A PAPER PRESENTED @

THE NATIONAL SCIENTIFIC CONFERENCE OF THE ASSOCIATION OF MEDICAL OFFICERS OF HEALTH IN

NIGERIA (AMOHN)

By

DR. JIDE IDRIS

Commissioner for Health, Lagos State

FINANCING OF PRIMARY HEALTH CARE: COMMUNITY BASED HEALTH INSURANCE SCHEME (CBHIS) – A VIABLE

OPTION.

OUTLINE

Challenges of healthcare Strategies to improve Healthcare

Financing Specific Challenges of Primary Health Care

(PHC) Strategies for revitalisation of PHC Universal Health Coverage Health Insurance as a sustainable

Healthcare Financing Strategy General Overview of CBHIS CBHIS in Lagos State

Current Challenges of Healthcare

Population- ability to mobilize enough money to meet desired expenditure

Disease Burden Economic structure – huge informal sector Budgetary Allocation and demand from

other MDAs High Out-of-Pocket system The private facilities provide healthcare for

over 55% of the population in the State. Quality Issues Human Resource Challenges

Strategies to improve Financing of PHC

Free Health Scheme PPP Revamping the Tax System Increased Budgetary allocation to Health Exploring ways and means of increasing

efficiency of the system Health Insurance (CBHI – pilot schemes): To

replace out of pocket expenditure on health.

x

Y2004 Y2005 Y2006 Y2007 Y2008 Y2009 Y2010 Y2011 Y2012 Y20130.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

5.65

3.28

5.36

5.81

7.01

7.53

5.3

7.87

7.08

7.67

TOTAL PERCENTAGE ALLOCATION OF BUDGET TO THE HEALTH SECTOR, 2004 -2013

% ALLOCATION ( TO...

in p

erc

enta

ge

Specific challenges of PHC

Poor Coordination and Low Level of Community Participation in PHC.

Dilapidated Infrastructure: Inadequate number of staff. Inadequate staff capacity. Poor Staff Attitude (Service-Provider Misconduct). Irregular supply of Essential Drugs and other

commodities Unsustainable Financing.

Universal Health Coverage (UHC)

Definition: WHO defines UHC as access to key promotive, preventive, curative and rehabilitative health services of good quality for all at an affordable cost.

Goal: The goal of universal health coverage is to ensure that all people obtain the health services they need without suffering financial hardship when paying for them.

WHA Resolution 2011 asked: Member States to develop their Health Financing system towards universal coverage.

Primary health care is crucial to attainment of UHC

UHC: Concept

Universal coverage: Lays emphasis on equity. Is a critical component of sustainable

development and poverty reduction. Is a key element of any effort to reduce

social inequities. Is the hallmark of a government’s

commitment

UHC: Factors Responsible for Catastrophic Health Care

Exclusion linked to Social Determinants or Factors outside of Health System: inequalities in income, level of education, Gender, Migrant Status etc.

Weak Health System: Insufficient health workers, irregular supply of life saving commodities and drugs, inadequate health technologies, ineffective service delivery, poor information system and weak government leadership.

Non-functional and unsustainable Health Financing System. The other building blocks of the health system cannot function if the financing system is weak.

UH: Component

Access to care.

Quality of care.

Sustainable financing (reduction of out of pocket expenditure on health)

Health Insurance as a Sustainable Healthcare Financing Strategy

Health risks are usually insurable, in that health crisis occur to individuals mostly independent.

In health insurance there is usually interval between time of payment and time of use of health care services This makes it possible demand for health care services by members who ordinarily could not afford the real cost of services.

The poor benefits from health insurance in that they usually bear high indirect costs of treatment due to their limited ability to mitigate risk.

Types of Health Insurance

Social Insurance: Provision of insurance with some social considerations.

There are two types of Social Health Insurance: Mandatory Health Insurance Scheme: For the Formal

Sector (NHIS). Community Based Health Insurance Scheme: For the

informal sector.

Market Insurance: Provision of insurance with purely commercial consideration. The price of market insurance is usually beyond the reach of low income earners.

Concept of Community Based Health Insurance Scheme (CBHIS).

CBHIS A micro finance scheme for healthcare delivery

Designed mainly for covering health risks.

