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Many challenges of accessing cheap, quality, universal care via optional health insurance


Lagos mandatory scheme promises to address gaps, reach more residents

Busayo Busari and her daughter Fikayo were detained at the Lagos University Teaching Hospital (LUTH), Idi-Araba, Surulere for four months over unpaid bills, after Busayo was delivered of Fikayo through a caesarean section in February 2018.

After spending about a month at the hospital, the family’s medical bill rose to about N387,000. It was reported that some social workers at LUTH had to raise fund to pay part of the bill, which reduced it to N93,000 before other good Samaritans came to settle the remaining debt.

Also, in one of the national newspapers, the family of Mr. Jimoh Arola sought financial assistance of about N2 million for plastic surgery for their 35-year-old daughter, Afuzat Jimoh, whose face, hands, neck and chest were burnt after falling into boiling oil in Ejigbo, Lagos State.


It is common in Nigeria to see cases mentioned above, where citizens beg for money to offset medical expenses. Not that the issue of begging to defray medical expenses is new, in the past, it was limited to family members whether nuclear or extended. Today, sick persons are advertised in the media with a call to support them financially to be able to do surgery or pay medical bills after being refused to leave the hospital ward. Sometimes, such sick persons are paraded on streets and major roads with the intent to get donation to treat their ailments.

Indeed, many of the sick that are paraded on streets are even being endangered as some of them are under scorching sun. This is despite some of these sick persons being in critical condition. Since there is no health insurance to fall back to as being done in other climes to offset bills to treat minor or major ailments, many have no other option, but to device a means to generate fund to pay for treatment, which sometimes include going to the public to beg.

Some health experts have argued that in a system that works with effective health sector supported by health insurance, people soliciting financial support to upset medical bill would be near to nothing. There have been cases where just as donations and contributes is about reaching the mark of money needed, it would be announced that the patient is dead.

In developed countries health care provision through insurance scheme holds prominent position in government agenda and manifestoes of politicians.

For instance, the Patient Protection and Affordable Care Act, popularly called Obamacare, which was signed into law by former United States President, Barack Obama, in 2010, made provision to greatly reduce the number of uninsured Americans through the provision of affordable health insurance.

Although the Obama government was largely criticised by some persons and groups on account of the Obamacare, records of the benefits of the health scheme showed that the uninsured population in America reduced by 50 per cent, with almost 24 million citizens enrolling between 2014 and 2016.

Also in Ghana, the concept of health insurance commenced in 2000 by a former president, John Kufuor, who made it a major campaign issue during the electioneering.
He promised to abolish the cash and carry system, which required a patient to pay for his treatment before getting treated even in an emergency.

Kufour introduced the health insurance scheme to ensure that treatment was provided first before payment for Ghanaian citizens, providing equitable access and coverage of basic health care services to the citizens.

The health insurance scheme, which started almost the same time with Nigeria’s scheme, had enrolled about 11 million, about 40 per cent of the 26.9 million population of Ghana, according to Ghanaian records.

In Nigeria, the National Health Insurance Scheme (NHIS) was established under the Act 35 of 1999 Constitution by the Federal Government to improve the health of all Nigerians and make the cost affordable.
It has the mission to facilitate the financing of health care costs through pooling and judicious utilisation of financial resources; to provide financial risk protection and cost burden sharing for people against high cost of health care, through various programmes prior to falling ill.

Parts of the objectives of the scheme are to ensure that every Nigerian has access to good health care services, and to protect families from the financial hardship of huge medical bills. Unfortunately, due to poor government funding of health care and non-functional 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 five per cent, falling behind THE/GDP ratio in other developing countries such as Kenya with 5.3 per cent; Zambia, 6.2 per cent; Tanzania, 6.8 per cent; Malawi, 7.2 per cent and South Africa, 7.5 per cent. Remarkably, the federal budgetary component of health expenditure has increased over the years. It increased from 1.7 per cent in 1991 to 7.2 per cent in 2007 but it has been less than five per cent in the last five years. In fact, the budgetary allocation for health in the 2019 proposed budget is about 4.1 per cent. These figures are still below the 15 per cent endorsed by the Abuja Declaration in 2001 and signed by the Nigerian government.

Nigeria and South Africa are the biggest economies in Africa but in terms of budgetary allocation for health they are worlds apart.

While South Africa is said to have spent $46 billion on health between 2014 and 2017, Nigeria has only achieved $3 billion within the same period, Nigeria’s population is 180 million and South Africa is 55 million.

In 2018, South Africa estimated its expenditure on health to be $14 billion, which is 12 percent of its budget; Nigeria’s expenditure on health is about $949 million, which is 3.9 percent of its budget.

