Investigating the existence of moral hazard: a case study of insured malaria outpatients at Saint Peter’s Hospital, Jacobu-Ashanti Region, Ghana.

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Analyses of health insurance markets over the past several decades have recognized that insurance encourages beneficiaries to consume more health care than they would if they were uninsured. Although advocates for universal coverage and improved access to care may view this increase in utilization as positive, standard economic analysis suggests that this extra consumption could diminish economic welfare and the label for this extra use, moral hazard, reflects this negative connotation (Frick & Chernew, 2008). This study adopted Nyman (1999) proposition to establish that moral hazard could be efficient (welfare improving) in malaria treatment; using pure price (substitution) effect of people consuming more health services when its price is low but not the income effect of people consuming more health services because of insurance. The study used personally administered questionnaires to gather information related to the subject matter whilst using purposive sampling method in selecting insured malaria outpatients at the study area. Specifically, the study used logit regression as the empirical method of estimation under quantitative method. The study revealed that, greater percentage of insured malaria outpatients engage in moral hazard at the study area. However, in the case of malaria treatment, the substitutes for medical care are not effective enough to ensure improved health care for Ghana’s population. Given this, the study has shown that moral hazard in malaria treatment is welfare improving. It is therefore recommended that, NHIA should strengthen sensitization programmes aimed at improving accessibility to medical care with insurance coverage for malaria treatment. Eventually, the rate of morbidity and mortality as a result of ineffective malaria treatment would reduce for both children and adults in Ghana.
A thesis submitted to the Department of Economics, Kwame Nkrumah University of Science and Technology- Kumasi, in partial fulfillment of the requirement for the degree of Master of Arts in Economics, March-2013