Stemming out-of-pocket medical expenses

• Why over 190 million Nigerians have no health insurance
• 77% of total health spending in Nigeria out-of-pocket compared with 37% African, 18% world average
• Experts identify absence of mandatory health insurance for certain categories, systemic corruption
• The Lancet Nigeria Commission recommends FG funds health insurance coverage to all Nigerians by paying
N15,000 per capita yearly premium for 83 million, not wealthy individuals

Healthcare is becoming more unaffordable for many Nigerians, particularly, the masses. Ordinarily, public hospitals are usually cheaper and more affordable, but the trend is now fast changing.

Minimum wage salary earners can no longer confidently go to public hospitals for treatment as the costs are well out of their range.

“You have to make a deposit before we can treat the patient” is what many patients and their relatives are greeted with when they enter healthcare facilities in Nigeria: Hospitals, public or private, demand upfront payments.

There is an over-reliance on out-of-pocket payments in Nigeria. The Guardian investigations revealed that in some public hospitals, particularly Lagos University Teaching Hospital (LUTH), Idi Araba, initial deposit for treatment can vary from N15,000 to N50,000 in the children’s ward, while in the Intensive Care Unit (ICU), the deposit can climb into hundreds of thousands.

Apart from the deposit, patients are meant to go through batteries of tests to ascertain their health condition, determine line of treatment and also check whether treatment has eliminated illness or infections. So, a particular test can be conducted many times to check up on new developments or verify doctors’ observations.

Findings showed that the prices for such tests vary, as some can be carried out for as little as N1,500, others go for between N5, 000 and N20, 000 or much more in special cases.

On the average, patients can be made to undergo more than three tests in a week and more than five tests carried out on one blood sample. Scan too can carry heavy prices. Some scans such as echocardiography carry a price of N5,000, while others such as computerised tomography (CT) scan cost around N20,000 and Magnetic Resonance Imaging (MRI) goes for around N70, 000.

To cash in on these tests being ordered by doctors, there are medical laboratories within the hospital and also in its environment. Some of these laboratories charge higher than even the hospitals. For instance, CT scan that LUTH charges N20,000, a radiology in Surulere collects N40,000, while another highbrow laboratory in Oshodi charges N50,000.

Aside these tests, patients are required to buy many items and equipment such as gloves, which go for N3,500. Patients on average buy two or three gloves per week. In cases where oxygen is required for treatment, patients can buy a cylinder, which costs N10,875 more than four times in a week.

And in a situation where patients need to be given blood transfusion, they are to find a donor for each pint of blood and still pay N9,000 for screening of the blood.

It was gathered that in cases where no donor could be found, there are those who will volunteer to donate for prices between N8,000 and N10, 000 per pint. So, in a situation where a patient collected many pints of blood, his/her expenses will accumulate.

Now, aside the deposit, patients are running up bills in the pharmacy and will be notified the status of their debt after a period.

Findings also revealed that for surgery, minor ones cost around N50, 000 and below, while major surgeries can go up from N150, 000 to N500, 000, depending on the complexities involved.

At the end of a patient’ stay, during final clearance, he/she would be charged for laundry, which can cost more than N50, 000 if you are there for more than a month and nursing services, which can also be in the same region aside other hospital fees.

A Naval officer, who doesn’t want his name in print, said on the day of admission alone, the family spent around N50, 000 when they brought their baby to prenatal care unit of the hospital.

According to him, he spent on average around N300, 000 during the two weeks of admission, despite paying for some of the expenses through the National Health Insurance Scheme (NHIS).

The Guardian also observed a nursing mother, who demanded for her baby to be discharged when she was told her bill for drug had already accumulated to N17,000 in their first week, saying she could not afford it.

ACCORDING to the World Health Organisation (WHO), out-of-pocket payments can make households and individuals incur catastrophic health expenditure and this can exacerbate the level of poverty.

Studies in Enugu and Anambra States in Nigeria showed that the incidence of catastrophic health expenditure among households (at a 40 per cent threshold of non-food expenditure) were 14·8 per cent and 27 per cent, respectively. Such source of health-care financing negatively affects people’s living standards and welfare.

Studies indicate that more than 90 per cent of the Nigerian population is uninsured in spite of the establishment of NHIS, in 2005.

According to a study published in the journal PlumX Metrics and titled “Out-of-pocket payments in Nigeria”, less than five per cent of Nigerians in the formal sector are covered by the NHIS.

