Hospital laboratories play a central role in disease diagnosis, monitoring, and treatment outcomes. In general, laboratories play pivotal roles in disease surveillance, with the WHO estimating that about 60% to 80% of all clinical decisions, including those regarding diagnosis, treatment, and discharge, stem from outcomes of accurate and reliable laboratory investigations and data from these laboratories
Despite its critical contribution to healthcare delivery, many public hospital laboratories in Ghana face significant financial and operational challenges. The lack of a dedicated funding mechanism for laboratory operations often leads to frequent shortages of reagents, malfunctioning equipment, and delayed diagnostic services. To address these challenges, there is an urgent need to establish a Hospital Laboratory Account modeled after the existing Hospital Pharmacy Account system
Background and Context
In the late 1980s and early 1990s, Ghana faced frequent shortages of essential medicines and significant inefficiencies in procurement. In response, the Ministry of Health (MOH) implemented the Drug Revolving Fund (DRF). Established in 1989 under the ‘cash-and-carry’ scheme, this initiative allowed health facilities to retain proceeds from drug sales to replenish their stock (3,4).
The policy aimed to ensure the continuous availability of medicines while reducing reliance on central government budget allocations. Recognized as one of the most impactful interventions in the health sector, it has fostered self-sufficiency and made affordable medicines accessible to the average Ghanaian. The policy continues to operate under the National Health Insurance System (NHIS) to this day.
Over the years, this mechanism has ensured a steady supply of drugs, improved accountability, and reduced dependence on central government funding (4,5). Public hospital laboratories continue to depend significantly on erratic budget allocations and donor funded programs, which frequently prove to be inadequate or delayed.
The lack of a consistent financial framework hampers their ability to maintain operational efficiency and respond to diagnostic needs.
The sense of professional embarrassment, moral and ethical frustration, and financial irony (given that laboratories are often seen as revenue generators for hospital facilities) substantially affects staff morale.
Furthermore, it raises questions about institutional practices, especially considering the high level of training and expertise of Ghanaian Medical Laboratory Professionals.
It is disheartening to hear the Ministry of Health suggest that outsourcing our laboratories to the highest bidders or relying on equipment placement and profit sharing alone with these hospitals will resolve Ghana’s health challenges, particularly as it attempts to separate the NHIS tariff for diagnostics.
The case of the Taylor & Taylor Company Limited offers critical insights for the Hon. Minister.
The first large-scale equipment placement initiative in the country was destined for failure due to a significant oversight, lacking a sustainable funding mechanism to ensure that the vendor would be compensated for their investment.
Consequently, the funds generated from the equipment placement were diverted into a consolidated fund within the hospitals, which, as is often the case, was poorly managed and inadequately accounted for. To address these issues, the establishment of a Hospital Laboratory Account is essential.
This initiative would enhance the efficiency, accountability, and sustainability of laboratory services within our institutions. Furthermore, it would effectively reduce diagnostic costs, modernize laboratory facilities, and equip them with the necessary tools, all of which align perfectly with the Ministry’s objectives (6,7).
The Case for a Hospital Laboratory Account
Establishing a Hospital Laboratory Account would enable laboratory units to generate, retain, and reinvest revenue from diagnostic services. Such a model, which is intended to follow the mechanisms of the Pharmacy account arrangement, would enhance efficiency, accountability, and sustainability of laboratory operations (8).
The following are additional reasons why there is an urgent need for the creation of the account: Parliament of Ghana. Health Sector Reform and Sustainability Bill (Draft). Accra: Parliament;
Sustainability of Laboratory Operations:
Establishing a dedicated account will guarantee a continuous supply of essential reagents,
consumables, and maintenance of equipment, independent of the often delayed central funding. This ring-fenced account, supported by legal provisions, would safeguard against political interference, even with changing government administrations.
Unlike the current scenario, where a new government might replace existing contracts under the guise of “creating jobs for the boys,” this approach would prevent arbitrary shifts in staffing. It also avoids the risk of altering contractual agreements related to equipment placement at facilities or profit-sharing arrangements with facility management, which has been proposed by the ministry (9).
