DEVELOPING A PRIVATE

HEALTH INSURANCE
COMPANY
PROJECT CHARTER
JEFFREY YOUNGMANN
3/31/2013
Contents
EXECUTIVE SUMMARY .................................................................................................................................. 2
PROJECT PURPOSE ........................................................................................................................................ 3
Business Need ........................................................................................................................................... 3
Business Objectives................................................................................................................................... 5
PROJECT DESCRIPTION.................................................................................................................................. 6
Project Objectives ..................................................................................................................................... 7
Project Requirement ................................................................................................................................. 7
Project Constraints.................................................................................................................................... 8
Project Assumptions ................................................................................................................................. 8
Preliminary Scope Statement ................................................................................................................... 8
RISKS.............................................................................................................................................................. 8
PROJECT DELIVERABLES ................................................................................................................................ 9
PROJECT DURATION ...................................................................................................................................... 9
SUMMARY MILESTONE SCHEDULE ............................................................................................................... 9
SUMMARY BUDGET .................................................................................................................................... 10
Personnel Resources ............................................................................................................................... 10
PROJECT APPROVAL REQUIREMENTS ......................................................................................................... 10
PROJECT MANAGER/ CONSULTANT............................................................................................................ 11
Associate Consultants ............................................................................................................................. 12
Medical Practitioners (3)..................................................................................................................... 12
I.T Professionals (2) ............................................................................................................................. 12
Actuary (1)........................................................................................................................................... 12
AUTHORIZATION ......................................................................................................................................... 13

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EXECUTIVE SUMMARY
In 2003, the National Health Insurance Act (Act 650) was passed into law by the Parliament
of Ghana to secure the provision of basic healthcare services to persons resident in the country
through district mutual and private health insurance schemes. This Act established the National
Health Insurance Scheme as a healthcare financing mechanism to remove financial barriers that
were inherent in the erstwhile cash and carry system at that time. The National Health Insurance
Scheme has transformed the health delivery system in Ghana from pay-for-service system to an
accessible cash-free system.

Over time, the benefits provided under the National Health Insurance Scheme have become
inadequate to suffice the healthcare needs of many Ghanaians. The inefficiencies associated with
the implementation, and the politicisation of the NHIS has made it an unattractive choice for many
middle class workers.

This project seeks to establish a private health insurance company that does not only
provide quality basic healthcare needs to its subscribers but fast access to specialist care. It will
aim at providing tailor-made medical coverage with flexible payment options to its subscribers
with emphasis on preventive health. The backbone of this health insurance scheme is information,
communication and technology with e-health at the heart of its operations. This health care
financing plan would be the leading private health insurance scheme in Ghana, Africa and rest of
the world.

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PROJECT PURPOSE

Business Need
Health insurance is insurance against the risk of incurring medical expenses among
individuals. The insurance policyholder contracts the insurance provider to cover his or her
medical expenses. This contractual agreement would require the policyholder to purchase an
insurance cover to enable him or her enjoy medical benefits. This contract can be renewable or
lifelong or mandatory.
There are two ways of paying for healthcare service in Ghana; purchasing health insurance
or paying out-of-pocket. After the abolishment of the cash-and-carry system, health insurance has
become the preferred payment mechanism for medical bills for many Ghanaians. Statistics from
the National Health Insurance Authority shows that close to 90% of medical bills are paid by some
form of insurance [Daily Graphic, 20th September, 2012, pg. 50]. The latter option of paying-out-
of-pocket is gradually becoming obsolete and the average Ghanaian now understands the need for
health insurance.
Over the years, 22 million out of the over 24 million Ghanaians have registered under some
form of health insurance at the end of 2011 [Abbey, R. (2012) NHIA chides Akuffo-Addo over
alleged NHIS collapse, myjoyonline.com [internet] 22nd August 2012]. However, only 9 million
are currently active members representing a little over 37% of the population. This huge deficit is
as a result of various factors with the main ones outlined below.
The pro poor inference underlining the NHIS: Many people see the NHIS as a scheme for
poor people who cannot afford basic healthcare needs. The NHIS is also designed in such
a way that the benefit packages cater for mainly primary health care needs restricting both
the subscriber and the service provider to arigid rudimentary basket of services and
medicines.
Delays in claims reimbursement: the service providers have come to rely on claims
payments as a source of funding for their daily operations. Delays in claims reimbursement
directly means lack of funds to purchase medicines and supplies, pay salary of employees
(in the case of private providers) and improve infrastructureamong others. According to
Legislative Instrument 1809regulation 38(I), a claim for payment of health care service
rendered which is submitted to a scheme shall, unless there is any legal impediment, be
paid by the scheme within four weeks after the receipt of the claim from the health care
facility. Currently it takes several months for claims to be reimbursed to service providers.
This has negatively affected service delivery at provider sites with some accredited health
facilities reluctant to provide service to NHIS card bearing members.
Poor customer service and quality of care: Because of the large number of patients that
throng the health facilities,nurses, midwives and other health attendants are unable to
provide adequate customer service. Patients spend hours retrieving folders from the records
department and going through fundamental procedures such as temperature and blood

