EVALUATION OF HEALTH INSURANCE IMPLEMENTATION IN NIGERIA: GAINS,

CHALLENGES AND POTENTIALS~ Dr Tarry Asoka

8th Annual General Meeting and Scientific Conference of HEALTHCARE PROVIDERS

ASSOCIATION OF NIGERIA (HCPAN), 27th November, 2012 at the Banquet Hall, Airport Hotel, Ikeja-Lagos,

Nigeria.

Take Home Messages• Government budgetary allocations (Federal/State)

to fund healthcare will continue to be inadequate • Health Insurance as an alternative source of

funding is feasible in Nigeria, with potential to secure universal access

• But with low coverage rate & slow progress, health insurance programme facing many challenges

• What is needed: strengthen existing structures; modify some areas; creative stakeholder engagement; and facilitate rapid programme uptake at State level

Introduction• Continuous decline in public spending for health in

Nigeria, relative to the needs of a growing population

• Although progressive increase in absolute amount allocated to health sector by Federal government

• But as proportion of total budget, allocation to health ranged only between 2 and 6 % over a twelve year period (2000 – 2011)

• Less than half of the 15 per cent target set by African Heads of State in April, 2001 in Abuja to fund the health sector

FEDERAL ALLOCATION TO HEALTH – in Relation to Total Budget & GDP

Source: Budget Office of the Federation, Federal Ministry of Finance

S/No.

YEAR TOTAL ALLOCATION (NGN in Billion)

ALLOCATION TO HEALTH(NGN in Billion)

As % of TOTAL BUDGET

GDP(NGN in Billion)

As % of GDP

1. 2000 745.1 15.7 2.1 4,717.33 0.3

2. 2001 1,044.2 42.6 4.1 4,909.53 0.9

3. 2002 2,294.8 44.7 1.9 7,128.20 0.6

4. 2003 2,481.9 52.2 2.1 8,742.65 0.6

5. 2004 3,182.1 59.8 1.9 11,673.60 0.5

6. 2005 2,245.3 71.7 3.2 14,735.32 0.5

7. 2006 1,900.0 106.9 5.6 18,709.79 0.6

8. 2007 2,396.6 122.9 5.1 20,874.17 0.6

9. 2008 3,966.1 143.9 3.6 24,552.78 0.6

10. 2009 3,557.7 154.6 4.3 25,102.44 0.6

11. 2010 4,427.2 164.9 3.7 30,980.84 0.5

12. 2011 4,971.9 266.7 5.4 36,123.11 0.7

Health Allocations as Percentage of Total Federal Government Budget

Source: Budget Office of the Federation, Federal Ministry of Finance

Comparatively , all 6 Africa countries - which have met or surpassed this target by 2010, are considered to be poorer than Nigeria

Source: Africa Union Commission, 2011

Introduction II• >60% of total health expenditure in Nigeria comes

out of peoples’ pockets• Fees required to be paid at health facilities deter

large proportion of population from accessing modern healthcare

• Typical household decision: buying medicine for a sick child versus providing food for a day for the entire family

• Herein Health Insurance or similar pre-paid mechanisms - ‘ring-fenced’ from further budgetary cuts and providing financial risk protection

A working definition of health insurance:

“any approach that enables people to receive healthcare services or products without the need to pay for such services and products at the point of care, becoming a barrier to access”

(Care Net Nigeria, 2011)

So what is the state of health insurance in Nigeria, with particular reference to the NHIS? How has this system worked to reduce the financial

burden of ordinary people in accessing health care services?

What experience has been gained from this programme of social protection against the financial risk of ill-health in a vast country such as Nigeria?

What challenges is this system being confronted with, in doing so?

And what practical actions should be taken to rapidly scale-up health insurance in a way that it protects the vast majority of the population from financial difficulties when accessing health care services?

