Health is Wealth by NiceTime



  Health is Wealth

    Health Insurance Scheme


       A Practical Manual

Health is Wealth, Health Insurance Scheme Damongo, A Community Based Initiative for
Health Financing

About the Authors
John Kipo Kaara, born 1959 in Bole (Ghana), was an accountant at the hospital where
the health insurance scheme was introduced. Now he is in charge of the programme.
Stefan Marx, born in 1957 in Willich (Germany), learned the merchant trade before
working for almost twelve years in the management of a hospital and then in a private
company. During his last employment, before going to work in Ghana, he was in charge
of an insurance scheme of the company.

Published by
Arbeitsgemeinschaft für Entwicklungshilfe e.V
Ripuarenstrasse 8
50679 Cologne
Phone: 0049 (0) 221 8896 – 0
Fax:      0049 (0) 221 8896 – 100
action medeor
German Medical Aid Organization
St. Töniser Str. 21
47918 Tönisvorst
Phone: 0049 (0) 2156 9788 – 0
Fax:      0049 (0) 2156 9788 – 88

Signum [ kom. Cologne

medeor, Marx, Kipo Kaara

For orders contact:
AGEH or medeor

Juni 2001


Health is Wealth
A Community Based Initiative for Health Financing
0.0 Foreword, „Health is Wealth“                                         4
1.0 Introduction                                                        7
    1.1 Health Insurance – a first description                          9
    1.2 Why is a Health Insurance Scheme needed?                       10
2.0 How to start                                                       13
    2.1 Identification of Service Provider                             15
    2.2 Legal aspects involved                                         16
    2.3 Mapping out the catchment area                                 18
    2.4 Taking population figures                                      19
    2.5 Consideration of prevailing diseases                           19
    2.6 Necessary materials for implementation                         21
    2.7 Getting people involved                                        22
    2.8 Recruitment of volunteers (Role of contact persons)            23
    2.9 Intensive education an conscientization of future members      24
    2.10 How to calculate a reasonable premium                         25
3.0 Management structure (S)                                           27
    3.1 Management team                                                27
    3.2 Education Commitee                                             29
    3.3 Advisory Board                                                 31
    3.4 Review Committee                                               32
4.0 Membership                                                         32
    4.1 How can one acquire membership by registration                 33
5.0 Termination of membership                                          34
6.0 Benefits and mode                                                  34
    6.1 Payment of all cost of the admission bill                      36
    6.2 No particular sickness is excluded                             37
    6.3 What, if patients are transferred                              38
    6.4 Admissions only – why?                                         38
7.0 Registration / Renewal                                             39
    7.1 Payment of existing premium                                    41
    7.2 Filling of Membership-/ID-Cards                                43
    7.3 Taking of passport pictures                                    44
    7.4 Why a waiting period?                                          45
    7.5 Open or closed registration period                             46
8.0 Short summary                                                      47
    8.1 Final remarks                                                  48

0.0        Health is Wealth
   The German Association for Development Cooperation (AGEH) and
the German Medical Relief Organization – action medeor – are joint pub-
lishers of the present practice-based report on the establishment of a sus-
tainable health insurance scheme in Ghana. Both organizations are in-
volved in the program in different ways.
   The authors, Stefan Marx and John Kipo Kaara, describe the experi-
ences they have had in planning, implementing and operating an insur-
ance scheme in Damongo. action medeor and the AGEH would like to
play a part in disseminating these experiences. Accordingly, the booklet
is addressed to people or organizations intending to set up an insurance
scheme or seeking new directions for an existing program.
   As a practical manual the booklet includes questions to the reader and
useful tips. With this approach, AGEH and action medeor offer a source
of help to all those with an interest in health insurance schemes. The
book does not encourage direct imitation. Much rather, it is intended as
“food for thought”.
   And the reader finds “food for thought” in abundance. How are the
premiums calculated? How are members recruited? What makes the mar-
ket place or a site in front of the Bank good places for collecting premi-
ums? What statistical information needs to be gathered during the plan-
ning phase? What basic preconditions must exist for an insurance scheme
to serve any purpose? Anyone interested in how to cut down abuse of an
insurance scheme will find advice here, as will the reader in search of the
necessary “starting kid” for such a program. What qualifications do the
permanent employees require, and how can voluntary workers be moti-
vated? How can non-readers be informed about the program? And how
is it possible to identify members of the insurance scheme?
   As further “food for thought”, the booklet also addresses legal aspects,
the relationship with government health care institutions, cooperation
with schools and commercial enterprises, and the relationship between
insurance schemes and preventive health care.
   The book is written in English with good reason. Advance orders have
already been received from other countries in Africa. This is another con-
tribution to the South-South exchange of experiences.
    The background to the program is unmistakably identifiable. Health is
a valuable resource. In most African countries, unfortunately it is a re-
source that very few people can afford. Too often, the cost of hospital in-


patient treatment is prohibitive. A hospital stay can have a disastrous im-
pact on the economic situation of a patient and his or her family.
   The consequence is, that people who cannot afford the hospital care
they need, are always left to choose from a range of fundamentally bad
options. They are forced to do without hospital care, at a cost to their
health. They or their families go into debt to enable the treatment. They
decide not to pay the hospital bill, which ultimately leads to financial ru-
in for the hospitals. They rely on charity, which keeps them dependent
and degraded by having to plead for help.
   A similar situation also existed in Damongo. On the one hand the ma-
jority of people living in the region could not afford in-patient treatment.
The occupation rates in the existing, well-run mission hospital were in
decline. The state of people’s health was deteriorating. On the other
hand, the hospital found itself facing a drastically rising number of un-
paid bills.
   Under the responsibility of the Archdiocese of Tamala – later the Dio-
cese of Damongo – a process was initiated to set up and establish an ap-
propriate insurance scheme. The aim was to put people without access
to hospital treatment in a position to finance in-patient treatment them-
   From the outset, the program financed by Misereor, the German
Catholic Bishops’ Organization for Development Cooperation, relied on
the strong participation of the people whose health was at stake. Their
opinions were surveyed and the solutions they put forward substantially
shaped the program. At the same time, intensive contacts were forged
with traditional decision-making bodies and state institutions. Later
schools and private companies were approached. All this served to un-
derpin and embed the program.
   From the very start it was clear that the aim should be to bring about
lasting structural improvements. This includes the greatest possible de-
gree of financial sustainability. And another thing was important to par-
ticipants from the beginning: there should be no question of importing
instant solutions from elsewhere. This did not rule out making use of ex-
ternal know-how. One of the authors, Stefan Marx, a qualified expert
supplied by the AGEH and financed by Misereor, was able to bring valu-
able past professional experience to bear.
   For action medeor as a specialist organization for health development,
the health insurance project in Damongo complements its traditional task
of supplying medicines. This example demonstrates the development of


the German Medical Relief Organization – action medeor -from an or-
ganization supplying medicines to an organization promoting sustainable
health care. Since 1964, action medeor has provided people all over the
world with vital medicines and medical equipment and supports more
than 11000 health centres in 157 countries. In recent years action mede-
or has gone beyond supplying medicines and now also supports coun-
tries in setting up viable and sustainable health care systems.
   It is vital that people in such places can afford to take care of their
health and make provision for emergencies. Thus action medeor con-
tributes to strengthening self-help capacities. Cooperation with local or
European partners, for instance Aktion Canchanabury, contributes to the
success and more importantly the sustainability of such a program. The
diverse partnerships and cooperation initiatives help towards the common
aim of safeguarding the basic right to health for the poorest people in the
   Over the years approx. 32,000 people have joined the insurance
scheme. This shows the high level of acceptance from the population and
by governmental and non-governmental institutions. The figures prove
that the members value their program because it improves their situation.
The members themselves often perceive a clear indicator of this. When
the need arises, they can take up in-patient hospital treatment without un-
due anxiety, whereas perhaps their neighbors cannot.

  We will be glad if this book fulfils its purpose and provides the reader
with “food for thought”.

Michael Steeb                                      Bernd Pastors
AGEH                                               action medeor
Director                                           Director


1.0     Introduction
   This booklet is based on the experience of the authors in operating a
community-based health insurance scheme in the northern part of
Ghana. The idea to establish the West Gonja Hospital Health Insurance
Scheme came up in July 1992. Hence, in the last six years we have been
engaged in implementing the project, with a pilot phase of three years
from 1st October 1995 to 30th September 1998.
   With this period having ended, it is time to evaluate the effectiveness
of the scheme and to consider those aspects of it, which did not run well.
The evaluation shows that the program meets the
immediate health needs of the people. More
than 95% of the members would be ready
to pay a higher premium in order to
keep the scheme running (according to
own evaluation). We have been able to
replace a system of ad hoc solutions to
the medical problems of the inhabitants
with one of a lasting and preventive char-
acter. Everyone now has the opportunity to take
care of his or her health needs, whereas previously one would have had
to pay out of the pocket or depend on charity in the time of need.
   The success of the scheme has been due to the fact that the members
have been involved, from the onset, in its planning and implementation.
Although without previous experience, they actively contributed to the
scheme, by openly appraising their own situation and voicing out hopes
and expectations.
   We have tried as much as possible, in this booklet, to give the reader
a correct insight of how the scheme was designed and implemented. Be-
fore starting this project at Damongo, there has already been a similar
health insurance scheme at Nkoranza in the Brong-Ahafo Region of
Ghana. Meanwhile, people have come forward with various suggestions,
while the Government of Ghana has also planned to introduce a Nation-
al Health Insurance Scheme on a pilot basis in the Eastern Region. This
scheme however may follow a different approach and it may be consid-
ered as modeled on existing schemes in Europe.
   The various chapters of this booklet should assist as „food for thought“


in establishing a project of this nature. The reader might already be aware
of some of the issues presented in this booklet. However, we have been
able to draw on the experience from other areas for the West Gonja Hos-
pital Health Insurance Scheme.