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 pressure readings and weight measurements. Even longer hours are spent waiting to consult
a doctor. The large numbers is also a threat to the level of quality of care provided at the
health facilities.
Politicization of the scheme: The NHIS being a state-owned social intervention program
has helped the scheme especially in the area of funding. On the flip side, well-intended
projects such as the capitation pilot and the one-time premium project have been bashed
by the opposition rendering them unpopular and rescinding the already wailing public
interest in the scheme.
These factors have made the NHIS unattractive to many middle income earners who spend
most of their time at workplaces. The delays and inefficiencies force them to pay out of pocket to
enable them access fast and more efficient healthcare services at high end private and quasi-
government health facilities.It has therefore become clear thatthere is a need for an
intermediarybetween socialhealth insurance and out-of-pocket payment for healthcare services.
Private Health Insurance schemes offer an alternative for individuals and groups that are
dissatisfied with the services under the social health insurance scheme and would not want to pay
for healthcare services out-of-pocket. The private schemes offer improved healthcare services at
provider sites, a wider basket of healthcare services and reduced claims reimbursement time with
much higher premiums than social health insurance schemes. Problems that have bedeviled the
NHIS such as provider shopping and poly pharmacy are better managed by the private health
insurance scheme because the numbers enrolled on their schemes are not as many as the NHIS.
As a fast and emerging one, Ghanas economy employs approximately 9 million people
with 10% belonging to the formal sector [Otoe C.N., Osei-Boateng C. &Asafu-Adjaye P.: The
Labour Market in Ghana].A countrys health has a direct correlation with its productivity; that the
health status of employees in a company is a major determinant in their output. Employers in
Ghana have recognized this relationship between the health of the employees and the productivity
of their companies. Hence to make them more competitive and attractive, they are searching for
alternatives to keep their employees healthy in order to reap the profits that come with it.

There two types of private health insurance schemes that can operate in the country. They
are private mutual which is a company limited by guarantee and private commercial which is a
company limited by liability. They target mainly corporate clients.For a new private scheme its
indirect competition is the NHIS since they are in the business of providing financial protection
for all residents with a particular attention to the poor and vulnerable. It is funded with the state
resources and heavily subsidized registration fees. It is basically a social intervention program run
by the state.The direct competitors are the 10 private health insurance schemes that are licensed
by the National Health Insurance Authority to operate; nine (9) private mutual schemes and one
(1) private commercial scheme. They have enrolled over 60,000 people, mainly corporate
institutions, covering 6.7% of the market share. This indicates how big the market is and presents
a business opportunity for a financial institution to develop a healthcare financing plan.