Its emergence is as a result of the crisis in delivery of healthcare to the low income people and the success of community based micro-credit schemes

Is a form of decentralization process too empower local communities fulfill their health care needs.

CBHIS is based on the realization that that even the poor can make small, periodic contributions that can go towards meeting their health care needs.

Concept of CBHIS contd.

A tool in financing healthcare provision in low income environments.

Provides income protection measures

Designed to improve access to healthcare through risk pooling and resource sharing.

The concept is more applicable and work for informal sector

Needs to be piloted before scale-up

Strengthens demand side and thereby helps the poor to articulate their own healthcare needs.

Concept of CBHIS contd.

Better positioned to organize the provision of health services which is pre-condition for generating demand for health insurance.

Incorporates both financing and provision aspects of healthcare delivery.

Better positioned to harness information, monitor behaviour and enforce compliance among members.

Has lower transaction costs than market or mandatory insurance because it is managed by local organizations

Attracts higher membership because it community based and therefore enjoy the support and trust of the local people.

Depends on local incentives and enforcement structure.

Features of CBHIS

Voluntary participation of the people

Not for profit

Managed by the community

Risk pooling and cost sharing.

 May collapse in the presence of covariate or aggregate risks.

Factors that may constraint enrollment into CBHIS

Income

Religion

Ethnicity

Quality of care

Benefits of CBHIS

Offers financial protection for low income earners.

Mobilize resources through members contributions.

Eliminates of social exclusion

Promotes organisation and provision of health care services according to the need of the community.

Challenges of CBHIS

Setting Incentives : How to set incentives for scheme managers to expand risk pool and better manage CBHIS in low income settings is a major challenge

Adverse selection problem: Usually mitigated by

defining households as units of insurance as opposed to use of individuals.

Moral hazard problem: Increasing individual health risk after enrolling due reduced care of health after joining or over consumption of medical services. Usually mitigated through group insurance contract.

Majority of CBHIS depend on external funding for sustainability.

The poorest people could not afford to enroll may still not be covered.

The reach of CBHIS is limited due to small number of schemes and small membership. However this could be improved upon.

Challenges of CBHIS contd.

CBHIS may collapse if too many people turn out to require healthcare services.

Individuals have no options. Its either you enroll or you don’t.

Development and design of a scheme with regards to timing and periodicity of payment is crucial to the success of CBHIS

Schemes that allow both households and individuals as unit of insurance tilt membership in favour of household by giving discount.

CBHIS – Rationale

Collaboration between governments (State and LGA)

Address HRH issues Private sector resource PHC challenges / address issue of access Address the informal sector / poor and

vulnerables Prepayment mechanism Community Engagement / Involvement Element of economic empowerment and

enterprise promotion Element of Risk Sharing

Lagos State (LS) CBHIS: Options

Option 1 The Government provides the Primary Health Care

(PHC) facility and equip, interested private provider to staff and manage the facility.

Option 1a

The Government provides the Primary Health Care (PHC) facility,

interested private provider to equip, staff and manage the facility.

Option 2 The Government would make use of the private

practitioner’s facility, staff and equipment.

The Ikosi-Isheri and Ibeju-Lekki LGA and CDA selected Option 1 for implementation

State Government – Payment of subsidies, capacity building and

Technical support, M & E, mobilization support and facility

development

Local Government – facility development and maintenance,

payment of

premiums for selected/needy community members

Community members – premium contribution and ownership / BOT

Private sector – staffing, equipping and service provision

Economic Empowerment (Skill acquisition) / Enterprise promotion

through WAPA and microfinance institutions

Referrals

LS CBHIS: Component

LS CBHIS: Data Management

A software developed for the scheme that is accessed at 3 levels: Administrator (SMOH), Facility (Provider) and MHA.

The MHA provides data on: enrollees,

premiums paid. The Provider provides data on clinic

utilization, diagnoses, referrals. Data is collated and analyzed at SMOH

level with monthly reports produced which serve as a monitoring tool.

LS CBHIS: Payment Structure

Payment of the initial fee confers membership on the enrolling family or individual.

Family Identification /membership card are provided with photographs of the principal enrollee and names of all other dependants to deter abuse of services.

The monthly fee (premium) is to be prepaid for each month by the 28th of the preceding month with a grace period extending into the 7th of the new month.