For further suggestions, remarks, questions etc. please contact:
        The Coordinator
        Health Insurance Scheme
        West Gonja Hospital
        P.O. Box DM 18
        Damongo - N/R
        Phone: 00233 - (0)717 - 22086 or 22001

You may also contact:
      AGEH e.V.
      Ripuarenstraße 8
      50679 Köln
      Phone: 0049 - (0)221 - 8896/0
      Fax: /100
      action medeor
      St. Töniser Str. 21
      47918 Tönisvorst
      Phone: 0049 - (0)2156 - 9788/0 Fax: /88


1.1     Health Insurance – a first description?
  Speaking about Health Insurance Schemes in Europe (Germany) and
in Africa is speaking about two entirely different situations.

Health Insurance in Europe
   First of all, if you look at the way health insurance systems are oper-
ated in Germany, you should bear in mind that health insurance was in-
troduced there more than one hundred years ago. Therefore a lot of ex-
perience has been gathered in running the system.
   In Germany today, out of a population of about 81 million, 71 million
are compulsorily insured. The remaining are members of many voluntary
insurance schemes. These people are either self-employed or higher in-
come earners. They pay a fixed monthly contribution into the scheme
they belong to. Those compulsorily insured pay about 7 % of their
monthly gross salary, with the employer contributing a similar propor-
tion, into the scheme. The amount is deducted at source and paid straight
into the particular scheme (s), where the employee is insured. One can
actually speak of a 100% coverage, as everybody is, in one way or the
other, covered under an insurance scheme. Women and children in the
family, when the husband is the sole income earner, are covered by the
man’s insurance. Retired people are covered through a deduction, from
source, of a percentage of their monthly pensions. Farmers are also cov-
ered by their own scheme (s). In the case of unemployment, a certain
proportion of the unemployment benefit is deducted and paid into to the
scheme. For people with no income at all, i.e. those living under social
welfare, the cost of the health insurance is borne by the Department of
Social Welfare. Doctors, hospitals and pharmacies claim their expenses,
or any other costs, straight from the scheme of the insured. In the last few
years, however, patients have had to bear certain cost themselves or
must pay a certain percentage of their medical cost. The days are gone,
when there was a hundred percent health insurance coverage in Ger-

The Situation in Ghana
   In Ghana today, with a population of about 18,5 million, there are on-
ly some schemes operating on a voluntary basis to cover the cost mem-
bers’ in-patient hospital treatment. A national health insurance scheme is
planned to be implemented on pilot-basis in one of the regions. There


are also commercial insurance companies, operating in the country. Many
of them have policies for health insurance.
  The first two examples of a community-financed health insurance
scheme in Ghana are at Nkoranza (started 1992) and at Damongo (start-
ed 1995).
  Contributions are collected from subscribers or policyholders, referred
to here as “the insured”, “members” or “clients” at a fixed premium for 12
months and kept in a „common pool“. When a member is ill and admit-
ted in hospital, the expenses for admission are paid from the pool.
  These two schemes cater, up to date, only for in-patient treatment, the
expenses for out-patient treatment at the hospital must be borne by the
  One cannot equate the latter schemes with a solidarity system in Eu-
rope. The premium is paid at a flat rate, irrespective of the level of in-
come of the subscriber.

 Question for discussion:
 1. Are there already existing schemes in your country or sub-region?
    (government, private, church, other non-governmental organizations)

1.2            Why is a Health Insurance Scheme needed?

The day-to-day situation without an Insurance Scheme
   The reason is obvious why the hospital authorities were asked to ex-
plore the possibility of establishing a health insurance scheme at Da-
mongo: The indebtedness of patients towards the hospital has been con-
stantly rising over the years. In the case of indebtedness, patients were
usually obliged to reach some agreement of payment with the hospital,
for which they had to provide an acceptable guarantor to the hospital.
Sometimes employees of the hospital have had to stand surety for pa-
tients. The experience with this kind of situation has not been very pos-
itive; especially hospital staff have had to shoulder responsibility for
„their“ patient’s failure to pay their bills.
   In addition: WHO (World Health Organization) recommended in the
World Health Report 2000 pre-payment schemes as ultimate way for poor
people to get access to health services and as a tool to fight poverty.
   The statistics for the years 1996 – 2000 show, that the considerable de-
crease of the outstanding amount is related to the implementation of the


scheme. The West Gonja Hospital Health Insurance Scheme is ready to
provide the figures on request.

            Patients owing to the hospital
                                     AMOUNT in Ghanaian Cedi
              Year                (7.000 Cedi – about 1 US$ / 2001)
              1991                            4,579,600
              1992                            2,957,500
              1993                            3,020,400
              1994                           15,431,400
              1995                           17,182,000

            Admission cases at West Gonja Hospital
              Year                   No. of Admissions
              1991                         3,136
              1992                         2,726
              1993                         2,180
              1994                         2,083
              1995                         2,248    starting point of the scheme, pilot phase

              1996                         2,802
              1997                         3,070
              1998                         2,828*
           * In 1998 there was an outbreak of cholera which hindered
             the admission of surgical cases. (Figures are taken from West
             Gonja Hospital)

   From the above figures, one can see that as the outstanding bills in-
creased and the number of hospital admissions declined. Studies at the
village level have revealed that this situation is not due to the fact, that
people now getting healthier. The simple fact is, that they don’t have the
financial means to go for hospital treatment. Also the figures proof, that
the admission cases increased as soon as the scheme started.
   A second group of people tries to obtain financial help from friends
and relatives before going to the hospital for medical treatment. Some of
them thus arrive there very late, when the illness has already worsened.
Others try to see a herbalist or traditional healer and only report at the
hospital, if their health does not improve. It should also be mentioned
here that for the treatment of fractures, people in this area prefer local
healers (bone-setters) – in many cases with positive results.


  The biggest problem for the hospital concerns those patients who ab-
scond. These are referred to as „run-aways“ or „self-discharged“, who, for
the hospital, are almost impossible to be traced. They might even have
given false particulars on admission. Some patients also leave some per-
sonal belongings behind, with the explanation of coming back soon to
pay their bills, only to later abandon them. At times staff are sent around
to trace some of these „absconders“. Often they ended up wasting time
and fuel.
  Another group of so called „charity seekers“ go to the SSpS Sisters, the
Congregation that manages the hospital, to plead for financial assistance
to enable them to pay their bills. As donor assistance to the congregation
was dwindling, the sisters found it extremely difficult to support this cat-
egory of patients. In as much as this dependency syndrome may not be
acceptable, some of the patients later provided services to the hospital in
the form of labor etc. to defray their indebtedness.

Insurance Scheme versus Charity-oriented Approaches
   Against this background of difficulties in settling hospital bills by this
category of people ( hard-core poor, „financial aid seekers“, „absconders“,
„charity seekers“ etc.) therefore, there was the need for an insurance
scheme to address these concerns. It would serve the needs of all parties,
those of the service provider (hospital), to ensure payment for services
rendered, and the needs of the patients, to enable them to go to the hos-
pital if needed and to ensure prompt settlement of their hospital admis-
sion bills. We observed that an insurance scheme also serves as a means
to poverty alleviation at the community level.

Complex of Problems
   Insurance schemes lay claim to enable poor people to get access to
health services and to be a efficient tool in the fight against poverty. As
consequence any scheme has to find ways to include the poor people in-
to the scheme. During the planning phase of any prepayment scheme at-
tention should be paid to the question, how the premium should be de-
signed, to give the chance for joining the scheme not only to the “well
off” but also to the poor.
       Members of the scheme may initially decide on the time of the year they have
       money at hand (e.g. small scale farmers/harvest), if they are not regular in-
       come earners. This should enable them to cater for their health needs, as re-
       newal of membership will always be at the same time of the year.

                                                                      How to start

Questions for discussion:
1 How does “your” institution/hospital retrieve outstanding bills?
2. Is the system working effectively? In other words, are you conversant with
   such kind of problems as described above?
3. How can people with very limited financial means be integrated into the

   If you think that an insurance scheme could be a beneficial instrument
to the community and in particular to the poor, then you may wish to con-
tinue reading this booklet, if not, you may stop here and save your time.

2.0     How to start
The following factors should be taken into account when starting a
Health Insurance Scheme:
  a) the need for it
  b) a good service provider (e.g. a hospital)
  c) legal framework
  d) community participation from the start
  e) adequate personnel/logistics

Only if there is the need
   If members of the community can afford to pay medical expenses,
there is no immediate need for a scheme of this nature. But in view of
the fact that there is no society in which every person is well off and can
afford basic necessities, a scheme as this kind is inevitable. A Health In-
surance Scheme is to help people who cannot otherwise pay for their
medical treatment.

