Failures of Nigerian Health Insurance Scheme: the way forward

The National Health Insurance Scheme (NHIS) has been in operation for over ten years but it seems to have failed in the realization of the objectives for which it was established. Key among its failures is the non-realization of the objective of making health care available to Nigerians at an affordable cost. As at date many Nigerians still pay out of their pocket for medical expenses; a retrogressive health care funding mechanism. This has continued to drive many families to catastrophic health expenditures and poverty. There is therefore an urgent need to review the scheme with a view to finding out factors responsible for its poor performance and proffer solutions that can lead to improvement in the scheme. This is necessary in order to accelerate the expansion of the scheme to cover many Nigerians within the shortest possible time.

The National Health Insurance Scheme was set up with the objective of making health care accessible and affordable to many Nigerians. However this lofty objective has been undermined by many factors. These factors have directly or indirectly contributed to the slow pace of success in the National Health Insurance Scheme. Addressing these factors is key to the success of the scheme. Find below the list of factors that have contributed to the failure of Nigerian health insurance scheme:
1. Inadequate legal framework for a successful scheme
2. Poor implementation of the Act
3. Poor government funding of health care and the health insurance scheme
4. Optional enrollment policy
5. Inappropriate practices by the regulatory agency, the Health maintenance organizations and the providers
6. Lack of political will

Inadequate legal framework for a successful scheme
The present ACT 35 of 1999 that established the NHIS is long overdue for review as it did not address key issues in the scheme. These are: failure to define the coverage population, failure to outline funding mechanism for the under privileged, failure to make the scheme compulsory and failure to outline ways of collecting funds from the informal sector. Consequently the informal sector which is the largest uncovered population has not been integrated into the scheme. There should be an immediate review of the act establishing the scheme to provide the legal framework for the enforcement of the scheme and inclusion of all sectors of the population. There should also be a defined way to collect the funds from the informal sector whose population is a significant contribution if added to the scheme.

Poor implementation of the act
Although there were good operational laid down strategies to improve coverage in the scheme; they were mere policies that were not implemented. The result is that over time there was no incremental growth in coverage as would have been expected. Thus the three per cent coverage achieved many ago is still the coverage status till date. These factors have hampered the attainment of the objectives of the scheme as only about 3% of Nigerians have access to medical care . About 97% of Nigerians are uncovered and among these are the less privileged and other vulnerable groups. These less privileged and vulnerable groups are not protected from financial hardship of huge medical bills. There is still a high out of pocket payment in Nigeria. The out of pocket expenditure as part of our Total health Expenditure is still about 64%.The high percent of Nigerians purchasing care out of pocket are exposed to fluctuations in the price of services unlike health insurance with a definite premium and price for services. It becomes difficult to control or limit the rise in the cost of health care services when a large proportion of the population is outside the control of the scheme.

The scheme is designed to maintain a high standard in the delivery of care. But the experience of enrollees point at poor service delivery with long waiting time, use of substandard drugs and poor attitude of healthcare providers. These have festered because of poor supervision and weak regulation.

There is immense private sector participation in the scheme. All the HMOs and providers are privately owned. While the HMOs that are privately owned play a dominant role in the operation of the scheme, the public hospitals play a dominant role in the delivery of care because of the dominant presence of specialists in these hospitals. The enrollee distribution is skewed towards public hospitals.

Poor government funding of health care and the health insurance scheme
Nigeria’s health expenditure is relatively low, even when compared with other African countries. The total health expenditure (THE) as percentage of the gross domestic product (GDP) from 1998 to 2000 was less than 5%, falling behind THE/GDP ratio in other developing countries such as Kenya (5.3%), Zambia (6.2%), Tanzania (6.8%), Malawi (7.2%), and South Africa (7.5%). Remarkably, the federal budgetary component of health expenditure has increased over the years. it increased from 1.7% in 1991 to 7.2% in 2007. Nevertheless, the budgetary allocation for health is still below the 15% signed by the Nigerian government in the Abuja declaration.

The inadequate budgetary allocation to health care has grossly affected government ability to cover vulnerable groups whose main source of funding still lies with the government. Thus till date, the poor, the destitute and children do not have funding provided by the government. Successful addition of this group with government funding can substantially increase the coverage of the scheme. This method of funding undertaken by government is what obtains in countries like the USA where the Medicaid carters for these dependent groups.

Optional enrolment policy
The fact that National Health Insurance Scheme is not compulsory has hampered the expansion of the scheme. The scheme has presently covered those in civil service, the armed forces, paramilitary forces and other employees of the federal government. The states have showed disinterest in enrolling its work force into the scheme. This is predominantly because there is no legal framework making the scheme compulsory for state government employees and employees of the formal and informal sectors. Thus one significant breakthrough towards coverage increase will be to make enrollment into the scheme compulsory for everyone. Act 35 of 1999 that established the National Health Insurance Scheme did not make health insurance compulsory for all Nigerians, as is expected in a social health insurance scheme.Thus the move to make the scheme compulsory though necessary has not fared well in the law making chambers of the government. The 6th and 7th Assemblies were unable to amend the law making it compulsory. It is now being discussed by the 8th assembly.

