A historical account of the health system in Ghana and the influence of NPM and Complex Systems

Historical Background

Ghana, originally known as the Gold Coast, was a British colony for approximately one hundred years before independence in 1957 (Dolvo 1997).

British rule brought modern or western health systems into the country. The country’s health systems at the time were described as focusing on hospitalized based clinical care; initially serving expatriate Civil Servants and merchants and most facilities were concentrated in port towns and areas with commercial activities and focused on sanitation activities in towns and cities (Kunfaa 1996).

The health sector, after the immediate post-independence period, started addressing issues of equity in health care by expanding hospitals and health centres to the countryside. However, these facilities were still not equitably distributed (Kunfaa 1996).

This action also coincided with the introduction of new cadres of health care workers such as Medical Assistants (or Health Centre Superintendents), Technical Officers and Field Technicians for Disease Control and Surveillance.

By the mid-1980s, like other sub-Saharan African countries, frequent coups d’etat and changes in government and economic decline had contributed to severe reductions in the resources available for health care.

This is noted by the World Bank, resulted in poor service conditions for health workers and a rapid decline in morale that affected the delivery of health care services in Ghana (World Bank 1994b).

To improve health care services in Ghana, the Primary Health Care Policy and Strategy papers were produced in 1979. It moved towards developing district health teams and district-based health service systems to refocus priorities toward basic clinical and prevention-oriented services (Kunfaa 1996).

Dolvo (1997), Aseno-Okyere et al (1997) and Mills (1999) argued that, by 1985, the government of Ghana introduced user fees into the health services marking a significant shift in health policy towards cost recovery, decentralization of management and rationalization of services.

In the early 1990s, Ghana began taking a series of actions towards restructuring its health sector, including developing a Basic Minimum Package of Services; refocusing the emphasis on Primary Health Care (PHC), including Reproductive Health; decentralizing greater management and financial responsibility to the districts; de-linking of Health Service Delivery from the Civil Service; and reviewing the MOH’s organizational structure to reflect a shift from vertically systems to a more functional horizontal system (Sakyi 2008, Dolvo 1997).

In 1995, the President of Ghana unveiled a policy document for taking Ghana into a “Middle Income Country”. This document was called “Ghana: Vision 2020". The Health Sector produced a five-year medium term Health Policy and Strategies derived from “Ghana: Vision 2020" that outlined the following objectives:

1) Efficient utilization of all resources allocated for health. 2) Access and equity are key factors in this policy. 3) Improve the standards and quality of services and personnel who deliver them. 4) Increase the empowerment of people and their communities. 5) New and improved organizational and institutional arrangements including increased decentralized authority for health service delivery to an executing agency outside the Civil Service.

In the early part of the 2000s, the World Health Organization developed the Millennium Development Goals (MDGs), which aimed at providing universal health services for all.

This meant that every population should have access to appropriate health when needed, and at an affordable cost. Further, this measure was to reduce the out-of-pocket payments which users made for health care. These were widely recognized as creating barriers to access, especially in poorer countries, and pushing households further into poverty (World Bank 1994a).

Social health insurance was seen as one of the health financing approaches with a strong potential to shared risk across population groups. Thus, several African countries interested in social health insurance thought that mandatory membership will prevent some of the problems associated with small voluntary health insurance schemes. Until recently, few large-scale social health insurance schemes were operating in sub-Saharan Africa (ones which extended beyond smaller groups of formal sector workers, such as civil servants).

That said, over the past decade, however, experiments in social health insurance have been springing up in several African countries, including Nigeria, Rwanda, Kenya, Tanzania, and Ghana (World Bank 1994 b).

In Ghana, the National Health Insurance Act (Act 650) was passed into law in 2003, which opened the door for the National Health Insurance Scheme to commence operations by 2005. It is managed by the National Health Insurance Council. The scheme aims at universal coverage. It is funded through private mutual insurance schemes, commercial health insurance and district mutual health insurance schemes (public ) ( Gharshong et al 2001).

