Establishing a National Health Insurance Scheme (NHIS)
Policy brief
Establishing a National Health Insurance Scheme (NHIS):
What steps should Nigeria take to avoid another white elephant scheme?
Executive summary The
Federal Ministry of Health in Nigeria has the direct responsibility for the health of the general population. Part of its mandate is to establish a national health system “which shall define and provide a framework for standards and regulation of health services and provide for persons living in Nigeria the best possible health services within the limits of available resources” –
Unfortunately successive governments in Nigeria have not been
able to make significant efforts in improving the health of Nigerians and in the last decade we have witnessed a major reversal of health gains made in the 90s. Average life expectancy at birth dropped as low as 44years (UNICEF 2009 State of World’s Child Report) and the general health status indicators for Nigeria ranked among the worst in the world. In Nigeria, statistics show that over 70% of the population pay out of pocket for their healthcare needs and many have indeed lost their lives due to their inability to meet this need. Other research carried out in developing countries shows that four out of five cases of bankruptcy are due to mounting or catastrophic health care bills (Obinna, 2012). High costs of medical care, especially when hospitalization is needed, are truly a burden that can send individuals and their families into debt or penury (Juttung, 2005). This is a situation that many similar socially and economically constructed countries like China, Taiwan, Chile, Brazil, SouthAfrica and near-by Ghana are taking concrete steps to eliminate National Health Bill 2011. through a well structured healthcare financing system (Meng & Tang -2010; Akazili -2010; Okma et al -2010; Coutollenc et al – 2007; Ataguba & Akazili -2010).
Existing
health financing options for Nigerians are fragmented, with pockets of private and community health insurance schemes and the social health insurance scheme for the Formal sector which are plagued by poor penetration, low acceptance and excessively narrow benefit packages. Overarching issues preventing quality health care delivery in Nigeria include weak human resource capacity for health, a general decay in the infrastructural support system including bad roads, unreliable electrical power and water supply, and dwindling Federal Government health expenditure as a percentage of the Gross Domestic Product (GDP), rather than absolute figures (from 12.25% in 2003, to 8.56% in 2005 (NSHDP 2010-2015), to 6% in 2012 (Nigerian 2012 Appropriation Bill). This is not in keeping with the agreement of the African Union’s Abuja Declaration of 2001 (appropriating 15% of the GDP for health) which ironically held in Nigeria! The renewed effort to implement a Vision 20:2020 plan for boosting the country’s economy has birthed a National Strategic Health Development Plan (NSHDP 2010-2015) with 8 strategic priority areas; “Financing for health” is one of the priorities.
© Dr Eno Usoroh, March 2012
Establishing a National Health Insurance Scheme (NHIS)
Policy brief
Introduction In order to ensure that every Nigerian has access to health care services, it has been deemed The National Health Bill passed in 2011 necessary to establish a NHIS. The NHIS was lists a fully functional National Health established under Act 35 of 1999 by the Federal Insurance Scheme (NHIS) as one of its Government of Nigeria and its aim is to provide provisions and is a key resource platform easy access to healthcare for all Nigerians at an for the NSHDP implementation. White affordable cost through various pre-payment elephant schemes in the past like “Health systems. Other functions of the NHIS are that of for all by Y2K” and the “Essential drugs regulator, to provide oversight functions to the programme” are a pointer to the importance organs that will be involved in direct delivery of of taking concrete and evidence based steps service to members i.e. Health Maintenance in order to achieve a feasible and fully Organizations (HMOs) as quality and fund operational NHIS that will be sustainable, managers and Providers as service deliverers. The acceptable and accessible to all Nigerians – health care providers under the scheme are NSHDP 2010-2015 expected to be a mix of public and private facilities in the spirit of public/private partnership. The bold strategy of the NHIS is to segment the entire population into executable programmes and members are free to choose to obtain services at any accredited health care provider under the scheme (NHIS Act 35 of 1999). In 2005, the NHIS was officially flagged off with the Formal sector programme which aims to provide social health insurance coverage to all workers in the civil service and the organized private sector (Ogundipe 2011). The NHIS programmes aimed at different segments of the society are summarized below:
Table 1: NHIS Programmes: Source, NHIS Operational Guidelines
Formal Sector