The author, Bolaji Samson Aregbeshola, said only three per cent of people in the informal sector are covered by voluntary private health insurance. Uninsured patients are at the mercy of a non-performing health system. Health indicators in Nigeria have not changed substantially due to the non-responsiveness of the health system to the needs and expectations of the population.

Unfortunately, for many years, there has been no action taken by political actors and policy makers. Most people seem to have accepted life with this terrible situation since there is not much they can do to reverse it.

According to him, there is a need to estimate the number of deaths associated with the non-responsiveness of the Nigerian health system. And there is also the issue of medical errors. Too many patients have died due to inefficiency of the health system across the country.

Indeed, there are several reports on how out-of-pocket spending on health and non-functional health insurance programmes are impoverishing and killing Nigerians. The gory tales are nationwide.

In fact, more people are dying because they cannot afford treatment and won’t bother going to the hospital, but rather prefer to stay at home and try cheaper options- quack doctors and or traditional medicine practitioners.

Also, the findings showed that some doctors recommend unnecessary expensive medical tests and work with some laboratories and pharmacies to defraud patients.

The Guardian investigation also revealed that hospitals offer cheaper/less effective drugs to patients on NHIS because that is what the package they paid for can offer.

Challenges facing health insurance in Nigeria
ACCORDING to a report last week, out-of-pocket payments have since become the most common mechanism of financing healthcare for individuals and households, creating a cost barrier and decreasing the use of health-care services and adherence to medications.

The Lancet Nigeria Commission, a multidisciplinary group of Nigerian academics based in Nigeria and around the world, working in close collaboration with University College London’s (UCL’s) Institute for Global Health and policy makers, in over a two-year period reviewed existing disease burden, and opportunities to improve health.

Their report noted: “Government health expenditures have risen somewhat under the Fourth Republic, however, Nigeria’s total government spending as a share of overall health spending was at 4·6 per cent in 2017, lower than the African average of 7·2 per cent and the world average of 10·3 per cent.

“In contrast, out-of-pocket expenditure is extremely high, at 77 per cent of total health spending in Nigeria, compared with 37 per cent for the African average, and a much lower 18 per cent for the world average. Compounding Nigeria’s health inequities are low in investment in water and sanitation infrastructure compared with other low-income and middle-income countries (LMICs), as well as generally low government spending across sectors.

“Overall, Nigeria’s model of health-care financing since the First Republic has gradually transformed into one focused on the generation of revenue for hospital management through the charging of user fees. Public health centres have been pseudo-commercialised as they are restructured to generate funds to work efficiently and independently. In the public and organised private sectors, neoliberal reforms have led health-care provision to be more market-oriented, even though 60 per cent of the Nigerian population is estimated to have minimal disposable income.

“As a result of underfunding, the capacity and quality of government health facilities and health services dwindled due to the persistent unavailability of drugs and equipment, resulting in increasing reliance on home treatment, medicine sellers, traditional medical systems, and faith healing by the Nigerian populace.”

The situation has raised lots of questions: Why are Nigerians still paying out-of-pocket for health services despite the establishment of NHIS since 2005? Why is health insurance not working optimally in Nigeria? How can the situation be addressed? How far with state health insurance schemes? How many states have kick-started the programme? Why are there still states without health insurance programmes despite the benefits? What are the challenges in running a functional health insurance programme?

A Julio Frenk Professor of Public Health Leadership at Harvard School T. H. Chan School of Public Health, Bolton, United States and former Minister of State for Health, Muhammad Ali Pate, told The Guardian: “If we are honest with ourselves as a country, these findings from your investigation are true. With very high out-of-pocket payments by families and individuals for healthcare, many are being pushed to poverty because of catastrophic health expenses, and millions are excluded from needed early preventive and curative care. Net effect is that health, as potential key engine for economic growth becomes a drag, pushing families into poverty and loss of lives.”

Pate said Nigerians are paying out-of-pocket because there is no organised and well-resourced large risk pooling mechanism or insurance. He said domestic public health spending has been declining, excluding COVID-19 related expenses in recent years. The public health expert said the fact is that Nigeria is not mobilising well enough, for various reasons, including corruption, and as a consequence, governments have not been able to raise health spending to the level needed for optimal health system performance. Consequently, he said individuals especially the wealthy and political office holders’ resort to paying for themselves, expensive care or travel abroad.

