Abstract
In many developing countries, financial risk protection for health is under-developed and negative health outcomes can be impoverishing. In this study, we sought to investigate the impact of negative health outcomes on household welfare and the role of public health insurance in mitigating this impact. We used data from the seventh round of the Ghana Living Standards Survey (GLSS). To address the potentially non-random nature of the health insurance scheme, the Lewbel instrumental variable estimation technique was used. The results suggest that more days of illness lead to fewer hours of labour supply and this result was statistically significant across all specifications. We found evidence of a heterogeneous impact of negative health outcomes through health insurance coverage on hours of labour supply for the full sample. We also find that for rural dwellers and informal sector workers, days of illness reduced labour supply, while the impact was relatively less with health insurance coverage. The findings call for policies that focus on reforming the NHIS to ensure effectiveness and achieve its primary objectives of removing financial barriers to health care in Ghana.
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Data availability
The data that support the findings of this study are openly available with the Ghana Statistical Service at https://www.statsghana.gov.gh/.
Notes
Official exchange rates from the Bank of Ghana as of November, 2021 were used ($1 = GHS5.9).
http://www.nhis.gov.gh/benefits.aspx (accessed 26th June, 2019).
See seventh GLSS report for further details about sampling procedure (Ghana Statistical Service 2019).
Detailed description of the survey design is presented in the survey report (GSS 2019).
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Acknowledgements
This research was carried out with financial and technical support from the African Economic Research Consortium (AERC) (Grant Number RT16535).
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Appendix
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Table 9 presents a VIF matrix of the variables included in the study. Results from the VIF matrix (and a pairwise correlation matrix—not presented here) suggest no multicollinearity since the VIF for each variable is less than 10.
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Novignon, J., Arthur, E., Tabiri, K.G. et al. Does health insurance mitigate the economic impact of negative health outcomes? Evidence from Ghana’s National Health Insurance Scheme. J. Soc. Econ. Dev. (2023). https://doi.org/10.1007/s40847-023-00287-4
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DOI: https://doi.org/10.1007/s40847-023-00287-4