Janet Ogundepo
The National President, Guild of Medical Directors, Dr Raymond Kuti, has expressed worries that the medical practice as a business is at a critical juncture for survival, stressing that hospitals cannot thrive under the current 33 per cent bank loan rates.
He called for the establishment of a dedicated health bank independent of the Treasury Single Account.
Kuti stated this at the opening ceremony of the 2024 National Annual General Meeting of the GMD, on Thursday, June 27, 2024.
The conference themed, “From Profession to Industry Practice in a VUCA Environment” held at the Federal Palace Hotel, from Wednesday, June 26 to Friday, June 28, 2024.
According to the Office of the Accountant General of the Federation TSAs are revenues and monies payable to the Federal Government, processed through Deposit Money Banks and electronic channels, with direct credit through the e-Collection system to designated accounts at the Central Bank of Nigeria.
Shedding light on TSAs, Kuti said, “This bank would manage funds collected and provide single-digit loans to hospitals and doctors for necessary equipment and supplies. Hospital businesses can’t thrive under the current 33 per cent bank loan rates.
“Standardising medical services and care is paramount and should apply uniformly across private and government medical institutions.”
Kuti further described the business environment in the health sector as volatile, uncertain and ambiguous.
“Just last week, two hospitals in Abuja closed due to unfavourable conditions. The cost of operating medical facilities has skyrocketed, while patients’ purchasing power has significantly declined. Health Maintenance Organisations have not adjusted tariffs for over two years and the National Health Insurance Authority has not revised prices in a decade.
“Most hospital necessities and consumables are dollar-denominated, with exchange rates increasing by over 300 per cent. These factors have made it nearly impossible for hospitals to deliver the required high-quality services,” he lamented.
The GMD President stated that the government must build public trust in the insurance scheme, noting that health providers should be integral to policy formulation and administration at the NHIA, which currently lacks health provider representation.
Kuti further expressed confidence that medical professionals and directors were dedicated to delivering the best and highest-quality services to patients despite the challenges.
In his welcome address, the Local Organising Committee Chairman of the GMD, Lagos State Chapter, Dr Ladi Alakija, explained that VUCA is an acronym first used in 1978 and it refers to the volatility, uncertainty, complexity and ambiguousness of policies and the hospital business environment in Nigeria.
He also stated that hospital directors have been finding it difficult to “survive in this VUCA environment”, describing it as hostile to business.
Alakija further noted that the GMD is responsible for the care of 60 per cent of hospital and clinic visits by patients, stating that it gets doctors who are experts in the medical practice and business.
“We are encouraging that the medical profession be run as a business as we can’t afford to have hospitals closing down. Salaries are going up, lab tests are going up but we still have to run business professionally,” the doctor said.
Speaking on the business aspect of healthcare, the Chief Executive Officer of Stanbic IBTC Holdings PLC, Demola Sogunle, said the contribution of the healthcare sector to the Gross Domestic Product in the country was infinitesimal.
He stated that 90 per cent of private hospitals in Nigeria were small and medium-scale enterprises, noting that most of them were vulnerable to the economic situations in the country and too many for the regulators.
“There is a need for key reforms in this sector and this audience, this distinguished gathering, is one of the places where you can start. Someone once said, I think it was Nelson Mandela, ‘If you don’t think about the absurd, you cannot achieve the impossible.’
“What is outside is that there are too many hospitals, and the numbers will overwhelm anyone. They are small and would soon be blown out. Every doctor cannot have a clinic or hospital. Despite the key reforms we are in the health sector how come we have not seen a significant jump? It is because the structure and infrastructure are not right,” Sogunle said
He noted that the challenges in the health sector offered opportunities for public-private partnership, collective intelligence, partnerships for collaboration, healthcare deployment and health education, and can further lead to increased investment in the sector.
“We need to find a way to see opportunities in rural healthcare development, opportunities in health insurance expansion, opportunities in health education, health-based and digital health solutions, and health workforce development. These are opportunities and lessons for the healthcare sector. Overall, performance improvement and capacity enhancement is very key,” he said.
Sogunle further called for tighter regulations to rebuild trust and confidence in the sector and strategic business alliances with key industry players.
The Stanbic IBTC CEO also recommended merger, acquisition and backward integration to ensure a vibrant, well-funded and well-consolidated healthcare sector.
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