In 2017, SA’s health expenditure stood at 13billion dollars and this accounted for 12 per cent of its total budget, Nigeria’s expenditure on health was $847million and this accounted for about 4.17 percent of its total budget.

In 2016, SA’s expenditure on health stood at 12 billion, and accounted for 12 percent of its total budget while Nigeria allotted $696 million and it accounted for 4.1 per cent of its total budget.

In 2015, South Africa’s expenditure on health stood at $11billion and this accounted for nine percent of its total budget while Nigeria’s expenditure on health stood at $724 million and this accounted for about 5.7 per cent of its total budget.

While Nigeria’s overall budget has grown by 92 per cent from N4.49 trillion in 2015 to N8.621 trillion in 2018, this cannot be said of its health sector instead, its health budget has fallen by more than three per cent.
However, South-Africa has grown its health allocation by 27 percent to $14 billion in 2018 from $11billion in 2015.

The World Health Organization (WHO) during the BAMACO initiative instructed countries of the world that their health care expenditure to GDP should be up to 15 per cent.

Statistics across several African countries showed that in 2016, Rwanda allocated 18 per cent of its national budget to health, while Botswana and Malawi have allocated 17.8 per cent and 17.1 per cent respectively.

Zambia is 16.4 per cent, while Burkina Faso is 15per cent. Meanwhile, Nigeria, which hosted the 2001 Abuja declaration, where it pledged alongside other member states of the African union to commit at least 15 per cent of their national budget to health, is still at 4.1 percent, with no trajectory towards achieving the 15 percent target.

Narrowing it down to Lagos, the budgetary allocation for health in the last five years has not gone beyond 10 percent. In 2014, the health sector got N37.812 billion, which is about 7.72 per cent and by 2015, it increased to N44.617 billion, which is 9.1 per cent. The amount allocated to the health sector in the 2016 budget increased to N64 billion, which is 9.76 per cent of the budget, but the allocation for the health sector in 2017 dropped to N57.29 billion, which is 7.05 percent. There was however a boost for the health sector in the 2018 budget as the allocation got increased to N92.6 billion, representing 8.86 percent.

Any sane society knows that a healthy population is critical to its economic development. This is why many developed countries not only strive to ensure that its citizens are healthy, they make concerted investment in that direction. Wanting to follow this honourable path of ensuring a healthy population, Lagos State Government in 2015 through law introduced the mandatory health insurance scheme in the state. This it felt would greatly make a huge chunk of the residents of the state to be healthy.

Before the law came onboard, Community Based Health Insurance Scheme (CBHIS) was test-run in three communities. The first in Ikosi Isheri at the Olowora Primary Health Care (PHC) in July 2008 with over 19,000 people reportedly enrolled as at three years ago. The second community was Ibeju Lekki, which was launched in March 2011 in two facilities Awoyaya and Iberekodo PHCs with over 10,000 enrolled three years ago, while in Ajeromi Ifelodun, which was launched at Tolu PHC on January 15, 2013, 9300 enrolled as at three years ago.

For many observers, having a health insurance scheme is a good development considering the place of Lagos in the set-up called Nigeria. Its economy is said to be the fifth largest on the continent, aside from the state being the economic nerve centre of Nigeria, housing most of the private businesses. This, therefore implies that if the over 20 million residents of the state are healthy, they will be able to serve as the human engine room to power the economy of the state and by extension Nigeria.

Many months after the first announcement of the willingness of the state to kick off the mandatory health insurance, the excitement that many of the residents and stakeholders have about the health insurance has started dwindling principally because the state has had to postpone its commencement date about thrice now. And this is coming in the face of the many hiccups that had trailed the National Health Insurance Scheme introduced by the federal government. But, three years after the law to have a mandatory health insurance scheme was passed into law, it finally kicked off when the scheme was launched in December 2018.

[FILE PHOTO] Minister of Health, Prof Isaac Adewole

Speaking on the health insurance scheme, a sociologist, Samuel Ajayi noted that a mandatory health insurance scheme is a very good and people-oriented health policy initiative, which shows that a state like Lagos is ready to join the league of developed states in the world.

According to Ajayi, the impacts would include guaranteed health coverage for all residents of the state depending on the scope and how it is structured. He argued that if it is well structured, it will reduce mortality rate including maternal, newborn and child mortality; ameliorate the health condition of so many people especially the poor; reinvigorate the economy especially the insurance sector; improve health care delivery, among others.

“There is a NHIS currently operating across the country, my reservation therefore lies in the structure, management and administration of the scheme, which I hope will be devoid of corruption, and rather embrace transparency in all the processes, accountability and inclusiveness. I hope the scheme will be affordable as well especially for the poor and those in the informal sector. It is therefore important to learn from the shortcomings of NHIS to make this initiative outstanding,” Ajayi stated.

