HMO re-accreditation to restructure Nigeria’s health insurance

With over 90 percent of Nigerians depending on out-of-pocket payment to access healthcare, the current re-accreditation of Health Management Organisations (HMOs) valued at over N30 billion annually into national, zonal and state operators in the country, experts say, would restructure health insurance under Public-Private Partnership with National Health Insurance Scheme (NHIS) providing oversight functions to the organs involved in direct delivery of services to members – HMOs and Providers.

The current re-accreditation, which began in October 2012 and handled by PricewaterHouse Coopers (PwC), is to ensure that any HMO that wishes to be a national operator should have a minimum share capital of N400 million; N200 million for zonal operators and N100 million for state operators.

In an Interview with BusinessDay, Oladipupo Awosika, chief executive officer, Total Health Trust, a health maintenance organisation, explained that financial burden of risks of over-using health services are borne by the HMO, its service providers or a combination as HMOs offer pre-paid, comprehensive healthcare coverage for doctors and hospital services.

The CEO stated that government has a great role to play in the operation of managed care as experiences in other nations have confirmed that the role should be limited to regulation and provision of the enabling environment.

According to him, “A substantial proportion of healthcare is privately provided but the capacity of government to develop and enforce regulations to ensure adequate quality of care is very limited. It is also known that enforcement of complex regulations is associated with high transaction costs.

“Regulation, monitoring, quality assurance processes and administration of the care to the disadvantaged sectors of the population are the main remit of the NHIS. The HMOs actuary procedures must be subject to scrutiny to prevent market failure.”

However, several African governments called for the expansion of insurance-based healthcare financing, to raise additional revenue to fund the cost of healthcare provision as well as diminish financial barriers to obtaining health care at the time of illness.

While calls for government to reduce the burden of healthcare services on citizens continue, the quest to attain universal health coverage for Nigerians may not become realised if the current NHIS Act established under Act 35 of 1999 by the Federal Government to make health insurance compulsory and subsidised is not amended.

ALEXANDER CHIEJINA