The district mutual health insurance schemes are the focal point of Act 650. Ghana is divided into 10 regions with 138 districts. The Act calls for a mutual health insurance scheme to be developed and operated in each of these districts, with membership in each of these schemes opened to all residents of the district. The schemes receive subsidies from the National Health Fund (Witter and Ghashong 2009). This fund is financed by the health insurance levy ( a 2.5% tax on all commercial expenditures and transactions), 2.5% of every person’s contribution to the Social Security and National Insurance Trust Fund (SSNIT Fund), money allocated to the fund by Parliament, money accrued from investments, grants, donations, gifts and other voluntary contributions (Witter and Ghashong 2009).

Under the scheme, those working in the formal sector make an automatic contribution to the scheme (as part of the 2.5% deducted from the Social Security and National Insurance Trust (SSNIT) contribution), while those in the informal sector pay a graduated amount depending on their assessed income level. Those determined to fall within the poorest segment are exempt from payment, and must only register to receive basic healthcare.

The National Health Insurance Council oversees the regulation of the National Health Insurance Schemes. Specific duties of this body include registering, licensing and the supervision of the schemes and management of the Fund. For the management of everyday operations, each scheme has a governing body that answers to the Council (Witter and Ghashong 2009).

According to Wahab (2008), the schemes faces several problems. Among them are poor planning and coordination of resources, hierarchical structures, lack of commitment and ownership, lack of regulations, conflict, accountability, high cost of affordability for rural people, large informal sector, poor leadership, fraud, poor reimbursement system, etc.

It is against this background that, I argue in this piece that, New Public Management (NPM) and Complexity Theory could be effective and useful management tools in analyzing and explaining some of the challenges that are occurring in the health care system in Ghana.

NPM is a set of administrative doctrines or principles which dominated the public administration reform agenda of most OECD countries from the 1970s. NPM promotes efficiency, accountability and effective management of public service (Hood 1991, Dunleavy and Hood 1994, Pollitt 1993, Ridley 1996 and Manning 2000). Other scholars like Osborne and Gaebler (1992), Borins (1994) and Hughes (1998) hail NPM as a new paradigm. Aucoin, 1990 and Hood 1991 indicate that NPM promotes performance-based accountability, performance contracts, deregulation of line management and control. Ingraham (1996) and Minogue (1998) argue that NPM reform facilitates privatization and downsizing of public enterprise.

According to Christopher Hood, New Public Management (NMP) should exhibit the following characteristics.

(1) Hands-on Professional Management in the Public Sector.

(2) Explicit standards and Measures of Performance.

(3) Greater Emphasis on Output Control.

(4) A shift to disaggregation of units in the Public Sector.

( 5) A stress on private-sector style of management.

( 6) A shift to greater competition.

( 7) Stress on greater discipline and parsimony in resource use.

While, Owen Hughes argues that, NPM, should indicate the following:

1. Changes on Outputs. This involves placing more emphasis on

target and results.

2. Changes on Inputs:

Here, the stress is on changing the structure to attain public purpose which involves:

a. Introduction of skilled workers

b. introduction of technology

c. Market-oriented practices (like grievance redressal mechanisms, the imposition of the user fee, outsourcing etc.)

3. Reducing the size of Government and Changing the Role of Government:

This refers to the rolling back of the influence of the State in everyday business. Here, the emphasis is on the role of the state to be just that of an enabler, facilitator, and trying to bring in more Market players with the emphasis of steering rather than rowing or calling the shots, thereby efficiently channelizing market forces into action.

4. Changing the relationship between Public and Politicians vis-a-vis Management.

This refers to letting the bureaucracy work with autonomy and at the same time keeping it accountable. This can be achieved throughout the principle - agent agreement which makes the system more citizen-friendly and client-oriented to address the complaints of clients.

However, some authors have argued against the benefits of NPM. For example, Polidano (1999) point out that, NPM reforms are common-sense response to common pressures and hostility to governments, shrinking budgets, and the imperatives of globalization. While, other scholars like Numberg (1995), Schick (1998) believe that, NPM cannot work in developing countries because most of the ideas of NPM are rhetoric and not practicable.

But some African countries have benefited from NPM reform. For example, in Ghana, the Korlebu Teaching Hospital (one the biggest in the country) which was formerly under the control of the Ministry of Health now has its own board of directors to manage its affairs as a result of implementing NPM reforms in the Health sector. Further, the reforms led to the reorganization of the service delivery arm of the Ministry of Health into a separate institution managing its own affairs without having to rely on the central ministry (Larbi, 1998, Mills 1999).

