Paying for Healthcare

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Healthcare financing strategies have continued to gain priority in international health policy debates and research.

A consensus is emerging on the need for developing countries like Nigeria to move towards universal health coverage through pre-payment financing mechanisms, given that user fees and other direct payments have had and continue to have negative effects, particularly on poor individuals and households. This is because user fees and direct payments disproportionately affect the poor, which unfortunately constitute almost 75% of our nation’s population with majority living in rural and semi urban areas.

Unfortunately exemptions and initiatives such as the national health insurance scheme (NHIS) among several others introduced to try to cushion the effects of user fees have failed to protect the poor from catastrophic health care costs to the point that almost 90% of those eligible for exemptions in never got them. Evidence shows that simply removing user fees, as some advocate, is not a sustainable solution to health care financing. It has to be supported by a simultaneous increase in funding through pre-payment mechanisms. As such, there is a growing need for Nigeria, to ensure fair financing in her health system, and provide universal coverage with financial protection for her citizens if she is to achieve the health related MDG goals by 2015 (which is less than four years away).

The World Health Organization has recognized this need and in its World Health Assembly resolution WHA58.33 called on all member states to “plan the transition to universal coverage of their citizens”. Identifying a combination of health care financing mechanisms that would provide the needed access to health care services for all citizens is best informed by understanding how the burden of health care financing currently falls on different segments of the population.

NHIS may have no doubt achieved a lot since it began operations, but it seems to me that those at the helm of affair are just getting in tune with the realities of health care financing given the various innovative programmes that they have introduced lately. Just recently, I came across a newspaper supplementary that (tried to) showcased the achievements of the agency since its inception. What caught my attention was the fact that the managers of the scheme are yet to recognize the importance of equity in health financing even though they have decided to extend their operational scope to cover excluded areas of the scheme such as the informal sector and rural communities.

Given such commitment to pursuing a universal health system and the proactive role played by the agency, i doubt if any form of equity assessment in health care financing was ever undertaken prior to the introduction of any of the NHIS programmes. It is my belief that equity is a necessary condition that must be met if we want to achieve universal coverage. This means that the agency must periodically carry out studies to ascertain the degree of progressivity of the existing health care financing mechanisms so as to be able to establish the relative funding burden on the poor compared with the rich. This will allow them to identify which health care financing strategies are regressive (i.e. place a greater burden on the poor) and which are progressive (i.e. the rich contribute a higher proportion of their income than the poor).

For NHIS to attain adequate financial risk protection and ultimately achieve universal coverage, it needs to extend pre-payment cover to all Nigerians, possibly through funding their contributions entirely from tax (contributions), and address other issues affecting the expansion of the scheme. Furthermore, the pre-payment funding pool for health care needs to grow so budgetary allocation to the health sector can be enhanced. NHIS may also have to investigate the extent to which paying for health care relates to people’s ability to pay and to investigate the relative progressivity of each of their scheme’s financing mechanisms. This requires an urgent assessment of the overall progressivity in Nigeria’s health financing system.

On a final note, I recently carried out an in-depth study on health financing, and I found out that the application of relevant tools for measuring the equity of financing mechanisms, particularly for assessing the progressivity of financing mechanisms, has remained focused primarily on the health care systems of developed countries and, more recently, some Asian countries. There has been only very limited application in developing countries. This is despite the apparent importance of health care financing equity as a central policy goal in many health systems in developing countries. With the exception of Tanzania, South Africa and of recent Ghana, to my knowledge, no such research has been carried out in Nigeria.

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