Health Financing: UK, Mexico, Ghana Comparison Report

This report undertakes a comparative and critical assessment of health financing mechanisms employed in the UK, Mexico, and Ghana to address health inequalities. The analysis begins with an overview of the UK's approach, highlighting the influence of reports like the Black and Acheson Reports, Sure Start initiatives, and area-based initiatives, while also acknowledging the criticisms of fragmented policies. The report then delves into Ghana's health financing, contrasting it with the UK's system by examining the reliance on direct and indirect tax revenues, including personal income tax, corporate tax, VAT, fuel levies, and import duties. It underscores Ghana's challenges of limited resources, donor dependence, and patient contributions. Finally, the report provides a comparative perspective, identifying strengths, weaknesses, and the varying impacts of these financing models on health equity and access in the three countries.

Comparative and Critical Assessment of Financing Mechanisms for the Promotion or
Reduction of Health Inequalities in the UK, Mexico and Ghana
Introduction
The World Health Report, 2000 recommends that the global health care system performances has
to be assessed by the average health of the population as well as by how citizen’s health status
and the financial burden of health care is evenly distributed among the population. This
dominant concern with equity is reflected in many modern directives on health, all in an attempt
to present an equitable system without financial preference on a global scale. For individuals at
the top of the socio-economic spectrum, the multiple mechanisms adopted by UK, Ghana and the
Mexican health systems provide excellent care according to any standard. But for the citizens at
the bottom of such social distributions, system delivers a little more than a vaccination. The
objective of this report is to conduct a critical and comparative analysis of UK, Ghana and
Mexican health system with special emphasis on financial inequalities discerned.
Financial Mechanisms in the UK
Minimizing health inequalities has been placed along with health gain as a pivotal point of
governmental policy. Leading organizations including the Department of Health, Standards and
Planning Framework with National Improvement Plan place an emphasis on need for healthcare
organizations to set up joint partnership along with other agencies to reduce the rise of health
inequalities (Ledger, 2017). UK government policy was narrowly aimed to address a wider range
of determinant factors of health including; lifestyle, employment, housing, income, crime and
environment in conjunction with actions across governments, community, voluntary and
business sectors (Marmot, 2011). Public Service Announcement targets were dominated by

government departments with relations to health inequalities, including ODPM; improvement of
social housing, transport; reduction in fatal accidents, provision of better employment while
sinking poverty, etc (Turkentine, 2010).
With a GDP of 0.3 percent increase in total expenditure on health as since 1980 till 2019
(Elflein, 2020), the UK’s approach to tackle health inequalities is divided in two:
i. The Black Report and
ii. the Acheson Report.
As a result of the fact that these two are different with reference to their impacts they are vital in
the establishment of a relationship between evidence and policy (Marmot, 2011). In 1997 in the
UK, the Labour party published a report referred to as the Black Report (1980) regarding health
inequalities for which 4 four determinants of were identified:
i. Artefact
ii. Natural selection
iii. Cultural
iv. Structural
Despite the acclaimed comprehensiveness, it was observed that no mediation in healthcare was
being conducted in order to reduce health inequalities (Ledger, 2017). The government in power
rejected the report as a result of the high-costing proposals and opposition to the issue, as a result
of which it had minimum impact on policy in over 10 years (Smith & Eltanani, 2015).
Afterwards, the Acheson Report was designed to determine that scientific evidence supported
socio-economic explanations of health inequality. (Marmot, 2011). As a result, the report

collaborated environments including socio-economic factors and individual lifestyles. On the
evaluation of its social determinants, it considered the following:
i. Poverty
ii. Education
iii. Employment
iv. Housing
v. Transport
vi. Nutrition
vii. Ethnicity
viii. Gender
ix. Healthcare
It indicated 3 vital factors namely:
"All possible policies having impact on health should be analysed with regards to their impact on
Health inequalities".
"High priority should be given to health of families with children".
Further steps are required to reduce income inequalities and improve standard of living in poor
households" (Committee of Inquiry, 1988).
The Report was welcomed by the government, although it was not universal, several academics
collaborated on the report which resulted into several criticisms (Bambra, et al., 2010);
i. No Priorities: Some recommendations carried equal-burden. According to Illsley (1999)
“the recommendations were similar to a shopping List.”

