• Tuesday, May 28, 2024
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Private sector dominance in healthcare driven by service delivery


Over 60 percent of Nigeria’s healthcare sector is dominated by the private sector, the International Finance Corporation (IFC), an arm of the World Bank Group has said.

Also it says, the share of the private sector is set to grow further, relative to overall growth in the health sector.

Patients are showing a preference for healthcare providers in the private sector because of greater accessibility, a perceived better quality of service, continuity of care and the availability of drugs, BusinessDay investigations revealed.

An IFC report titled “Guide for Investors in Private Health Care in Emerging Markets” revealed that in developing nations including Nigeria, 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.

According to the report “Given increasing demand worldwide, for health services, including diagnostic treatment and care, health service providers represent the largest investment opportunity within the industry. Growth opportunities exist throughout the spectrum of health service providers, including large facilities that use cutting-edge technology and promote medical tourism; medium-size, low-cost, high-efficiency hospitals that serve a range of income groups; and medical professionals in solo practice.”

The report added that increasingly, governments are outsourcing services to private health service providers, expanding their market share and their need for financing.

“There are indications that compared to other actors in the health sector, health service providers, particularly those that offer local essential services (such as SME and nurse- and physician-owned practices), tend to be less affected by economic downturns,” the report stated.

In an interview with BusinessDay, Muhammad Ali Pate, Minister of State for Health, said that unlocking the market potential for health services in Nigeria would create an enabling environment for the private sector to grow, thereby ensuring Nigeria becomes the destination for medical tourism.

While observing that most Nigerians visit foreign private hospitals for medicare, Pate said improving access to finance, as well as developing and enforcing regulation and policies that stimulate the sector will reduce the bottlenecks for effective private sector engagement.

“The private sector already accounts for at least half of healthcare service provision and has the potential to expand access to health services, improve the quality of care, contribute to job creation, and the country’s Gross Domestic Product (GDP). Imagine if we created an enabling environment for local vaccine manufacturing, pharmaceutical companies, hospital chains, and diagnostic centres of repute. This would enable us better harness the resources and expertise of our medical diaspora,” Pate explained.

Pate observed that as a first step, the Federal Ministry of Health (FMOH) would in the short term interventions, address regulations (such as fund transfer charges) that encourage the growth of medical tourism out of the country and review fiscal policies (economic incentives, tax, foreign exchange, import tariffs) that affect healthcare commodities, services and medical devices markets, in order to create more favourable economic incentives for doing business in the healthcare sector.

Fola Laoye, Chairman, Hygeia Group said that while significant gaps in human resources, both clinical and managerial, and slow progress in integrating the private sector into the policy enforcement have affected private sector effective participation in changing the dynamics of healthcare delivery, there is a need to rapidly implement the integration of the Private health sector into the National Health Strategic Framework.