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Business Objectives
The objectives of this project are
1. To maintain a financially sustainable health financing company
2. To provide subscribers with tailor-made healthcare service with affordable financing plans
3. To provide fast and easy access to the best healthcare facilities
4. To delight subscribers with quality healthcare services
5. To introduce a state-of-the-art health management information system

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PROJECT DESCRIPTION
The projects main purpose is to design and implement a healthcare financing plan that
would be administered through a private health insurance company. The company would seek to
provide subscribers with tailor-made healthcare service with an affordable financing plan to
provide fast and easy access to the best healthcare facilities and introduce a state-of-the-art health
management information system.

The healthcare financing plan would be health insurance products customized to cater for
individuals, families and corporate organizations. The plan would micro-manage each category
carefully, monitoring and assessing their risk and providing top notch medical care to alleviate
each risk. A wider basket of healthcare services and medicines would be incorporated into the plan
to meet the needs of subscribers with the aid of clinicians and actuaries. A major feature in the
company would be the various preventive health incentives that would be attached to each
healthcare plan to reduce the risk of encountering health problems. A comprehensive and
continuous program would be inherent to educate subscribers to participate in preventive
healthcare activities and encourage clients to indulge in them for rewards. This would improve on
the health status of clients while keeping them away from the hospitals and clinics and in the long
term reducing claims cost to the company.
As a company seeking to provide the very best of healthcare services, it would contract
some of the very best healthcare institutions in the country. A range of health facilities which
encompasses all sections of healthcare delivery, from clinics providing primary health care to
tertiary hospitals providing specialist care, would be contracted by the company to provide services
to its clients. Unlike many health insurance schemes, the emphasis would not be on the numbers
of service providers but the quality and accessibility that these providers would offer to our
esteemed clientele. The nature of healthcare requires that the upmost care must be taken when
accrediting a service provider. Thus, a system for assessing the quality of each contracted
healthcare institution would be incorporated in the design of the plan, to ensure that each facility
meets both the qualitative and quantitative requirements to be a service provider for the company.
Access to not only the health facility but to some of the most astute physicians would be the
hallmark of the company.
The health financing plan would include a health management information system that
would streamline the operational activities of the company. With the United States Health
Insurance Portability and Accountability Act (HIPAA) as a substrate, the company would develop
a system that manages membership and claims processing of each subscriber. It is an efficient,
portable and cost effective in the long-term. The system would be integrated at all provider sites
and securely networked allowing clients to access services at health provider with much more ease.
Such a system reduces the burden of paperwork and the storage problems associated with operating
a manual system.

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Project Objectives
The objectives which support the milestones and deliverables for this project have been identified.
In order for the project to be successful, the following objectives must be met within the designated
time and budget allocations:
1. Design the healthcare financing plan and present to the Board within 20 days from date of
commencement
2. Develop the operations manuals for the health insurance company and present to the Board
within 20 days after the approval of the healthcare financing plan
3. Prepare all licensing requirements and present to the Board within 30 days after the
approval of operations manual for the health insurance company.
4. Train all staff employed by the company within 10 days from the day of commencement
of business
5. To provide technical assistance to management of the company in running the health
financing plan for the first 3 months (66 working days) of operations.

Project Requirement
This project must meet the following list of requirements in order to achieve success:
o The project manager must be provided with a project office equipped with a desk, a
chair,and cabinet, a computer with internet connection and general office stationery as
well as transportation for all official duties only.
o The project manager must report for duty not later than 8:00 am and leave not earlier than
5:00 pm everyday excluding weekends and public holidays. He must be entitled to a 2
hour lunch break from 12:00 pm to 2:00 pm.
o The project manager shall be remunerated at a rate agreed upon by both parties per day.
o The project manager shall engage Medical Physicians, Information Technology
professionals and an Actuary (preferably from the Company of the Project Sponsor) for
specialized tasks at a rate agreed upon by both parties per day. Each professional must
be approved by the Board before engagement.
o The Board must appoint a Project Authorization Officer/ Body to whom the Project
Manager shall report and be accountable. The officer/ body would also provide guidance
on key issues such as company policy, objectives, marketing strategy, resource allocation
and decisions involving large expenditure.
o The Board must draw up a Service Level Agreement to be endorsed by both parties prior
to the commencement of the project.
o The project manager must provide a report on the status of implementation of the project
every two weeks. The project manager must produce ad hoc reports on the status of
implementation as and when the Board requires.
Additional requirements may be added as necessary, with the approval of the Board, as the project
moves on.