Is there a efficient service provider?
  There should be an efficient service provider, e.g. a hospital. If there is
no institution to render the required health services, a health insurance
scheme should not be started. The better the quality of services of the
health institution, the more attractive is the scheme to the members.

Trust pays
   In the case of West Gonja Hospital, people come to the hospital from
far distances, even up to 100 km, for medical treatment. This is due to

How to start

the hospital’s high reputation. This also accounts for the considerable
number of people registering with the scheme, even though there are oth-
er hospitals in the area. Therefore, a reliable and good service is the nec-
essary precondition.

Legal Framework
  There is the need to be conversant with legal aspects regarding Health
Insurance Schemes in the country where the scheme is operating. (!2.2)

Participation of the local community
   The local community must be involved in the planning and implemen-
tation of the scheme. If the population believes that the scheme is there
to assist them, they will be interested in its proper implementation. Where
this involvement is sought and obtained, the community in the long run
views it as the guarantor of high quality health service in their area.

      Ask the local community for advise how to include the very poor into the

Qualified personnel
  The question of adequately trained personnel should not be underesti-
mated. If you cannot recruit at least one experienced staff for your pro-
gram, irrespective of differences in health insurance systems, you should
engage a specialist institution to assist for some time. Ad hoc visits will
not help and can even become a burden for your program.

      Allocate a budget and time for proper studies and planning.

 Questions for discussion:
 1. Are inhabitants in “your” catchment area able to cater for their hospital
 2. Is your service provider (hospital) attractive enough to make people put
    their contribution into the scheme?
 3. Does “your” institution enjoy the trust of the population?
 4. What are the legal requirements of the country you want to operate your
 5. How best do you think you can get the local community involved?
 6. Do you have the requisite personnel to start the scheme or do you need out-
    side assistance?
 7. Could you imagine any cooperation with governmental institutions?
                                                                       How to start

2.1     Identification of Service Provider
A Health Insurance Scheme of our type is a tripartite venture as present-
ed in the diagram below:

                              Service Provider

      Beneficiaries                                      Implementers
       (Patients)                                          (Scheme)

   The most important aspect of any health insurance scheme is the Ser-
vice Provider. If there is no institution e.g. hospital, to render the service,
then there is no way for the
scheme to take off. If the in-                                                        Identifica-
stitution has a good reputa-                                                          tion of
tion in the area of operation,                                                        provider –
this will encourage people to                                                         Entrance to
                                                                                      West Gonja
register to become members,                                                           Hospital
as they can be assured and
convinced of quality health

Common understanding/
shared vision
   The Service Provider could be church or government-related or a pri-
vate health institution. The aims and objectives of the scheme should be
understood and accepted by all parties involved. For example, where one
party does not favor certain procedures, such as abortion, but the other
party finds nothing wrong with it, then there is bound to be a conflict of

Proper contract
   To avoid misunderstandings or misinterpretations, it is much better for
the parties to have a common agreement as a reference point. The situ-
ation in which the insured may want to defraud the service provider and
the implementing institution of the scheme should not be overlooked.

How to start

Guaranteed standards/quality management
   Certain standards should be agreed upon as a basis for a successful run-
ning of the scheme. The service provider should also guarantee availabil-
ity of basic drugs. This will ensure that the „pool“ of the scheme is not
depleted due to negligence. If possible you should agree on a list of es-
sential drugs.

      To avoid annoying debates between the service provider and the scheme
      both of the parties could agree on fixed standards such as: flat rate for treat-
      ments e.g. appendectomy or maximum duration (days/weeks in the hospital)
      for treatment of certain health problems. Also the scheme and the provider
      could lay down the modalities of imbursements (scheme to provider) in ad-
      vance. Such agreements increase the transparency and enable both of the par-
      ties to calculate on a more secure basis.

Be aware of Abuses: Trust versus Control
   If the service provider (e.g. hospital) wants to derive undue benefit
from the scheme, it could over-prescribe or keep patients unduly long on
admission. Alternatively, casualty cases may be retained for more than 24
hours, in order to get the bill settled by the insurance scheme.

 Questions for discussion:
 1. How would you design the contract with the service provider?
 2. Does your service provider have an essential drug list?
 3. How can you ensure that patients do not stay unduly long at the hospital?

2.2            Legal aspects involved

   In Ghana, as well as in most other countries, it is required by law to
register every business/enterprise with the Registrar General’s Depart-
ment or with a similar government institution. This gives the business cer-
tain legal rights, but also obligations. Law as a legal entity then recognizes
the company. This is certainly necessary. This enables non - fulfillment
of agreement to be redressed through the law courts.

 Certain standards or qualifications are required by law for a legal agree-
ment. Therefore, the aims and obligations of the scheme must be written

                                                                          How to start

down in the form of a constitution. In this respect, the scheme must, first
and foremost, make it’s own laws, by-laws, rules, and regulations. This
must be well explained to and understood by any interested person or
potential member.

    A constitution must be drawn up, taking into consideration a brief descrip-
    tion of the situation. It must indicate the name, purpose or objectives of the
    scheme, general conditions of service, membership and termination,
    fees/premium, organization and management, finances, accounts and audit-
    ing, benefits, amendment procedures etc. The constitution must not come in-
    to conflict with the customs and practices of the traditional set-up of its lo-
    cation of operation.

The Health Insurance Scheme of West Gonja Hospital
(H.I.S. / W.G.H.)
   The Health Insurance Scheme of West Gonja Hospital (H.I.S. / W.G.H.)
is a department of the hospital. The judicial power, that established the
hospital, also apply to the scheme. No registration with the Registrar Gen-
eral’s Department is required. The scheme has, however, its own consti-
   It has a separate account from that of the hospital. It also has a sub-
management team. The separate account and sub-management team
should ensure that the scheme is accountable to the members and not to
the hospital.

Questions for discussion:
1 Do you want to establish the scheme as a department of the service
2. If you want to run your scheme independently on private basis, what does
   the law of your country require ?
3. What kind of people do you want to recruit to draw a constitution and
   which bodies/organizations should be represented ?
4. Who should be signatories to the scheme’s accounts?

How to start

2.3            Mapping out the catchment area

Better to start small
   A good knowledge of the area of the program is necessary in estab-
lishing a project of this nature. The condition of the area will determine
the kind of logistic that is required in the execution of the project. The
catchment area of the Damongo Health Insurance Scheme has expanded
in radius from 10 km in the first year to 20 km in the second year and to
40 km in the third year.

Rules and Flexibility
    It is advisable to determine the catchment area in cooperation with po-
litical, religious and opinion leaders, as we did in 1993 and 1994. Similar
to our situation, it might be difficult to exclude some communities locat-
ed about two kilometers outside the catchment area, if they are very close
to a village or community in the catchment area. Another example may
be a department or company outside one of the planned phases, which
would like to be included in the project from the onset. Laying down the
bounds of the catchment area therefore needs flexibility and consensus of
the parties involved.

  In the particular case of W.G.H., there is a company whose employees
are scattered within and outside our catchment area. The company has
expressed the desire to join the scheme.
  The inclusion of such a high profile employer in the scheme raises the
confidence of the community in such a venture.

 Questions for discussion:
 1. Do you want to start your scheme in stages or are you in a position to
    cover immediately the entire catchment area of the institution?
 2. Who is going to decide on applications of villages, communities or employ-
    ers to participate from the beginning? (administrative structure of the

                                                                            How to start

2.4       Taking population figures

! Important for the calculation of the premium!
  Even if you know your area of operation quite well, you need proper
population figures to start with, which you are likely to obtain from var-
ious sources. However, depending on official census figures, and then
making adjustment for annual population growth of the area, may not be
adequate. If, for example, you operate in a city, where rural-urban mi-
gration is quite high, it will be difficult to get an estimate of the number
of people living there.

      For reliable data, the contact persons of the various communities and villages
      are helpful.
      They can be the best source of information on population figures if they can
      read and write and if they are trained properly. You may also get an estimate
      by comparing the figures of different sources. They can serve as a basis in
      assessing the number of people who might be interested in joining the

Questions for discussion:
1. Do you have reliable population figures available about your catchment
2. If there are reasons for high fluctuation, what strategy do you choose in get-
   ting realistic data about the people within your area of operation? Whom
   can you ask?

2.5       Consideration of prevailing diseases

! Important for the calculation of the premium!
The following factors also will determine your calculation of the insur-
ance premium:
  a) the most common or prevalent diseases
  b) the age group of the patients
  c) where do the patients come from
  d) what time of the year does the hospital register the highest/
     lowest number of patients
  e) the average amount of bills for admission/average cost of treatment

How to start

    These factors raise the relevance of a medical health certificate as con-
dition for registration. In the case of WGH/HIS there was no medical cer-
tification as a requirement for registration. However, the danger is, that
people will be tempted to register those members of the family, who are
frequently ill as requiring health insurance. WGH/HIS took the above
mentioned factors into consideration. But our aim was the coverage of all
the inhabitants of the catchment area by the insurance scheme. Further
more, we believed that nobody could determine for another person when
to and when not to fall ill. In this regard, we have been proved right in
the three years of operation. Those who, among the family members,
claimed that they were in good health were the first to go for admission
after being insured. Most of them only registered during or after admis-
sion at the hospital.
    A study of the statistics of the previous years points to a number of in-
teresting factors. There are months of the year, especially during the rainy
season, when malaria is the rampant cause of admissions. Similarly, we
noticed that there were periods when snakebites were quite often. The
monthly statistics of the service provider can give a lot of vital informa-
tion. The annual admission figure will give a ratio of admissions to the to-
tal number of registered members.

