Health insurance as panacea for achieving MDGs in Nigeria

By Kayode Obembe, CEO, Premier Medicaid International HMO

Kayode Obembe

HEALTH insurance is a mechanism for spreading the risks of incurring healthcare costs over a group of individuals and households. The two key phrases in health insurance are “resource mobilisation and risk sharing.” The conceptual framework does not depend on the administrative arrangement employed as long as the outcome is risk sharing subsequent upon cross-subsidisation of healthcare expenditures among participants. The health insurance schemes are policy concepts whereby officials formally hold funds consisting of contributions by insured participants and the resultant pool designed to finance all or part of members healthcare costs.

The other alternative to health insurance is the “Out of Pocket” payment at the point of service delivery otherwise known as “Point of encounter”. Of all the various modalities of healthcare financing, out-of-pocket payment at the point of utilisation of healthcare services is the least desirable mechanism of financing healthcare from an equity perspective, as it denies access to healthcare to those who cannot afford to pay at the time of their illness.

Prepayment schemes appear to offer a better health care financing option than user fees or “Out of Pocket” schemes. Removal of “out of pocket payment” at the point of service delivery is the goal of health insurance.

Financing health sector reforms
During the last decade of the last century, there was obvious awareness that healthcare was not effectively reaching the targeted population. Health Sector Reform (HSR) has been defined as an inherently political process initiated by public or political action motivated by dissatisfaction caused by the failure to deliver outcomes, and implemented on a sector wide level. The underlying motivation is “to address the problems of poor quality of care, inequalities and limited access to health services, insufficient funding for health, inefficiencies in the delivery of services, level of accountability and/or insufficient responsiveness to client needs.

The reasons for health financing reforms are:insufficient resources for health services as raised by government through tax revenue,public funding for healthcare is poorly targeted,public funding is also predominantly channeled towards tertiary and curative care rather than primary and preventive care and there is limited potential for donor funding to fully meet the gap.

Global trends in health insurance
One of the earliest historical records on health insurance dates back to 1778 when iJ of a small village in Germany resolved to make communal contributions and from the the treatment of their sick members. This idea has since been adopted as government many countries of the continental Europe. In 1948, health insurance was a key manifesto of the labour party which has evolved into National Health Service as if Is known today. All over the years there has been a significant correlation between the breakthrough in Medicine and Economics as exemplified by developed countries such as the United Kingdom, France, Germany, United States of America, and Japan.

The Health Insurance system in USA is a mixture of public/private arrangements. In the public sector, the Medicare is single payer under the Federal Government management but with multiple administrators. The Medicaid is mainly for the poor, there is partnership between Federal and state with single payer (the state) in each state but also with multiple administrators. In the private sector, this is employer/employee based.

This is highly competitive with multiple insurers competing on basis of price, product and service. The Insurers/Health Maintenance Organisations HMO can operate within a single state or portion of state, or across multiple states or nationwide. The evolution of private health insurance was as a request of high cost of healthcare since quality was not to be compromised.

In China, about 800 million people are mostly engaged in farming and live in rural areas. The average income per person is US$115. The Healthcare was financed through the co-operative medical system (CMS).Their health system is organised into three tier structure—Primary (village), Secondary (town), Tertiary (Country). The funds for the CMS were from compulsory payment by residents,village contributions and government subsidies.This “first healthcare revolution”, whereby preventive healthcare and primary care to almost every Chinese, was very effective in reducing infant mortality from about 200 per 1,000 live births 1949 to 47 per 1,000 live births (1973 - 75), and increasing life expectancy from 35 to 65years, all within the Span of 25years

When this Scheme collapsed in the late 1980’s the median infant mortality rate in the surveyed countries increased from 50 per 1,000 live births to 72 per 1,000 live births. Now, the vast majority of the populations now obtain health through fee-for-service (FFS) instead of the previous prepaid schemes.

Under the FFS, studies reveal that 28 per cent of seriously ill farmers did not seek healthcare, while 51 per cent of rural patients refused hospitalization due to financial reasons. The reason for the collapse of CMS was due to a shift from Communi!y’ to Government control.

One of the greatest challenges facing the global community today is how to increase the access of African population to healthcare.The Formal Sector Schemes effectively cover only members of the relatively small upper and middle classes.

As a consequence of low or irregular income, during illness user fees are a major contributing factor to the high incidence of out of pocket payment by individuals and households at”ilie time of illness. The user fees, in addition to having been largely unsuccessful in raising significant resources, have contributed significantly to increasing the exposure of poor households to financial depression associated with illness.

Out of pocket prepaid
Curative Preventive Budget constraint Not budget related Cost is barrier Cost is not barrier Provider not prepaid and not prepared Provider prepaid and prepared World Health Organisation identified sub-saharan Africa with only 600,000 health workers, as the region worst affected by the shortage of medical personnel. Brain drain was to blame, many developing countries lacked the resources to train personnel, and keep them in their country or community.