Retooling and Infrastructure Upgrade:
Funds accumulated through laboratory services could be used to procure modern diagnostic
equipment, upgrade infrastructure, and improve service delivery. The recent direction by the Public Accounts Committee (PAC) to Korle Bu Teaching Hospital, asking management to return funds that were used from the Revolving Drug Fund, is enough assurance that, should the Hospital Laboratory Account be created, there would be no opportunities for mismanagement, as has become the common practice of most hospitals (8,9,10).
Enhanced Quality Assurance:
Financial autonomy would allow laboratories to allocate resources to internal and external quality control programs, accreditation, and staff capacity building, ensuring standardization and reliability of laboratory results (8,9).
Reduced Service Interruptions:
With a revolving financial mechanism, laboratories can and would quickly respond to supply
shortages, avoiding diagnostic service disruptions that affect patient care. It will also eliminate the levels of professional embarrassment, moral and ethical frustration, financial irony (considering laboratories remain the cash cow of hospital facilities), impact on staff morale and institutional reflection that are commonly witnessed in our healthcare facilities, considering the level of training and the pedigree of Ghanaian Medical Laboratory Professionals (comparable to only Nigeria in the sub region) (10).
Improved Accountability and Financial Transparency:
Like the pharmacy account, the laboratory account will promote transparency in revenue generation, procurement, and expenditure tracking (11).
Support for National Health Insurance Scheme (NHIS):
By ensuring the timely provision of laboratory services, the account will enhance the strengthening of the NHIS implementation and hospital reimbursement processes (12)
Alignment with Health System Strengthening Goals:
Establishing this account would ensure alignment with the Ministry of Health’s agenda to build resilient health systems and strengthen diagnostic capacity across public hospitals (13).
Legal and Policy Considerations
While no specific Act currently mandates the establishment of a Hospital Laboratory Account, it can be instituted through policy directives from the Ministry of Health, similar to the Revolving Drug Fund. The framework could be integrated into existing hospital financial management systems and aligned with the Public Financial Management Act, 2016 (Act 921), to ensure accountability and transparency. Clear guidelines on fund management, approved expenditures, and signatory authority that safeguard the integrity of the account (14,15).
Expected Outcomes of Establishing the Hospital Laboratory Account
The funds from the Hospital Laboratory Account is expected to provide, among others:
- A sustainable funding source for routine and specialized laboratory services.
- A reduction in equipment downtime and an improved diagnostic turnaround time.
- An enhanced laboratory accreditation, quality assurance, and staff motivation.
- An increased public confidence in laboratory services within public hospitals and
- An improved data availability for disease surveillance and health planning (16).
Conclusion and Recommendations
In conclusion, the establishment of a Hospital Laboratory Account is not only necessary but urgent. The Hospital Pharmacy Account system has proven effective in sustaining medicine availability and promoting financial autonomy in Ghanaian hospitals (17).
While not explicitly created by an Act of Parliament, its basis in MoH policy and the National Medicines Policy ensures its legitimacy and operational importance. Establishing a Hospital Laboratory Account would provide similar benefits, enhancing the sustainability and efficiency of diagnostic services.
As the healthcare landscape evolves toward evidence-based decision-making, robust laboratory systems form the backbone of effective diagnosis and treatment. By adopting a model like the Hospital Pharmacy Account, public hospital laboratories in Ghana would achieve financial autonomy, sustainability, and improved service delivery.
It is recommended that:
- The Ministry of Health develops a national policy framework for Hospital Laboratory Accounts.
- The Ministry, through its agencies, pilots the system in selected facilities to demonstrate its effectiveness.
- Laboratory and finance departments collaborate to design transparent accounting and reporting mechanisms.
- Parliament considers integrating laboratory financial autonomy within broader health sector reforms (18). Thank you.
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Author, Dr. Felix Kodzo Besah Sorvor, is the President of the Democratic Forum for Medical Laboratory Professionals (DFMLP).
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