Why health insurance is not working optimally in Nigeria
FOR Pate, the reason are the “absence of mandatory health insurance for certain categories and expanded public subsidies for the poor and vulnerable in a risk pool, strong data systems for transparency and accountability, and lack of enough respect for patients by providers, which undermine trust.”

Pate raised the need to improve domestic resource mobilisation. He also canvassed the reforming of NHIS law to make for mandatory contribution consistent and convoke expanded public contribution of all poor and vulnerable populations.

A consultant on Public Health Physician, Global Health enthusiast and Chief Technical Advisor, Environment for Health Development Initiative (E4HDI), Dr. Nnenna Ezeigwe, told The Guardian, “the current economic condition and other social factors are driving more people to shun the hospital and rather stay home/seek alternatives. Unfortunately, most of these alternatives are ineffective at best and often dangerous. The level of poverty is alarming and all the social factors that determine the health status as well as health outcomes of the population, including availability of functional healthcare facilities, infrastructures such as roads, transportation, housing and electricity, education and employment opportunities are at their worst in recent times.”

Ezeigwe said these same conditions of increasing poverty and abysmal state of social determinants of health would tempt even a saint to embrace sharp practices like ordering unnecessary laboratory investigations or test kits.

Ezeigwe said, “it is true that many people are not enrolling into the national, state or Community Health Insurance Schemes (CHISs) and I find many reasons for this. Some people do not know much about the various schemes and this is surprising given that the NHIS has been in existence for over two decades with huge budgetary expenditures over the years. It would be interesting to know the result of impact evaluation of the NHIS since its inception.”

She expressed sadness that those who have been convinced to enroll into the scheme are confronted with a lot of obstacles that seem to have been purposely set to deter them from enrolling.

For example, she said in furtherance of their bid to promote Universal Health Coverage (UHC), E4HDI implements a programme that raises awareness and encourages individuals and groups such as Small and Medium Enterprises (SMEs) to enroll into the NHIS.

The public health physician said the process so far is so frustrating and far below her expectation of an enthusiastic establishment willing to leverage the collaboration to deliver on their core mandate.

The burden of paying out-of-pocket
Ezeigwe said: “Most of the patients that pay out-of-pocket are not covered by any insurance scheme. This is very sad because it can cost about N15,000 only to enroll into the scheme for one year, whereas a single episode of ill health can gulp more than that amount depending on the severity. Some people are deterred from enrolling or accessing care from their health care providers because they doubt the quality of care especially at the Primary Health Care (PHC) facilities, and prefer to pay out-of-pocket in trusted alternatives. Again, this is sad because with the huge sum of money so far expended in the PHC agencies and facilities across the country, most if not all the PHCs should be functional and able to respond adequately to the health needs of the people.”

Harvard-trained health economist and Executive Secretary, Delta State Contributory Health Commission (DSCHC), Dr. Ben Nkechika, said there are a variety of reasons, including the non-mandatory status of the NHIS. He, however, said State Social Health Insurance Agencies (SSHIAs) have mandatory health insurance schemes but unable to enforce it due to political considerations.

The health economist blamed limited political will to ensure a mandatory health insurance scheme implementation across the country; inability of most people to pay premium cost or prioritise payment of premium in their expenditure profile; and the wrong belief amongst most people that paying for healthcare upfront means inviting illness.

How to boost health insurance coverage in Nigeria
NKECHIKA recommended a law that will make health insurance mandatory in Nigeria. He said this would stimulate to some extent, the political will to ensure implementation along with a strong advocacy and sensitisation to relevant authorities and stakeholders by the regulatory body. He also listed the following as essential:
• Earmark funds to pay premium for the poor and vulnerable people in the society.
•Create incentives to encourage participation in the mandatory health insurance scheme and sanctions for those that have capacity to participate but refuse to.
•Improved quality of healthcare services in Government HCFs where majority of people that need Healthcare services go to.
•Mass advocacy and sensitisation campaign across all segments of the society on the benefits of participating in a health insurance scheme.

On how far states have gone with health insurance schemes, he said all states in Nigeria are at various stages of implementation of their health insurance schemes. Nkechika said while some have gone far with over one million enrollment, some states are having resource challenges to commence and scale up.