According to the report of the former British Prime Minister, Tony Blair Commission for Africa, the direct cost to Africa of health worker migration is put at US$500million each year. This is external brain drain. Another dimension is internal brain drain whereby the community remains depleted of health personnel while they(personnel) migrate to the cities and Tertiary Institutions because of better remunerations.

In African environment, insurance schemes that provide financial protection to household in the informal sector would constitute an important poverty-reduction measure. A study carried out in Ghana did not associate “health insurance” with risk sharing. Rather, it was an unfamiliar product purchased by the elites. Risk-sharing arrangements were only associated with “Solidarity GrouIs.

In the absence of risk protection, the cost of care becomes a barrier to seeking and obtaining health care. Thus,health insurance not only provides protection for the income consequences of ill health but also encourages prompt access to treatment. Carte d’Assurance Maladie (CAM) is a national health insurance card introduced by the Government of Burundi in 1984. The Government is both managing the Scheme and providing the healthcare.

Nigeria current health indices
Nigeria is rated very low in terms of healthcare delivery for to citizens. This is reinforced by the developmental statistics published by the United Nations Development Program (UNDP), 2004. Human development report indicates that life expectancy is 51years (local experts put it at 48 years for men).

Infant mortality rate (IMR) 100 per 1,000 live births
Under five mortality (UFMR) 201 per 1,000 live births

Maternal mortality rate (MMR) is 800/100,000, with regional differences being 250 - 2,000/100,000 live births, aggregate 1500 per 100,000 live births - 3rd largest in the world

1 in 100 women will die as a result of child birth
Public expenditure on health is less that US$8 per capita (compared with $34 recommended internationally). Rehabilitation and Refurbishment of Tertiary Health Institutions being largely responsible for the increase. Despite all these efforts, latest United Nations Fund for Populations Activities (UNFP A) reports that Nigeria is one of the countries with the worst maternal mortality rate in the world. The others are Angola, Burkina Faso, Mauritania and Sierra- Leone.

WHO report stated that as many as 92.2per cent of Nigeria citizens live below N256 per day and public workers earn a minimum wage of N179.40 per day, and 20 per cent cannot afford the prices of medicines. The immediate effect is that they cannot access Medicare because drugs are purchased “out of pocket”.

Malaria associated morbidity reduces economic productivity; economic growth rate is retarded by 1.3per cent per year. 1l0million case incidence of malaria is also reported per year. 30 per cent of infant deaths are due to malaria. The goal of Roll Back Malaria Programme is to reduce death from malaria by 75per cent by year 2015.

The President of Federal Republic of Nigeria has recommended that Nigeria should be one of the best 20 economies of the world by the year 2020. The World Bank Report July 2007 states thus: “good health and sound health system have been recognized as major inseparable contributions to economic growth”.

The Social Health Insurance Fund is usually an autonomous public fund set up by the Government for all formally employed persons. Standard pay-roll deduction is made from both employers and employees.The fundamental problem that bedevils the health sector in Nigeria is lack of conceptual framework that ensures uniformity, continuity and sustainability.

National Health Insurance Scheme
The history of health insurance in Nigeria dates back to 1962 when the first bill was presented to the Parliament by the Honourable Minister of Health at that time, Dr. Majekodunmi—an obstetrician and gyneacologist .

In 1984, the scheme was revisited by the National Council of Health, when a committee was commissioned to study the National Health Insurance. In 1989, Eronini Committee report was submitted and approved by the Federal executive Council. In 1992, there was a directive that NHIS should commence. In 1999, the Enabling Decree—Decree 35 was promulgated—May 10,1999

In 2005, June 6, the formal sector of Social Health Insurance Scheme was flagged off by Chief Olusegun Obasanjo GCFR—President of the Federal Republic of Nigeria, As at today, the Scheme has covered all the Federal Ministries, Parastatals and Agencies, the Nigerian Police and the Armed Forces. It is now firmly established in private organizations.

Objectives ofNHIS are mainly to ensure that every Nigerian has access to good healthcare services. The key provisions of CAP 42 of the Laws of Federal public of Nigeria is that an employer who has up to ten employees may contribute to the Scheme, 10 per cent of salary by the employer and five per cent by the employee.

The four major stakeholders are employer, employee, the provider, and the Health Maintenance Organisation (HMO). Healthcare Providers are primary and secondary in category. The disease conditions are also categorized. The HMO’s are the operators of the scheme while the government agencies (NHIS) serve as regulators.

Private Health Insurance Scheme has gotten various benefit packages which the Company can choose from i.e. Silver, Gold, Platinum, and Diamond resource mobilisation is followed by a pattern of disbursement i.e. capitation, fee-for-service ( administration, and reserve funds.

Treatment is given through a network of providers. All have codes and their specialisations are noted. There are some diseases or management entities that are classified as Exclusions - many of them hm predeterminable end point. There are disadvantages of the former system fee-for-service, out of pocket. There are a lot of benefits of the National health Insurance Scheme, the most important is “Reso-Mobilisation” and Cross-Subsidisation.