ii. No Mechanism: The process in which policymakers renovate recommendations into
actions were necessary. Thus, they were argued to be "politically naïve".
iii. Evidence Policy Mismatch: The absence of collaborating evidence between policy and
application resulted into an undetermined report (Mackenbach, 2014).
iv. Specificity of Recommendations: family health of families including children and high-
priority recommendations were unclear for policy-makers to implement (Turkentine,
2010). Others were too distinguishing and no implementations were considered.
v. Cost effectiveness: The lack of evidence about cost-effectiveness resulted into concerns
especially as a result of the absence of tackling of policies against inequalities. Therefore,
it is important especially since the Black Report was rejected as a result of costly
recommendations.
As a result, the adaptation of the newly adopted policies is associated with the recommendations
following these criticisms.
The life-course initiative is the focus of the UK health inequality, in connection with early years
of childhood which contains an explanatory approach (Bartley, 2016). The Sure Start initiative in
UK was aimed for the improvement of the possibility of young children and families living in
poor areas to experience a change in existing services. As a result, 500 programs were introduced
in 2004 with an objective to reach 1/3 of UK children in poverty. Due to this design, children in
poverty somewhere else will not be considered for the benefits except the policy is converted
from sure to unsure start area (Ledger, 2017).
In 2004, child poverty was the UK government’s aim, with intent in reduction by ¼ since it has
over past years been suffering from high rates of poverty (WHO, 2016). This was calculated
according to households with incomes below 60% of the national median income. Implemented

policies were targeted for individuals in disadvantaged communities; their contributions included
increasing welfare benefits as well as incorporating benefits with impacts for low-paid workers
and through the subsidization of child care (Turkentine, 2010). Research indicate that progress
report regarding the matter was inconclusive, statistics however indicate that between 1996 and
2001, "there was a downfall of 1.3M in the amount of children below 60% of 1996-1997 median
income" (Office for National Statistics, 2002). Besides the fact that it is impossible to attribute
the identified changes to policies alone, children were raised from poverty-range in which
nearest poverty line-resulted into a lack of residual group thereby making existing policies seem
unreachable.
In 2003, Area-Based Initiatives in which UK was mainly focused on policies targeting close
relation to geographical communities with an emphasis on poverty and its disadvantages were
adopted. Such initiatives include:
Health Action Zone which was composed of companies through which 26 areas of poverty and
deprivation in Health were acknowledged, with an astounding total coverage of about 13 million
citizens (Ledger, 2017). The HAZ attempted to implement strategies organize with an objective
to reduce health inequalities. It however, HAZ suffered from a continuous change in operation
being founded in 1997. As a result of ulterior objectives, it is constantly employed by the
government as a reform body in other sectors, which constituted a disadvantage for it.
As a result of its failure, the Redistribution-Welfare-to-Work provided a shift in concertation to
poorer citizens across UK’s social gradient (Black & Morris, 2013). Familiar forms of
redistribution with an emphasis on taxation were designed, it used paid employment as an ideal
escape for citizen poverty and connected benefit payments to employment in a scheme referred
to as the "welfare-to-work". Other implemented policies combined minimum levels despite not

being able to focus on inequality because they do not progressively redistribute (Mackenbach,
2014).
The implementation of UK’s health policies has met with several criticisms, which has resulted
into adoption and readoption of other policies. As a result of its fragmented society, it is difficult
to find a policy which best suits its system, and this may enable the adoption of policies
significant to individual environment at the expense of a national system.
Financial Mechanisms in Ghana
The national pattern of health finance globally depends on differing degrees of resources from
national governments, private and social insurance, foreign bodies, non‐governmental
organizations, households and communities. Unlike in the case of the UK, Ghana has an
unfortunate history of relying on a combination of rare government resources, donor-funded
projects and high-levels of household contributions due to its under-developed nature. Due to an
increase in budget deficits in the 1980s, a deterioration of both quantity and quality of public
health services resulted in higher dependence on payments made by patients through the
implementation of user fees which was supported both by the UNICEF and the World Bank
(Gilson L, 2000). During the early 1990s, concerns were raised regarding the negative impacts of
the fees on equity and access to healthcare (Castro‐Leal, et al., 2014). As a result, Ghana
gradually favoured the implementation of several financial mechanisms with an objective to
reduce risks of disastrous payments (Adisah-Atta, 2017). In more recent times, there is
significant attention towards innovative schemes designed to address health equity issues.
Performance based contracts were introduced in an effort to improve efficiency and equity in the
Ghanaian health sector in the supply department (Ekman, 2016), as well as demand incentives