*Public sector (Federal, State and Local Government) *Armed forces, Police and other uniformed services *Organized private sector *Students of Tertiary Institutions and voluntary participants
Informal sector
*Rural community (RCSHIS) *Urban self employed (USEHIS)
Vulnerable groups Others
*Permanently disabled persons and the aged *Children under 5 years (CUFHIS) *Pregnant women and orphans *Prison inmates *Diaspora family and friends *International Travel Health Insurance *Retirees and the unemployed
© Dr Eno Usoroh, March 2012
Establishing a National Health Insurance Scheme (NHIS)
Policy brief
Nigeria has continued to fare badly in global development indicators and was ranked 156 out of 187 surveyed states by ‘’Every Nigerian will be covered the 2011 UNDP report. With an under-five mortality of 138 out of 1,000 births and a current life expectancy of 51.9 under the revised NHIS Act. The years, we have a low Human Development Index (Obinna, sole purpose of the Act is to 2012). The varied health challenges such as dwindling ensure that the NHIS covers all standards of health care delivery, epidemiological transition with the increasing emergence of non-communicable Nigerians…and also for the diseases while communicable diseases remain the major government to take responsibility causes of morbidity and mortality, poor integration of the for those who cannot private sector in the nation’s health care delivery system Executive (NSDHP 2010-2015), and far-reaching poverty (> 70% contribute’’. living on < $2/day) – (NHIS website) leading to inability to Secretary, NHIS (2011) purchase available healthcare can account for these poor health indices. A well established and sustainable NHIS will be beneficial in increasing the efficiency of the GDP vote for health as well as the private sector out of pocket contributions to the Total Health Expenditure (THE). It is pertinent to note at this point that a focused scheme is necessary otherwise Nigerians will continue to struggle to pay health care bills and the country’s health indices will continue to plummet. Fig 1: Nigerian
2012 Appropriation Bill (already passed into law) – Source, Budget Office, the Presidency.
© Dr Eno Usoroh, March 2012
Establishing a National Health Insurance Scheme (NHIS)
Policy brief
Policy issues and options The 2011 National Health Bill proposes a radical shift in health financing in Nigeria through the establishment of a Fund â&#x20AC;&#x201C; National Primary Health Care Development Fund. This Fund (separate from the GDP vote for health) will be financed from the Federal Government (with an amount not less than 2% of its value); international donor partners; and funds from any other source. Proposed allocation of the fund is as follows:
However,
despite these laudable policy documents, from my experience there are numerous factors preventing the successful implementation of the NHIS, some of which are; weak government policies (the Bill is yet to be assented to by the President and the Act establishing the NHIS does not make it a
mandatory scheme), insufficient awareness of an NHIS and lack of community involvement/participation, poor penetration of the population to be covered and exclusion of those most in need. Others are opposition from organized labor unions (largely due to ignorance of the actual mechanism of the scheme), refusal of most state and local governments to join the scheme, poor health management information systems (HMIS), weak capacity to run the scheme, inadequate risk pooling and purchasing of health services and a restricted benefit package (Usoroh 2010).
National Primary Health Care Development Fund: 50% - Provision of a basic package of health services to all citizens in Primary health care facilities through the NHIS 25% - Provision of essential drugs for Primary healthcare services 15% - Provision and maintenance of facilities, equipment and transport for Primary healthcare 10% - Development of Human Resources for Primary healthcare services
What are the key considerations for funding an NHIS within the present context? Key considerations are: 1. To
optimize
the
effectiveness
of
existing investments in the health sector
spending
by
all
tiers
of
government (Federal, State and Local authorities)
2. To ensure better value for household expenditures via a strong resultfocused approach to risk pooling mechanisms
and
social
health
insurance. payment mechanisms and tariffs for essential drugs for the current scheme were developed with little professional input and consultation with health care practitioners. From my experience as a medical manager, many health care providers complain bitterly about the insufficiency of the fees paid to them as well as the irregular nature. Agitations for review and adjustment have met with inertia on the part of the NHIS management. Current beneficiaries of the scheme complain of shabby treatment from the health care providers including delay in receiving care and many have abandoned the insurance scheme at the point of service in favor of cash payments which yield better services, and later submit complaints and requests for refunds from the HMOs. This unfortunate scenario plays out across many facilities nationwide.