      After the scheme is fully established, it is advisable to combine publicity cam-
      paigns with preventive measures. As demonstrated with video films about
      HIV/Aids or the measuring of blood pressure at registering etc., people can
      be informed about the prevention of certain diseases. In the long run, this can
      lead to an enormous reduction of cost and an to improvements regarding the
      health of members.

 Questions for discussion:
 1. What are the most common diseases of members within “your” community?
 2. Do you intend to register all interested people irrespective of their health
 3. Is there any way to involve the people in the active prevention and how do
    you want to incorporate this important task into your work? (education

                                                                     How to start

2.6     Necessary materials for implementation

Starting kit
The logistical requirement for any health insurance scheme may include:
- the means for identification, i.e. numbered registration forms, camera
  to take photos, etc.
- educational literature in the form of hand-outs
- Videos, music, posters, talks etc. for information/promotion/prevention
For a start, the West Gonja Health Insurance Scheme :
- got an effective and reliable service provider
- recruited permanent Staff and Volunteers
- acquired education materials: video deck, TV, portable generator, pro-
  motion materials like T-Shirts, cotton shopping bags, lighters, pens etc.
  with the logo of the scheme
- procured transport: a vehicle equipped with public address system
- formed an Education Committee
- formed an Advisory Board
- incorporated within local structures (governmental, non–governmental)
- acquired offices to accommodate the health insurance department, and
- sourced initial funding

  The required equipment will depend on the design of the scheme.
Nevertheless, anything available to get your information across to the tar-
get groups should be used. To enable the contact persons to make a
proper assessment of their communities, they need to be provided with
certain inputs. This can make a positive impression on the villagers, as
they can see, how serious and effective the organizers of the scheme are
going about with their work.

Questions for discussion:
1. What materials do you need for the various stages of introducing a health
   insurance scheme and where and how do you get them?
2. In which ways do you want to get your information across?

How to start

2.7            Getting people involved

     b) HEADS OF DEPARTMENTS (Government)

  Experience has shown that a project or an idea, that is imposed on the
people, never works. It may even end up having some devastating results
on community level. Therefore, it is better and necessary that all parties,
including the beneficiaries, should be involved in it from the onset. De-
pending on the situation of the area, the following institutions/people
should be involved in the program:
- Heads of Government Departments
- Chiefs/local authorities
- Opinion leaders in the area
- Voluntary organizations
- Political and religious leaders etc.

      A thorough study of the situation is necessary to be able to assist the people.
      Let them realize that they are solving their own problem and that they are re-
      sponsible for their actions and omissions. As the traditional system is still
      strong in certain parts of Africa, its leaders should be involved in the program
      as much as possible. You might have a common approach to the solution of
      their problems, while their confidence will be won, particularly if they have
      identified the problems themselves. The leaders, traditional, political, reli-
      gious or otherwise, are the direct channels of communicating with the peo-
      ple. An opportunity for you to address these people can bring a positive psy-
      chological effect. It is advisable to get church and political leaders involved
      in the scheme/program. Through them –in our case - it was possible to get
      the audience of the people.

   While political and religious leaders can be reached at meetings, con-
tact with traditional rulers should be approached in a different manner. It
is a traditional custom in Ghana that a person on an important mission
may seek the audience of the traditional ruler and pay him his respect.
Quite a number of traditional rulers within “our” catchment area need an
interpreter to communicate in English. This may be quite difficult at meet-
ings involving large crowds. One may decide to communicate with the
traditional leaders in the native language, which is even preferable.

                                                                     How to start

Questions for discussion:
1. Which important people/groups in the area are to be contacted/involved?
2. Which of them could be appropriate in informing the people about the aims
   and objectives?
3. What is the appropriate way to approach the various people/groups?
4. How can people with leadership roles be convinced to play an active part
   in setting up and promoting the scheme?

2.8     Recruitment of volunteers
        (Role of contact persons)

Investment in volunteers payment
   The success or failure of a scheme may be determined by the kind of
the contact persons (volunteers) working at the community or village lev-
el. Experience showed, that zones or villages with industrious contact
persons recorded the highest number of registrations and renewals. The
villages were better informed about the project.
   The chiefs and elders were asked to nominate reliable people as con-
tact persons and their assistants. They worked on a voluntary basis. The
contact person is the link between the community and the management
of the scheme. A contact person must therefore be of reputable charac-
ter in the community. The scheme, as an organization, has the duty to
give the contact person adequate training to enable them to perform their
duty effectively. Although on a voluntary basis, it is advisable to think of
incentives. The Damongo Scheme, for example, held meetings with the
volunteers for discussions and feedback regarding the performance. The
best performing contact persons were then rewarded. To think of incen-
tives does not mean to think
in terms of money only.                                                             Training of
   Initially, the contact per-                                                      Contact
sons were required to com-
pile a list of potential mem-
bers of the scheme. They
were asked to take down the
names of all inhabitants in
their communities or villages
and isolate those who were
interested in joining the

               How to start

               scheme. This already gave the accurate population figure to start with.
               The contact persons were introduced to the communities during the train-
               ing period. They quickly understood, that the contact persons were work-
               ing in the interest of the communities.

               Go to the people
                  Any time the scheme wanted to interact with the communities, the mes-
               sage was channeled through the contact persons. Also it is important to
               find out which particular days were most appropriate for visits. Whenev-
               er the communities were properly informed by the contact person, there
               was a high attendance.

                Questions for discussion:
                1. If you want to engage contact persons at village/community level, do you
                   want to or are you in a position to compensate, or are they to work on a
                   voluntary basis? What kind of incentives are possible?
                2. What are your criteria for candidates to become contact persons?
                3. How and where can they be trained?
                4. Important: if they work on voluntary basis, how can they be motivated?

               2.9            Intensive education and conscientization
                              of future members

                  As described earlier, the scheme found out at the village level, why
               hospital admission was declining over the years. When the aim of the
               project was understood by the communities, they showed great interest
               in assisting in finding solutions to financing their health related problems.
               People were ready to help in whatever small way possible.
Advertising                                                     The West Gonja Health In-
       your                                                  surance Scheme started with
  scheme is
                                                             village meetings of the chiefs
(signboard                                                   and elders. This was followed
   near the
                                                             by meetings with the commu-
                                                             nities, where the reasons for
                                                             the declining hospital atten-
                                                             dance were enumerated and
                                                             discussed. Some promotion
                                                             items, such as T-Shirts, stick-

                                                                       How to start

ers, lighters, waist-bags, pens and umbrellas, all bearing the logo of the
scheme, were displayed and offered for sale. A video film of a drama play
at the West Gonja Hospital and other health-related films were shown.
The students, who performed the drama, also sang songs about the
scheme in the various indigenous languages. The songs were played on
loudspeakers to propagate the scheme to communities. As the people
became more informed about the project, their interest in it increased.
   Consultations were held with heads of institutions, schools were visit-
ed to introduce the scheme to students. Meetings were held at market
places to meet the people where they are. Handouts were also circulat-
ed, informing the people what they could expect from the scheme – and
what they could not expect (the ‘dos’ and ‘don’ts).

Questions for discussion:
1. How can the people be informed about the scheme (booklets, role plays,
   posters etc.)?
2. Which group of people can you get involved to get the message across?
3. What kinds of media are available for an education and information

2.10    How to calculate a reasonable premium

Reliable population figures
   The initial premium is one of the most important issues in addition to
the availability of a reliable service provider. The calculation of the initial
premium is not a guess work but rather a time consuming affair. Since
the catchment area in the beginning might not extend to the entire catch-
ment area of the hospital, it may be advisable to study previous records
in determining the starting premium. Using the population figures of the
area, it may be possible to get an estimate of hospital admissions. If the
figures are acquired from other sources, one should better crosscheck
them on the spot, possibly with the help of volunteers. Community mem-
bers can be of great help in this exercise. They know the number of peo-
ple living in the various compounds of their villages. If population fig-
ures fluctuate, for one reason or the other, one should try to verify it one-

How to start

Relationship between population figures and attendance
A bit of theory and mathematics is needed
  Population figures for at least 25 % of the inhabitants of the catchment
area should be used for comparison between population and hospital at-
tendance. It is advisable, in this respect, to use the rate of hospital atten-
dance of, at least, the last three years. If you have the estimate of the num-
ber of people who could not attend hospital for lack of money, you may
increase this estimate by the percentage that admissions dropped during
the last years. Assuming you have figures showing that, on the average,
about eight out of a hundred people (8%) went on admission, then you
should multiply this figure with the average in-patient bill. This figure will
show you how many, out of hundred people, must contribute into your
„pool“ in order to be able to take care of the bills of eight patients. If you
want to achieve financial independence from the beginning, you will
have to add other positions e.g. running cost and personnel emoluments.

