prices implicit GDP deflator
Governmen t f inance (%of GDP, includes cumnf grants) Current revenue Current budget balance Overall surplus/deficit
T R A D E
(US$ miilions) Totaiexports (fob)
Cocoa Timber Manufactures
Total imports (cif) Food Fuel and energy Capital goods
Export price index (200O=WO) Import price index (200O=WO) ~ e r r n s o f trade (2000-00)
B A L A N C E O f P A Y M E N T S
(US$ miliions) Exports of goods and services Imports of goods and services Resource balance
Net income Net current transfers
Current account balance
Financing items (net) Changes in net reserves
Memo: Reserves including gold (US$ millions) Conversion rate (DEC, locaVUS$)
1985
0 3 20 6
113 0 1
-4 1
1986
633 4 P 28 56
738 111
230 207
65 94 69
1986
672 857 - 8 5
-111 33
-263
148 115
76 2
EXTERNAL DEBT and RESOURCE FLOWS
(US$ rniliions) Total debt outstanding and disbursed
1985
2,243
IDA 259
Total debt sewice 159
IDA 3
IBRD im
IBRD m
Composition of net resourceflows Official grants 75 Official creditors 66 Private creditors 35 Foreign direct investment (net inflows) 6 Portfolio equity(net inflows) 0
World Bank program Commitments 8 1 Disbursements 70
Net flows 60
Net transfers 49
Principal repayments 0
Interest payments 11
1996
59.5 43.0
217 5.3
-8.8
is95
1431 390 8 1 P8
1851 278 207 891
75 10 68
i s 9 5
1596 2,140 -544
-03 523
-154
386 -211
0 1200.4
1995
5,495 59
2,375
386 21 25
238 306 38
0 7 0
299 242 23
2 8 23
8 7
2004
12.6 14.1
30.1 9.2 -3.1
2004
2,639 638 8 0
249 4,376
592 852 1211
96 P3 80
2004
3,487 5,356 -1,869
-88 1831
-236
4 6 -mo
1815 9,004.6
2004
7,035 3
4,309
240 2
39
187 255
31 t39
0
361 230
t3 2 7 28 me
ZOO5
151 14.8
29.3 0.7 -18
2005
2,774 875 8 8 261
4,737 623 862
1399
99 0 4 80
2005
3,663 6,200
-2,536
-158 1938
-756
861 - 0 5
1992 9,072.5
ZOO5
0 4,234
2 99
305 67
239 35
204
In f l a t i on (K) 40 T I
00 01 02 03 04
-0DPdeflator -CPi
I Export a n d Import leve ls (US$ mlll.)
I 98 00 01 02 03 04 05
aExports oimponr
ICurrent accoun t balance t o GDP (X)
~ ' T
-15
C o m p o s i t i o n o f 2004 debt (US$ mlll.)
A: 3 0: 706
A - IBRD E - BilBe-BI B - IDA D. other mitilaiera, F - Private C-IMF 0 . Short-tern
Note: This table was produced from the Development Economics LDB database. 6/23/06
71
PRICES and GOVERNMENT FINANCE
Domestic pricas (136 chmgff) Consumer pnees Implicit ECP defiator
Governm~ni finance [ 56 of GDP, mciudes currrecnfgraflfs) Current revenue Current budget balance Ovaall surplugildefictt
TRADf
(us$ tW@QflS] Tutal axports {MI
cocoa Timber Manufactures
Taal imwrts Icifj food Fuel and energy Cepttal gcds
BALANCE of PAYMENTS
Wet znme Net cumnt transfers
Financiog items (net) Chamgw m net reserves
EXTERNAL DEBT arrd RESOURCE FLOWS
1985
I O 3 20 6
11 3 0.1
4 . 2
1985
633 412
28 56
738 111 230 207
65 94 69
1985
672 857
-185
-111 33
-263
148 115
78.2
1985
2 243 118 259
1 S% 18 3
75 86 35 6 0
291 70 1D 60 19 49
1995
59 5 43 0
21 7 5 3
-8.8
1995
3 $3 1 390 194 128
‘1 a57 278 207 891
75 110 68
1995
1,5Y6 2.140 -544
-133 523
-154
366 -211
0 1,m.4
1995
5.495 59
2.375
386 21 25
238 306 38
107 0
299 242 23
21% 23
197
2004
12.6 14.1
30 1 9 2
-3 1
2004
2.639 838 190 149
592 852
1211
98 123 90
4,373
2004
3.4R7 5 356
-1.R69
-198 1.83 1
-235
416 -1BQ
1.815 9,I)W 5
2004
7 035 3
4.309
240 2
39
1.817 255
31 139
0
36 1 230
13 217 za
1 ~a
2005
1s I 14 8
29 3 I O 7 - t 8
2005
1,774 875 198 261
4.737 623 e62
2,399
%! %24 80
2005
3.863 6 2M3
-2.5%
- 7 % I338
-756
86 t -f05
1.932 9$72 5
20115
I) 4,334
- D
3115 67
2SY 35
204
LC
33
2c
1ci
Export and import levels (US$ mill.)
