According to recent World Health Organization estimates, every year 25 million households (more than 100 million people) are forced into poverty by illness and the struggle to pay for healthcare. This coupled with the lack of basic health infrastructure in rural and remote areas aggravate the health conditions of the poor, leaving them in a perpetual state of poverty. Access to health services and health protection is a key component of the fight against poverty as good health is a major driver of economic development and a necessity for the poorest nations’ climb out of poverty.
An efficient healthcare system is critical in breaking the vicious cycle of poverty and poor health. Moreover, it is critical in meeting the Millennium Development Goal (MDG) of “marked improvements in the health of the poor by the year 2015.” For many developing countries, the goal of providing affordable healthcare to all has been an arduous task. In an attempt to improve access to affordable healthcare, a number of sub-Saharan African countries adopted several models of healthcare financing, most of which have been wholly unsuccessful at reaching the poor. These healthcare financing models range from a “free health care for all” model to a fee collection at the point of service popularly referred to as cash-and-carry model. Funding for the “free health care for all” was unsustainable because governments were unable to generate sufficient tax revenues. Consequently, very limited public expenditure was dedicated to public health, particularly in the rural areas. Likewise, the “cash-and-carry” healthcare model made healthcare accessible only to those who could afford it, excluding the poor from health care utilization.
Recent interventions by NGOs in the form of community based health insurance schemes or Mutual Health Organizations (MHOs)1 have been fairly successful in improving access to healthcare. In 2003, realizing the potential that MHOs have to increase healthcare utilization and protect people against catastrophic health expenses, the government of Ghana became the first country in Africa to set up MHOs in every district in Ghana through the National Health Insurance Act. As of January 2007, approximately seven million people (35% of the total population) have enrolled in MHO. Enrolment in MHOs is low, especially among the poor. Many, particularly those in the informal sector, still have difficulties joining MHOs due to the irregularity of their incomes. Individuals who become members of MHOs eventually abandon their memberships because of their inability to make payments on their dues and insurance premiums.