Initial Premium
   If you receive subsidy from the beginning, as the West Gonja Scheme
did, e.g. from Misereor, it may be possible to get a lower (subsidized)
starting premium. Especially in an area where people are poor and not
yet used to the operation of such a system, this could be of great advan-
tage. Your aim should be letting as many people as possible to become
members of your scheme. Those, who register in the beginning, are the
very ones to propagate the scheme in their villages and far beyond. If you
are in need of financial subsidy for the initial premium, then you should
inform/consult your subscribers. They should be aware that, even if the
scheme runs smoothly, the premium would gradually rise in the future as
your donor support is scaled down.

More than one way to be attractive
   The premium also may depend on the level of the coverage. You may
decide to refund less than 100 % of the admission bills, in contrast to the
way, H.I.S. used to operate. You may request your members to shoulder
a basic fee for admission or bear a proportion of the bill. Another formu-
la could be in the form of different levels of premium for different levels
of health coverage. You may decide to refund ten times the amount of
premium of a patient’s bill. However, we started by refunding the com-
plete bill, as this was feasible from the beginning. If you make your sys-
tem too complicated in the initial stage, it might discourage people from

                                                                  Management structures

joining it. The administrative aspect of a complicated system should not
also be overlooked. In the course of time you may reconsider certain as-
pects for amendment.

Questions for discussion:
1. Do you have accurate population figures of your catchment area?
2. Can you rely on your service provider for accurate data on in-patients
   of the previous years or do you have to find it out yourself?
3. How do you calculate your premium?
4. Should the scheme pay for the total cost of admission or not? In which way
   do you want to limit the scheme’s obligations?
5. Do you go for a self-financing or a subsidized scheme? How long should it
   be subsidized and by whom?

3.0     Management structures
   The Health Insurance Scheme is a department of West Gonja Hospital,
Damongo. The only difference between it and other departments of the
hospital is, that there is a separate account for the scheme. This is to en-
sure proper record keeping and reporting. According to the constitution,
a quarterly report must be submitted to the service provider (West Gon-
ja Hospital Management Team) and the supervising body, which, with re-
gards to West Gonja Health Insurance Scheme, is the Executive Secretary
of the Diocesan Health Committee (DHC) of the Diocese of Damongo.

Questions for discussion:
1. What kind of structure would be the best for “your” program?
2. Do you want to integrate the program in existing structures?
3. How can your set-up be integrated into the existing structures?

3.1     Management team

  The Management of the West Gonja Health Insurance Scheme com-
prises of the Senior Medical Officer of the West Gonja Hospital and the
Coordinator and Assistant Coordinator. As the Senior Medical Officer is a
member of the Hospital Management Team (HMT), this person is an im-
portant source of vital information about the hospital’s policies. For a

Management structures

smooth running of the scheme, it is essential to be informed about measures
being planned by the HMT, e.g. any impending change in admission
charges. If, for example, the hospital increases the charges of its service, it
has an immediately effect on the budget of the insurance scheme. As the
West Gonja Health Insurance Scheme is operated with a waiting period of
three months, the cost structure of the hospital should only be changed up-
on agreement by the two parties. There are other decisions that can affect
the running of the scheme, e.g. services not available throughout the year
but offered from time to time. If a dentist, a team of ophthalmologists, or-
thopaedic or plastic surgeons were offering services to the hospital, a cer-
tain amount of bills would have to be borne by the insurance department.

Transparency through information
   Regular meetings will enable the management team to prepare for certain
decisions. Based on monthly statistics, e.g. number of new registrations, re-
newals, amount of bills refunded etc., the team will be in the position to
brief the appropriate channels. If there are changes of policy by the hospi-
tal, this information might also be of interest to other institutions involved,
e.g. donor agencies.
   The Management Team at Damongo is the body responsible for pro-
posing changes in the premium and renewal fees. The basis for this are
the monthly figures, for which a sheet, called the „Monthly Spending Lim-
its“, has been designed.

Investment of money/management of capital
   Another important management decision concerns investment policy.
The contributions of members should be kept in an interest-bearing ac-
count before being released to settle hospital bills of members. As a Bank
at the district capital might be less attractive than one in the regional or
national capital, it might be advisable to negotiate the rate of interest for
capital invested. We saved a large part of the contribution with the local
Bank at Damongo as a way of supporting the local structures. If there
should however be a huge disparity in the interest rate, your decision
might be otherwise. An important factor may also be the condition and
duration of deposit – savings, fixed deposit or Treasury bill. A higher in-
terest rate may be obtained for a period of three months. If a large amount
is however unused for a long period and the rate of inflation is low, then
a long-term investment might be a god alternative.

                                                                 Management structures

Questions for discussion:
1. Who should be represented on “your” management team for the day-to-day
2. What are the criteria for investment capital? (interest rate, security, long-
   term or short-term…)

3.2     Education Committee

Speak the language of the people
   An Education Committee is an element of high importance. The first
task is to inform the people about the project. In the case of WGH, sev-
en people were selected, with different backgrounds. Two of whom were
women. It was decided that all the various ethnic communities should be
represented, if not by their own people, then, at least, their language
must be spoken by a member of the committee. This was not successful
with only one language. Therefore, we encountered much difficulties
when we met with people of this particular ethnic group, who could not
understand the language spoken. The language barrier can be a real
   If possible, you should get a member of the Information Services on
your committee. This has the immediate advantage that the scheme can
benefit from media publicity at the district level and possibly beyond. The
education committee may perform the task of training the contact per-
sons and their assistants and also monitor them, if necessary.
   We tried as much as possible to visit all 34 communities twice in the
first phase/year in which we covered a radius of 10 km. The visits were
prepared by the education committee and, depending on knowledge of
the local language, a committee member was in charge of it. The speech,
first delivered in English, was then translated into the languages of the
area. This is not an easy task in West Gonja District because of the many
languages and dialects. The situation may be different in other areas. The
high illiteracy rate made it more difficult for us.

Allow Discussions
   The floor was now open for questions and suggestions after address-
ing the problem. This gave us an immediate feedback from the audience
for the planning of the scheme. Whereas coverage of hospital admission
bills was quickly understood, questions and suggestions were aimed at

Management structures

other benefits that went beyond that. Some proposed coverage in the case
of bereavement of a registered member. Others requested for some kind
of reduced premium, if a member does not fall ill after some years of

The official Launching
   Non-refund of the cost of a normal delivery was a burning issue. An-
other was the waiting period for newly born babies. These questions
were referred to the education committee. After meeting with the various
communities, we started preparing for the official launching of the pro-
ject, for which the education committee sent invitations to dignitaries of
all walks of life. Various communities and groups were invited to con-
tribute. There was drumming, dancing and singing. In speeches, the var-
ious dignitaries underlined the importance of the scheme to the commu-
nities. The drama group sang songs, specifically composed for the occa-
sion, in the various languages. It was also an opportunity for the educa-
tion committee to introduce the contact persons and their assistants to the
public. The launching was recorded on video and shown on our final in-
formation visit to the communities. To crown it all, the organizers of the
launching ceremony were invited for a pito (a “healthy” local drink made
from guinea-corn and malt) and the guests from afar, together with a se-
lected number of local dignitaries, had lunch together.
   Six months prior to the take-off of the scheme, another visit was made
to the communities, at which the video recording of the launching and
other health-related films were shown. Meetings were also held with the
administrative leaders of Damongo town itself.

 Questions for discussion:
 1.What kind of people (qualification) do you need to constitute the committee
    to educate the people within the area of operation?
 2. Do you want or are you in a position to compensate those people for the
    work in the education committee? If not, what else can you offer?

                                                               Management structures

3.3     Advisory Board

  Similar to the hospital, West Gonja Health Insurance Scheme has a
board of directors, called the “Advisory Board”. The following institutions
constitutes membership of the board:
- Regional Director of Health Services
- Executive Secretary of the Diocesan Health Committee (DHC)
- Bank Manager, Ghana Commercial Bank, Damongo
- District Veterinary Officer, Damongo
- District Director of Education
- District Director of Health Services
- Senior Medical Officer, West Gonja Hospital, Damongo
- Vicar General, Diocese of Damongo:
   Meetings of the Advisory Board are to be held on a regular basis. They
function to advise the management team of the scheme on the general
policy guidelines.
    During the planning phase, the Advisory Board was constituted on a
smaller scale with five members. Nonetheless, it was deemed necessary
to get some other influential people or representatives on this board. The
Management Team has recommended to the Advisory Board to hold its
meetings a day before or after the Hospital Board meeting. This strategy
is meant to cut down traveling expenses since most of the hospital’s Ad-
visory Board members also serve on the that of the HIS.
   Soon after the creation of the Damongo Diocese, a number of positions
were vacant, which made it difficult to get committees constituted. Even
the hospital Advisory Board could not meet because the post of the Ad-
ministrator had not been filled up. The vacancies in the diocese affected
the decision to adjust the level of the premium and the fee for renewal,
as these decisions required the approval of the Diocesan Health Com-

Questions for discussion:
1. How should the Advisory Board be composed?
2. How often should the Advisory Board meet? a) in the planning phase; b) in
   the time of implementation; c) when the scheme has been properly estab-
   lished ?
3. Which responsibilities should be given to the Advisory Board?


