Chijioke Iremeka
Healthcare providers have said implementing a unified cost structure for private and public health insurance policies will enhance healthcare delivery in the country and expand health insurance coverage.
The providers said though there was an attempt to standardise health insurance policies in Nigeria to harmonise costs across public and private sectors, operational disparities persist.
The health practitioners noted that while private health insurance plans offer more comprehensive coverage though expensive, a unified cost approach would address disparities in pricing by integrating private and public health insurance policies under a single standardised pricing model.
Recall that the Lagos Chapter of the Association of Community Pharmacists of Nigeria on Tuesday criticised the current system payment structure, and called for the adoption of the Lagos State Health Insurance Management Agency model.
According to them, the LASHIMA model separates fees for professional services from capitation payments for other primary care services.
At a press conference in Lagos to commemorate this year’s Pharmaceutical Society of Nigeria Scientific Week, the ACPN Chairman, Tolu Ajayi, argued that the payment system must be simplified to move Nigeria closer to achieving the Sustainable Development Goal of Universal Health Coverage.
An online medical journal, ScienceDirect, defines health insurance as a tool that spreads the financial risks associated with health spending due to the uncertainty and unpredictability of medical expenses, aiming to enhance welfare by providing coverage against high healthcare costs.
In Nigeria, the National Health Insurance Scheme was established in 2005 by the Federal Government under Act 35 of 1999 to “Protect families from the financial hardship of huge medical bills; limit the rise in the cost of healthcare services; ensure equitable distribution of healthcare costs among different income groups, and maintain high standards of healthcare delivery within the scheme.”
Speaking exclusively with PUNCH Healthwise in different interviews, the healthcare providers maintained that a unified system would potentially eliminate disparities between public and private healthcare services, ensuring high-quality care for all citizens, especially those in lower income brackets.
They advocated for a standardised fee structure where healthcare services or insurance premiums are set at a uniform rate across all providers, where patients would pay the same amount for specific services or coverage.
The PUNCH Healthwise reports that a unified cost structure for all will prevent the usual situation where a patient goes to the hospital but can’t access certain services because the patient’s premium doesn’t cover certain services.
According to the President of the Association of Nigeria Private Medical Practitioners, Dr. Austin Aipoh, a unified cost structure aims to provide a level playing field where the quality and scope of care are consistent regardless of the provider.
Aipoh, who said there is a unified cost structure in the country whether fee-for-service or capitation, noted that the current practice does not favour the private sector as there are certain incentives that should be given to them to reduce their costs.
He said, “The current fee structure is problematic because it does not take into account the additional costs borne by private sector healthcare providers. Unlike public facilities, private providers must cover expenses such as generator fuel, diesel, operational costs, and salaries, yet they receive the same payment for services.
“To address this issue, the Federal Government should consider implementing a tiered fee structure or different capitation rates for private versus public sector services. Although this may seem challenging, it would help account for the unique financial burdens faced by private providers.
“The government could establish grants or low-interest loans specifically for private healthcare facilities, similar to the approach taken in India. In India, grants and single-digit interest loans were provided to bolster private healthcare investment.
“Unfortunately, in Nigeria, loans are often offered at high interest rates with no sector-specific variations, which hamper private healthcare development. We propose the creation of a specialised health bank, akin to the Bank of Industry, to facilitate access to low-interest loans for private healthcare providers.”
Aipoh said that the health bank would allow the government to channel resources more effectively and support the growth of the private health sector in Nigeria.
He stressed that when these measures are implemented, even with the current fee structure for both private and public services in the country, it will significantly improve the situation and bolster equitable healthcare delivery.
“We hope that continued advocacy will lead the government to recognise the need for these changes and take appropriate action. The cost dynamics between public and private healthcare services reveal significant disparities.
“In the public sector, salaries, allowances, and rent are covered by the government, creating an uneven playing field compared to private providers who must shoulder these costs independently,” he said.
Consequently, the cost of private healthcare services can be higher, he noted.
Aipoh also emphasised that healthcare financing differs between public and private schemes, saying that while the National Health Insurance Scheme and other government-run schemes provide basic coverage, private health schemes offer additional, often more comprehensive options.
“For example, large companies can purchase extensive health packages for their employees, beyond the basic minimal coverage mandated for all Nigerians by law. Individuals or organisations must first secure basic health insurance coverage before they can opt for supplementary private plans.
“For instance, a person paying a minimum premium of N1,200 may choose to enhance his coverage with an additional private plan costing N20,000 per month. This supplemental coverage can be used for various services, such as advanced diagnostic tests or specialised treatments.
“The private healthcare plans vary in terms of services and costs. Higher premiums generally correspond to more extensive coverage like advanced treatments. Therefore, the more one pays into a private health scheme, the more comprehensive their healthcare coverage becomes,” Aipoh added.
Corroborating his statement, the Nigeria Medical Association Chairman, South West chapter, Dr Babatunde Rosiji, acknowledged that in 2022, former President Muhammadu Buhari, signed into law the National Health Insurance Authority Bill 2022, which repealed the National Health Insurance Scheme Act of 1999 and established the NHIA Act, of 2022, to oversee and regulate Health Insurance Schemes.
According to him, the NHIA was given new and enlarged duties that enable it to operate as a regulator, implementer, investor, and insurer of health insurance policies and programmes in Nigeria.
Rosiji, who is also the Medical Director at the State Specialist Hospital, Ikole, Ekiti State, said, “Premiums and Fee-for-Service rates need to be unified and renegotiated to reflect current economic realities.
“These adjustments ensure that NHIS patients receive quality care and are not relegated to second-class treatment in our hospitals.”
He noted that once a health insurance enrollee has paid the premium, which is a sum for the predetermined healthcare services, the HMO will then pay the capitation to accredited healthcare providers, such as hospitals and clinics, on behalf of the enrollees.
After this has been done, the employees can access the health services covered by the plan.
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