Nigeria
In the 1940s the British instituted the Nigerian Colonial Development Plan of the 1940s, creating a unitary health service system under the Ministry of Health (MOH). The MOH coordinated and budgeted health services throughout the country. Health services were designed principally for government workers, though preventative care was provided to the general public at no cost by the government. Curative and specialized services were provided by missionaries and the private sector. In the 1950s, regionalization occurred, and the national health system evolved from a unitary system to a regionally based system, with local governments managing independent and occasionally parallel health systems with the federal government. Along with this, the Second National Development Plan was instituted, which included an idea for a national health insurance scheme. The Nigeria Medical Association protested against the scheme, blocking its passage.
In the 1940s the British instituted the Nigerian Colonial Development Plan of the 1940s, creating a unitary health service system under the Ministry of Health (MOH). The MOH coordinated and budgeted health services throughout the country. Health services were designed principally for government workers, though preventative care was provided to the general public at no cost by the government. Curative and specialized services were provided by missionaries and the private sector. In the 1950s, regionalization occurred, and the national health system evolved from a unitary system to a regionally based system, with local governments managing independent and occasionally parallel health systems with the federal government. Along with this, the Second National Development Plan was instituted, which included an idea for a national health insurance scheme. The Nigeria Medical Association protested against the scheme, blocking its passage.
During the 1980s, a fiscal crisis was created by a collapse of the oil market. At the same time, only about 30% of the population had access to health care, biased heavily in favor of urban dwellers. A Structural Adjustment Program was put in place in 1986, which led to a precipitous drop in federal health expenditure that continued into the 1990s. In 1989, the federal health expenditure was 77% less in real terms than in 1980, and in 1999 it remained 32% lower than in 1980. Financial concerns were compounded by a decline in donor aid during the 1980s and 1990s, which resulted in the growing importance of the private sector in healthcare during this period.
To address this, the Bamako Initiative was adopted, which intended to improve service equity, health services, and community participation through decentralization. In 1989 a draft constitution included a clause specifying that free and adequate health care was to be available as a matter of right to all Nigerians younger than 18, older than 65, and the handicapped. This provision was, however, not implemented until May 1999, when the government passed Decree 35 (now Act 35), providing a legal framework for the establishment of National Health Insurance Scheme. The institutional arrangement, known as NHIS, which had been in modest existence since 1998 eventually transformed into an Agency of Government and in 2005, formally flagged off the Formal Sector Program.
The Formal Sector Program is based on social health insurance principles. The Scheme covers government employees (Federal, States, LGAs, Armed forces and other uniformed services), employees in the private sector, Students in tertiary institutions and is open to individuals who wish to contribute voluntarily into this pool. Benefits include preventative, promotive and curative care from health facilities accredited by NHIS and specialized care by referral to secondary and tertiary facilities. As part of a quality improvement mechanism, NHIS allows each insured member to decide which health facility to register with. This strategy was put in place to challenge health care facilities to improve their service quality, as this plays a significant role in enrollees’ choices of their primary healthcare providers. A monthly capitation fee is paid to the primary health provider for services, while secondary and tertiary services are paid for by the Health Maintenance Organizations (HMOs) using a fee-for-service method. The HMOs play a major role in the purchasing of health services for NHIS enrollees, carrying out quality assurance of the healthcare providers and registering the enrollees. They report to the regulator of the system, the National Health Insurance Scheme, which is supervised by a Governing Council.
The years following Decree 35 were marked by both political and financing problems, which slowed the implementation of NHIS and contributed to deteriorating national health indicators. With the launch of formal sector social health insurance in 2005 and the Federal Government’s contribution for its employees, government expenditure as a percentage of Total Health Expenditure has increased; from 4.39% in 2000, the figure rose to 9.4% in 2003 and fell to 5.3% in 2008. The average from 2000-2008 was 5.13%.