Provider
Š Dr Eno Usoroh, March 2012
Establishing a National Health Insurance Scheme (NHIS)
Policy brief
Table 2: Strategic Objectives and Interventions for 2010 – 2015. Source, NSDHP 2010-2015
FINANCING FOR HEALTH Goal: To ensure that adequate and sustainable funds are available and allocated for accessible, affordable, efficient and equitable health care provision and consumption at Local, State and Federal levels To develop and implement evidenceTo develop and implement health financing based, costed health financing strategic strategies at Federal, State and Local levels plans at LGA, State and Federal levels in consistent with the National Health Financing line with the National Health Financing Policy Policy To ensure that people are protected from To strengthen systems for financial risk financial catastrophe and impoverishment as a health protection result of using health services
Viable options for funding an NHIS *Implementing the NSHDP for financing health – putting life into the current NHIS. This is the responsibility of the authorities’ at all three levels of health care delivery in Nigeria i.e. Local, State and Federal governments. All other important stakeholders in health including the National Health Insurance Council, Nigerian Labour Congress (NLC), Health providers (public and private sector health workers), Ministry of Finance, National Communications Commission (NCC), the Private sector, Development partner agencies, NGOs in health, Civil society groups, Faith based organizations and Communities must collaborate on the implementation. The goal is to establish a Social Health Insurance Scheme with a risk pooling mechanism to ensure that users of health services get efficiently delivered, acceptable quality and available care. The focus is that of overall population coverage by multiple programmes within the scheme in order to build adequate reserves for purchasing of services and re-investment to avoid catastrophic wipe-out. The advantages of a robust NHIS are that the scheme can operate with a large degree of autonomy from the government. The health authorities at various levels of governance as well as the stakeholders’ collaboration for this singular common cause will
ensure that the ear-marked fund is used for what it is meant for. The scheme must be mandatory for all and will be funded from a mix of sources including: i.) Pay roll deductions from the Formal sector (uniformed personnel, public and private sectors) ii.)
A fixed flat-rate contribution from the re-assigned Informal sector (Urban self employed, Rural communities, students of tertiary institutions > 18years of age and retirees)
iii.) Exemption funds to provide 100% cover for the identified poor and vulnerable groups - National Primary Health Care Development Fund as prescribed by the 2011 National Health Bill (which must speedily be assented to by the President), MDG debt relief gains virtual fund, voluntary contributions from Diaspora family and friends, Development partners contribution to the health sector, proposed VAT deductions, and Mobile phone tariff deductions of one kobo per second from airtime (over 90 million Nigerians use mobile phones daily – Uzor 2012). Other innovative ways to fund these exemption schemes can be added over time.
© Dr Eno Usoroh, March 2012
Establishing a National Health Insurance Scheme (NHIS)
*Establishing a National Health Service – innovating the United Kingdom model This involves the establishing of a mainly taxbased health services to be administered directly by the government. Nigerians already contribute >70% of the THE through out-of-pocket payments. This indicates a willingness to pay for services. However, the obvious disadvantages of a NHS is the already weak capacity of the health system, risk of side-lining private health care providers, poor predictability and release of funds by the government, inadequate and untimely availability of quality health commodities. Given the highly decentralized health system in Nigeria, this poses another disadvantage to the success of a NHS as governments at the lower levels (state and local) are poorly accountable to the communities they purport to serve, lack the human resource capacity to provide the same quality of health services as the federal level, and are also poorly financially accountable to the central level. Health services under an NHS will be funded again by a mix of sources listed below. i.)
Various government taxes including VAT, Mobile phone tariffs, income taxes, customs, import duties etc.
ii.)
User fees at point of service e.g flat rates paid to obtain a hospital card or for prescriptions etc. The established poor and vulnerable groups ideally should be subsidized or exempted from these user fees.
*Mandatory Private Health Insurance/ Exemption schemes for the poor – putting NHIS on hold A dynamic private sector (as already displayed in the banking and telecommunications sectors) offers an opportunity to fill in the gap for provision of health insurance services to those who can pay. Already existing HMOs can be organized to manage a robust private health insurance scheme while the government focuses on developing a health subsidy-exemption scheme
Policy brief
for the poor and vulnerable groups at all levels of the health system (federal, state and local). The disadvantages here include poor risk pooling as those who can afford health insurance will not always purchase it except the regulations are very strict (still some will evade it). In addition is a continuously rising cost of premium set by the HMOs, cream skimming (selecting healthy clients while innovatively making registration difficult for the sick), and poor assurance of the quality of services delivered by the providers especially those receiving smaller pools of funds. In additions are the disadvantages already mentioned concerning wholly government implemented schemes for the poor.