The National Health Insurance Scheme (NHIS) in Nigeria

The Background Context

Processes for establishment of NHIS on-going right from the time of independence in 1960;

Attempts by successive governments met with vigorous opposition either from the labour unions or bickering among health care professionals;

Maiden Health Summit held in Abuja in 1995 give major impetus – introduction of HMOs;

Decree establishing the National Health Insurance Scheme (NHIS Decree 35 of 1999) signed on May 10 of the same year;

Formal sector programme for Federal level employees formally took off with some incentives in 2005

Key NHIS Milestones ¨1984 - National Council on Health under the then Health Minister, Admiral Patrick Koshoni, set up a committee under Prof. Victor Diejomaoh to advise government on the scheme. Panel recommended NHIS as a viable funding mechanism for healthcare in the country. ¨1985 - Dr Emmanuel Nsan as Health Minister, set up an NHIS review committee, under Mr. L. Lijadu. Also submitted that the scheme was viable.¨1988 - Health Minister, Prof. Olukoye Ransome-Kuti set up another committee led by Dr Emmanuel Umez-Eronini to recommend a more realistic and acceptable model for the implementation of the scheme.¨1991 - The Federal Government of Nigeria signed an agreement with the United Nations Development Programme (UNDP) and the International Labour Organisation (ILO) for the planning and implementation of the scheme. ¨1993 - Dr Christopher Okojie, the Health Secretary in Interim National Government (ING) presented a memorandum to the Traditional Council (TC) asking for immediate take-off of the scheme. ¨1995 - Maiden Health Summit held in Abuja recommended private sector involvement with the introduction of Health Maintenance Organisations (HMOs). ¨1997 - Former Head of State, Late Gen. Sanni Abacha launched the scheme on October 15th

¨1999 - Former Head of State, Gen. Abdulsalam Abubakar signed NHIS Decree 35 in May.¨2000 - House of Representative Committee on Health of the National Assembly held a Public Hearing on NHIS between February 21st – 24th necessitated by calls for amendments to the enabling laws (NHIS Decree No. 35 of 1999)¨2001 - Extraordinary National Council on Health with NHIS as sole agenda item held in July at Port Harcourt.¨2002 - Re-launch of NHIS by Mrs. Stella Obasanjo, wife of the President of the Federal republic of Nigeria (FRN) at Ijah community, Tafa LGA, Niger State on March 22nd .¨2003 - Health Minister, Prof Eyitayo Lambo commissioned a Ministerial Committee to develop a blueprint for the revitalization of NHIS¨2005 - Former President, Olusegun Obasanjo flags off the formal sector programme covering Federal Government Employees across the country, with progressive addition of other segments of the population. ¨2015 Universal Coverage ??

Objectives - ensuring access to good health care without financial hardship to families; limiting the rise in cost of health care services etc.

Oversight responsibility - Council of NHIS - issuing appropriate guidelines to maintain the viability of the scheme; registering HMOs; and others necessary or expedient for the purpose of achieving the objectives of the scheme.

Model - Social Health Insurance; individual choice of provider; capitation payment of providers; & HMOs

NHIS Main Features:

Health Maintenance Organizations (HMOs) – What are these?

“insurance-based health systems that have the responsibility for the provision of a comprehensive package of care to an enrolled population for a prepaid fixed fee” (Robinson and Steiner, 1998)

…an institution, company or provident association using its administration or insurance companies to provide health care for its clients through associated health centres (NHIS Act).

HMOs expected role within NHIS• Collect contributions from all eligible employers

and employees;• Collect contributions from voluntary contributors;• Render returns to the council of the NHIS;• Contract with only health care providers approved

by the Council; and • Ensure that contributions are banked according to

guidelines approved by Council (NHIS Act)• But how well are they carrying out these

functions?

HMOs in Nigeria • Predated the NHIS, mainly home grown &

active in major cities – Lagos, Abuja, Port Harcourt

• Few with equity participation from foreign entities (IFC, Insurance Companies) & Some affiliated to commercial banks

• Persons with medical or health background are predominant managers

• Although signed up with large employers – but act mainly as ‘third-party administrators’ to the public sector formal programme of NHIS

NHIS - Main Programmes

1. Formal Sector Social Health Insurance Programme2. Urban Self-Employed Social Health Insurance

Programme3. Rural Community Social Health Insurance

Programme4. Tertiary Institutions Social Health Insurance

Programme and 5. Voluntary Participants Social Health Insurance

Programme(2 & 3 = Community-Based Health Insurance (CBHI)

NHIS - Formal Sector Programme Employees in formal sector – public and private Contributory premium – 15% of worker’s basic salary

(employee 5% + employer 10%) Benefit package almost comprehensive, excluding only

high-cost illnesses -HIV/AIDS, only generic drugs covers employee, spouse and 4 children under the age 18.