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Project Constraints
The following constraints pertain to this project:

o The Board must sanction the commencement and closing of each objective. The approval
of all deliverables per objective shall mark the closing of that objective.
o The Board shall approve a budget for the project and the project manager must operate
in accordance to the allocated budget and timelines

Project Assumptions
Upon agreement and signature of this document, all parties acknowledge that these lists of
assumptions are true and correct:
1. The project has the full support of the Board
2. The Board shall provide additional resources if necessary
3. An objective completed and approved earlier than scheduled and with lesser than the
allocated resources shall be considered closed and remunerations shall not be affected

Preliminary Scope Statement

This project will include the design of a health financing plan, the development of a company to
administer the plan, preparation of all licensing requirements, training of staff of the company and
offering technical assistance to the management of the company. All project work shall be
independent of daily and on-going operations of the Project Sponsor. All project objectives shall
be approved by the Board before considered closed or complete. The main duty of the project
manager would be to design, develop and build capacity of the company to become a sustainable
health insurance scheme. All funding for the project shall be provided and managed by the Project
Authorization Officer/ Body up to and including the allocated amounts in this document. Any
additional funding shall require Board approval. This project would be closed upon submission of
a final project report within 30 days after the approval of all deliverables by the Board.

RISKS
Every project has some form of risk attached. The following risks for this project have been
identified. The project manager would determine and employ the necessary risk mitigation/
avoidance strategies as appropriated to minimize their likelihood.

1. Potential delays in registering the company at the Registrar Generals Department

2. Potential delays in licensing and registering company as a private health insurance
scheme
3. Potential delays in approval of project objectives can delay the initiation of the next
one
4. Potential delays in contracting health facilities to be service providers for the company

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PROJECT DELIVERABLES
The following deliverables must be met upon the successful completion of the project. Any
changes to this list must be approved by the Project Sponsor

o Healthcare Financing Plan Design

o Operations Manual for the Health Insurance Company
o Accreditations Manual for Contracted Providers by the Company
o All NHIA Licensing Requirements
o Staff Training Report
o 3 Monthly Operational Reports
o Final Project Report

PROJECT DURATION
Each objective under the project is expected to take the following number of days to complete

TASK DURATION (DAYS)

Signing of contract and commencement -
Complete Healthcare Financing Plan Design 20
Complete Operations and Accreditation Manuals 20
Prepare Licensing Requirements 30
Submit Training Report 10
Commencement of Business -
Submit 1st Operations Report 22
Submit 2nd Operations Report 22
Submit 3rd Operations Report 22
Submit Final Project Report 30
Project Complete -
TOTAL 176

SUMMARY MILESTONE SCHEDULE

A summary milestone schedule is presented in the table below. As the project requirements are
more clearly defined, the schedule may be modified. All changes would be communicated through
the status implementation meetings to the Board.

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 Summary Milestone Schedule- List key milestones relative to project start
Project Milestone Target Date
(DD/MM/YY)
o Start Project 06/ 05/ 2013
o Complete Healthcare Financing Plan Design 30/ 05/ 2013
o Complete Operations and Accreditation Manuals 28/ 06/ 2013
o Prepare Licensing Requirements 12/ 08/ 2013
o Submit Training Report 26/ 08/ 2013
o Commencement of Business 02/ 09/ 2013
st
o Submit 1 Operations Report 16/ 10/ 2013
nd
o Submit 2 Operations Report 14/ 11/ 2013
rd
o Submit 3 Operations Report 15/ 12/ 2013
o Submit Final Project Report 16/ 01/ 2013
o Project Complete 17/ 01/ 2013

SUMMARY BUDGET
Personnel Resources
The following table is the summary budget based on the personnel resources cost estimates for the
project. All rates are negotiable except for the fees for specialist services.

