By Anthony Adu-Gyamfi

Nanay25@yahoo.com

In recent times capitation has become one of the most mentioned words in the Ghanaian health sector. The National Health Insurance Authority in its quest to reduce the enormous costs it bears and to ensure probably the financial sustainability of the scheme is advocating the use of capitation as a mechanism of paying the various health care providers and physicians for the services rendered to patients. But I must say that it seems the NHIA authorities themselves are not well informed about this mode of payment, its effects on both patients and the health care facilities or providers. Therefore, this article will try throwing light on this method of payment under health insurance and the effects it has on patients and health care providers.

Capitation is defined as a method of paying health care service providers (e.g. physicians) a set amount for each enrolled person assigned to that physician or group of physicians, whether or not person seeks care, per period of time. In simple terms it is used by health care insurance companies to pay health care network providers. This is usually done under guidance of Health Maintenance Organization (HMO) plans (Admin, 2010), this HMO that providers are contracted with is known as Independent Practice Association (IPA). Under capitation, health care providers go into agreement with insurance companies in our case the NHIA to provide a specified amount for each patient enrolled in the scheme. Usually this amount is paid monthly regardless of the number patient visits. The amount that health care providers are paid is based on the average expected health care utilization of that patient (the amount varies depending on the medical history of the patients). Other factors considered include age, race, types of employment and geographical location, as these factors typically influence the cost of providing care. I must say that I overheard in the media that the NHIA is paying GHC 1.70. How did they come by this amount? Were these factors accounted for? By the way, what is the average expected health care utilization of patients in Ghana?

What is the objective for adopting this payment mechanism under a health insurance scheme? It is no secret that the sole objective of this method of paying health care providers is to reduce overall costs. The question is to who? Obviously to the insurance company! The proponents of this method of payment especially insurance companies argue that when health care providers are not paid extra for additional office visits any associated medical expenses, they are likely to be more conservative with their treatment assessments. This will drop to zero the habit of inducing patient with unnecessary and costly medical procedures or prescriptions since any additional costs will have to be absorbed by the health care providers. Also, proponents of this method indicate that capitation would encourage doctors to focus on preventive care for their patients. Doctors will be more concerned with patients health status because falling sick will cost them more to treat. They would encourage patients to get healthier by losing weight, exercising, eating or to quit smoking. But I would like to know. Is this not the responsibility of the patients, insurance companies, health care providers, government and NGOs who focus on health matters so why burden the health care providers alone with this? And this is what capitation does. It must be said also that the health care providers benefit from capitation in terms of reducing administrative cost as there will no need to process and file claims here and there. But why should this be the concern of the insurance company?

However, critics of capitation (I subscribe to this view) forcefully argue that it results in poorer health care simply because when physicians or providers of health care are worried about recommending extra procedures (necessary) or medical care since they don’t want to bear the extra cost that results; the quality of the patients care will be in trouble especially if there is justification for that extra care. It must be emphasized also that capitation places much risk on the health care providers especially financial risks and it must be mentioned that the financial risks health care providers accept are the traditional insurance risks. Since providers have fixed revenues each enrolled patient makes his/her claims against the full resources of the provider (value of capitation) but it should be pointed out that Physicians and other health care providers lack the necessary actuarial, underwriting, accounting and finance skills for insurance risk management and therefore it becomes difficult for them to function well especially in our part of the world.

Capitation may discourage a Physician from providing the level of care that they would if they were paid per procedure. Providers in capitation system may want to provide good care but the financial gain conflicts with the well being of their patients. There are also incentives for health care providers to choose patients who are lower risk to avoid high risk patients who need more care thus limiting access to those patients. Will this not defeat the motive of our health insurance scheme which is based on income and not on risk as in other countries? It also undermines the trust between a physician and the patient. In the past patients felt their doctor was on their side to advocate for them with the insurance company. From the patients perspective the physician may not have switched teams.

In conclusion I would like to ask the following questions to the NHIA:
1. Why undertake a pilot project with a whole region reported to have the largest subscribers under the NHIA. How well will the project be monitored under this large scale, won’t it have been better if it was done in a district just like the insurance scheme itself?
2. How did the NHIA come up with the amount to be paid per patient? Do they know as at now the average expected health case utilization of patients in Ghana? What works did they do to arrive at that if they have the figures?
3. Have they considered all the factors such as age, sex, type of employment and geographical location that influences the cost of providing care?
4. It is said that if one finds himself outside his PPP zone such a person could seek care at accredited health care unit as an emergency case so I would like to know. What do they consider an emergency for such a person to receive care and for how long and what if he changes his residence permanently?