Lawal Qudus Olajide: Challenges Of Health Care Financing In Nigeria: Effective Insurance Scheme As A Way Out

In the last couple of months, social media especially twitter was flooded with #savecitizen drives, aimed at raising fund for medical treatment of compatriots. Laudable as these ventures seem, their sustainability is doubtful, as donor fatigue will set in. For every one citizen saved, there are a thousand and one citizens waiting in anguish to be saved.
Begging to foot medical bill is not alien to our society; we are inundated daily with image display of ailments in our mosques churches and market places. The images displayed often include dehumanizing pictures, showing of sensitive parts like scrotum and breast. To convince would-be donors on the veracity of their ailments, patients often display their ailing body parts to the public. This definitely shouldn’t be the means of financing health care.

Health care is a right not a privilege, its provision should be based on need not ability to pay. A major setback to providing health for all is its cost; financing health is an investment without direct economic returns.

There are two broad ways of financing healthcare, the public financed in which government is responsible for health care of its citizen and the free market driven type, in which health care is the responsibility of individuals and employers. Nations adopt either of the two with modifications to ensure quality health for all citizens.
Nigeria practises mainly free market financing with pockets of public funding in some states in the form of ‘free health’

Free Market driven health financing aim at providing best quality health service through market competition and innovations. Health services are provided at a cost determined by forces of demand and supply, with economic gains by the providers influencing pricing. To ensure individuals (children, elderly, unemployed, low income earners e.t.c) to the left of the demand curve who cannot afford the equilibrium price are not priced out of health care, government provide safety nets.

The free market health financing as practised in Nigeria is devoid of safety net as it is in Singapore (3M programs) & USA (Medicare) where this system is practised. Thus many Nigerian households have reached their CATASTROPHIC THRESHOLD (the percentage of a household’s income above which a given health expenditure is considered to be inimical to the survival of the household.), forcing them to street /social media begging to save their heaths.

Payment for services in market based financing could be directly from personal income in form of Out-of-pocket or through employers, in which employer of labour are responsible for the health of their staff, (an indirect form of out of pocket, as the cost of health provision is considered in formulating staff salary). It could also be a joint venture, in which the employer and employee have an agreement on sharing cost of employee health care. This bring to fore the #savemeka issue which many on twitter argued Silverbird TV ought to have funded as its CRS, though morally right, if there is no such agreement in his employment contract, SilverbirdTV is not bound to do so.

In public funding, governments make budgetary provision to ensure free access to health by all citizens at no cost. To ensure sustainability and avoid overuse some governments opt for revolving scheme in which health is provided at a much subsidised cost. The setbacks for this are that it limits choice and it doesn’t encourage health innovation. The out of stock syndrome (o/s) is also common a feature of this system in Nigeria. Many governments advertise free health on media yet most prescriptions are marked o/s or N/A (not available).

It is unfortunate that the host nation for HEALTH FOR ALL conference, in which African countries resolved to spend at least 15% of its budget on health, still spend a paltry 3.5% a decade after. No wonder our life expectancy remained unacceptably low 47 yrs. With vicious circle of ignorance, poverty and disease, it is obvious that public funding and market based funding (without safety net) cannot ensure health for all Nigerians
Health insurance scheme a novel means of funding which address this problems by sharing health risk over a large population, thereby providing care at cheap cost. It could be state owned or private.
Privately owned insurance scheme has a limitation in form of cream skimming (i.e. selection of less risky groups by insurance companies)

Public Health Insurance scheme has the advantage of pooling huge funds over a large population (making cream skimming unnecessary), eliminating financial burden on citizens at time of illness.

Another form is Community insurance scheme in which community contribute an agreed premium to cover the health need of its member. Expectedly, contribution is voluntary and the fund raised is meagre, posing great challenge in handling cost intensive ailments

NHIS, the Nigerian Public health insurance scheme, operates on 15% basic salary as premium, 5% contribution from patient 10% by government.

As stated on NHIS website, the contributions paid cover healthcare benefits for the employee, a spouse and four (4) biological children below the age of 18 years. More dependants or a child
above the age of 18 would be covered on the payment of additional contributions from the principal beneficiary. However children above 18 years who are in tertiary institution will be covered under Tertiary Insurance Scheme.

Healthcare providers under the Scheme shall provide the following benefit package to the contributors: Out-patient care, including necessary consumables;
Prescribed drugs, pharmaceutical care and diagnostic tests as contained in the National Essential Drugs List and Diagnostic Test Lists; Maternity care for up to four (4) live births for every insured contributor/couple in the Formal Sector Programme; Preventive care, including immunization, as it applies in the National Programme on Immunization, health education, family planning, antenatal and post-natal care; Consultation with specialists, such as physicians, pediatricians, obstetricians, gynaecologists, general surgeons, orthopaedic surgeons, ENT surgeons, dental surgeons, radiologists, psychiatrists, ophthalmologists, physiotherapists, etc.;

Hospital care in a standard ward for a stay limited to cumulative 15 days per year. Thereafter, the beneficiary and/or the employer pays. However the primary provider shall pay per diem for bed space for a total 15 days cumulative per year. Eye examination and care, excluding the provision of spectacles and contact lenses; A range of prostheses (limited to artificial limbs produced in Nigeria); and Preventive dental care and pain relief (including consultation, dental health education, amalgam filling, and simple extraction).

This is an ideal health package to alleviate Nigerians health suffering, however,as it is for all government projects, corruption and inefficiency has plagued the national insurance scheme introduced in 2005 .

It saddening that for a program that dragged about 20yrs from conception to full operation (85-2005), decade after its take off its yet to make meaningful impact in the lives of the masses. The scheme as it is now is targeted at federal workers, whose majority can cater for their health need with/without insurance scheme. Those in the states service and informal sector who easily reach their catastrophic threshold in times of ailment are left uncovered. A 3.5 million coverage of 160 million citizens is far from acceptable.

A major setback to states implementation of insurance schemes at state level, is the cynical attitude of our labor unions towards any scheme that intends to deduct from salary. This cynicism has been built around previous mismanagement of such fund, a ready example is the mortgage deduction.

Insurance schemes are meant to be saving grace when ailments unfortunately NHIS has skimmed out cost intensive treatments. One wonder the essence of having an insurance cover for malaria when diseases that drain citizens pocket(like cancers) are left uncovered.

While we encourage well-meaning Nigerians to continue the charity of saving Nigerians, focus must be placed on making NHIS work.

Lawal Qudus Olajide
medical practitioner and public affairs analyst
@lawalqdus