3.4          Review Committee (RC)

Trouble shooting or conflict solution
  The HIS constitution provides for a Review Committee (RC) whose
functions include looking into cases of malpractice. This committee meets
whenever the need arises. So far, the RC of the West Gonja Health Insur-
ance Scheme has not had cause to meet. It is necessary to maintain such
committee, as malpractice cannot be ruled out.

The RC comprises of the following members/institutions:
- Hospital Chaplain of West Gonja Hospital, Damongo
- Assistant Superintendent of Police, Damongo
- Representative of the Muslim Community
- District Director of Education
- Representative of West Gonja Hospital Management Team

 Questions for discussion:
 1. Is there the need for a Review Committee?
 2. Should your Review Committee only offer recommendations or should it
    have the power to take punitive measures?

4.0          Membership
   Associations enjoy the right to restrict membership to a certain catego-
ry of people. However, there are some associations, which cannot afford
such restriction. One of these is a health insurance scheme working un-
der the condition to provide financial support for the sick, especially the
poor people. Therefore, the membership of the health insurance scheme
is open to all persons without regard to ethnicity, age, sex, religions or
educational status. Membership is on individual basis but with emphasis
on family registration. The maxim goes that no one ever receives med-
ical treatment to benefit another persons. A premium must be paid, with
a membership form filled out and a photo taken or provided. An identi-
ty card is then issued to the member. The membership entitles to full
medical coverage on admission West Gonja Hospital only.


   The average in-patient bill of the preceding year, less the cost of ad-
mission at West Gonja Hospital, is granted to a patient being transferred
for specialist treatment to another hospital. These conditions were laid
down in order to get a smooth running of the scheme.
   Some of the rules may seem to be too restrictive. However, we decid-
ed to start in the restrictive way and to work on a more ”liberal“ system
after same practical experience.

Questions for discussion:
1. Do you want to register on individual or family basis?
2. Do you want to offer full coverage of hospital bills?
3. How do you want to compensate members transferred?
4. How do you think about “restricted membership”?

4.1    How can one acquire membership by registration


   The constitution of the HIS provides that interested people within the
defined area are eligible to become members of the insurance scheme.
No medical examination or check-up is required. The aim is to cater for
those people who, owing to financial reasons, cannot go to hospital for
treatment. The scheme is designed that the entire registered members
should bear the cost of hospital admission of any member. In addition,
temporary residents outside the defined catchment area are eligible for
   Although people outside the 10 km radius during the 1995-96 registra-
tion were informed that they were not eligible to register, some managed
to do so. Due to the external family system, there is hardly anybody in
the West Gonja District without a relative or friend in or around the dis-
trict capital. As such, some people gave false residential addresses and
managed to register, some of them were detected by coincidence. There-
fore, the registration procedure was reviewed. The applicants were asked
to give both the information, namely their own addresses (outside the
catchment area) and those of relatives and friends within the area. We ex-
pected, that this policy would be useful for any extension of the area of

Termination of membership

coverage, since it would enable the project staff to identify members by
zones, villages, and contact persons. Some members from different parts
of the country are part-time residents of the catchment area, for example
students .

 Questions for discussion:
 1. Do you want to restrict the acquisition of membership to those people liv-
    ing within the area of operation and if so, how do you want to achieve this?
 2. If you allow people from outside the area of operation to register with the
    scheme, should they pay the same premium (or more/or less)?

5.0         Termination of membership
   There are various ways in which membership of the health insurance
scheme may be terminated. Where a member is unable or unwilling to
renew his/her membership, for instance. Other conditions leading to the
termination of membership were part of the constitution of HIS. The con-
stitution can be ordered from AGEH or from HIS.

 Questions for discussion:
 1. Do you want to follow a restrictive policy regarding transfer of membership
    or do you offer compensations?
 2. Do you want to make part-refund of amount paid for insurance, if some-
    one leaves the catchment area?

6.0         Benefits and mode
   Every member of the West Gonja Health Insurance Scheme is entitled
to free admission at West Gonja Hospital, Damongo, since the scheme
takes over the cost. This ranges from cost of surgical operations, bed fees,
X-Ray charges, laboratory tests fees, drugs, etc. Where the attending
physician prescribes a drug, that is not immediately available at the hos-
pital but included on the hospital’s essential drug list, the cost of that
drug, when purchased by the patient, is to be refunded upon presenta-
tion of the prescription and receipt covering the purchase.

                                                                 Benefits and mode

Being referred to another Hospital
   If a patient is referred (by the doctors) to another hospital for special-
ist treatment, the scheme must refund the average in-patient bill of the
preceding year, less the current expenses for treatment at West Gonja

The peculiar topic of deliveries
   Whereas emergency child deliveries at WGH, deliveries referred from
clinics within the catchment area, and those on medical indication at the
hospital’s Ante-Natal-Clinic were covered by the insurance scheme, nor-
mal deliveries are exempted from the service. In case of doubt, the chart
is presented to the Medical Officer for clarification. Normal delivery is not
covered by the insurance scheme, if the expecting mother is detained for
not more than 24 hours in the maternity ward. This however should not
discourage anybody, especially pregnant women, from registering with
the scheme, as complication of pregnancy can never be predicted.
   A number of patients are confused with the regulation, that cases de-
tained for more than 24 hours at the casualty ward and paid for by the
scheme should also apply for normal deliveries which occur after a peri-
od of 24 hours at the Maternity Ward. Treatment at the Out-Patient De-
partment is not covered by the insurance scheme. The same applies to
treatment at the casualty ward, unless patients are detained for more than
twenty-four hours.
   Admission bills from any other hospital than West Gonja Hospital, Da-
mongo, are not refundable. If a patient is, however, admitted at another
hospital and is transferred to West Gonja Hospital, the scheme takes care
of the treatment at WGH. Any member of the scheme may request an am-
bulance service but at his own expense.
   An insured member going for admission must go for identification at
the Health Insurance Department. No deposit of money is required for
admission. As a patient will have been registered for at least three month
before admission, his picture (photo) serves for identification. The insur-
ance scheme can thus guarantee payment to the hospital by inserting the
patient’s insurance number on his chart. A stamp and signature of the
identification officer also is added. If a patient is in a bad condition and
unable to walk to the insurance office, a relative can notify the insurance
staff so that identification can take place at the patient’s bed. Uninsured
patients are usually required by WGH to deposit an amount of money at
the Accounts Department in case of an operation. This amount can be

Benefits and mode

quite substantial and could have been used to pay the premiums of the
entire family members. Often times, this deposit is not immediately avail-
able to the patient.

 Questions for discussion:
 1. What regulations do you envisage to establish concerning deliveries?
 2. When do you consider a detained patient as admitted?
 3. Should “your” scheme take care of the ambulance bill for certain kind of
 4. How do you go about patients/members being referred to an other hospital?

6.1         Payment of all cost of the admission bill

      Yes or no – but make it clear right from the start

   The question of coverage of all cost of treatment of a member is a
thorny issue, which must be addressed at the very beginning of the
scheme. W.G.H. decided to take care of the complete admission bill of
each member.
   Experience shows, that in refunding hospital charges on behalf of the
insured members, there are a few cases only calling for a review of total
refunding. In case of terminal illness, where medical treatment yields no
improvement in the patient’s condition, one is likely to have a second
thought about the need for a limit of coverage. Other cases may be very
complicated treatments such as heart transplantation. However, it is very
difficult to give appropriate advices for such cases because of the ethical
dimension involved. On the one hand side there is the need, to run the
program in a sustainable way as far as finances are concerned. On the
other hand side in some very hard cases members may be excluded from
the services.

      Make clear right from the start, if the cost of “review visits” some times after
      the treatment in the hospital are covered by the scheme.

                                                                     Benefits and mode

Questions for discussion:
1. Will it be possible to discuss with “your” doctors how to go about with
   patients having a terminal disease or a very “expensive” sickness?
2. Do you consider the review of a case to be part of a bill to be covered by the

6.2     No particular sickness is excluded

   As mentioned earlier, no medical check-up is required for membership
to the scheme. If this requirement (medical check-up) is implemented, it
could serve as a disincentive to the already impoverished sections of the
target communities. This would also be an additional cost to them!
   In the case of WGH/HIS, it was impossible to exclude certain diseases
from the benefit package as no medical certificate is required for regis-
tration. One might even not be aware when one is suffering from any
such disease, e.g. HIV/AIDS, since the majority of victims only become
aware when they are already on admission and random tests were con-
ducted on them. It would therefore be unethical to ask patients, when
discharged, to shoulder their admission bills. If HIV/AIDS, for example,
should disqualify people from registration, the concept of health insur-
ance would immediately and completely lose its relevance in several
countries of the world. Investigations at the hospital at Damongo reveal
that an HIV/AIDS patient stays at the hospital, on average, for two weeks
before being discharged. An expensive treatment, compared to Europe or
Northern America, actually is not available. A common health problem in
northern Ghana, where the majority of the inhabitants are subsistent
farmers, is Hernia, the causes of which may be malnutrition, unbalanced
feeding at childhood and hard farming conditions. There were a number
of people who became strongly interested to register following diagnosis
for Hernia and requiring an operation, but would have to wait for three
months before treatment.

Questions for discussion:
1. Do you want to restrict membership to people not being able to certify that
   they are not suffering from certain diseases?
2. If you want to impose such restrictions (“health certificate”), how do you
   want to achieve this?