Also speaking, a medical doctor, Abisola Adeniran applauded the state government for coming up with the health insurance scheme, as it will provide access to quality healthcare at a cost-effective rate to all subscribers. She added that the policy is going to allow both the rich and the poor the same quality of health service. She noted that the patient only tends to pay ten per cent of the medical bill in the long run.

An Islamic scholar, Sheikh Mansur Williams, said it is a must for the government to provide health facilities for the average citizens. He therefore said government should be concerned about providing health facility for all irrespective of whoever they are. “And anyone who chose to have health insurance scheme, let it be. What the government is providing today is highly inadequate. So the provision of health facilities should be at the finger tips of the citizens because you cannot expect a pregnant woman now to wait for her husband when she is in labour or before going for antenatal. A pregnant woman should be able to press her phone and comfort should meet her at that point by being attended to by a medical team.”

He asked rhetorically, “How many insurance companies keep faith with those who insured their cars.”

Williams further stated that with the state of the health system, he will not agree to a mandatory health insurance scheme. “How many of the public and private facilities are functioning well. Somebody said the private hospitals are slaughter centres, if you go in there, you are not sure of coming out alive. In government hospitals, I heard that a doctor would say he could only attend to ten patients, when there are probably about hundred waiting to see him. And the first two of the patients will tell the doctor what he cannot diagnose. “Imagine a patient telling a doctor that he is having headache, which is giving him pains all over his body. And many residents of the state, all they know is get a leaf from the farm or patronize those who hawk drugs whether orthodox or herbal mixture. Yet, these categories of persons are to be signed on for the health insurance scheme, so I do not know how these people will see the scheme without re-orientation.”

He argued that in executing the scheme the government should not look at the few rich but the larger society, which are the poor and uneducated.

Providing some insight into how health insurance works in the United Kingdom, a Nigerian doctor based there, Matthew Agwae, said the health insurance programme is called the National Health Service (NHS) in the United Kingdom (UK). He described it as a form of Universal Healthcare System, where residents of the country receive medical care with little or no cost. “In the UK, the NHS is funded by the government and supervised by the department of health. The government uses tax to fund the NHS.”

According to Agwae, non-permanent residents pay an amount as their contributions when securing their visas, about £150 a year, while a two-year visa attracts an additional cost of £300.

“Visitors to the UK are not charged this amount and they cannot access healthcare as well. The scheme is coordinated centrally but each hospital has its autonomy in terms of administration and rendering of service. The package includes free healthcare and highly subsidised medicines as well. Some are however free

“So, for instance, a pregnant woman, from start to putting to bed and all the services rendered thereafter are free as she pays absolutely nothing. A sick person rings the ambulance, he or she is picked up, seen and admitted in hospital, perhaps has an operation and follow up. All these services attract absolutely no charge.

“For the system to work, there is a water tight database of everyone living legally in the country. As long as this information is kept and taxation is ensured, there is always money available for the NHS.”

He further said under the NHS, everyone pays the same amount if on a visa, irrespective of whether or not he or she visits the hospital regularly or not. “Also, irrespective of the amount of tax paid by individuals, they all receive the same healthcare package.

“There are private hospitals and clinics outside the NHS. They charge for their services. The NHS could pay these private hospitals to see patients on its behalf to reduce queues and waiting time,” Agwae said.

Commenting, General Secretary, Nigeria Network of Non Governmental Organisations (NGOs), Ayo Adebusayo said the Lagos State Health Insurance Scheme (LSHIS) is critical to ensuring Universal Health Coverage (UHC) in Lagos, as it would help improve health outcomes for the poor.

He noted that Nigeria has one of the highest percentage of out-of-pocket expenses for accessing health care, about 70 per cent of total health spending in Nigeria is out-of-pocket expenses of the patient, which he said further impoverishes the citizens and denies the poor access to health care.

Citing the case of the United Kingdom where taxpayers enjoy free basic healthcare without having to contribute anything extra, Adebusayo said it is a wrong premise, as Nigerians nay Lagosians cannot eat their cake and have it. He added that Nigeria has one of the lowest tax ratios to GDP and revenue in the world, which implies only a tiny fraction of Nigerians are paying any tax.

“In the LSHIS there is still provision for free health care for the most vulnerable, which will be funded by the Health Scheme Fund. It should be obvious to all that this present system is in near collapse with all indicators at the bottom of the barrel even when graded with other low and middle-income countries. This is the only way forward out of this mess.”

