The National Health Insurance Scheme......

....PRIVATE VS GOV’T ENTERPRISE…. A TIME FOR CHOOSING

Recently the Minister for Health, Dr. Anane, outlined the plan for a National Health Insurance Scheme (1). He also invited the Ghanaian public to comment on it. Indeed, this is a new era in Ghana, when a political figure solicits public comments before implementing a scheme. A few days ago Alhaji Huudu Yahaya (2) of the NDC added his voice to the debate by comparing the insurance scheme to the current cash-and-carry system put in by the NDC. Of course we all know that it is always good to save for unforeseen expenses such as health. And a properly instituted insurance scheme is the way to do it. Here are a few comments from a health insurance professional.

The NPP government has repeatedly assured the Ghanaian public that this is the “Golden Age of Private Business”. The question then is why is the government ready to embark on this venture? Why can’t it act as a catalyst for the health insurance companies already operating in the country and other entrepreneurs to implement such a scheme? The rent-seekers (government workers in competition with the private sector) are probably hovering around ready to take positions in this scheme. They will risk nothing and also produce nothing but reap a lot by way of plunder. What is really surprising is that a conservative government like the NPP trying to expand the size of government instead of scaling it back like its counterparts around the world, particularly in the USA and Britain.

Ghana’s per capita income was at par with South Korea’s at the dawn of independence in 1957. It now stands at more than 30 to 1 in favor of South Korea ( 1999 estimates of $13,300 to $390). The South Korean governments over the years gave incentives to its private sector corporations such as Samsung and Hyundai, by taking a page out of the German economist Frederick List’s theory of promoting infant industries, to get them to compete on the global scene. At the same time Ghana was busy creating and running state-owned corporations such as GNTC and PWD, while ignoring the Anim-Addos and the Kasarjans who were better situated to use any help from the government. Just remember the fate of these and other state-owned corporations. After 44 years of such failures Ghana is again ready to start another one with its healthcare system.

To paraphrase the statement that killed Mrs. Clinton’s similar initiative in the USA back in the mid 1990’s: fellow Ghanaians, be prepared to pay five-star hotel prices for the unreliability of the Water Supply system, the inefficiencies of the Passport Office, bound by LEEBDA type of contracts, and put up with the dangers of the public roads, all in a one-stop-shopping at the National Health Insurance Scheme by the government

The government should rather assist the private sector to take up this National Health Insurance Scheme along the lines of Blue Cross / Blue Shield system in the USA on regional basis. The good people of Nkoranza have shown the way. Encourage the other communities to adapt the Nkoranza scheme to their own situations. Then private capital can bring each region under one umbrella for economies of scale. The private health insurance companies mandate should include a clause to insure all the people in a community that has shown some commitment to the scheme. The premiums charged should be based on the community’s risk. The government may institute laws to regulate the health insurance companies profit charges included in the premiums to be in line with other private companies with similar risk and capital requirements. The profits that will accrue to the private companies will pale in comparison to the rent-seeking, plain fraud, anti-selection and inefficiencies a government sponsored scheme will foster. Hopefully, the government’s regulation of the private health companies will be better than it has been with other private sector companies in recent years.

These private companies can obtain better savings than the government can from purchasing drug formularies and both physician and hospital services en block. A conservative government like the NPP should be able to assist the private health companies to obtain claims and administration computer systems, the major component of the initial setup cost, from the USA for next to nothing.

Besides the benefit of a better public health, a private system will be more innovative particularly with new technology, have better trained personnel and will seek a lower operating cost system because of the risk of bankruptcy, which government employees all over the world do not face. In the USA, one is always reminded of this when one has to renew a driver’s license. You always wish the McDonalds’ people will take over these outfits and introduce some efficiency. The expertise gained by these private health insurance firms can be leveraged to do both back and front end claims and administrative work for other health insurance companies in the developed countries such as the USA. Who knows, the next Tetteh Quarshie to uplift Ghana’s economy could come from this.

Try getting a processing contract for the Ghana government sponsored insurance scheme in the USA. Fat chance!

The government should direct its efforts to improving the peoples health by: maintaining better roads and highways to alleviate road accidents and sore bodies for using the roads; encourage Park and Gardens Department and the neighborhoods to grow more grass around the towns and cities to cut back on the dust; build central sewage systems and water towers around the country for better public hygiene and health. Governments do these things better than the private sector. Here the government can encourage the various agencies to competitively sell long-term bonds to SSNIT for these purposes. It will be better than hijacking SSNIT’s investment gains in mid stream. These gains are supposed to augment the future pensions of its contributors rather than support a health insurance scheme. It will also serve to better match SSNIT’s long-term liabilities and provide a better investment vehicle than SSNIT has been able to find so far.