Benefits and mode

6.3         What, if patients are transferred?

Once again, because the importance is high
   Depending on the services offered by the service provider (hospital or
clinic etc.), there can be cases of illness requiring outside specialist treat-
ment. If the hospital, for example, does not offer eye care, some insured
patients will have to be transferred to a specialist hospital. Here once
again, it should be noted that the charges differ from hospital to hospital.
The same service rendered at a district hospital might cost up to ten times
an equal service in other hospitals. Some specialist services offered by,
say, only one medical center in a country, e.g. heart operation, will cost
an amount of money far beyond anybody’s imagination, as it was men-
tioned above. If your system should guarantee to cater for such specialist
treatment, the risk of exhausting the pool (finances) of your scheme will
be enormous.
   To avoid this kind of situation, one will have to provide alternative so-
lutions. Telling patients that nothing can be done about their condition
can undermine confidence in the scheme. Similar to common practice, we
agreed to refund to the registered member, for such purpose, an amount
that is equivalent to the average in-patient admission expenses of the pre-
ceding year. In case the member is being transferred from Damongo hos-
pital to another, the balance of the average admission expenditure of the
preceding year will be refunded to him.

 Questions for discussion:
 1. Do you want to give assistance (in full or partly) in all cases of transfer?
 2. Can you afford to pay the average in-patient bill in addition to the bill in-
    curred at your institution?

6.4         Admissions only – why?

   The aim of the West Gonja Health Insurance Scheme is to assist the in-
habitants of the catchment area in paying for their hospital admission
charges. This is stated clearly in the constitution. All the figures available
at the hospital, revealed that, by far, the bulk of the bills were related to
in-patient treatment. Therefore, the highest priority is to tackle this prob-
lem. The local population is conversant with reasons for excluding out-
patient treatment from coverage. Members of the community could fore-


see that -if the chances to defraud the system were not checked – it
would cripple the scheme completely.
   Whereas impersonation can be minimized at the admission level (pho-
to -identification), control at the Out-Patient Department (OPD) level will
not function for numerous reasons. For example, there are certain ail-
ments, whereby an uninsured ill person could send a different (insured)
person as proxy to the hospital for consultation. In the course of the proj-
ect, and also following many complaints about this limitation, W.G.H. has
included certain cases of out-patient sicknesses in the coverage, such as
fractures and deep cuts, requiring treatment at the theatre.

On the way to full coverage

      Initially the management team was not sure about the acceptance of the in-
      surance scheme by the population. However, with the very high rate of re-
      gistration so far achieved, it should be possible to include out-patient treat-
      ment in the coverage. This will however require new planning, as informa-
      tion is needed for the calculation of a new premium. It may, for example, be
      advisable, in the pilot phase of out-patient coverage, to use information from
      a sample of the population to assess the impact of full coverage (in-patient
      and out-patient treatment). This will again necessitate adequate staff and it
      will require very close monitoring.

 Questions for discussion:
1. How much income does “your” service provider realize from
   a) The in-patient department
   b) The out-patient department?
2. What is the financial limit of what people can afford to pay themselves?
3. How high are outstanding bills at your institution for which mode of treat-
4. Do you think it to be feasible to include out-patient treatment from the be-

7.0       Registration/Renewal
   One important question was, how to tackle the problem of registration
in such a vast area. One solution was the use of volunteers from the var-
ious communities, villages and zones to do registration in their neigh-
borhoods or of interested persons.
   In the case of West Gonja Health Insurance Scheme, the officers and


volunteers visited the people in their homes, as it was done during the
publicity campaign. The Insurance Department issued a roster of the vi-
sits to the various communities, a copy always was given to the contact
person. The program tried as much as possible to include the proposals
of villages and communities, such as their preference of certain days or
hours for the visits. Since a large section of the communities are Muslims,
most people preferred visits on Fridays, when there is no farming work
because it is a religious day. People quickly understood the procedure of
registration and renewal. This made it quite fast and effective. In the end,
it was possible to handle large numbers of people. Two cards were de-
vised, one, kept at the insurance office, and an other given to the member.

Go to where the people go

      There was the need for convenient places to do the registration. In Damon-
      go, effort was made to meet people in places easy to reach for them. There-
      fore, the registration officers went to the market places on Saturdays. Initial-
      ly, there was not much immediate success. The idea was new to the people
      and they didn’t expect to be able to register at the market places. After some
      few weeks, the number of people registering at this venue increased and
      quite a number of them even came from far away places. The contact per-
      sons spread the information about where registration and renewal was taking
    Another place to meet potentially interested people was at the Bank. In
West Gonja District, most government employees receive their monthly
salaries through the Bank. Other public places, such the Post Office, are
also worth mentioning.
    Contact with school authorities is a way of getting students registered.
It is a well-known fact that a number of schools are reluctant to send stu-
dents to the hospital, especially when the illnesses could result in admis-
sion. Schools, without any special fund, face the problem of raising the
required deposit amount for hospital admissions. W.G.H. therefore visit-
ed the two Senior Secondary Schools to register their students. This was
quite successful, and it was even made more attractive through a dis-
count, if the students registered within their school. The school authori-
ties later informed the insurance office of new admissions - and getting
them insured became an easy going venture.
    If there are companies or institutions with large numbers of employees,
it is definitely promising to contact them to get their staff and family mem-
bers insured. Financially strong firms might sometimes be ready to shoul-


der the amount of money re-                                                                 Registration
                                                                                            at the Health
quired as contribution by                                                                   Insurance
their staff members. In Da-                                                                 Office
mongo, where the largest Na-
tional Park is located, the au-
thorities of the Game Reserve
made it compulsory for the
staff members and relatives to
register with the scheme.
They were known to have the
habit of asking the manage-
ment for advances from their salaries to deposit for hospital admission.
The West Gonja Hospital itself also registered its staff and a number of
family members with the scheme.

      It has been noticed that the first Saturday of the month is a very successful
      day for registration and renewal because a lot of people, by this day, have
      already received their salaries.

Questions for discussion:
1. Where are the attractive places for registration within your area?
2. Do you want the people to come to your institution for registration or do
   you want to meet them at their communities, villages and places?
3. Where are institutions/companies within your target area, which could be
   partners for bulk registrations?
4. Are there any reasons for companies/institutions to cooperate with the
5. Would it be possible to offer these groups better conditions, e.g. by reducing
   the premium?

7.1       Payment of existing premium

Registration against payment
   For registration, the premium must be paid in full. There is no regis-
tration without payment of the premium. Any person may however pay
the fee / premium for other members of his or her family in their ab-
sence. The premium for registration is flat, irrespective of age, sex and
health status.


   To introduce the premium as flat rate (every member pays the same
amount) is not the most natural thing in the world. One is entitled to ask,
why a member, provided with very limited financial resources, should pay
the same premium as a member who enjoys a high income. This ques-
tion is related to equity and equality. In Germany – for example – the for-
mula is simple. The higher the income the higher the premium. A system
based on flat rates will reduce the transaction cost of the scheme since
there is no need to check the income of the member/applicants. But the
question remains: how can the very poor be included into the scheme?

 Questions for discussion:
 1. How do you think about a “flat rate premium” or premiums related to in-

Learning by doing
   We tried initially to be strict on persons who failed to renew their pol-
icy before they expired. According to the constitution, such people were
to apply for new registration. The day-to-day experience has revealed
however that this approach is not practicable. To be initially avoided was
members abusing the scheme by renewing their policies only on admis-
sion. Exactly these cases were presented to the insurance department, for
which a reasonable solution was needed. This solution is as follows:
   If a person comes for renewal within eight days after expiration of his/
her registration, the date of renewal is the date of validity. Registration
eight days after expiration attracts a penalty, being the renewal fee plus
a waiting period of one month before gaining validity. For clarity, here
are three examples of how this problem was solved in respect of entries
on the I.D. Card of the respective member.

                Member A:   Expiry date of policy:    31.12.1996
                            Date of Renewal:          17.12.1996
                Member B:   Expiry date of policy:    31.12.1996
                            Date of Renewal:          05.01.1997
                Member C:   Expiry date of policy:    31.12.1996
                            Date of Renewal:          24.02.1997


Insurance Card of
                          Member A     Member B          Member C
Date of Renewal:          17.12.1996   05.01.1997        24.02.1997
Amount paid:              C 4,000.00   C 4,000.00        C 4,000.00
Insurance period:
From:                     01.01.1997   05.01.1997        24.03.1997
To:                       31.12.1997   31.12.1997        31.12.1997

Stamp / Signature

Questions for discussion:
1. Should it be possible that people pay their premium by installments?
2. How should those who fail to renew the policy on time be treated?

7.2     Filling of Membership-/I.D.Cards

  As described above, two separate registration cards were used.
The first contains particulars such as:

•Surname                               •Date of registration
•First Name                            •Amount paid
•Date of Birth                         •Begin of Insurance Period
•Zone / Village                        •Expiry Date of Insurance Period
 which are noted on the front.         •Stamp
                                        Signature of project staff noted at the back.

  Typed on an A 6 paper format, it is easily foldable into a normal-sized
purse. This is the I.D.Card.