Nevertheless, works of a number of scholars have shown that reform processes are complex and may require more than just one approach like NPM to explain these intricate reform processes taking place in the public sector. Thus, the use of NPM and Complexity Theory might help capture the nuances in the reform processes that may be occurring in the public sector in the developing world.

Complexity theory or complex systems emphasizes the interactions and the accompanying feedback loops that constantly change systems. While it proposes that systems are unpredictable, they are also constrained by order-generating rules. Complexity theory has been used in the fields of strategic management and organizational studies.

Complex systems can be found in many different places, for example in nature, traffic, our brains, the economy and society. The common characteristics of complex systems are:

(1) Emergence:

Complex systems show emergent behaviour. Out of the interactions between the individual elements in the systems, behaviour emerges at the level of the system as a whole. This so-called higher-order behaviour cannot simply be derived by aggregating behaviour at the level of the elements. The whole is more than the sum of its parts. This higher-order was not intended by the elements. It is a spontaneous order.

(2) Sudden transitions/ tipping-points/ non-linearity:

Complex systems show non-linear dynamics. That means that they may suddenly change behaviour or move to another regime. They may move from a high degree of stability to very unstable behaviour. Think for example about revolutions and financial crises. A very moving description and literary account of the rather sudden cultural breakdown in Austro-Hungarian society at the beginning of the 20th century can be found in the book "The World of Yesterday" by Stefan Zweig.

(3) Limited predictability:

The behaviour of complex systems cannot be predicted well. Small changes in initial conditions or history can lead to very different dynamics over time. The existence of non-linear behaviour also adds to unpredictability.

(4) Large events:

Relatively small changes may lead to large effects. This is the case if a complex system is close to a tipping point and it is therefore related to the non-linearity of complex systems. These are the result of the inter-connectivity of complex systems. Pressure may build up over time and then erupt suddenly and forcefully. Large events do happen more frequently than expected on the basis of the normal distribution of events. Events that are almost impossible according to the normal distribution have a low probability in a complex system. They are not impossible. They are so called Black Swans. They follow a so called power-law or log linear distribution.

(5) Evolutionary dynamics:

Complex adaptive systems are often shaped by evolutionary dynamics. The mechanism of evolution starts with variation. Then there is selection of elements that are fit for the changed conditions. These elements flourish and multiply in the system. They may also change the external environment of the system, causing new variation. New variation may also come from outside the system. A new cycle of variation-selection-multiplication-variation starts. The system is never at rest. There is no movement to a knowable “end point” or equilibrium. There is constant change and innovation.

(6) Self-organisation

Complex adaptive systems operate without central control. However, they are often characterised by a certain order. They, as it were, organise themselves from the bottom-up.

(7) Fundamental Uncertainty

Complex adaptive systems are extremely hard to predict in great detail. This means their future is fundamentally uncertain. (Source: Future Learn; University of Groningen).

Hence, from this detailed analysis of the characteristics of Complex systems, I suggest in this piece that, Complexity theory is a useful management tool that, enhances the effective coordination of complex activities and programs like in the health care sector to avoid chaos but promoting feedback mechanisms for growth and development (Klijin 2008, Manson 2001, Mitleton-Kelly 2003a, 2003b, Mischen and Jackson 2007, Waldrop 1992) which are indeed also essential to the success and management of complex health insurance schemes.

Arguing along similar lines like Klijin 2008 and Mitleton-Kelly 2003a; Mintzberg (1979) indicates that, healthcare organizations and their programs are among some of the complex institutions to manage. This is because they consist of many different programs and care services, involving different processes. Yet, these processes act as a unique part of a given system. The question then is, how can such organizations or programs be managed effectively? Plesk and Greenhalgh (2001) point out that, such organizations need highly qualified professionals to manage them. As complex organizations, they have a number of “complexity zones” (different set of activities) (Lapao and Tavares 2007:14) where professionals are required to interact with others in many diverse ways. These risky “zones” represent opportunities for learning ( or innovation ) and demand people capable of solving complex problems to form self-organization (Kauffman 1995: 71). Self organizations also facilitate interaction between professionals and patients. These processes could be incorporated into the NHIS in Ghana to facilitate learning and new management skills to help solve some of the myriads of problems involved in Health Insurance management in the country.