For working couples, their contributions cover both and not more than four children under the age of 18.

For other dependants, the employee will be surcharged. Participants can enjoy services only after a waiting period of one month and are issued with Identity (ID) cards to minimize fraud.

(NHIS Act)

Community-Based Health Insurance (CBHI) in Nigeria

• Framework developed by NHIS• Several pilots with variable levels of success• Notable ones include: donor funded

programmes in Lagos and Kwara (PharmAccess) and Lagos State sponsored scheme

• Have major challenges in scaling-up• Renewed interest to scale-up across the country

by NHIS, donors, and others • But are we taking on board lessons learnt?

CBHI in Nigeria II• Promoting solidarity among poor people

was seen to be counter productive- weak economic based does not allow for creation of sufficient

‘pooled capital’ to meet recurrent needs• Has undertaken on a large-scale that can reach significant

proportion of the poor. - multiple schemes but one major pooled fund• Also confronted by the same issues as those of more

sophisticated social or private health insurance schemes • – building up adequate reserves, health plans being informed

purchasers, consumer education, re-insurance etc. not sustainable• Not sustainable unless there is some external back up or support

either from government or international donor on a long-term basis.

NHIS - Main Achievements • Prof of concept – notion of health insurance tested

and found to be feasible• Enrolee benefits – little or no out-pocket payments

and enhanced patient -experience • Provider Innovation – IT and better health

information systems• Increased provider working capital – upfront

capitation payments retained at health centres • Significant political will and commitment at Federal

level – massive initial cash injection, Debt relief funds, regular funding with the Health Bill

NHIS – Core Operational Issues• Extremely low coverage rate – just about 5 million out

of a total pop. of 100 million (5%)• Fragmentation of funding pools – different

programmes operate independently of each other – no cross subsidisation

• Stakeholders issues that remain unresolved – States not fully engaged; informal sector workers and rural dwellers feel left out; 2° & 3° facilities accredited as primary care providers; complain of high handedness of HMOs by GPs; many HMOs only act as ‘third party administrators; NHIS Council assumed several functions assigned to others

NHIS – Key Challenges • Health Insurance Funds - there are none, so no gathering of payments into a resource pool before the sharing of risks • Capacity Issues - organizational capacity in management of an insurance-based health care service lacking at all levels of operation • Institutional Arrangements - unresolved ambiguity between the roles and responsibilities of the major players despite legal framework and guidelines

NHIS – Key Challenges II• Stakeholder Disenfranchisement- State governments even with considerable resources and autonomy have no assigned role in the scheme

• Micro Management and Poor Regulatory Oversight

- Council of NHIS tends to do what other actors are meant to do and so poorly performs its assigned duties

NHIS – Way Forward

• Re-orientate stakeholders to understand the National Health Insurance Scheme as a ‘system’ rather than as an ‘institution’

• Reposition the Council of NHIS as the overseer of this system, away from implementation

• Decentralize the governance structure of the system to give the States some responsibilities

NHIS – Way Forward II

• Allow various models of social health protection to flourish within the system, including demand-side financing approaches such as vouchers

• Coordinate the pooling and allocation of funds, including those from external donors

• Design and market better health insurance products with the aim of making them simple and ‘culturally acceptable’ – learning from the “Nollywood Paradigm’

…what are we asking people to buy?

Meanwhile…

Conclusion • Huge expectation from NHIS despite its failings• But unlike traditional insurance, health insurance

is about service delivery and rather than paying to compensate for loss

• And health insurance is actually a financial instrument that makes service delivery possible and not a health intervention

• NHIS will not solve all the financial and funding problems of the health system in Nigeria, it has potential to provide financial risk protection for essential health care for all Nigerians