- e =
The World Bank Group EIIS table was prepared bf mntry unit staff; Hguma rnaydtkr f m ather ‘World Bank pu&lrshed data a m m
Current account balance to GDP I%)
‘T 0
-5
-10
Composition of 2854 debt (US$ mil$.]
72
KK ww aa hh uuPP ll aa tt ee aa uu
AAkk ww
aapp
ii mm-- TT
oogg
ooRR
aann
ggee
ss
Mount AfadjatoMount Afadjato(880 m) (880 m)
U P P E R W E S TU P P E R W E S T
B R O N G - A H A F O B R O N G - A H A F O
A S H A N T IA S H A N T I
W E S T E R NW E S T E R N
C E N T R A LC E N T R A L
E A S T E R NE A S T E R N
V O LV O L TT A A
U P P E R E A S TU P P E R E A S T
N O RN O R T H E R NT H E R N
GREAGREATERTERACCRAACCRATTemaema
WinnebaWinneba
EnchiEnchi
KadeKade
PresteaPrestea
TTwifo Prasowifo Praso
TTarkwaarkwa
OdaOdaDunkwaDunkwa
KpanduKpandu
KrokosueKrokosue
DiasoDiaso
BibianiBibiani
GoasoGoaso
TTechimanechiman
YYejieji
KwadwokuromKwadwokurom
DambaiDambai
NakpayiliNakpayili
YYendiendi
GushieguGushiegu
WWalewalealewale
WWalewaleTalewaleTumuumu
NakpanduriNakpanduri
HamaleHamale
BoleBole
SawlaSawla
FufulsuFufulsu
AtebubuAtebubu
JemaJema
KintampoKintampo
MakongoMakongo
SalagaSalaga
AgogoAgogo
BerekumBerekum
NavrongoNavrongo
ObuasiObuasi
HoHo
WWaa
KumasiKumasi
TTamaleamale
SunyaniSunyani
KoforiduaKoforidua
BolgatangaBolgatanga
U P P E R W E S T
B R O N G - A H A F O
A S H A N T I
W E S T E R N
C E N T R A L
E A S T E R N
V O L T A
U P P E R E A S T
N O R T H E R N
GREATERACCRA
Takoradi
Newtown
Tema
Winneba
Axim
Enchi
Kade
Prestea
Aflao
Twifo Praso
Tarkwa
OdaDunkwa
Kpandu
Krokosue
Diaso
Bibiani
Goaso
Techiman
Yeji
Kwadwokurom
Dambai
Nakpayili
Yendi
Gushiegu
Walewale
WalewaleTumu
Nakpanduri
Hamale
Bole
Sawla
Fufulsu
Atebubu
Jema
Kintampo
Makongo
Salaga
Agogo
Berekum
Navrongo
Obuasi
Ho
Wa
Kumasi
Tamale
Sekondi
Sunyani
Koforidua
Cape Coast
Bolgatanga
ACCRA
TOGO
BENIN
CÔTED'IVOIRE
BURKINA FASO
White Volta
Kolpawn
Daka
Oti
PruTain
Bi
a
Tano
Pra
Anum
Afram
Volta
Birim
Ank
ob
ra
Bla
ckVo
lta
BlackVolta
Gul f of G uinea
LakeVolta
To Porto-Novo
To Abomey
To Sokodé
To Djougou
To Dapaong
To Tenkodogo
To Bobo-
Diolasso
To Ferkéssédougou
To Bouna
To A
gbov
ille
To A
bidj
an
To Djougou
K w a h uP l a t e a u
Ak w
ap
i m- T
og
oR
an
ge
s
Mount Afadjato(880 m)
6°N
8°N
10°N
6°N
8°N
10°N
2°W
2°E
0°
2°W 2°E0°
GHANA
0 20 40 60
0 20 40 60 Miles
80 Kilometers
IBRD 33411
SEPTEMBER 2004
GHANASELECTED CITIES AND TOWNS
REGION CAPITALS
NATIONAL CAPITAL
RIVERS
MAIN ROADS
RAILROADS
REGION BOUNDARIES
INTERNATIONAL BOUNDARIES
This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, o r any endorsemen t or a c c e p t a n c e o f s u c h boundaries.