Inappropriate practices by the regulatory agency, the health maintenance organizations and the providers
The operation of the NHIS has been hampered by corruption in successive administrations running the scheme. The result is that allocations made to the scheme have not been properly channeled and utilized. There have been cases of collusion between agents of the regulatory body,the health care providers and health maintenance organizations. Thus there has been poor regulatory activity by the NHIS as a result of compromise.

The NHIS currently functions as both a regulator and an operator in contravention to the Act stipulating that they should function as a regulator with defined roles. This creates a conflict of interest with the Health Maintenance Organizations who are the legal operators of the scheme. There is also a poor regulatory framework. The HMOs and providers are not adequately supervised and as a result, there is poor service delivery. Some of the enrollees who should be promoting the programme have poor memories with respect to satisfaction with services rendered in the scheme

Inadequate risk management systems in the present programmme
There is inadequate risk management system in the present programme and this has exposed the HMOs, providers and enrollees to risk. A situation where a provider receives the same premium for a 75 year old and a 15 year old, does not promote efficient service delivery. The payment mechanism for the present programme using global capitation for primary care ,fees for service for secondary and tertiary care does not take into consideration numbers of enrollees per HMO or provider, and geographic location. A provider in the urban area is paid the same fee as a provider in the rural area despite the provider in the urban area having a higher over head cost in running the scheme. Also a provider with five enrollees and that with one thousand enrollees receive same rate of payment. The pooling mechanism and risk sharing mechanism intended by use of global capital for primary care transfers all the risks to the provider with a small pool. As a result the enrollee will be unable to access quality care as some provider resorts to sharp practices to continue in business.

A programme like the Voluntary Contributor Social Health Insurance Scheme (VCSHIP) is a misnomer. This product is not a social insurance product because it is neither compulsory nor subsidized by government. It has succeeded in creating a pool of chronically ill and pregnant women. It has a very high level of adverse selection to the extent that some providers reject this class of enrollees because they deplete their pool. The NHIS has done nothing to date to address this risk.

Lack of political will
It was the political will demonstrated by Chief Olusegun Obasanjo in 2005 that operationalized the NHIS with the enrollment of the federal Civil servants. This was after many attempts at kick starting the scheme by previous administrations failed. However it is noteworthy that although the scheme has finally kicked off there has been lethargy in implementation of all aspects of the scheme including the Prison inmate insurance scheme, disabled persons social health insurance scheme etc. Lack of political can also explain the fact that the bill to amend the ACT setting up the scheme has gone through the 6th to 8th assemblies without being amended. There is compelling need that government prioritizes the health care of the citizens and issues like this amendment should be given top priority

Sometimes the release of appropriated funds to agencies like the NHIS can be delayed unnecessarily leading to government funding of the scheme being jeopardized. There should be good political will to implement policies of the NHIS scheme. This inappropriate government response to health care scheme has led to unabated worsening of health care indices in the country.

The world health statistics report 2010 showed that neonatal mortality rate(probability of dying by day 28 of life) per 1000 live births as at 2008 was 494. This is against 3 in the Netherlands at the same time. The infant mortality rate in 2008(probability of dying by age one) per 1000 live births was 96 as against 4 in the Netherland. The under- five mortality rate (probability of dying by age 5) was 186 as against 5 of the Netherland. The WHO using the index; disability adjusted life expectancy ranked Nigeria as the 163rd out of 191 countries with respect to life expectancy 5. This index attempts to assess population health using indices like probability of survival and quality of survival. According to this index, life expectancy in Nigeria is 48.4years. This is worse than even our next door neighbour Ghana which has a life expectancy of 61.9 years using 2011 estimate5.

The way forward
The key factors that have contributed to the failure of the NHIS are poor funding from government, lack of necessary legal framework for enforcement. Any model that will thrive and be successful will confront these challenges.There is need to enact the necessary laws to enforce membership of the scheme. When the scheme is made compulsory everyone comes on board and this can be one of the steps towards improving monitoring of the scheme, efficiency , proper utilization of the health facilities and ultimately better health care delivery system in the country.
Government should give health care funding a priority attention by fulfilling its own obligation in the funding. The government should use the political will to bring about the implementation of the policies of the scheme and mete out necessary penalties to defaulting operators and providers after sanitizing the regulators. There should be no further delay in amending the NHIS Act.

The amendment of the Act should make health insurance compulsory for all Nigerians with clearly defined means of funding. A central pool should be created instead of fragmented pools to reduce the risks. Every state of the federation should join the scheme so that a central pool will be generated to guarantee better risk management. There should be a law to this effect. The NHIS operational guide should identify and implement adequate risk management mechanisms to ensure sustainability of the scheme.