which were focused on poor people have been attracting an increased attention among policy‐
makers. It is worthy to note that the poorest Ghanaian population remain exempted from health
care, this is including services established to be highly cost‐effective which have begun to fail to
reach the needy (Lagarde & Palmer, 2018). Along these lines, there is an increasing evidence
regarding individuals with the least access who are the poorest and most vulnerable at the same
(Preker & Carrin, 2011). As a result of these factors, a limited access as well as a low utilization
of the important health services is contributory factors to the persistence of disease as well as a
low life expectancy.
Ghana’s GDP on health experienced an increase by 6.8% between 2017 and 2018, to 3.5 of its
total economy (Adisah-Atta, 2017). It is important to note that the Ghanaian health care system
unlike UK, is financed by both direct and indirect tax revenues (Bambra, et al., 2010). With
reference to direct tax and personal-income tax, workers contribute a total of 5% of retirement
income, an amount collected by the SSNIT; a social security organization (Castro‐Leal, et al.,
2014). These rates fall within 0% for incomes less than GH¢180 to a figure of 28% for incomes
exceeding GH¢720 (Adisah-Atta, 2017). Personal tax is a contributor of about 5.2% health
expenditure of the Ghanaian health system.
The heavy reliance of the Ghanaian system on tax enables corporate tax to feature as a funding
source of the country’s health system. The important elements of the debate regarding corporate
tax is about whether an increase will lead to lower wages, low retail earnings, or higher prices.
There is a general assumption an equal share of burden for customers and shareholders, while
others argue for a 10% burden on customers and 90% on shareholders (Lagarde, et al., 2014).
Besides these speculations, corporate tax contributes 7.1% to total health expenditure of Ghana.
At the same time, Value Added Tax (VAT) is used to finance the health sector. Due to this, the

current total rate of collected VAT is 15% (Adisah-Atta, 2017). This includes VAT component
of 10% with additional sector components of 2.5% each.
Unlike the UK, Ghanaian fuel levy is another mechanism through which the country funds its
health sector. In 2005, the levy was second to VAT in contribution to national total tax revenue,
at 8.5% (Castro‐Leal, et al., 2014). Ghana’s fuel composition includes petrol, kerosene and
diesel. Kerosene is consumed more citizens without a constant access to in remote areas. This
has resulted into a high cost of kerosene which consumes a significant part of family’s income.
Due to the fact that kerosene is frequently purchased, it was annualized (Gilson L, 2000)
resulting into more difficulties for these families. Besides the indicated sources, import duty is
also a contributor to the finance of the Ghanaian health sector. It is the third largest contributor of
tax after VAT and income tax for the Ghanaian economy. It contributes a total of 8.0% health
expenditure in Ghana, and apart from the tax, Ghanaian health care is financed by contributions
from health insurance comprising of premiums and pay roll deductions to the (NHIS) National
Health Insurance Scheme and out-of-pocket payments (OOP) (Ekman, 2016).
The design of the mechanisms influencing inequalities in the Ghanaian health sector seem to be
concentrated further towards increasing the gap in inequalities. As indicated, majority of the
revenue generated for health care in Ghana is through tax, which has a more negative influence
on Ghanaians than not. The only advantage is that the quality of the provided healthcare service
at least is impressive, but this is only because it rips off of the meagre income that a majority of
its poor population are able to garner. The system is therefore disadvantageous towards the
reduction of health inequality instead only expands it further as it implies that while the rich are
barely bothered, the country’s poor population are enforced to pay a significant part of their
income in an effort to obtain health care services.

Financial Mechanisms in Mexico
With significant differences to Ghana and the UK, the structure and financing mechanisms of
Mexican healthcare system is a critical impediment to the reduction of health inequity. This is in
the midst of ensuring citizens are guaranteed equal access to basic package of health-care
services with protection from financial destruction as a negative effect of ill-health (Barraza-
Lloréns, et al., 2013). Mexican government preserves multiple, parallel systems for different
population categories, which create incentives for the maintenance or increase of inequity rather
than channelling resources into pressing needs (Danese-Dlsanto, 2011). Although the UK and
Ghanaian systems are different from Mexico’s, an analogy indicates that inequity in consistent to
health care is observed due to the separation of the policies implemented. Mexico’s 100 million
citizens receive health care from a system composed of 3 principal subsystems:
(1) social security institutes which provide health insurance for formally employed people and
their families, such a system is financed by employer and employees payroll taxes including
legally mandated contributions
(2) government services managed by the Ministry of Health as well as limited services from
NGOs for uninsured Mexican citizens
(3) a huge private sector almost financed out-of-pocket because of the coverage of the private
insurance market (Williamson A, 2020).
Closer to the American system, Mexico’s social security sector encompasses different
institutions which provide range of benefits for the advantage of different parts of its labour
market. As the largest of the institutions, the Mexican Social Security Institute (IMSS) has an
organizational structure similar to a huge, vertically integrated; staff modelled health

