NHIS and the unfinished reform
At the 2012 Physicians Week in Abuja, the president of the Nigerian Medical Association (NMA), Osahon Enabulele, lamented that foreign medical treatment was costing the nation over $500 million annually, with as many as 5,000 Nigerians travelling outside the country monthly for treatment!
Why is the Nigerian health sector not interested in intercepting this huge traffic of money flowing out of the country every year? Why is our National Health Insurance Scheme (NHIS) so uninspiring that Nigerians are so desperate to be treated abroad? In the other sectors of our economy (such as aviation, banking, telecoms, postal services, broadcasting, etc), the private sector has moved to effectively exploit the gaps in the services rendered by our public sector. Why is this not effective in our health sector? Why do we not see private-sector performance from our NHIS, which is even dominated by private firms? Why are the big players in the private sector (including outstanding Nigerians in the Diaspora who don’t even need government money to set up world-class health facilities here) not finding the space?
Many people may think that the solution to our present healthcare challenge is to throw more money and budget into the sector. We submit that the starting point is to find answers to the above posers!
The missing driver of success
A vital “driver of success” in social service delivery (whenever corruption can be a threat) is always to put the funding of programmes in the hands of those the programmes are designed to serve!
A textbook application of this principle was the American GI Bill. Following the return of millions of American soldiers (the GIs) from the Second World War, the American Congress passed the GI Bill, which President Franklin D. Roosevelt signed into law on June 22, 1944. This bill allowed each GI to pick any accredited university or polytechnic they wanted with the assurance that government would pay. In this way, government’s funds followed the GIs to whatever schools they chose while institutions (private and public) now scrambled vibrantly for the GIs and their funds. In the peak year of 1947, these veterans accounted for 49 percent of all US college admissions. By the time the programme ended on July 25, 1956, nearly 8 million World War II veterans had participated. The bill was a phenomenal success, which continues to be credited with turning millions of battle-scarred American young men and women into the educated backbone of America’s post-war economic boom.
Notice that the US government could have set up a special agency whose job it would have been to “allocate” the GIs to institutions. Or it could have used the programme’s budget to build new institutions for the GIs, or expand existing institutions. But it chose to put the programme’s funding squarely in the hands of the GIs themselves; and that was what unlocked the vibrancy and economic success that the programme generated.
We can even use our public and private school systems to explain this vital principle further. The funding of a typical private school is in the hands of the community the school serves: if parents are not satisfied, they will readily withdraw their children, and money will stop flowing to the school. Notice how this creates inbuilt incentives for hard work, as well as automatic consequences for failure to improve. This drives the private school system towards better service.
The funding of the public school, on the other hand, comes from government. Even if parents are not satisfied with the school’s performance, the funding still continues, and the teachers (who are government employees) continue to be paid. The school will also continue to receive pupils, especially from the poor and disadvantaged families who have no choice. That’s why a poorly-performing public school can afford to continue performing poorly.
In general, every social programme whose funding is put in the hands of those it serves always achieves phenomenal success while no programme that violates this cardinal principle ever works well in a corrupt environment. Our health sector can improve dramatically if we slightly re-jig our NHIS operations to unlock this vital driver.
The NHIS and vital driver
The NHIS is funded through the automatic monthly deductions from workers’ salaries and the matching contributions of their organisations. These contributions end up with the Health Management Organisations (HMOs) that provide the insurance. Once an organisation selects a particular HMO, the staff of that organisation (the service recipients) will become automatic enrolees of that HMO and are limited to the hospitals in that HMO’s list. This means that the vital decision of where each contributor’s fund goes (i.e., which HMO receives the fund) is not being made by the enrolees, but by their organisations. The HMOs in turn pay the hospitals for services they render to the enrolees.
Now, too many things are profoundly wrong with this arrangement. For example, in our very corrupt environment, why should a HMO bother about the quality of service when it can easily (and far more lucratively) settle a few persons in each organisation with a generous percentage of the deductions it receives from that organisation? Similarly, why should a hospital bother too much about NHIS patients who have been rendered ‘choiceless’? And so on! In fact, there is nothing in the arrangement to drive the cardinal objective of the NHIS of ensuring “high standard of healthcare delivery to beneficiaries”.
Rather, it is a perfect arrangement for making the NHIS fund (collected monthly from organisations, on behalf of workers) an object of cheap corruption – the kind of corruption that stakeholders have been screaming about! Below are a few examples: Ejiro Foyibo, national chairman, Association of Community Pharmacists of Nigeria (ACPN): “I boldly say that NHIS is a fraud! The pharmacists, physiotherapists, laboratory technicians have all been sidelined in the operations of the scheme” (June, 2010); Nigeria’s House of Representatives: “The scheme is a national embarrassment, disaster and colossal failure” (November 2011); and the acting executive secretary of NHIS, Abdulrahman Sambo: “Most of the enrolees are cheated, short-changed and segregated against by institutions providing health insurance” (September 2011, at a subscribers’ forum in Abuja).
Ironically, I had in my 2006 book Reinventing the Nigerian Public Service (published soon after our NHIS officially began in June 2005) warned that the scheme was going to have problems because we were failing to put its funding in the hands of the enrolees. I can warn even more emphatically today that Nigeria’s healthcare can never get off the ground (even if we allocate our entire national budget to it) as long as it is driven by this NHIS arrangement, which discourages hard work, innovation, and quality service. Even if the model has worked for some other country, it can never work in our environment.
Finally, notice how we are missing the profound lesson of the GI Bill and the neat opportunity to use our NHIS fund to unlock vibrancy, innovation, and decisive service-quality in our health sector. With the key actors assured of our cheap NHIS fund, they need not bother about other opportunities, including what they are losing monthly to foreign medical institutions.The solution
The starting point is to appreciate that the only reason Nigerians are so desperate to be treated abroad is that our NHIS is not providing the expected “high standard of healthcare delivery to beneficiaries”. Indeed, a vibrant, innovative, and service-focused NHIS will by itself dramatically transform our healthcare delivery. Now, nothing (absolutely nothing) can stop us from that if we can redefine roles in the scheme to “give service recipients unfettered freedom to choose and change their HMOs (and hospitals) as they want”.
With this as the starting point, we can now work out other roles. For example, our employers of labour (after making their matching contributions) should not go beyond collating the list of their workers that select each HMO/hospital (the way many organisations handle workers’ salary accounts with different banks). And so on! This roles redefinition will dramatically light up our NHIS by creating new incentives in the scheme for hard work, as well as automatic consequences for failure to improve. For example, the HMOs, instead of competing on how much “kick-back” they can give, will start advertising themselves directly to us, with focus on the services they can provide. The problem of enrolees being “cheated, short-changed and segregated against” will vanish. Our NHIS fund will move from being an object of cheap corruption to becoming the catalyst for unlocking the vibrancy, innovation and service quality that have practically disappeared from the sector. This will create that vital space for big private-sector players (including many Nigerians in the Diaspora who don’t even need government money) to come and set up world-class facilities here.
Way forward
Nigeria’s health sector transformation is far easier than many people may be thinking. In fact, our health sector would by now have blossomed like our telecoms sector if not for the abovementioned flaw in the NHIS roles definition, which has stunted the scheme. What government needs to do now is to put together a small committee of experts to decisively correct this flaw and unlock the huge potentials of our health sector. The exploits of our medical personnel (when they travel to other parts of the world) attest to their innate capacity to drive a world-class local health sector and stem the tide of Nigerians seeking medical treatment abroad.
GABRIEL ZOWAM