Effects of Capitation on the Health Outcomes of Malaria Patients: Evidence from Ashanti and Brong Ahafo Regions of Ghana.

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How best to pay for healthcare services has been a subject of considerable debate due to the little evidence on the impact of different types of payment systems on providers’ attitude towards patients. Hence, provider payment systems are continuously and rapidly going through reforms to mitigate their negative effects and preserve their positives since they can provide strong incentives for improving health worker productivity, usage and quality of care, and affect treatment outcomes. However, payment methods that limit incomes through financial risk transfer may cause resistance from providers and impair their viability. The introduction of capitation in Ghana met fierce resistance and opposition from providers and pressure groups. The argument was that the capitation system would adversely affect patient health outcomes because the financial risk transferred to providers may lead to under-provision of services and reduced quality, as has been suggested by many studies. Using (ordered) logistic and ordinary least squares regressions, this study was basically conducted to find out whether capitation has any negative effect on the health outcomes of patients, provider’s attitude towards the patient, visits, referrals and patients’ willingness to stay or switch provider within a two month recall period. A sample of 250 NHIS malaria patients each from Ashanti (capitated group) and Brong Ahafo (Diagnosis Related Groupings/fee-for-service (DRG/FFS)) regions of Ghana was used for the study. The principal findings were that income, education (except basic) and mission health providers significantly improved health outcomes, and reduced “doctor shopping”. Again, patients under capitation had poorer health outcomes than patients under DRG/FFS. Patients who sought treatment from mission health providers had better health outcomes. Providers’ attitude towards patients was better among mission and private health providers than public health providers but the attitudes were poorer under capitation than under DRG/FFS. Visits were fewer under capitation, and these fewer visits (common among private healthcare providers) were significantly influenced by the copayment introduced by the providers. Again, Capitated patients had higher referrals and lower continuity of care than their DRG/FFS counterparts. Clearly, Capitation greatly reduces the quality of treatment and puts patients at a greater health risk. In view of these findings, educational policies should gear towards increasing enrolment and quality in schools to at least secondary school level to improve outcomes and continuity. Policies aimed at raising income levels among the population should be embarked on to improve health outcomes and better provider relations. It is important to also encourage patients in low income groups to report malaria cases to health facilities hence the need for measures to check additional fees charged by providers at the point of service use by NHIS patients. Again, policies should encourage and support religious bodies to build more (expand) and operate health facilities to improve outcomes, continuity of care and better provider relations. Finally, policy makers should restructure the Capitation payment method to prevent patient dumping and under-provision, and better provider relations to improve quality of care.
A Thesis submitted to the Department of Economics, Kwame Nkrumah University of Science and Technology, in partial fulfilment of the requirements for the degree of Master of Arts (Economics),