Testing for Moral Hazard in Caesarean Section in the Ghanaian National Health Insurance Scheme; an Approach using Matching Estimation

Abstract

Health care financing scheme in Ghana is now switching from out- of- pocket payment system to a prepayment system. The reason for  the switch is the impoverishing effect of the out of pocket system. Under the prepayment system, registered members can have access to  health care without any financial obligation. There is thus some incentive for members to over- utilize health care. This study used  maternity data to test for the existence of moral hazard in the demand for caesarean section. The matching estimation approach used  was able to randomize the data and so make unbiased comparison of insured and uninsured patients possible. The results showed that  moral hazard exists. In addition the study also found a high correlation between caesarean section and the National Health Insurance  regardless of the risk type of patient. The study made some recommendations to discourage unnecessary caesarean section and help  improve the efficiency in the operation of the scheme.