Payment after this period attracts a 10% surcharge after which services will be suspended for the defaulting member until the payment is effected.

Provider payment is by capitation

Subsidy paid by government

LS CBHIS: Benefits Package

Treatment of common ailments Antenatal care Family planning. Immunization. Management of uncomplicated (normal) deliveries. Referral to secondary care centre. Health education Provision of other services under the free health

scheme of government e.g malaria and TB. Skill acquisitions training by WAPA. Provision of soft loans for those with identified trade.

LS CBHIS Pilot: The Ikosi-Isheri Scheme

Began operations at the Olowora Primary Health Centre in July 2008.

Scheme is targeted at the peri-urban Olowora, Magodo and Isheri communities, with an estimated population of 70,000 persons.

Premium is set at #1200.00 per month (initially N800) for a family of six and N600.00 per month for individual enrollees.

#300 per month is paid for any additional member exceeding accepted family unit of six.

The scheme offers primary healthcare services to all enrolled members of the community.

The scheme is in its sixth year of operation and has enrolled 18,092 people since inception at one time or the other.

Total Enrollee Population/Year

2009 2010 2011 20120

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2482

3297

4144

4705

Total enrollee Population

Cumulative Enrolee Population

Scheme Service Access Pattern

Morbidity Profile of patient Encounters

Families with ANC Users

Premium Subsidy Profile

The Ibeju-Lekki Scheme

Commenced operation on the 1st February, 2011

Located at two Public facilities Awoyaya and Iberekodo Health Centres

Premium is set at N 1,200 less subsidization.

Capitation for provider is set at N1,500/ family of six

Higher number of subsidized families (1,150 versus 500 in Ikosi Isheri) Instead of reimbursing 100%, reimburse 50%

Low operational processes requiring training for Ikosi Isheri MHA staff

Ajeromi Scheme

Scheme commenced operations in January of this year Tolu PHC.

The scheme is managed by a 7-member Board of Trustees of the Mutual Health Association (MHA) for Ikosi-Isheri.

Premium is N1,200 for a family of six , N300 for any additional member and N600 for individuals.

Currently there are total of 2157 enrollees

LS CBHIS: Studies

Actuarial Analysis of Ikosi-Isheri Scheme

Actuarial studies conducted to ascertain ideal premium and subsidy level for scale-up and for maternal and child care in 2012.

Participatory Wealth Ranking exercise conducted in Ibeju-Lekki selected communities to identify the poor.

LS CBHIS: Challenges

Rise in attrition rates

Poor Data Management

Poor support from LCDA Leadership

Inadequate M & E

Pro-poor component yet to be

incorporated

Lessons Learned

A latent period is requisite to build up numbers for scheme viability.

Attainment of optimal population requires Initial Intense Mobilization while sustenance and increase in population requires continuous mobilization strategies.

Quality of Care is a powerful tool in sustaining continuous enrolment through word-of-mouth adverts

Scheme uptake is geographically determined by proximity of a target community to MHA office/information center/healthcare provider

Lessons Learned

Infrastructure and processes necessary for the proper enforcement of risk management rules must be implemented before launch of scheme

Committed leadership is key success factor for the scheme (both LCDA and BOT leadership).

Feedback from community is essential to scheme success.

Setting subsidy level targets encourages more determined participation by BOT.

Moving Forward

Outsourcing of data management Increase information sharing with members

through more regular meetings and sensitization in all communities- stakeholders meeting now quarterly rather than yearly

Consider loyalty plans to encourage low utilizers to stay in the plan.

Consider alternative premium structures to increase persistency.

Commence means testing for selecting deserving families for health plan subsidies.

Moving Forward

Consider budget limits and subsidy targets going forward.

Need for innovative methods of facilitating sustained premium renewal

Consider alternative community and individual outreach approaches- employment of community youths to conduct daily marketing of insurance with targets is being explored by the BOT.

Consider bringing on board HMOs to stimulate MHOs and the development and growth of CBHIS at the grassroot.

A blueprint is being developed to scale up the CBHIS to all the LGAs/LCDAs with the incorporation of the Maternal and Child Health Reduction Programme.

Conclusion

CBHIS is not just a viable option, but the most sustainable mechanism for financing of PHC.

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Thank you for your

attention