Healthcare Financing in the Developing World: Is Nigeria’s Health Insurance Scheme A Viable Option?

Health Insurance is a branch of insurance business, a social device whereby financial loss is spread over so many members of the public thereby allowing healthcare delivery to be spread to the poor and the rich by payment of voluntary or compulsory premiums or contributions that they can afford since income distribution in any society is highly skewed with most people in the very low income brackets.
The idea of a National Health Insurance Scheme was first considered by the authorities in 1962 but successive governments lacked the political will to actualize this dream. It was not until 43 years after when the immediate past President, Chief Olusegun Obasanjo, set apart the sum of 26 billion Naira for the scheme in the 2005 budget. The former president directed at that time that no deductions be made from any government employee until the end of 2006 when the performance of the scheme would have be evaluated. He opined that this grace period would allow for confidence building. His speech at the launch of the program in June 2005 attempted to debunk the widespread cynicism been exhibited by majority of Nigerians about this typical Nigerian white elephant project.
The Nigerian National Health Insurance Scheme (NHIS) was established by Decree No 35 of 1999. The Decree states that “there is hereby established a scheme to be known as the National Health Insurance Scheme (in this Decree referred to as "the Scheme") for the purpose of providing health insurance which shall entitle insured persons and their dependants the benefit of prescribed good quality and cost effective health services as set out in this Decree”.
The NHIS decree statutorily allows each insured person to decide which health centre he wishes to register with. A monthly capitation is paid to the health centre from the pooled funds. Health Maintenance Organizations (HMOs) are empowered to coordinate the activities of the health centers as they dispense healthcare to the insured while the over-all regulation of the scheme rests with the National Health Insurance Scheme Council. The council was established by the same decree.
The WHO has this to say about healthcare financing in Nigeria: “Funding Health in Nigeria is from a variety of sources that include budgetary allocations from Government at all levels (Federal, States and Local), loans and grants, private sector contributions and out of pocket expenses. The value of private sector and out of pocket expenditure contribution to financing the sector is yet to be determined. According to a World Bank source, the public spending per capita for health is less than USD 5 and can be as low as USD 2 in some parts of Nigeria. This is a far cry from the USD 34 recommended by WHO for low-income countries within the Macroeconomics Commission Report. Although Federal Government recurrent health budget showed an upward trend from 1996 to 1998, a decline in 1999 and a rise again in 2000, available evidence indicates that the bulk of recurrent health expenditure goes to personnel. Federal Government recurrent health expenditure as a share of total Federal Government recurrent expenditure stood at 2.55% in 1996, 2.96% in 1997, 2.99% in 1998, declined to 1.95% in 1999 and rose to 2.5% in 2000. Beyond budgetary allocations, a concern in funding the health sector in Nigeria is the gap between budgeted figures and the actual funds released from treasury for health activities”.
The Nigerian NHIS is already facing some problems. Some segments of the populace are left out. Recently, retired senior citizens complained on national television that the scheme does not cater for them. There is the issue of integrating the rural populace who do not have clearly identifiable sources of income since their means of livelihood is mainly subsistence farming. There is also the problem of inadequate human capacity to drive the NHIS. There is still a dearth of necessary professionals grounded in healthcare financing whose input cannot be done away with. And how will the NHIS survive if we do not deal squarely with the recurrent problem of graft? And graft manifests in different ways: from the healthcare provider who does not make essential medicines available or provides poor quality service, to the HMO who deliberately delays/withholds captitation. Many of the consumers grapple with the bottlenecks associated with accessing healthcare under such an administratively cumbersome scheme. Perhaps the greatest problem facing the NHIS is the monopoly it enjoys as lack of competition stifle growth and birth mediocrity. The success recorded in the telecommunication industry in Nigeria so far has been attributed in part to the vigorous competition it is experiencing. Many are already calling for the liberalization of the health insurance business as obtainable in some developed economies.
The foregoing clearly lends credence to the fact that for sustained development in the healthcare industry in Nigeria and the developing world, healthcare financing must not be left in the hands of government alone; certainly not in the hands of inept, pathologic, corrupt governments. It is in this vein that many have proposed other funding options including the somewhat ‘extreme’ idea of wrenching the NHIS from the hands of government lest it goes the way of other public enterprises such as the National Housing Fund, National Provident Fund, and many defunct Pension Schemes.
We should begin to promote the commercial health insurance option as this will bring some life into the health insurance industry in the developing world. Informal prepayments arrangements as is the case with some rural cooperative societies such as Country Women Association of Nigeria (COWAN) have been proposed as an attractive model for low income urban/rural populations in the informal sector since this eliminates the high cost of premiums necessary to subscribe to commercial health insurance. The downside to this model is that the fee-for-service approach may compromise the quality of service provided by healthcare providers. It is also very likely that the amount contributed by these poor families may not be adequate to cater for major illnesses.
Before the developing world finds her feet, donor countries/agencies can explore the possibility of setting up not-for-profit Voluntary Health Insurance Plans (VHPs) which has great potentials for mitigating the numerous health problems of the poor.

Paul Farmer: The Man Who Would Cure The World

The Pulitzer Prize-winning author, Tracy Kidder, described Paul Farmer as "a man who would cure the world". I found the following brief bio about Dr Farmer on Harvard Medical School's website: "Medical anthropologist and physician Paul Farmer is a founding director of Partners In Health, an international charity organization that provides direct health care services and undertakes research and advocacy activities on behalf of those who are sick and living in poverty. Dr. Farmer’s work draws primarily on active clinical practice (he is an attending physician in infectious diseases and chief of the Division of Social Medicine and Health Inequalities at Brigham and Women’s Hospital (BWH) in Boston, and medical director of a charity hospital, the Clinique Bon Sauveur, in rural Haiti) and focuses on diseases that disproportionately afflict the poor. Along with his colleagues at BWH, in the Program in Infectious Disease and Social Change at Harvard Medical School, and in Haiti, Peru, and Russia, Dr. Farmer has pioneered novel, community-based treatment strategies for AIDS and tuberculosis (including multidrug-resistant tuberculosis). Dr. Farmer and his colleagues have successfully challenged the policymakers and critics who claim that quality health care is impossible to deliver in resource-poor settings".
I consider him a great inspiration.

Caesarean Birth at Evangel Hospital

ECWA Evangel hospital trains Family Medicine residents to dispense care and solve common health problems that are common to most people in most places with the most cost-effective approaches. The ability to be able to rapidly carry out a Caeserean delivery is one of the fundamentals of emergency obstetric care. The video is one of several deliveries carried out regularly by the highly competent personnel at Evangel Hospital. Take a peep!

Just rearranged this blog!

I just modified the look of this blog.
Post your comments/suggestions about this to my mailbox. Thanks!