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How to enhance Lagos private hospitals for universal health coverage, by experts




UNTIL there are functional health facilities in the nooks and crannies of the state, the quest for universal health coverage may continue to be a pipe dream.

This was the consensus of stakeholders in the health sector recently in Lagos, as they rallied support for the private sector, given its huge numerical strength to cushion the challenges of service delivery gaps in the state.

Specifically, the stakeholders called on the big lenders like the Bank of Industry (BoI) to push support funds towards the proliferation of private health facilities. The government too, they said, should not only regulate “to extinction” but also support the facilities to acquire standard, while promoting enabling environment for the all-important spread.

But the private sector, made up of private hospitals, diagnostic centres and laboratories among others, are not without their own challenges. Medical practitioners, as the would-be health entrepreneurs are not trained to run business outfits. Worst still, the humanitarian nature of their profession, too, has made existing ventures too “risky” an investment and endangered specie among poor population paying out of pocket for health.

These were the issues that came to the fore at the Health Small and Medium Scale Enterprises (SMEs) forum, organised the Lagos State Ministry of Health (SMoH), Partnership for Transforming Health Systems II (PATHS2) and BoI, in Lagos.

Experts in the know have submitted that the global quest for universal health coverage, led by the United Nations and the World Health Organisation (WHO), reinstated healthcare as a priority of government at all levels. But amidst other contending socio-economic issues like education, security among others in the polity, how much of health facilities and services can government provide for the population? Certainly not very much.

Dr. Femi Olugbile, who was the guest speaker at the forum, noted that with state government’s persistent huge investments in health, only 250 primary health centres, 27 general hospitals and one tertiary facility are owned by the state, out of about 3000 health facilities statewide.

Olugbile, the immediate past Permanent Secretary in the SMoH, said the figures also confirmed a global trend in Lagos, where larger percentage of healthcare services are carried out be health SMEs (private providers).

He added that the presence of over 2500 private facilities in the state confirms that the state is well endowed, but still needed to work in synergy with the government, “because it has been found that healthcare can actually work as a business.”

National Programme Manager, PATHS2, Mike Egboh, said while the private facilities were concentrated in city centres, they contribute very little to improving the alarming state of health in the country.

Egboh noted that the private sector, providing about 60 per cent of the services in Lagos, were mostly underfunded and unable to attract investment capital due to no credit history and are unable to cover the high costs of capital charged by banks and investors to compensate for certainty and risk.

As a consequence, many private health providers lack capital, which is impacting negatively on the growth of health businesses in terms of size, infrastructure and quality.

Part of the problem, Egboh added, was that doctors were not trained to be businessmen, “because business is not their calling.” But the onus lies on the financial sector, not only to avail funding, but to also train the health entrepreneurs on the business-side of health and motivate them to take the risks.

Apparently in response to the clamour for funding, the Managing Director of BoI, Hakeem Olaoluwa, said the lending bank recognises the strategic role that the health sector plays in national development, particularly the private providers, adding that the health providers had been added to a cluster of SMEs that are eligible to BoI’s financial support.

Besides healthcare taking a centre stage in socio-economic development matters, Olaoluwa said, the quality of health service on offer in a country remains one of the 12 development rating indices.

He said it is therefore on this basis that private hospitals, laboratories and medical diagnostic facilities in the health sector would now be eligible to BoI’s financial services, in addition to existing support to eight pharmaceutical companies in the country

The MD added that it was imperative for loan applicants to have a business model, with clear understanding of what services to provide, targeted population and how the business will make profit.

According to him, “These are very important because as a lender, before we give out loans, we have to be sure that the business can generate sufficient output to payback the loan. The issues of collateral, legal mortgage and bank guarantee and so on are secondary. The primary source of repayment must really attract us,” he said.

Olaoluwa added that quality of the managing team and commitment of the owner are also important to the business plan and proposal.

To support the applicants, BoI currently has 14 offices across the country and trained 100 business service providers to assist the entrepreneurs with basic preconditions the bank is expecting of the applicants.

Continuing, he said: “The advantage that we have as BoI is that we can lend up to seven years, so you have an extended period within which you pay back the loan. We can give you a one year moratorium period to enable you set up your facility and our interest rate is just 10 per cent,” he said.

Speaking on behalf of the private healthcare providers, Chairman of the Association of General and Private Medical Practitioners of Nigeria (AGPMPN) in Lagos State, Dr. Adeyeye Arigbabuwo, commended the loan initiative as a great booster for the practitioners.

Arigbabuwo observed that there were several challenges that had made the private providers “unbankable” for years. Besides the conflict between medical ethics and varying business models, the poor members of the public are demanding services without plans for payment.

He added that the sector, as currently constituted, allows for all tom, dick and harry to practice, posing threats to licensed practitioners. While the government must be unrelenting in weeding out the bad eggs, he said, the good ones must also be supported to remain in business.

Arigbabuwo added that with improved collaboration and take off of merger among providers, otherwise called ‘Modified Group Practice’, the private sector might still be able to negotiate lower interest rates from the BoI.

He said further that the health sector would only grow stronger if given the much canvassed intervention fund like the Federal Government had done with the Agriculture, Aviation and Nollywood sectors of the economy.

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