Nigeria
Historical Context
In the 1940s the British instituted the Nigerian Colonial Development Plan of the 1940s, creating a unitary health service system under the Ministry of Health (MOH). The MOH coordinated and budgeted health services throughout the country. Health services were designed principally for government workers, though preventative care was provided to the general public at no cost by the government. Curative and specialized services were provided by missionaries and the private sector. In the 1950s, regionalization occurred, and the national health system evolved from a unitary system to a regionally based system, with local governments managing independent and occasionally parallel health systems with the federal government. Along with this, the Second National Development Plan was instituted, which included an idea for a national health insurance scheme. The Nigeria Medical Association protested against the scheme, blocking its passage.
During the 1980s, a fiscal crisis was created by a collapse of the oil market. At the same time, only about 30% of the population had access to health care, biased heavily in favor of urban dwellers. A Structural Adjustment Program was put in place in 1986, which led to a precipitous drop in federal health expenditure that continued into the 1990s. In 1989, the federal health expenditure was 77% less in real terms than in 1980, and in 1999 it remained 32% lower than in 1980. Financial concerns were compounded by a decline in donor aid during the 1980s and 1990s, which resulted in the growing importance of the private sector in healthcare during this period.
To address this, the Bamako Initiative was adopted, which intended to improve service equity, health services, and community participation through decentralization. In 1989 a draft constitution included a clause specifying that free and adequate health care was to be available as a matter of right to all Nigerians younger than 18, older than 65, and the handicapped. This provision was, however, not implemented until May 1999, when the government passed Decree 35 (now Act 35), providing a legal framework for the establishment of National Health Insurance Scheme. The institutional arrangement, known as NHIS, which had been in modest existence since 1998 eventually transformed into an Agency of Government and in 2005, formally flagged off the Formal Sector Program.
The Formal Sector Program is based on social health insurance principles. The Scheme covers government employees (Federal, States, LGAs, Armed forces and other uniformed services), employees in the private sector, Students in tertiary institutions and is open to individuals who wish to contribute voluntarily into this pool. Benefits include preventative, promotive and curative care from health facilities accredited by NHIS and specialized care by referral to secondary and tertiary facilities. As part of a quality improvement mechanism, NHIS allows each insured member to decide which health facility to register with. This strategy was put in place to challenge health care facilities to improve their service quality, as this plays a significant role in enrollees’ choices of their primary healthcare providers. A monthly capitation fee is paid to the primary health provider for services, while secondary and tertiary services are paid for by the Health Maintenance Organizations (HMOs) using a fee-for-service method. The HMOs play a major role in the purchasing of health services for NHIS enrollees, carrying out quality assurance of the healthcare providers and registering the enrollees. They report to the regulator of the system, the National Health Insurance Scheme, which is supervised by a Governing Council.
The years following Decree 35 were marked by both political and financing problems, which slowed the implementation of NHIS and contributed to deteriorating national health indicators. With the launch of formal sector social health insurance in 2005 and the Federal Government’s contribution for its employees, government expenditure as a percentage of Total Health Expenditure has increased; from 4.39% in 2000, the figure rose to 9.4% in 2003 and fell to 5.3% in 2008. The average from 2000-2008 was 5.13%.
As a part of the effort to strengthen the national health system, a National Health Policy (NHP) was adopted in 2006. NHP seeks to establish a realistic health financing system that has the capability of meeting health system goals of improved health status of Nigerians; financial protection of citizen against cost of illness; fair financing of health services; and responsiveness to the citizens’ expectations. This plan includes the implementation of a re-designed National Health Insurance System (NHIS).
As a part of the effort to strengthen the national health system, a National Health Policy (NHP) was adopted in 2006. NHP seeks to establish a realistic health financing system that has the capability of meeting health system goals of improved health status of Nigerians; financial protection of citizen against cost of illness; fair financing of health services; and responsiveness to the citizens’ expectations. This plan includes the implementation of a re-designed National Health Insurance System (NHIS).