He is however not happy that the state government is dillydallying on the kick-of of the scheme. “It is taking a long time to roll out implementation after three years of the Lagos State Health Scheme Law that was enacted in 2015, a few weeks to the end of the last administration.”

According to him, there is the need for more sensitisation at the community level to ensure maximum buy-in and ownership by the communities, as it is critical to the success of the health insurance scheme.

National President, Healthcare Providers’ Association of Nigeria (HCPAN), Dr. Umar Oluwole Sanda, said the health insurance scheme is a way to save for the raining days, as a citizen may not know when he or she may fall sick. He said it would also help to eliminate out-of-pocket payment for health, which is the way to go, as most developed countries started it many years ago.

“The population of Lagos is large and more people are coming in, therefore government alone cannot provide for the health needs of all the residents of the state. So by introducing health insurance, which is contributory, it will increase access, quality of healthcare as well as eliminate quackery.

“There are so many models of health insurance. The model we are trying to use here is the contributory, as resources are being put together. Basically, we should treat primary care. The government cannot do it alone considering their facilities cannot cater for the needs and demands.

“The way Lagos state is going about it, it is being overdressed. They know all the private hospitals that register with them and the majority of the health facilities are competent enough to handle primary care and if they really want to, they can engage all of them at a go and not try to discriminate. If they did not meet the standard requirement, the state government will not register them. There is a monitoring agency that checks the activities of private hospitals, register and renew license and many of the private facilities in Lagos have registered by the monitoring agency.”

Sanda maintained that with the about 4000 health facilities registered and renewed yearly, it is enough to start a primary health care service in the state, which is the target of the insurance scheme.

“The agency comes occasionally to inspect the facility to make sure that it does not fall below standard. And the majority of the private facilities in Lagos are more than qualified for primary healthcare service, which the health insurance scheme wants to start with.”

He suggested that the state government should do a lot of publicity and communicate the scheme to the citizens. “This is because many people once they hear insurance, they are always afraid to register, and the mandatory aspect of it is that if you do not have health insurance, you cannot do anything with government would make it better accepted. At the national level, only the civil servants seem to have registered for it. So the coverage is very low, may be the fear is, the coverage may not be much but with time, it will get better as gradually it will increase.”

Sanda however said the rule of engagement should favour the healthcare providers, besides they must be carried along, because neglecting them is the beginning of the failure of the scheme especially as they are the bedrock of the scheme.

“I do not know why Lagos State is dragging, as other states that have promulgated laws to back their health insurance scheme have started in a little way. They can start in a little way and grow it; the earlier we start the better. There is nothing in this world that you start new that there would not be challenge, but as the challenges come, there will be solutions.”

Lagos State Commissioner for health, Dr. Jide Idris, speaking on what informed the mandatory health insurance scheme, said health insurance is a symbiotic financing scheme for the state, as it is a way of mobilising funds for the sector. He added that the sector is very huge and resource- demanding, so, if there is no financing scheme it would simply amount to a waste of time. “This is because with a proper financing scheme, a number of things would be taken care of, one of which is access to healthcare. In the course of doing that, the quality of care and effectiveness of care would be addressed. If we get it right with the health insurance it would change the entire picture in the health sector because it will address the core issues.

“Right now, practitioners in the public sector at the primary, secondary and tertiary care provider levels are not up to 400, while the private practitioners are over 4000. So, the focus is to effectively bring the two together for the benefit of the people. You also know that people have been bitterly complaining about waiting for too long at general hospitals, and some of them end up not being properly attended to or treated.

“What we are trying to do with this scheme is to reorder that system to address all the key problems. This is because all providers participating in the scheme must meet certain criteria if they must provide quality service. We should by now know that free healthcare cannot work, but there are poor people within our system and it is government’s responsibility to cater for them.”


On what makes the state’s health insurance scheme mandatory when some residents are already under the NHIS, Idris said for those contributing to the NHIS, the state would not force them to join, as it might create unnecessary problems out there. “We are going to focus on the people who don’t have at all. And most of the people contributing are in the formal sector because it is easier to get their contribution.”

There are residents who stay in rural and riverine communities with no public and private healthcare facilities in their domains. The state government even said from its statistic, there are about 120 wards in the state with no public primary healthcare facilities. Yet, they are to be covered by the scheme and falls mainly among the poor that the state government is supposed to cater for, for free.

The commissioner is however optimistic that they would be attended to under the health insurance scheme. He said: “We also know that our budget can’t cover all those places because of many things we need to do. In those communities, there are private facilities and there is a payment scheme in the works, at least when they provide services to the people, the healthcare providers are sure of getting paid, which is what the insurance scheme is going to ensure.”

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