‘Health Insurance Is Poverty Alleviation Measure’

Dr Patrick Korie, a medical doctor with specialization in health insurance, is the Managing Director and Chief Executive Officer (CEO) of Managed Healthcare Services Limited (MHS), a Health Maintenance Organisation (HMO) headquartered in Lagos.In this interview, Korie explained how Nigeria can use health insurance to boost health financing and reduce poverty among the citizenry.

HOW will you rate Nigeria’s health insurance? Health insurance in Nigeria is still at a very rudimentary stage. It is rudimentary because the rate of uptake compared to the population is low; the number of Nigerians who have health insurance is too small. It is between six to eight million people who are actually enjoying health insurance in a population of about 170 million people.

We have to look at what insurance is. Insurance is something you do in case of the unexpected. It is something you do to restore you to your former state if you encounter the unexpected without any loss to you. Health insurance is something we have to do. If we are ill, it will provide us with medical care to restore us to a healthy state. It is a cost saving measure for individuals.

Against this background, it is surprising that health insurance is not being taken up. It is because it is still at the rudimentary stage because people are not aware. They do not know that health insurance is a poverty alleviation measure. If a daily low earning individual is hospitalised for a week, he is going to pay for the medical bill. And he would have lost money from not working. What happens to that individual? You cannot compare that individual to an individual who has health insurance with the same status and who is not going to pay for his medical bills. He may only lose money he may not earn for that day or week, but he is not going to pay medical bills from his pocket.

There are common health conditions ranging from delivery to treatment of malaria, where some people borrow money to offset their bills. When it gets to complex deliveries like caesarian section, some people sell their lands to pay the bills. When some patients are hospitalised for more than a week, they sell their property to get them out of hospitals. But health insurance would have made a difference in these instances. Health insurance would have taken the burden off those affected. So, a small part of the money the person would have paid directly from his pocket for healthcare can be used to purchase health insurance cover.

The remaining part of the money can be channeled into other things. When you have resources, you can distribute into ventures that can improve your life like business, education of your children, housing, feeding among others to improve your social wellbeing. But when you use this to take care of an ill person, it plunges the family into poverty. Some families, as a result of paying for medical bills, have had their children drop out of school.

As a result of paying medical bills, they can no longer feed or even lose their means of livelihood. That is why we describe health insurance as a poverty alleviation strategy because it ensures that the person will not sell his property in order to access healthcare. And remember the saying that a healthy person is a wealthy person. When a person is living with a burden of disease, that person is a poor person. Why do people live with diseases? They live with diseases because they may not afford care, or they cannot access healthcare.

What do we do to raise awareness on health insurance?
We will love the state to embrace health insurance and recognise it as alternative means of healthcare funding and pursue it aggressively. A small state with two million people, if only 20 per cent of the two million people are working to support health insurance, the result will be tremendous. If the 20 per cent, which amounts to 4,000 people, contribute N1, 000 each every month, we are going to have N4.8 billion annually. Add this to the budget of the state on healthcare; if you plow N4.8 billion into healthcare of a state with a population of two million people, it is a lot of money. Imagine replicating this in the 36 states of the federation.

Imagine if health insurance becomes 60 per cent of our Total Health Expenditure. About 63 to 65 per cent of our Total Health Expenditure is out -of-pocket medical expenses. That means that our people pay from their pockets when they are about to access care. If we convert this to health insurance, the kind of pool we are going to generate is going to serve a lot of people. So, we need to create awareness at institutional level using policies. That is why we are advocating that health insurance should be made compulsory.

On the issue of awareness, the health insurance regulator, the National Health Insurance Scheme (NHIS), has come out to accuse HMOs and other healthcare providers of not doing enough to raise awareness on health insurance, unlike what happened in the telecom sector where providers went into aggressive marketing. How correct is such accusation?

That accusation is not correct. We are doing enough to create awareness on health insurance. The awareness we have today in Nigeria is as a result of awareness created by HMOs because HMOs are the marketers of health insurance. Unfortunately, earlier than now, the average Nigerian expected the government to provide free health, and government had provided free health services to the people. This is unlike what obtains in the telecom sector; the government never provided free telecom services to the people. Any person who wanted telecom service paid for it from the beginning.

Our people have not been paying for their healthcare services. They had been accessing it free. Telling our people now that they have to contribute a little to enjoy free healthcare services looks abnormal. Initially, it may look as if the government is not taking up its responsibility of providing healthcare. But it is not true. Even though the government is doing what it is supposed, it is very wise for government to join us in creating awareness and tell Nigerians that the ‘free healthcare we were giving you was out of tax’. Let us create special fund to give the people free healthcare.

What have been the challenges you have faced in operating health insurance?
We have been in health insurance since 1998; we are the guinea pigs of health insurance. And we have acquired a whole lot of experience in the critical areas of health insurance, from underwriting to client management, product development and clients’ satisfaction. The challenge we have had has been inflation. Although the cost of medical services keeps increasing, we are not increasing our premiums at the same rate. This is because we know that if we do so, we will find ourselves increasing premium quarterly at the same rate with changes in price. But we try to absorb that using our pool and experiences.

But it has become a little difficult for us to project. We have to be careful not to project our products beyond the reach of our clients. This exposes a lot of HMOs to price risk, because they have to rely on their reserve to ensure that care is delivered to the people. And those that do not have reserve will collapse over time, if the issue of price risk is not address by them.

But these are the things we have managed over the years with our experience. We want to impact that on the industry. We are advocating that the premiums that we should have in the industry should be properly directed using proper risk analysis in such a way that the industry will not collapse. If we do not address this, it will surely collapse the industry because the cost of medical care is the same for everybody. And most people who want to purchase health look for the cheapest as a form of cost saving. But that cheapest product may not deliver the required health services. So, it is important that we understand players who want to deliver services in the market and players who just want to have presence.

Players like us who have been in the industry since 1998 are projecting bigger and better tomorrow with our experience. Our strength has been corporate health insurance and National Health Insurance Scheme (NHIS). But we noticed that these two areas have not touched people. That is why we have embraced NHIS scheme that touches the individual- the Voluntary Contributors Social Health Insurance Scheme (VCSHIP). The premium is N15, 000 per person yearly.

We embraced and market this product on behalf of the NHIS to ensure that every Nigerian who can pay N15, 000 can pick it up and enjoy full benefits of health insurance. A lot of people are picking it up and we are happy to be part of it.