The broad objectives of NHIS are:
- To ensure that every Nigerian has access to good healthcare services
- To protect families from the financial hardship of huge medical bills
- To limit the rise in the cost of healthcare services
- To ensure equitable distribution of healthcare costs among different income groups
- To ensure a high standard of healthcare services delivered to Nigerians
- To ensure efficiency in healthcare services
- To improve and harness private sector participation in the provision of healthcare services
- To ensure equitable distribution of health facilities within the Federation
- To ensure appropriate patronage of all levels of healthcare; and
- To ensure the availability of funds to the health sector for improved services
Towards ensuring coverage of the different socio-economic groups in Nigeria, the NHIS has developed three major programs for this: the formal sector program; informal sector program; and vulnerable group program.
The NHIS commenced the implementation of the Formal Sector Social Health Insurance Program in 2005. The Formal Sector Program provides coverage for individuals in formal employment including public sector employees (Federal, State and Local Government), armed and uniformed services, organized private sector employees, students of tertiary institutions, retirees, and voluntary contributors. Under Act 35, membership is not explicitly compulsory, which has created a challenge in phasing in all groups that comprise the formal sector. Contributions to the program are 15% of the employee’s basic salary, with the employee contributing 5% while employers contribute 10%. These contributions cover the employee, their spouse, and up to 4 children. Benefits include in-patient and out-patient care, as well as specialized care, eye care, dental care, and all prescribed medications and consumables.
The Informal Sector Program is directed at the self-employed and rural community dwellers. This program is based on a pilot conducted earlier in 12 communities, international study tours and desk review of global best practices. Participants in the informal sector program make a monthly contribution actuarially determined based on the benefits package set by the local insurance group. Some schemes of this nature are already in existence in some parts of the country, however, these operate outside the purview of NHIS.
The Vulnerable Groups Program is intended to be a subsidy program to cater to pregnant women, children under 5, the unemployed, orphans, prison inmates, and the permanently disabled. Individuals in this group are not required to pay contributions but are eligible for health benefits.
All levels of government, the private sector, and development partners work together to create a mixed health care economy of both public and private providers. The public system is organized as a federation with the Ministry of Health (MOH) responsible for policy formation, monitoring and evaluation, and operational responsibilities. State and local governments share responsibilities in management; states largely operate secondary health facilities, while local governments manage the local elements of primary health care, including dispensaries. States are responsible for training nurses, midwives, and community health extension workers (CHEWs). State and local governments have a great deal of autonomy, which effectively constrains the ability of the federal level to implement policies, creating a gap between federal legislation and local practice.
Currently, 61 Health Maintenance Organizations (HMOs) licensed by the NHIS facilitate the interface between the governmental organizations, the delivery system, and eligible contributors. HMOs work with providers under the supervision of the central government to determine provider payment. Decree 35 determined that the only payment systems in NHIS are capitation, fee-for-service, per diem, or case payment. A capitation system is the predominant form of provider payment used to pay primary healthcare facilities, while secondary and tertiary healthcare facilities are paid by fee-for-service and per diem.
Under the NHIS, a three level healthcare delivery system is operated. More than 60% of all registered facilities are privately owned. In the Formal sector Program, the choice of primary health provider is that of the contributor. Primary healthcare providers serve as gatekeepers, regulating the entry of enrollees into the other levels of care in the system through referrals, which must also be endorsed by the HMOs. Utilization rates for secondary and tertiary care based on returns from the HMOs have been very low. Anecdotal evidence suggests an under production of these services (through under endorsement by HMOs) to save cost and make more profits.
The NHP also created the National Health Management Information System in 2006 to establish effective Health Information Systems, coordinate information sub-systems, provide technical and managerial support to health information, ensure timely sharing of relevant data, and serve as a regular feedback mechanism.
Nigeria
Summary of Reforms
As a part of the effort to strengthen the national health system, a National Health Policy (NHP) was adopted in 2006. NHP seeks to establish a realistic health financing system that has the capability of meeting health system goals of improved health status of Nigerians; financial protection of citizen against cost of illness; fair financing of health services; and responsiveness to the citizens’ expectations. This plan includes the implementation of a re-designed National Health Insurance System (NHIS).