Project Objective No. of Rate

Cost (GHC)
Days (GHC)
Design of Healthcare Financing Plan
Development of Operations and Accreditation
Manuals
Preparation of Licensing Requirements
Training of Health Insurance Company Staff
Provision of Technical Assistance to Company
Fees for specialist services for 6 persons (3 Medical
Physicians, 2 I.T. professionals and 1 Actuary at 10
days for each)
Total

PROJECT APPROVAL REQUIREMENTS

This project would be deemed successful when all the objectives have been achieved and the
deliverables approved. This would include a full and comprehensive project report on all activities

10
conducted throughout the project life cycle. Success would be determined by the Project
Authorization Office/ Body approval and subsequently the Boards.

PROJECT MANAGER/ CONSULTANT

Jeffrey Youngmann BScis a versatile and self-driven professional with academic training in
Statistics and Computer Science and practical experience and exposure to the operations of health
insurance schemes in Ghana and abroad. His experiences working with the Operations Division of
the National Health Insurance Authority (NHIA) has given him a firm grasp of all subjects related
healthcare financing. His expertise is in developing healthcare financing schemes, collecting,
collating and analysing data, developing monitoring and evaluation tools, developing information
systems and electronic healthcare solutions and capacity building. As an employee of the National
Health Insurance Authority, he revised the Uniform Monthly Reporting Format for 150 National
Health Insurance District offices and 10 Regional offices on all operational activities and
coordinated the training of over 920 NHIS staff. He also collected and collated data from the 150
district offices and 10 regional offices and produced regular operational reports. He collaborated
with Actuarial Division in the data analysis for improving provider payment mechanisms and
financial sustainability projects such as NHIS Capitation pilot. He also assisted the Human
Resource Department in their nationwide audit of district and regional offices. He collated
applications from service providers for NHIS Accreditation. He has also conducted monitoring
and evaluation exercises in all 10 regions to inform appraisal of NHIA district and regional offices.
He developed the monitoring tool and was part of the team that reviewed the field inspection tool
for private health insurance schemes conducting several field inspections and monitoring in the
process. One of his roles was to coordinate all matters on Information Technology that related to
the operations of the scheme. This led him to be part of the committee on Regionalizing ICT
Equipment Maintenance and Procurement as well as the NHIS Biometric Registration and Instant
ID card project. Mr Youngmann is currently a liaison for The McGrigor Corporation (UK) in
providing consultancy services to AXA-PPP International in the extending its operations to Ghana
and was the lead consultant for the development of a mutual health insurance scheme for Apex
Capital Partners. He was a member of the Ghanaian Delegation to International
Telecommunication Union Conference (Abuja 2005). He is a professionally trained project
manager and has strong communication (written and verbal), interpersonal and organizational
skills and excellent coordination skills.

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Associate Consultants
Medical Practitioners (3)
The three(3)medical practitioners to be contracted must:

1. be duly licensed to practice the relevant profession in Ghana by the appropriate regulatory
body of the profession;
2. be a member in good standing of the relevant national association of the profession;
3. abide by the Code of Ethics of the profession; and
4. must have relevant experience in managing health insurance claims
5. must have worked in an NHIS accredited health institution

I.T Professionals (2)

Thetwo (2) I.T experts would be required: one a networking specialist and the other a
programming and information systems specialist. They must:

1. Hold a minimum qualification of a degree in Computer Science, nationally or

internationally recognized professional qualification in Computer Science
2. Have relevant experience in Information Systems Management and Networking
3. Must have relevant experience in managing similar projects

Actuary (1)
The Actuary would be required to price the benefit packages and play a major role in designing
the financial model for the scheme. The preferred option is that the Actuary is one already
employed by the project sponsor

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AUTHORIZATION
Approved by the Project Manager:

___________________________________ Date:_________________________

Approved by the Project Sponsor:

___________________________________ Date:_________________________

Name:
Institution:

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