maintenance organization (HMO). The IMSS was created in response to political pressures of
emerging worker class in association with rapid industrialization (Urquieta-Salomón &
Villarreal, 2015). The organization’s funding mechanism has a foundation in mutual societies
arranged by employees (Leslie, 2019). Since foundation, employers, employees, and federal
government has contributed to its scheme. Access to health care was a significant aspect of these
requirements, though it was created within welfare purposes: which includes the provision of
workers with social security benefits, this includes coverage against health risks; provision of
financial security benefits for retirement; and protection against financial loss which are
associated with disabilities or death (Gutierrez, 2020).
Though affiliation with it is mandatory for citizens employed within the formal economy,
exceptional voluntary insurance schemes are incorporated to recognize the necessity of the
provision of access to social insurance for some workers outside of the formal employee-
employer relationship (Barraza-Lloréns, et al., 2013). Thus, with the increase in formal
employment, there is a corresponding increase in social security coverage enabling it to
eventually cover a majority of the population. However, political pressure from interest groups
stopped the integration of some population groups into the single social security scheme; to cate
for them, multiple parallel social security schemes were created for other formally employed
citizens, including those employed by the federal government, state-owned oil companies
(PEMEX), and military (Williamson A, 2020). Consequentially, these institutions have
developed health care infrastructures, self-sufficiently providing services for members through
separate finance and delivery mechanisms.
In Mexico, health care accounts for 5.3% of Mexico’s GDP as well as an average per-capita
health spending of $520 (Barraza-Lloréns, et al., 2013). The social security sector is responsible

for 33% of its total health spending while the Ministry health service represents 13%. While the
Ministry of Health has been responsible health system stewardship, especially policy making,
regulation, and information gathering, only a fraction of the country’s hospitals have been
certified with a limitation to physician quality. Therefore, while the social security institution
may have been an applicable scheme on paper, it provides a potential for effectiveness and
efficiency while presenting an opportunity to cater for the health of all citizens. It is however
worthy to note that since the creation of the health institution, there has been no major changes
yet undertaken in the structure of Mexico’s health care system (Urquieta-Salomón & Villarreal,
2015). Consequentially, the system remained fractured hovering between citizens access to
social security coverage alias the upper echelons and the uninsured. Thus, a disadvantage of the
system is its complexity, as well as the fact that it is not cost effective, making it essentially
difficult to manage.
Reducing Health Inequalities in Ghana: Recommendations
If equity is the objective of the Ghanaian health system, then policy and evaluation standpoints
have to be long-term. Despite the speed in change of the finance of the tax system, it is possible
to repair the decay demonstrated and achieve greater equity in health status. Empirical evidence
suggests that it is not feasible to continue to implement the same policy on the poorer citizens,
whose means of livelihood is taking a heavy toll. This is why it is important for the country to
adopt a national health care system, one that is not based primarily on a private taxation–funded
scheme. Private and social insurance schemes funded by local taxes have to be integrated and
strengthened as a means for the purchase of comprehensive insurance amenities for the
generality of the populace. While this will further improve the quality of health care, it will take

the burden off citizens from private tax to public tax revenue sources. The single health
insurance scheme is anticipated to explicitly cover an elementary package of health care for
Ghanaians, delivery can be organized in ways to include private sector while ensuring that
public-sector capacity is applied for patients’ benefit. It is easy to integrate arrangements in
which patients can decide providers, with information on their rights and benefits under the
scheme. This system can improve social capital as long as choice is endorsed.
Conclusion
The report conducted a critical and comparative analysis of how finance mechanisms promote or
reduce health inequalities in the UK, Ghana and Mexico. The report focused on Mexico, the UK
and Ghana, expressively demonstrating how they differed as well as the effectiveness and
shortcomings of their health mechanisms. It thereafter proceeded to provide recommendations
for the Ghanaian mechanism as a result of its heavy reliance on private-income tax of a
developing economy and suggested a more central system locally funded.