The broad objectives of NHIS are:
- To ensure that every Nigerian has access to good healthcare services
- To protect families from the financial hardship of huge medical bills
- To limit the rise in the cost of healthcare services
- To ensure equitable distribution of healthcare costs among different income groups
- To ensure a high standard of healthcare services delivered to Nigerians
- To ensure efficiency in healthcare services
- To improve and harness private sector participation in the provision of healthcare services
- To ensure equitable distribution of health facilities within the Federation
- To ensure appropriate patronage of all levels of healthcare; and
- To ensure the availability of funds to the health sector for improved services
Towards ensuring coverage of the different socio-economic groups in Nigeria, the NHIS has developed three major programs for this: the formal sector program; informal sector program; and vulnerable group program.
The NHIS commenced the implementation of the Formal Sector Social Health Insurance Program in 2005. The Formal Sector Program provides coverage for individuals in formal employment including public sector employees (Federal, State and Local Government), armed and uniformed services, organized private sector employees, students of tertiary institutions, retirees, and voluntary contributors. Under Act 35, membership is not explicitly compulsory, which has created a challenge in phasing in all groups that comprise the formal sector. Contributions to the program are 15% of the employee’s basic salary, with the employee contributing 5% while employers contribute 10%. These contributions cover the employee, their spouse, and up to 4 children. Benefits include in-patient and out-patient care, as well as specialized care, eye care, dental care, and all prescribed medications and consumables.
The Informal Sector Program is directed at the self-employed and rural community dwellers. This program is based on a pilot conducted earlier in 12 communities, international study tours and desk review of global best practices. Participants in the informal sector program make a monthly contribution actuarially determined based on the benefits package set by the local insurance group. Some schemes of this nature are already in existence in some parts of the country, however, these operate outside the purview of NHIS.
The Vulnerable Groups Program is intended to be a subsidy program to cater to pregnant women, children under 5, the unemployed, orphans, prison inmates, and the permanently disabled. Individuals in this group are not required to pay contributions but are eligible for health benefits.
All levels of government, the private sector, and development partners work together to create a mixed health care economy of both public and private providers. The public system is organized as a federation with the Ministry of Health (MOH) responsible for policy formation, monitoring and evaluation, and operational responsibilities. State and local governments share responsibilities in management; states largely operate secondary health facilities, while local governments manage the local elements of primary health care, including dispensaries. States are responsible for training nurses, midwives, and community health extension workers (CHEWs). State and local governments have a great deal of autonomy, which effectively constrains the ability of the federal level to implement policies, creating a gap between federal legislation and local practice.
Currently, 61 Health Maintenance Organizations (HMOs) licensed by the NHIS facilitate the interface between the governmental organizations, the delivery system, and eligible contributors. HMOs work with providers under the supervision of the central government to determine provider payment. Decree 35 determined that the only payment systems in NHIS are capitation, fee-for-service, per diem, or case payment. A capitation system is the predominant form of provider payment used to pay primary healthcare facilities, while secondary and tertiary healthcare facilities are paid by fee-for-service and per diem.
Under the NHIS, a three level healthcare delivery system is operated. More than 60% of all registered facilities are privately owned. In the Formal sector Program, the choice of primary health provider is that of the contributor. Primary healthcare providers serve as gatekeepers, regulating the entry of enrollees into the other levels of care in the system through referrals, which must also be endorsed by the HMOs. Utilization rates for secondary and tertiary care based on returns from the HMOs have been very low. Anecdotal evidence suggests an under production of these services (through under endorsement by HMOs) to save cost and make more profits.
The NHP also created the National Health Management Information System in 2006 to establish effective Health Information Systems, coordinate information sub-systems, provide technical and managerial support to health information, ensure timely sharing of relevant data, and serve as a regular feedback mechanism.
The Nigerian health system is operating in a complex and rapidly-changing environment, and has made a great deal of progress, but there are still substantial strides to be made. In 2000, the World Health Report ranked Nigeria as the 187th of 191 member nations for its health systems performance. This poor performance can be attributed to convoluted and poorly coordinated roles and responsibilities with regards to both the governance structure and the provider system.