  The second card, of format A 5, called the „Insurance Card“ is kept at
the hospital and contains a number of additional information to the I.D.
Card, such as:

• Sex of the registered person              • Occupation
• Father’s Name                             • Employer
• Mother’s Name

   All this information, including space for renewals for the next five years
and also for a passport picture, is at the front page. This card is used for
identification when the member comes to the hospital for admission. The
back of this card carries information about the admission itself. After dis-
charge and settlement of the bill by the scheme, the following informa-
tion is entered onto it:

 • Date of Admission                     • Disease / Diagnosis
 • Date of Discharge                     • Bill on discharge
 • Ward-No. within the hospital          • Remarks

  In the column „Remarks“, one can find the admission registration num-
ber, which makes it easier to crosscheck the hospital bill.
  The forms are printed in English because there are too many local lan-
guages and dialects in the area. Oral translation of the questions into the
various languages is therefore necessary at registration.
  There is a book for recording the actual day of renewals. This is used
in controlling the fees coming in later at the office.

 Questions for discussion:
 1. What information would you need for registration in “your” scheme?
 2. Would it be appropriate/possible to print forms in the local language(s) of
    your area?

7.3         Taking of passport pictures /
            providing passport pictures

   The identification of members was a crucial issue from the beginning.
There was a consensus in favor of identity photos in order to avoid im-
personation. There was also the need to minimize, as much as possible,
the financial burden involved. So far, taking pictures of six people at a
time is the way the identification problem has been solved at a minimal
cost. This problem was solved through group photographs of six people
on a 9 x 13 cm photo format, with three people seated in front and three
standing behind. As the background of those sitting, a bed sheet was
used. The pictures are then cut into six proportional sizes and fixed on-
to the membership cards with the insurance numbers and kept in the of-


fice. There is no need for a picture on the I.D.Card, because it bears the
same number as the membership card. We used a camera with a foldable
wooden frame for taking passport pictures in order to save space in the car
when going out for registrations.                                                     Taking of
Questions for discussion:                                                             pictures.V. l.:
                                                                                      Bernd Pas-
1. Do you see any alternative to                                                      tors, medeor,
   passport pictures as a means                                                       Reinhard
                                                                                      Micheel, Ak-
   of identification?                                                                 tion Can-
                                                                                      Josef Stangen-
7.4     Why a waiting period?                                                         berg, medeor,
                                                                                      Client, John
                                                                                      Kipo Kaara
   In contrast to a scheme with a closing registration period, open registra-         and Child,
tion requires a waiting period. Depending on the circumstances, this can
be weeks or months. W.G.H decided on a waiting period of three months.
For convenience, any date of the month is appropriate. So whether one
registers on the first or any other day of the month, this is the beginning
of the waiting period. Since the registration was started in October 1995,
all the people, who were registered in this month were entitled for cover-
age for 12 months from 1st January 1996. The waiting period is to dis-
courage people from coming at the last minute to register, when they might
be already aware that they are going for admission. On the other hand, a
long waiting period can also discourage people from registering. Our ex-
perience with the three months’ waiting period is positive. After some time
of publicity, it has been well understood and accepted.
   There was the need, after the first year of operation, to introduce a
second waiting period. A number of people, whose registrations were
due for renewal, failed to do so and so defaulted on their membership.
We observed that some even waited until they were admitted at the hos-
pital before renewing their membership. Therefore we saw the need to
come out with another waiting period, as described above, for renewals.
    The waiting period also enables the management to invest the money
collected. In case of financial constraints of the service provider, one
might also decide to advance money in respect of anticipated bills. This
money, when it goes into the purchase of medicaments, still serves the
aim of the scheme, since drugs prescribed but not available at the hos-
pital, when purchased by the patient, must be refunded.
   The investment of money should meet the legal requirements. In Ger-
many, for example, there are restrictions to invest the money collected


from the members in the stock exchange, because it might be too risky.
However, the profit out of the money invested can be useful in many
ways. It can cover anticipated or unforeseen bills. It can be used to cov-
er the transaction cost of the scheme. Last but not least it can be helpful
when it comes to the question, how to include the very poor into the
scheme. Such aspects should be taken into consideration during the plan-
ning phase and when the premium is calculated.

 Questions for discussion:
 1. In the case of a scheme with closed registration period, would you still con-
    sider it to be useful to operate with a waiting period?
 2. If your scheme should operate with open registration, what waiting period
    would you consider to be suitable?

7.5         Open or closed registration period
   A number of initial decisions must be taken when designing a scheme.
One concerns the modalities of registration with the scheme. Some com-
munity based self-financing schemes offer a certain period of the year for
registration, e.g. three months of the year. There is no registration in the
remaining nine months. There are probably several reasons for this poli-
cy, e.g. one knows the exact number of people to be catered for in the
rest of the year. On the other hand, there is a disadvantage. If you oper-
ate with a closed registration period, the amount of money collected and
available for the settlement of member bills is limited. Apart from the in-
terest on the invested capital, there are no other means of raising the in-
come of the current period. If, for any reason, the fund runs down before
the end of the year, there is nothing one can do to maintain liquidity, ex-
cept, may be, to appeal for funds from other sources.
   In the case of the West Gonja Health Insurance Scheme, the majority of
the planners decided for a scheme with an open registration period. A
number of people argued, that a registration period of three months of the
year would exclude certain people from registration, as they might be lack-
ing the required amount of money at the particular moment, when the next
registration is due. In addition, an open registration would cater for flexi-
bility. It would enable the management to raise the premium if there is an
expected or foreseeable change in the price list of the service provider. One
might also decide to reduce the fixed premium if the reverse is true.

                                                                   Short summary

Questions for discussion:
1. Do the majority of the people in the catchment area earn regular incomes
   or are there certain periods of the year/month when most people have some
   cash at their disposal?

8.0     Short summary
   The example of the Health Insurance Scheme Damongo is a positive
one. The scheme enables the members to go to the hospital for treatment,
if needed. The members do not depend on charity and they are in no dan-
ger to spoil their health or to face unbearable financial setbacks as it was
the case, before the scheme was implemented. The increased admission
cases at Damongo Hospital can be taken as indicator. Not only the mem-
bers benefit from the scheme. The provider was able to reduce the out-
standing bills in a significant way. This helped to secure the hospital.
   Nevertheless: a lot of questions are still remaining. May be the most im-
portant one is, how the very poor people can benefit from such schemes
without neglecting the financial sustainability of prepayment schemes.
The authors give some ideas. They approached universities, schools and
private companies. The program did a lot to increase the number of
members. As a result of all this efforts the risk is shared among a larger
community. The members of the scheme form a “mixed risk group”. The
waiting period avoids to a certain extend, that people register with the
scheme only, when they are in the immediate need to go to the hospital.
   The Damongo Scheme decided to implement “flat rate premiums”. All
the members pay the same amount. It would be very interesting to com-
pare this way with insurance schemes which are in favor of calculating
the premium in accordance to the income of the members. The question
of equality, equity and capacity is a burning one and needs to be ad-
dressed in future.
   The same applies for the transaction costs of a health Insurance Scheme
and the way, the transaction cost is covered. The prices of treatment and
drugs, the premium, the possibility to invest collected money, full cover-
age of all cost of treatment or partly coverage, the inflation rate in the
country and the overheads are important aspects in this context.
   Some months ago, the Damongo team was called to visit Nigeria,
Enugu, to discuss with the administration of the Annunciation Hospital
about the implementation of a Health Insurance Scheme. The consulta-

Short summary

tion visit worked out well. In the second half of 2001 the planning phase
will begin. The Health Insurance Scheme in Enugu will not be a blueprint
of the Damongo Scheme. However, it is I good to hear, that a promising
program serves as “food for thought” in other places.

8.1        Final remarks

   In the meantime, approx. 32,000 people have joined the Insurance
Scheme. The person in charge of the program is Mr. John Kipo Kaara, Ste-
fan Marx’s former counterpart. A similar insurance scheme is soon to be
established in Enugu, Nigeria. Advisory visits to Nigeria by the team from
Ghana have already taken place. Experiences from the program have con-
clusively proved that it stands up as a systematic and sustainable contri-
bution to poverty alleviation. People for whom it was previously impos-
sible to take up essential in-patient hospital treatment now have this op-
portunity, thanks to the health insurance scheme. The example of Da-
mongo shows once again how important it is:
• to take seriously the people whose lives are affected, together with
   their needs and ideas, and to include them in the project right from the
   outset. This was an essential precondition for acceptance among the
• to make and stick to transparent and binding agreements, because this
   is the way to establish trust.
• to put rules in place – and to be flexible and use continual learning
   processes to keep adapting them to the realities.
• not to succumb to the temptation to propagate over-hasty and inap-
   propriate solutions to problems.
• again and again, to initiate joint learning processes and community
   based problem solving.
   The authors are conscious that the present booklet cannot give answers
to every possible question. This is impossible for the simple reason that
not every eventuality can be anticipated, and because the practical design
of an insurance scheme is always determined by the specific conditions
prevailing in the locality where it is to be established. However the au-
thors hope that by presenting the Insurance Scheme Damongo, they have
helped draw attention to some important questions and aspects which
must be considered when planning and implementing insurance schemes,
and that they have also played their part in making some worthwhile ex-
periences and approaches more accessible.


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