The benefit package should be targeted towards the greatest killer diseases in the country.The major killer conditions in Nigeria today are Malaria, Road Traffic Accident, and HIV/AIDS.For children and many adults, enteric fever should be added and then bronchopneumonia. For women, complications of pregnancy and childbirth are major causative factors.Therefore, haemorrhage, obstructed labour will have to be taken care of 23

In terms of resources mobilisation, it is my suggestion that the three tiers of Government should be rea support this course by a sum of N100 per enrollee per month. Every enrollee should also be rcady to pay N100 per month. These should be pooled together and put at designated bank at the Local government where the World Health Organisation is located.

It should be made clear that it is only when the enrollee has paid N100 that the contribution will bc multiply by 4, the additional input coming from the Local Government, State and Federal Government.Even hundred naira can be paid for the enrollee by any of the tiers of government or relatives in diaspora; following benefit package should be guaranteed:

Malaria Preventive and Curative,Enteric Fever - Typhoid, Bronchopneumonia,ANC, Pregnancy, and Deliveries including Caesarean Section and Road Traffic accident. The contributions from the Federal, States, and Local Governments should be deducted at source and paid to the accredited Bank in that Local Government.

Effectively, each enrollee will be insured with N400 x 12 = N4,800 per year, and each health Promoter’s Association should be about 500 in number. This is lodged into Community Health Insurance Fund(CHIF) account. Standard Treatment regimes should be established for the above, costed actuarially and standardised.

The scheme does not in anyway nullify whatever existing health programmes that have been put in place by the various governments and NGO, but inculcates a fundamental philosophy that health is a habit, not an act, and at any point in time, health is a RIGHT not a priviledge .

The goal of the CHIS is to build a micro or miniature tertiary centre where some operations can be performed. It should actually function as a “colony” of a Teaching Hospital, so that if any Consultant decides to work there, he can continue to publish and attain Professorship in record time because there are more materials in the community, and community will be empowered to negotiate and pay for such services under Public Private Partnership arrangement. The contract between the consultant and the relevant University is intact.Environmental Sanitation should be incorporated into the Community Health Insurance Scheme - members of the Executive Committee should go around in turns and those who refuse to clear their refuse should be made to pay “fines.” These “fines” must be paid into the CHIF. Different quarters in the community should be awarded prices for coming 15t in environmental cleanliness, so that “cleanliness becomes a culture” and not an instrument of coercion or harassment as witnessed during the First Republic.

Health Promoter Association (HPA) must be registered and given a code number, because the relatives in town and overseas can conveniently insure their relatives by sending money home to the CHIF. The account of the CHIF shall be audited in line with the regulations of the Corporate Affairs Commission and the National Health Insurance Scheme.

The healthcare providers shall also be chosen by the community. The community is free to choose either Government or Private Providers provided they shall comply with the Actuarial Pricing which will be released by NHIS from time to time. All insured enrollees should carry their Enrollee Access Card, which should indicate the Blood Group (ABO), genotype, and Rhesus Status (RS).

Millenium Development Goals (MDGS)
The fundamental rights to health was codified in the Universal declaration of Human Rights of the United Nations General Assembly in 1948, 30 World Conference of Human Rights in Tehran, Iran 1968, in Cairo, Egypt 1994. All these conferences articulated the need for conceptual framework to address health issues, eradicate poverty, and improve quality of life in 192 countries of the United Nations.

In recent years, the Millennium Development Goals (MDGS) have become a quantitative set of targets for poverty reduction and improvement of health, education, gender equality, the environment and other aspect of human development. The MDG can be achieved in the following ways:Poverty, ignorance, and disease always constitute vicious cycle which has to be broken. But when disease is removed, the individual can work, become economically productive and can liberate himself from poverty.

Universal Primary Education can only succeed when the Children are free from the scourge and burden of disease. Economic and gender empowerment is guaranteed once every pregnant woman is insured. She can confidently go to a registered facility to deliver without any fear of hospital bills. Reduction of child mortality is directly effected since malaria, enteric fever and bronchopneumonia an covered.

The three major causes of maternal mortality can be treated - hemorrhage, infections (malaria) and prolonged labour. These can be managed under skilled supervision concept of prophylactic obstetrics Environmental Sanitation will reduce malaria, enteric fever and improve community health.

The improvement in all the six target goals will be an encouragement for donor countries to increase official development assistance. According to the last estimate of maternal mortality for 1995 alone, 500,000 women die annual pregnancy and childbirth, most of them from conditions that could be prevented or treated in we medical facilities. For the reason, maternal mortality is very low in Latin American and East Europe where skilled attendants are available with equipped medical facilities, but very high in Mrican and regions where many of the attendants are unskilled and facilities are lacking in equipment.

Conclusions
Aristotle the great philosopher once said, “we are what we repeatedly do, excellence then is not ( habit”. So Health should cease to be an Act but a Habit. Health should cease to be a Privileged but” not the years in your life that matters but the life in your years. Let us all carry the message of Health Insurance to our people. The task before us may be Herculean but not insurmountable.