The Nigerian health system is operating in a complex and rapidly-changing environment, and has made a great deal of progress, but there are still substantial strides to be made. In 2000, the World Health Report ranked Nigeria as the 187th of 191 member nations for its health systems performance. This poor performance can be attributed to convoluted and poorly coordinated roles and responsibilities with regards to both the governance structure and the provider system.
Concerns about access to health insurance still exist, especially for vulnerable populations. There are still about 46 million Nigerians, or 33% of the population, with no access at all to any form of organized health insurance. Studies have found that income is highly linked with access to health insurance and benefits that are available. The lower the income of the individual, the fewer benefits he or she has access to, and by extension, the worse their health outcomes are. This indicates that there is still a great deal to focus on with regards to expanding the breadth of health insurance coverage, as well as the equitable nature of benefits and health provisions.
Within the general health care system, there are concerns regarding physical and financial barriers health services, due in part to inadequacies within the primary health care system. Primary health care should cater to about 70% of the health needs of the entire population, but attends to a much smaller percentage largely due to lack of funding leading to a lack of essential supplies and qualified staff. This is especially true in rural areas where large disparities in health services exist. To improve access to primary and curative care, local governments must be strengthened; the number of local health facilities must be increased; and rural areas need to be focused on.
Health financing levels in Nigeria remain low, with total health expenditure at less than $4.00 per person, which highlights a systematic underfunding of operation costs. A disproportionate amount of the health budget is allocated to the state level ministry of health, which is the policy arm of the health sector at the state level, leaving smaller budgets to support service delivery function of the hospital management boards. In fact, 75% of the state budget is spent on salaries. Out of pocket expenditures remain the primary means of financing for the health care system in Nigeria. This method is unreliable and also creates high barriers to entry for poor and vulnerable populations. The National Health Insurance Scheme has yet to reach the grassroots populations. High economic barriers to health care must be dismantled in order to ensure that there is equity in the system and that individuals are able to access health care.
Nigeria
The Way Forward
The Nigerian health system is operating in a complex and rapidly-changing environment, and has made a great deal of progress, but there are still substantial strides to be made. In 2000, the World Health Report ranked Nigeria as the 187th of 191 member nations for its health systems performance. This poor performance can be attributed to convoluted and poorly coordinated roles and responsibilities with regards to both the governance structure and the provider system.
Concerns about access to health insurance still exist, especially for vulnerable populations. There are still about 46 million Nigerians, or 33% of the population, with no access at all to any form of organized health insurance. Studies have found that income is highly linked with access to health insurance and benefits that are available. The lower the income of the individual, the fewer benefits he or she has access to, and by extension, the worse their health outcomes are. This indicates that there is still a great deal to focus on with regards to expanding the breadth of health insurance coverage, as well as the equitable nature of benefits and health provisions.
Within the general health care system, there are concerns regarding physical and financial barriers health services, due in part to inadequacies within the primary health care system. Primary health care should cater to about 70% of the health needs of the entire population, but attends to a much smaller percentage largely due to lack of funding leading to a lack of essential supplies and qualified staff. This is especially true in rural areas where large disparities in health services exist. To improve access to primary and curative care, local governments must be strengthened; the number of local health facilities must be increased; and rural areas need to be focused on.
Health financing levels in Nigeria remain low, with total health expenditure at less than $4.00 per person, which highlights a systematic underfunding of operation costs. A disproportionate amount of the health budget is allocated to the state level ministry of health, which is the policy arm of the health sector at the state level, leaving smaller budgets to support service delivery function of the hospital management boards. In fact, 75% of the state budget is spent on salaries. Out of pocket expenditures remain the primary means of financing for the health care system in Nigeria. This method is unreliable and also creates high barriers to entry for poor and vulnerable populations. The National Health Insurance Scheme has yet to reach the grassroots populations. High economic barriers to health care must be dismantled in order to ensure that there is equity in the system and that individuals are able to access health care.
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