Conclusion In a developing economy like Nigeria, resources for health care are scarce and the largely poor population bears most of the burden for providing this care. The country is yet to strengthen existing policies and institutional innovations to make the current NHIS a viable tool for financing health and provision of financial protection for the poor (and those able to pay) from catastrophic health expenditure. Such a scheme is also in tune with government’s poverty reduction policies and strategies as risk sharing for health is critical in alleviating poverty. The relationship between the federal, state and local arms of governance, especially within the health system is very important for the sustainability of a NHIS. The decentralization of functions notwithstanding, policies and mechanisms to ensure accountability and uniformity of policy implementations are necessary for a seamless rolling out of all the programmes of the NHIS. Close collaboration with stakeholders and sources of funding for the NHIS, especially in terms of NLC and community involvement in the implementation of the various programmes of the scheme is vital for the success of a NHIS. It is necessary to engage continuously with all groups of health providers who are the front-end in service delivery as acceptable provider-payment mechanisms are a bed-rock for success in any
© Dr Eno Usoroh, March 2012
Establishing a National Health Insurance Scheme (NHIS)
NHIS. In addition, the capacity of all major players in the implementation and sustenance of our NHIS must be a focal point, even within the context of infrastructural gaps and failings in our society. This will ensure an acceptable quality of health care is delivered by the scheme. As our policy-makers and government decide how best to channel resources in reducing health risks of the people, we must constantly be aware of the challenges of such a scheme which is a clear break from the traditional ways we have had of financing health care. Finally, as we experiment with a NHIS tailored to suit the Nigerian context, we should not lose sight of regularly evaluating our efforts in order to learn from mistakes and accumulate best practices.
Recommendations Despite the current economic and social climate of Nigeria, the NHIS is still a potential tool for provision of affordable and acceptable quality of health care for the larger Nigerian population. The following recommendations are made to ensure the effectiveness and efficiency of the NHIS.
Advocacy
efforts to establish an enabling environment for successful implementation of the NHIS. An urgent review of the NHIS Act is necessary to make the scheme mandatory for all Nigerians. In addition, there is a need to lobby Mr President to give the final assent needed for the National Health Bill to become a law that will bind all players in implementation of the NHIS. The lack of necessary good governance in enforcing the implementation of these beneficial initiatives will result in the current NHIS rapidly becoming another white elephant scheme doomed to fail as it is not mandatory and therefore risk pooling is inadequate, leading to an unacceptable restricted benefit package and eventual pulling out of the formal sector from the scheme.
Policy brief
including the State and Local government authorities and Communities, NLC, Private sector, NCC (Telecoms tariff and HMIS development), Banking sector (for ease of payment platforms), donor partners and agencies, and different health care provider groups. The communities involved must develop a sense of ownership of the scheme embedded in acceptability and a willingness to participate.
Capacity building of all key players. Capacity needs to be built across board for all key players within the NHIS. The health care system needs to be strengthened even within the context of an infrastructural challenged country as ours. Continuing professional development programmes should be uniformly constructed and deployed across all cadres of health workers and levels of the health system (local, state and federal). The capacity of the NHIS to interpret policies, implement and regulate the scheme at all levels of the health system is very important. Another key area for building capacity is within the HMOs as the ability to adequately manage the health funds disbursed to them in conjunction with the health care providers, resolve conflicts, carry out clinical audits while assuring an acceptable standard of care must be not be underestimated.
Optimum
stakeholder involvement and participation. Vigorous and sustained efforts are necessary to ensure the widespread acceptance of the scheme and backing of key stakeholders Š Dr Eno Usoroh, March 2012
Establishing a National Health Insurance Scheme (NHIS)
Policy brief
