Pathways to solving Nigeria’s out-of-pocket healthcare emergency crisis

Nigeria is facing numerous public healthcare challenges. With over 56 per cent of the population living below the poverty line, Nigerians are forced to bear the full burden of skyrocketing out-of-pocket (OOP) healthcare costs leading to devastating financial hardship and a vicious cycle of poverty and poor health outcomes.

In a statistics supported by WHO and World Bank, over 90 per cent of Nigerians pay out of pocket (OOP) for healthcare representing one of the highest rates globally. This heavy reliance on OOP spending pushes millions of families into poverty each year as catastrophic health expenses consume a disproportionate share of household budgets.

The consequences are dire – lack of access to affordable, quality care results in preventable deaths with Nigeria accounting for an astounding 12 per cent of global maternal mortality and about 95 per cent of those deaths being preventable. Chronic diseases go untreated, acute episodes become life-threatening emergencies and the overall health of the population continues to deteriorate.

Noting that OOP payment is one of the factors responsible for pushing billions of the world’s population into poverty, the World Health Organisation (WHO) advocates for Universal Health Coverage (UCH), where everyone, everywhere can access the quality health services they need without financial hardship.

In an attempt to address the financial risks associated with OOP payments for healthcare, the Federal Government of Nigeria in 2005 kick-started the National Health Insurance Authority (NHIA) with the intention to provide access to good healthcare services and also ensure the protection of households from the financial burden of OOP health payments. Almost two decades later, evidence suggests that less than five per cent of Nigerians, mainly federal government workers, are insured under this scheme.

Also, less than three per cent of the Nigerian population is under private health insurance (PHI) schemes which is mostly provided by employers. Despite the government’s attempt at minimising the impact of catastrophic OOP spending on healthcare among Nigerians, why do the statistics say otherwise?

Determinants of out-of-pocket healthcare spending in Nigeria
Even though communities from all over the world experience catastrophic health payments including Europe’s more developed economies, OOP spending on healthcare in Nigeria often comprises user fees paid in public health facilities, and other private payments to healthcare providers for medicals, Medicare and other forms of treatment.

The maintenance of public health facilities, the regulatory function of government and the public health function of government all depend almost exclusively on government’s budgetary provision for the health sector. Findings suggest a general problem of under-spending on the health sector in Nigeria hence such under-funding has always placed the country in a tight position towards meeting the international health financing benchmarks. To be able to attend to their health needs, households have to pay for their health most times which increases out-of-pocket spending.

In addition to these factors, research has shown that there is a higher likelihood of using low-level and informal providers such as traditional healers among the poorest households while poorer households are more likely to use the services of higher-level and formal providers such as health centres and hospitals.

As a leading Health Maintenance Organisation (HMO) in Nigeria, Hallmark Health Services Limited believes that there isa moral and strategic imperative to break this cycle of OOP healthcare spending and move our nation towards Universal Health Coverage (UHC). By implementing bold and innovative solutions, we can empower Nigerians to access the care they need without fear of financial ruin.

Progressive pathways to resolving Nigeria’s OOP healthcare dilemma
Expand social health insurance coverage: A critical first step to drastically reduce the effects of catastrophic OOP spending on household finance is to significantly scale up enrolment in the National Health Insurance Authority (NHIA). Currently, less than five per cent of Nigerians are covered by the NHIA. HMOs must work with the government to make enrolment mandatory for all citizens, with premiums subsidised for low-income households. Increased enrolments expand the risk pool, improve financial sustainability, and ensure equitable access to essential healthcare services.

HMOs are willing to work with the National and State Health Insurance Schemes to expand access to all, this is possible by creating low premium products which can be affordable by the low-income earners and through the government healthcare institutions.

Increased public healthcare funding: Increased funding for public health facilities eliminates user fees as a common OOP spending thereby improving the quality and affordability of care particularly for low-income households while simultaneously increasing the quality of healthcare service provided in public health facilities to meet international health financing benchmarks.

Strengthen public-private partnerships: Forging strategic partnerships between HMOs, the government and private healthcare providers can yield significant dividends. HMOs can collaborate with the public sector to expand insurance coverage while private providers can support capacity-building initiatives and innovative service delivery models.

For example, disease-specific interventions in collaboration with prominent healthcare medical practitioners/ influencers can simultaneously drive awareness and increase subscriptions to health insurance, in turn minimising OOP healthcare spending. By aligning incentives and pooling resources, HMOs in partnership with the government can ensure that quality healthcare reaches even the most marginalised communities.

Implement bundled care packages: To curtail high cost of care and improve care coordination, HMOs and specific providers can develop customised benefit packages that cover a broad spectrum of primary, secondary, and emergency services for a fixed, affordable price, based on the need of the clients and as agreed with the care giver on what is reasonable and fair, this can be tagged special bundled care package. This model incentivises providers to deliver holistic, preventive care, rather than fragmented, fee-for-service treatments that drive up OOP spending.

Awareness creation through stakeholders engagement: As huge as the challenges of healthcare management and financing is in Nigeria, it has not gained sufficient public awareness as to the causes and possible simple solutions. Hallmark Health Services Limited organises an annual stakeholders forum which brings together experts in the healthcare management, financing, delivery and regulatory space to dialogue on this important national subject. A few other institutions are pushing in this direction. It is still not enough. We need more to get the message across to all spectrum of society so that we can all work together to move the universal heath coverage towards the desired target.

A call to action
The time for bold action is now. By embracing innovative and integrated solutions, we can break Nigeria’s vicious cycle of catastrophic out-of-pocket healthcare spending and move closer to the vision of Universal Health Coverage. As healthcare leaders, we have a responsibility to our fellow citizens to spearhead this transformation and build a healthier, more prosperous future for even the most marginalised communities.

Adeogun is the Managing Director of Hallmark Health Services Ltd. (Hallmark HMO), a member company of Consolidated Hallmark Holdings.