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Achieving community health insurance fund development goals in Nigeria


Dr-Khaliru-AlhassanCase Reports
ON the 22nd September, 1983, I left the shores of Nigeria to commence one year hospital attachment with Aberdeen Royal Infirmary, Scotland as part of the requirements of the Fellowship Programme of the National Post Graduate Medical College of Nigeria at that time. I was occupying the post of Clinical Research Fellow and Rotating Registrar at the maternity unit of the university.

On 27th September 1983, I was the Registrar in charge of the maternity. I was called to review a patient (called Mrs. X) at 1 a.m. who had features suggestive pre-eclampsia. I wanted to prescribe a drug and I thought I should check whether they were used to the drug, and whether it was available in their Pharmacy. The reply I got was that “here, any drug you prescribe must be made available under National Health Service (NHS), shortage of drug is not allowed provided it is in the British National Formulary.” Of course, the drug was supplied immediately.

On 29th September 1984, I returned to Nigeria, back to University College Hospital. Shortly after, 10th October 1984, I was the Senior Registrar in Labour Room. At 2.00 a.m., I received a call from Casualty Department, ‘‘there is a woman in casualty, 37 weeks pregnant, bleeding. Should we send her to Labour Room?” I said, “Of course, yes and quickly too!” (Mrs.Y.)

It was then the Labour Room sister called me and said: “Dr. I know you have just come from abroad, you do not just authorise them to bring patient to labour ward until you certify that all materials you need are ready and available, if they are not, then you write them out and ask patient to go and buy – we call that shopping list.”

Then I asked: “What if this patient does not have the money or the pharmacies are closed at this time of the night, what happens?” The sister replied: “If you now decide to take on the management of the patient, and you do not have the materials – not even gloves to examine – what happens?”

All the possible drugs and other requirements were written out and sent to the patient to go and buy. The patient never reported back, what happened after that anyone can guess.

What is the difference between Mrs. X in Aberdeen and Mrs. Y in Ibadan who was denied access? The difference is “health insurance.” Mrs. X. was insured under NHS, and Mrs. Y was not, no health insurance for Nigerians then.

The situation was as disconsolate as it was disconcerting! I suddenly realised that it was not only Mrs. Y that was in that situation, any Nigerian could have been in her position.

I moved from government employment to private sector the following year, and that year I incorporated a Limited Liability Company whose functions included health insurance. This was probably one of the first companies in Nigeria to categorically state health insurance as one of the objectives in the Article of Memorandum.

It is a historical paradox that today, I am happy to inform you, as chief executive officer of the Health Maintenance Organisation in charge of University College Hospital, Ibadan under NHIS, 3310 members of staff are already carrying health insurance cards and no incident, similar to the one in 1984, has been reported to our company. Nigeria is indeed on the right track.

With this, the goal of this lecture is to define the strategy towards ensuring that every Nigerian carries the Health Insurance Card – also called ‘‘Enrollee Access Card.” A life, on which no premium is paid, is very unsafe.

This lecture is dedicated to the Emeritus Professor of Medicine, Prof. O.O. Akinkugbe, who as a giant colossus has traversed the terrain of medicine in this generation leaving his indelible footprints in the sands of time. As one of his many attributes, he has always shown keen interest in health insurance. He is the chairman, Board of Directors of Premier Medicaid International HMO.

Health insurance is a mechanism for spreading the risks of incurring health care costs over a group of individuals and households.

The two key phrases in health insurance are “resource mobilisation and risk sharing.” The conceptual frame work does not depend on the administrative arrangements 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’ health care 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 health care financing, out-of-pocket payment at the point of utilisation of health care services is the least desirable mechanism of financing health care from an equity perspective, as it denies access to health care 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 use 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 health 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 health care 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.

The main directions of change initiated in health care financing as part of HSR have included introduction of user fees where public funding was predominantly through taxation, Prepayment schemes or health insurance, multiple insurance funds, private insurance, public private partnership in the provision of health care services.

One of the earliest historical records on health insurance dates back to 1778 when inhabitants of a small village in Germany resolved to make communal contributions and from there pay for the treatment of their sick members. This idea has since been adopted as government policy in many countries of their sick members. This idea has since been adopted as government policy in 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 it 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.

United States of America
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.

Various measures have been taken by governments to strengthen the community financing schemes.

These include subsidising the premiums of the poor, providing technical assistance to improve scheme management capacity and forging links with the formal health care networks.

Unsuccessful self-treatment frequently leads to huge bills by traditional healers, private practitioners and Pharmacies.

The Co-operative Medical System (CMS) in China captured the attention of the world in the late 50’s. Other schemes include the Thai Health Card and Indonesia Dana Sehat. These schemes satisfy the three criteria of community finance scheme.

Community Control
Voluntary membership
Prepayment for healthcare by the community members

The success of community financing scheme has in their potential to mobilise fiscal resources and attract a large percentage of target population to enroll. Another precondition for success is people’s confidence and trust in the organisation managing the fund.

National scheme

In China, about 800 million people are mostly engaged in farming and live in rural areas. The average income per person is $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 fund for the CMS was from three sources: Compulsory payment by residents, village contributions, 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 65 years, all within the span of 25 years.

When the 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, students reveal that 28 per cent of seriously ill farmers did not seek healthcare, while 51 per cent of rural patients refused hospitalisation due to financial reasons. The reason for the collapse of CMS was due to a shift from community to government control.