Lastly, let us look at the question of privacy. Do you really want the government to know all your medical history? The data will be in the possession of the insurer. Imagine what will happen when political party hatchet men and women can get their hands on such data during hotly contested elections

The more one reads the Minister of Health’s statements the more one is reminded of former USA President Ronald Reagan’s speech in 1964 for the republican presidential candidate then. It is entitled “It is Time for Choosing” and certainly belongs to the ages. It may have been written for the American public but it rings true today for Ghana. It is reproduced below in its entirety. Please read and enjoy as you educate yourself to make a contribution to this National Health Insurance Scheme debate.

A Time For Choosing (3)---- by Ronald Reagan

I am going to talk of controversial things. I make no apology for this.

It's time we asked ourselves if we still know the freedoms intended for us by the Founding Fathers. James Madison said, "We base all our experiments on the capacity of mankind for self government."

This idea that government was beholden to the people, that it had no other source of power is still the newest, most unique idea in all the long history of man's relation to man. This is the issue of this election: Whether we believe in our capacity for self-government or whether we abandon the American Revolution and confess that a little intellectual elite in a far-distant capital can plan our lives for us better than we can plan them ourselves.

You and I are told we must choose between a left and right, but I suggest there is no such thing as a left or right. There is only an up or down. Up to man's age-old dream - the maximum of individual freedom consistent with order or down to the ant heap of totalitarianism. Regardless of their sincerity, their humanitarian motives, those who would sacrifice freedom for security have embarked on this downward path. Plutarch warned, "The real destroyer of the liberties of the people is he who spreads among them bounties, donations and benefits."

The Founding Fathers knew a government can't control the economy without controlling people. And they knew when a government sets out to do that, it must use force and coercion to achieve its purpose. So we have come to a time for choosing.

Public servants say, always with the best of intentions, "What greater service we could render if only we had a little more money and a little more power." But the truth is that outside of its legitimate function, government does nothing as well or as economically as the private sector.

Yet any time you and I question the schemes of the do-gooders, we're denounced as being opposed to their humanitarian goals. It seems impossible to legitimately debate their solutions with the assumption that all of us share the desire to help the less fortunate. They tell us we're always "against," never "for" anything.

We are for a provision that destitution should not follow unemployment by reason of old age, and to that end we have accepted Social Security as a step toward meeting the problem. However, we are against those entrusted with this program when they practice deception regarding its fiscal shortcomings, when they charge that any criticism of the program means that we want to end payments....

We are for aiding our allies by sharing our material blessings with nations which share our fundamental beliefs, but we are against doling out money government to government, creating bureaucracy, if not socialism, all over the world.

We need true tax reform that will at least make a start toward restoring for our children the American Dream that wealth is denied to no one, that each individual has the right to fly as high as his strength and ability will take him.... But we can not have such reform while our tax policy is engineered by people who view the tax as a means of achieving changes in our social structure....

Have we the courage and the will to face up to the immorality and discrimination of the progressive tax, and demand a return to traditional proportionate taxation? . . . Today in our country the tax collector's share is 37 cents of -very dollar earned. Freedom has never been so fragile, so close to slipping from our grasp.

Are you willing to spend time studying the issues, making yourself aware, and then conveying that information to family and friends? Will you resist the temptation to get a government handout for your community? Realize that the doctor's fight against socialized medicine is your fight. We can't socialize the doctors without socializing the patients. Recognize that government invasion of public power is eventually an assault upon your own business. If some among you fear taking a stand because you are afraid of reprisals from customers, clients, or even government, recognize that you are just feeding the crocodile hoping he'll eat you last.

If all of this seems like a great deal of trouble, think what's at stake. We are faced with the most evil enemy mankind has known in his long climb from the swamp to the stars. There can be no security anywhere in the free world if there is no fiscal and economic stability within the United States. Those who ask us to trade our freedom for the soup kitchen of the welfare state are architects of a policy of accommodation.

They say the world has become too complex for simple answers. They are wrong. There are no easy answers, but there are simple answers. We must have the courage to do what we know is morally right. Winston Churchill said that "the destiny of man is not measured by material computation. When great forces are on the move in the world, we learn we are spirits-not animals." And he said, "There is something going on in time and space, and beyond time and space, which, whether we like it or not, spells duty."

You and I have a rendezvous with destiny. We will preserve for our children this, the last best hope of man on earth, or we will sentence them to take the first step into a thousand years of darkness. If we fail, at least let our children and our children's children say of us we justified our brief moment here. We did all that could be done.