Appendix 1: Reference list Abuja declaration on HIV/AIDS, Tuberculosis and other related infectious diseases. (Apr 2001) African summit on HIV/AIDS, Tuberculosis and other related infectious diseases. OAU/SPS/Abuja/3. Abuja, Nigeria. Akazili, J. (2010). Who pays for Health Care in Ghana? Strategies for health insurance for equity in less developed countries. SHIELD Information Sheet. [online] Available at http://web.uct.ac.za/depts/heu//SHIELD/reports/SHIELD_Ghana_WhoPays%20forHealthCare.pdf [Accessed 22 March 2012] Akazili, J and Ataguba, J.E. (Feb 2010). Health care financing in South Africa: moving towards universal coverage. Continuing Medical Education. Vol.28 no.2 [online] Available at http://www.ajol.info/index.php/cme/article/view/55239/43707 [Accessed 22 March 2012] Couttolenc, B; La Forgia, G and Matsuda, Y. (Sept 2007). Raising the Quality of Public Spending and Resource Management in the Health Sector. ‘’En breve’’, No. 111. Latin America and the Caribbean Region of the World Bank, Brazil [online] Available at http://www.worldbank.org/lac. [Accessed 22 March 2012] Juttung, J. (Dec 2009) Innovations in health insurance: community-based models. Innovations in insuring the poor; 2020 vision for food, agriculture, and the environment. International Food Policy Research Institute. Focus 17; Brief 11 Meng, Q and Tang, S. (2010) Universal coverage of health care in China: challenges and opportunities. World Health Report (2010) Health systems financing: the path to universal coverage. Background Paper, 7. World Health Organization, Geneva, Switzerland National Health Bill (2011). Nigeria [online] Available at http://www.herfon.org/docs/Harmonised-NATIONAL-HEALTH-BILL2011%20doc.pdf [Accessed 22 March 2012]
National Health Insurance Scheme Act (1999). Nigeria [online] Available at http://www.nigerialaw.org/National%20Health%20Insurance%20Scheme%20Decree.htm [Accessed 22 March 2012] National Health Insurance Scheme. Welcome to NHIS website [website] http://www.nhis.gov.ng/ National Health Insurance Scheme. (May 2005) Operational Guidelines. Nigeria [online] Available at http://www.scribd.com/doc/24167404/National-Health-Insurance-Scheme [Accessed 22 March 2012] National Health Services. NHS choices: your health, your choices. [website] http://www.nhs.uk/NHSEngland/thenhs/about/Pages/overview.aspx © Dr Eno Usoroh, March 2012
Establishing a National Health Insurance Scheme (NHIS)
Policy brief
National Strategic Health Development Plan 2010 – 2015 (NSHDP 2010-2015) Ministry of Health, Nigeria. Nigeria’s Vision 20: 2020 (Apr 2009). Economic transformation blueprint. Accentur – National Planning Commission’ Nigeria [online] Available at http://www.npc.gov.ng/vault/files/ntwginductionpresentationfinal.pdf [Accessed 22 March 2012] Nigerian 2012 Appropriation Bill. Budget Office, The Presidency, Federal Government of Nigeria, [online] Available at http://www.budgetoffice.gov.ng/Federal%20Government%20of%20Nigeria%202012%20v3.pdf [Accessed 22 March 2012] Obinna, C. (Feb 2012). NHIS: Steering access to quality healthcare in Nigeria. Vanguard news in health [online]. Available at http://www.vanguardngr.com/2012/02/nhis-steering-access-to-qualityhealthcare-in-nigeria/ [Accessed 22 March 2012] Okma, Kieke G. H. , Cheng, Tsung-mei , Chinitz, David , Crivelli, Luca , Lim, Meng-kin, Maarse, Hans andLabra, Maria Eliana (2010) 'Six Countries, Six Health Reform Models? Health Care Reform in Chile, Israel, Singapore, Switzerland, Taiwan and The Netherlands', Journal of Comparative Policy Analysis: Research and Practice, 12: 1, 75 —113 Ogundipe, S. (Dec 2011). ‘’Every Nigerian will be covered under the revised NHIS Act’’ Interview with the Executive Secretary of the NHIS, Dr. Waziri Dogo-Mohammed. Vanguard news in health [online]. Available at http://www.vanguardngr.com/2011/12/%E2%80%98every-nigerian-will-be-covered-under-therevised-nhis-act%E2%80%99/ [Accessed 22 March 2012] UNDP (2011) World Health Report UNICEF (2009) State of World’s Child Report Usoroh, E. (Sept 2010) An appraisal of the NHIS; Medical Mgr Abuja; Clearline HMO; Paper presented at an NHIS Stake-holders Forum. Lokoja, Kogi State, Nigeria (not published)
Uzor, B. (Jan 2012) Nigeria to become dominant in Africa’s mobile payment market. Business day [online]. Available at http://www.businessdayonline.com/NG/index.php/news/76-hot-topic/31507-nigeria-to-become-dominant-in-africas-mobile-payment-market [Accessed 22 March 2012]
© Dr Eno Usoroh, March 2012
Establishing a National Health Insurance Scheme (NHIS)
Policy brief
Appendix 2: Literature search strategy Key words: I used various combinations of these key words as a search strategy for literature on establishing a national health insurance scheme: Nigeria, National health insurance scheme, establishment, acceptance, universal health cover, social health insurance, community health insurance, private health insurance, low and middle income country and the reference lists of literature reviewed on the internet and organization websites . Web search engines: I searched in Google scholar, WHO website, UN website, and Scopus. Government policy documents and report reviews: A few are available online; the others are available to me from my previous work with the NHIS in Nigeria.
Š Dr Eno Usoroh, March 2012