In 1990, Indonesia was ranked as the fourth largest population in the world with around 210 million people in about 35 small and major islands. Since 1990, the Ministry of Health encouraged the Dana Sehat (the village health fund), a voluntary community-based prepaid health care programme which is most common in rural area of Indonesia. Community calls its members through periodic meetings to discuss the programme while the government provides the tools and guidance such as Dana Sehat operations, monitoring and supervisory procedures.

The population of Thailand is 59 million (1992). In 1994 per capital income was $2,410. The Thailand Health Card was a voluntary prepaid scheme primarily designed to promote maternal and child health.
Purchase of the card means prepayment of a certain fixed premium, with the objective of improving health among the rural populations. The health card has evolved to a social welfare program, since it now receives an explicit contribution from the government equal to the contribution of the cardholder.

In Bangladesh, community control and participation in health care is increasing. The Grameen Bank is internationally known as group-based credit programme providing credit to the rural poor particularly women. It also supports social development programme for poverty alleviation. Health was later incorporated into the scheme based on the discovery that some were unable to repay their loans back. This was due to one sickness or the other. The Grameen Health Programme (GHP) was thus established as a prepaid health insurance programme to provide basic health service to its members.

Latin America
Social security institutions have dominated social insurance schemes in Latin America. For this reason, health sector reforms in Latin America have been a response to segmentation of the health system funded with multiparty financing; the public sector with government funding and private sector financed by private out-of-pocket expenses and private insurance (Chile, Columbia and Peru). In some countries, the main focus is to unify system fragmented into numerous contributory funds (Argentina and Uruguay).

One of the greatest challenges facing the global community today is how to increase the access of African population to health care. 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 major contributing factors to the high incidence of out of pocket payment by individuals and households at the 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
Curative, budget constraint, cost is barrier, provider not prepaid and not prepared
Preventive, not budget related, cost is not barrier, provider prepaid and prepared.
WHO identified sub-Sahara 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 Minister, Tony Blair Commission for Africa, the direct cost to Africa of health worker migration is put at $50 million 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. There are some large population schemes in Burundi (Carte d’Assurance Maladie), Tanzania (Community Health Fund, CHF), Abola Village Insurance Scheme (Guinea-Biassau), Bruwanda Hospital Insurance Scheme, Nkoranza Community Financing Health Insurance Scheme (Ghana).

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 Groups.”

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. The CAM Card is sold at a fixed price and entitled household member (husband, wife and all their children who are less than 18 years old) access to healthcare. The price of the card was $1.85. CAM cardholders who seek healthcare at government facilities did not incur out of pocket expenses.

The CAM cards are not accepted by mission or for profit clinics. CAM empowered women to seek medical treatment without necessarily obtaining male permission.

In Tanzania, the community health is a national initiative and thus has the central government political support.
The financing mechanisms employed include national user fees, insurance contributions and subsidies from the World Bank. Decisions about the use of the funds are made at the ward level and reflected in the ward health organisation. The ward health committees are selected by the community to collect ward contribution, or may be part of a consultative group representing community groups and health facility management.

All participating households contribute a flat rate and all members of that household have unrestricted access to the health service provided by that hospital. The premiums are calculated per person and thus vary with the size of the family.

The community health insurance scheme started in the NKoranza district of Ghana in 1992. The management and health care are provided by hospital personnel.

The administration is based on three tier structure: Insurance Management Team (IMT) – this consists of medical officer in charge of public health and the hospital management team.

Insurance Advisory Board made up of traditional, political, religious and administrative leaders in the community.

Zonal co-ordinators and field workers – these groups supervise voluntary field workers who register families into the scheme.

The premiums are calculated per person and thus vary with the size of the family. The scheme ensures access to care at St. Theresa’s Hospital in Nkoruma district (Ghana) by providing free admission in the medical, surgical and maternity wards.

As a result, in terms of admission, utilisation was greater than the uninsured by a factor of 2.4. The insured patients reported earlier on the average; the overall treatment was less costly.

Ghana programme of work 2000 – 2002, Ministry of Health
“The goal is a system that embraces both the formal and informal sectors, providing affordable health insurance to the majority of Ghanaians and exemptions for the indigents.” The framework envisages “community based health insurance schemes and mutual health organisations for the informal rural sector” will be a component of the multi-scheme approach.

Bamako initiative
Community based health insurance in sub-Saharan Africa has been extensively reviewed. In the West African sub-region an attempt was made at ensuring that revenue should be raised and controlled at the local level.

Current health indices

Nigeria is rated very low in terms of healthcare delivery 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 51 years (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 1,500 per 100,000 live births – 3rd largest in the world.

One in 100 women will die as a result of child birth.

Public expenditure on health is less than $8 per capita (compared with $34 recommended internationally). Attempts have been made by the past administration to increase the health budget.
14 billion naira – 2001
107 billion naira – 2006
122 billion naira – 2007

Rehabilitation and Refurbishment of Tertiary Health Institutions being largely responsible for the increase. Despite all these efforts, latest United Nations Fund for Populations Activities (UNFPA) reports that Nigeria is one of the countries with the worst maternal mortality rate in the world. The others are Angola, Burkina Faso, Mauritania, Sierra-Leone.

WHO report stated that as many as 92.2 per 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 1.3 per year. 110 million 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 75 per 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: “Good health and sound health system have been recognised 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 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.

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