Paying For Health In Nigeria | Part Four

By Hezekiah Shobiye

This edition rounds up the series on ‘Paying for Health in Nigeria’. In Part 3, I concluded that the aim of an equitable and efficient health financing system has and will probably not be achieved if we do not alter the current trend. I have therefore decided to use this last part of the series to share my recommendations on what I believe is the way forward for the health financing system in Nigeria particularly the National Health Insurance Scheme (NHIS).

However, for a robust analysis, I will start by highlighting some of the major challenges facing the NHIS and then make my recommendations thereafter. The major challenges I want to focus on include: the inadequacies in the act, the economic status of the country, the organisational structure of the scheme and the poor state of the healthcare system.

The first one is on the inadequacies in the act. The scheme is currently optional meaning that apart from the federal government employees, no one else is mandated to enroll in the scheme. Universal coverage will not be possible if this legal framework is not altered. Also, this will lead to adverse selection, attracting more of higher-risk individuals, as the rich and low-risk will not want to join. The potential outcome is a heavy financial demand on the scheme’s fund as high-risk individuals are more likely to make more demands from the healthcare benefit package. Thus draining the pool and pushing the viability and sustainability of the scheme to a gridlock.

The second challenge is the economic status of the country which reflects a high level of inequality and poverty. The ability of potential enrollees to contribute to the scheme is important for its financial viability and sustainability. The large informal sector and the diversity in the economic status also makes it difficult to pool funds and determine premium equitably. In addition, the NHIS presently enjoys funds from the MDG’s office and debt relief gains, which will not be forever. Coupled with this is the fact that majority are still not enrolled because they are not even aware of the existence of the NHIS and its benefits for them.. There is therefore a need for more people to be enrolled and a home-grown way of financing the scheme in order for it to be sustainable in the long run.

Thirdly, there are issues with the organisational structure of the scheme. It is believed that the over-centralisation of power by the federal body is one of the major setbacks of the NHIS. Nigeria runs a three tier government; federal, state and local governments, with the federal, although the highest controlling body, having limited power over the affairs of the other tiers of government. Unfortunately, in reality this is not the case. State governments are not given the liberty and flexibility to tailor the NHIS to meet their exact needs. This is obvious from the fact that so far only 6 out of 36 states have agreed to enroll their public sector employees into the formal health insurance programme.

Fourthly is the poor state of the healthcare system. The NHIS is currently ensnared in a weak healthcare system and the current low utilization rate is precisely what one will expect in a structure built on a weak foundation. It will not stand firm and may eventually collapse if the right precautions are not taken on time! The lack of government’s commitment to healthcare spending, uneven distribution of health facilities in the country, dearth of healthcare professionals, ill-equipped hospitals and health centres all amount to the fact that the NHIS will not be able to effectively and efficiently meet the needs of the Nigerian populace if the system is not retrofitted.

So how can we retrofit the system?

Firstly, the act needs to be made mandatory. This will help to increase revenue collection, at the same time allowing for cross subsidy between the rich and the poor, the ill and the healthy and also between the young and the old.

Secondly, the community based health insurance (CBHI) scheme that targets the large informal sector needs to be strengthened. I particularly propose a public private partnership using a social business model to create a homegrown way of financing and rapidly scaling up the CBHI scheme. Majority still are not aware of the health insurance scheme. Therefore, the government needs to increase media publicity on the benefits of having health insurance. Private sector employers should also be enlightened on the need to insure all of their employees. Incentives such as reduced taxation can even be offered to employers to increase compliance.

Thirdly, a decentralisation of power must occur so as to give state governments freedom to set up separate NHIS programmes that will not be in opposition to the national NHIS. They should be able to develop their own administrative and management systems and accredit their own HMOs. This in turn will pave way for flexibility and variety, as HMOs can choose how to operate efficiently within the various tiers of government. However, it is argued that decentralisation would not solve the problem of fair-financing. The argument is that there is a high level of inequality among the states, as some states such as Lagos contain more of the affluent people of the nation, compared to states like Kano, which contain more of the poorest people that cannot afford to pay for healthcare and stand a higher risk of falling sick easily. Decentralisation will therefore mean that each state has to pool its own funds separately, and as such, states with more of poor people will not be able to generate enough resources and will still be faced with the financial risk of paying and accessing healthcare. Also, the HMOs may become selective of states where they are assured of more enrollment and a larger pool. While this argument is valid, I believe that a robust and transparent system can be put in place by the National Health Insurance Council to effectively monitor the activities of the HMOs and the federal government can always assist poorer states that cannot sufficiently fund their own scheme.

Lastly, the federal government must increase its commitment to healthcare spending from its current level of about 6.5% of the total annual budget to 15% recommended by the WHO and agreed by the African Heads of States during the 2001 Abuja declaration. Government should also pursue more public-private initiatives to build more hospitals and other health infrastructures. The private sector or investors can help to finance health projects by building, operating and transferring to the government at the end of a concession period. There is also the need to engage more of the private sector’s technical expertise especially in the area of management, achieving targets and coming up with innovative and sustainable solutions to solve health problems.

Going further, it is very clear that we have a long way to go and the change that we desire for the Nigerian healthcare system will not happen in the twinkle of an eye. However, I believe that if we begin to take the right steps in the right direction and remain committed, we will get there. Let me therefore conclude with this Chinese proverb I adore so much, ”the best time to plant a tree is 20 years ago, but the next best time is now”. Now is the time for us to start thinking differently and to start taking a more practical and innovative approach towards achieving a very effective, efficient and equitable health financing system for Nigeria.