He said the challenges in running a functional health insurance programme include: Lack of technical support to implement; lack of resources required to commence and sustain implementation; inadequate political will leading to resource challenges; and effective legislation that will enable enforcement of a mandatory health insurance programme.

National Chairman, Association of Hospital and Administrative Pharmacists of Nigeria (AHAPN), Olabode Ogunjemiyo, said the NHIS was put in place to improve the health of all Nigerians at an affordable cost. He said it is one of the health financing options adopted by the Nigerian government for improved healthcare access, especially to the low-income earners.

Ogunjemiyo said health Insurance is social security system that guarantees the provision of needed health services to persons on the payment of token contributions at regular intervals. It is meant to reduce or eliminate out of pocket expenses.

Ogunjemiyo said the scheme is supposed to bring sanity to both the Health Maintenance Organisations (HMO) and Healthcare Providers Association of Nigeria (HCPAN).

He explained: “For secondary care, healthcare providers are expected to collect codes from the HMOs. In recent times, codes are expected to be given within 48 hours by these HMOs. Healthcare Providers are even encouraged to report erring HMOs who will in turn be sanctioned by the NHIS. As for the pharmaceuticals, enrollees are expected to make a co-payment of 10 per cent of the total cost of the pharmaceuticals prescribed. For instance, if the total cost of a patients’ prescription is N5, 000, such person is expected to pay just N500 to collect the medications. However, pharmaceuticals not covered under the NHIS list would be procured out-of –pocket. I must add that we have also seen enrollees collecting medications for the use of members of their families not covered under the NHIS, hence gross abuse.

“It will interest you to also know that some of people prefer to visit spiritual homes due to our religious beliefs. Comments such as ‘it is a spiritual attack’ are very rampant. It is after going round that medical treatment are sought for and in most cases, the ailments must have progressed terribly.”

The consultant pharmacist said the issue of provision of cheaper/less expensive drugs to patients on NHIS because that is what the package they paid for can offer couldn’t be substantiated. He said the NHIS is expected to stock good, efficacious and qualitative generics and not branded medicines. Ogunjemiyo said pharmacists as custodian of drugs use their knowledge in drug selection and quality assurance to ensure that qualitative generics are procured for use by the enrollees. He said a new drug price list was rolled out late 2021 with some new medications included.

On his experience as a practitioner, he said: “My experience hasn’t been bad as I access health insurance from a tertiary health institution where I practice. My family members have also benefitted from it. In the past six months, there has been an improvement in the services provided.”

On reasons Nigerians are still paying out-of-pocket for health services, Ogunjemiyo said a lot of Nigerians (about 95 per cent) are not under the insurance cover.

“Not all pharmaceuticals, procedures and medical devices are covered by the NHIS. For those services that aren’t covered, the enrollees will have to pay out-of-pocket. Some patients insist on a particular brand of pharmaceuticals, which aren’t readily available. Incessant increase in prices of pharmaceuticals in recent times is affecting stocking of some pharmaceuticals. Some items on the list before had been removed (face masks, examination gloves etc.),” he said.

On the state of health insurance scheme in states, the consultant pharmacist said almost all the states in the federation have keyed into the health insurance scheme for the benefit of their citizens. However, he said, majority are yet to fully implement because of initial logistics. The pharmacist said a state must first have a multipurpose building for her agency after passing the State bill into law before the accreditation and approval by the NHIS.

On the challenges in running a functional health insurance programme, he identified: Lack of political will and non-prioritisation of healthcare needs of the citizens; non- involvement of the relevant stakeholders like labour unions and professionals at the inception of the programme; ambiguity in the laws setting up the health insurance in the states; irregular payment of salaries and remittances leading to default in the relevant amount remitted to the agencies; inability of states to access the Basic Health Provisions Fund (BHCPF) set aside for the purpose of health insurance; and difficulty in commencing the informal sector health insurance schemes.

The Lancet Nigeria Commission recommends that the Federal Government funds health insurance coverage to all Nigerians by paying the estimated N15,000 per capita yearly premium for 83 million least wealthy individuals (approximately 40 per cent of the population) with revenue raised through the Basic Healthcare Provision Fund, taxation, and levies, and each state to fund residents through their state health insurance scheme supported by a national mechanism to assure quality.

According to the report, today, it would cost N1.2 trillion or nine per cent of the current budgets to cover individuals who cannot afford to pay current premiums in National and State Health Insurance Schemes.