• Wednesday, November 29, 2023
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Lack of health insurance cover creates huge market for HMOs


As out-of-pocket payment dominate healthcare spending in Nigeria, recent survey by NOI Polls Limited, a polling and research organisation, reveal that 8 in 10 Nigerians (79 percent) do not have access to health insurance, a development that shows huge market opportunity for health insurance business in Nigeria.

Health Maintenance Organisations (HMOs), which have witnessed a boom in the country for over a decade (from 13 in 2000 to 66 HMOs in 2012), have become more sophisticated with monthly capital payment processed manually by these HMOs put at about N5 billion among over 6,000 accredited providers.

The survey which captured the six geopolitical zones revealed that 35 percent of respondent have access to health insurance via a private Health Management Organisation (HMO) paid by their employer while 6 percent of respondents have access via a private HMO, but self-funded.

“The South-West has the highest percentage of people (51 percent) with access to health insurance through their employers while the South-South (15 percent) and South-East (12 percent) have the highest proportion of respondents with private HMO arrangements, which are self-funded. The North-West has the highest proportion (83 percent) that benefit from NHIS followed by the North-Central (81 percent),” NOI Polls pointed out.

Ladi Awosika, CEO, Total Health Trust, HMO, said that the basis for insurance is to protect individuals from the financial consequences of events with a low probability of happening but with the potential to cause substantial loss.

With operating margin for HMOs remains low (between 1 to 4 percent), Awosika noted that adequate working capital for HMOs is critical as the number of Nigerians who have health insurance expected to increase with amendment to the NHIS Act to provide seamless opportunities for more users to be added to the scheme.

“We are at the beginning of a revolution in the provision of affordable and qualitative medical services to Nigerians. Managed care is not about micromanaging doctors as they practice medicine or about putting profits above patient care. It is about introduction of business models and management tools into delivery of health care which initially threatens the status quo, but will ultimately raise the quality of health care to everyone,” Awosika stated.

Abdulrahaman Sambo, executive secretary, National Health Insurance Scheme (NHIS) noted that lessons learnt from Community-Based Health Insurance (CBHI) showed that weak technical and administrative capacity of Board of Trustees (BOTs), community ownership and participation in CBHI is key to sustainability.

“Fragmentation of CBHF as small does not allow for significant pooling of health risks/costs and enhanced equity and Government support is key to successful implementation of CBHI provision of targeted subsidy important for wider coverage and sustainability of CBHI schemes.

“The strength of CBHI is that outreach penetration achieved through community participation. It is an avenue for required community mobilization for action to achieve Millennium Development Goals (MDGs 4 and 5) targets and provides an avenue for financing the health care needs of pregnant women and children under the age of five,” Sambo said.

As Nigeria’s healthcare sector dominated by the private sector, the International Finance Corporation (IFC), an arm of the World Bank Group, with share of the private sector set to grow relatively to overall growth in the health sector, the NOI Polls shows that 5 in 10 Nigerians (50 percent) rely on private hospitals/healthcare facilities for healthcare needs.

With private healthcare providers gradually becoming patients’ preferred choice due to greater accessibility, people increasingly rely on private health care organisations to address their health needs with the trend expected to continue due to the fundamentals that drive demand – population growth, increasing life expectancy, growing disease burdens, and patients’ demand for treatment.