In the wake of rising medical emergencies and last-minute crowd funding, coupled with lack of consumer trust in Nigerian health insurance companies, the Chief Executive Officer, Avon HMO, Adesimbo Ukiri, in an interview with Martins Ifijeh talked on the ideal agenda for the new Executive Secretary of the NHIS. She also shares her thoughts on innumerable challenges which have bedeviled NHIS, and how technology can be used to achieve Universal Health Coverage. Excepts;
What are the key issues the new executive secretary of the NHIS should focus on with immediate effect?
I think the new Executive Secretary has a unique opportunity to have far-reaching impact that will make Nigerians adore him. He’s in the right place at the right time. The industry is ripe, people are yearning for change and thankfully he is not a stranger to the industry. He was there from the very beginning and he knows the laudable vision for which the NHIS was set up. The key issue that I think the new ES should focus on is growth in coverage and all the factors hindering it. There has been progress on the consumer side and a lot has changed as public perception improved. People are more aware of HMOs, health insurance, how to subscribe to health plans and the advantages it brings. They are also aware of their rights and the obligations that HMOs and hospitals owe to them under the health plans. What is holding us back from the transformation that this country deserves is that the pillars and structures that would make the industry deliver still haven’t been put in place.
We still don’t have legislation that makes it compulsory for all Nigerians to have health insurance. The industry is not being effectively regulated and therefore, there is no transparency. The industry is also highly fragmented and the financial strength and capability of many players in the sector is questionable. Thus you have many of them being unable to pay hospital bills when due. There’s also a lack of trust between key players – HMOs, healthcare facilities and the regulatory authority. There has been a long history of debilitating public spats between these three stakeholders; this has only weakened public trust and confidence even more.
Up till now, NHIS positions and enables itself not so much as a regulator of the players within the industry but more as a competitor and co-operator. In addition, anywhere you have a regulatory authority as we do with ours, holding funds with the ability to derive revenue from those funds, there’s bound to be conflict. A regulator should regulate, the holder of funds should manage and disburse funds while operators should operate.
The delivery side is not without its challenges. Hospitals are still highly fragmented, owner-managed and desperately struggling to keep their heads above water. None have achieved any significant scale. There’s a dearth of doctors, nurses and other skilled healthcare workers. Also, use of technology and automation in most hospitals is negligible; some hospitals have management information systems while the vast majority do not. Where technology even exists, there’s no interconnectivity between hospitals, HMOs and the regulator.
All these, would have been addressed happen over the past 10 years if we had the kind of regulatory body we all pray to have. With all I’ve mentioned, you can see that there’s a lot for the new ES to do; from getting us the right regulatory framework, to ensuring that the NHIS becomes an efficient and effective regulator. He also needs to ensure that there’s consolidation in the industry and that the remaining players have the financial capability to evoke trust in the minds of Nigerians and can hold their own against their global peers.
Some quick wins – firstly, we need the regulator to look at the one per cent of total earnings HMOs have been contributing to the NHIs towards an IT fund since 2005. This should be between 1.2 and 2 billion depending on who you ask. It is sitting idle with the regulator. The ES can immediately invest this fund in an IT Infrastructure that supports the entire system. In 2014, CEOs of leading HMOs and their counterpart executives and senior management in the NHIS went to the Netherlands (a country which has achieved Universal Health Coverage – 99 per cent population covered) to understudy the country’s health insurance system. The most impactful and memorable part of the trip for us all was the existence of an extensive and interconnected IT infrastructure. This is the backbone of their entire system, linking HMOs, hospitals and the regulator together from the backend. We returned with the hope that the IT fund was going to be used to develop and implement something similar in Nigeria but this hasn’t happened and we are still waiting.
Ensuring financial capacity and capital adequacy is another quick win. Let us have serious players that are ready to commit the right level of investment, abide by world-class standards of solvency and take the industry forward. There has been a history of some HMOs with liquidity problems offering health plans at ridiculously priced premiums. In spite of this, these HMOs still fall short of their obligations to hospitals. This affects the ability of the industry to price appropriately and contributes to the distrust of HMOs by hospitals and the larger public.
The third win is about availability and transparency of industry wide data. This includes financial information as well as medical utilization data. At the end of the day, Nigerians need to be able to look at the data being published by the regulator and choose which HMO they would like to subscribe to. They should be able to see financial information by HMOs, HMOs claims payment history, customer service indicators and what goes on between the HMOs and the hospital by virtue of the returns being rendered to regulatory authority.
Under previous recent NHIS leadership, all Nigerians have been subjected to, are scandals, stories of corruption, mismanagement and fraud. The new ES can give us some good stories this time around. Let’s have an agenda that shows a journey with milestones and deadlines.
What is your view on the N400m minimum share capital HMOs are required to have; do you think that would allow for a strong industry?
Let’s look at the closest sector to us. NAICOM recently issued a new capital requirement for insurance companies, with life insurance required to move from N2bn to N6bn minimum share capital and non-life insurance moving from N3bn to N9bn by June 20, 2020. HMOs’ share capital is a paltry N400m and mind you, we are insuring people’s health not cars. In 2017, PENCOM raised the capitalization requirement for Fund Administrators to a minimum paid capital of N25bn. In 2005 and later on in 2008, the Central Bank of Nigeria (CBN) carried out an extensive recapitalisation of banks such that there was a reduction in the number of banks from 89 to 24 between 2005 and 2009. As at now, we have 21 strong commercial banks in the country.
There is a need to re-examine the adequacy of the N400m minimum share capital that HMOs are currently required to have. This should be part of a wider consolidation exercise to reduce the current 66 HMOs that have been licensed to operate in the country. I’ve already said it’s time for the Executive Secretary to take a hard look at the capital adequacy and solvency requirements for HMOs to operate in Nigeria. He needs to review the financial requirements that will produce the kind of players he needs to take the industry forward.
How can Nigerian health insurance companies address the lack of consumer trust?
Operators have a role to play but so does the regulator. In other climes and sectors, regulators tend to publish quarterly, mid-year or annual statistics on the industry. If Nigerians could see highlights of the key performance indicators (KPIs) and every HMO’s audited financial statements, they would have more confidence in the system. If Nigerians could see a simple table that shows how many claims relative to premiums that the HMOs have been paying out towards utilisation of the services by the population, they would have a bit more trust. They would also see that their HMOs are not just sitting on and mismanaging their money like many Nigerians believe right now.
In recent times, there has been a lot of negative publicity about HMOs such that the little trust Nigerians had was constantly being eroded. We need to put a stop to that by telling positive stories and one way to ensure this happens is to publicly penalise any bad eggs in the system.
Crowd sourcing funds for medical emergencies has been on the rise recently. From your experience working in the health insurance space, why would you say people seem to prefer crowd funding to health insurance?
It’s a real shame because a lot of people have come to believe that they can resort to crowd funding to raise money if an expensive medical need arises. Most times when you see people that are being crowd-funded for, you can honestly tell that it’s a dire situation between life and death. You hear reports that they have stage four cancers or renal failure and are in need of kidney transplants. It’s almost as if they’ve waited till the last minute when death is imminent before resorting to crowd funding.
Why? Many of these situations could have been avoided if the person was under a health cover. This is because whatever the disease is, it would have been discovered earlier through annual health checks and treatments would have commenced a lot earlier. Most of these diseases occur due to complications from other conditions that were not treated on time. This is why I see crowd funding as something we need to educate the public on. I believe more than 70 per cent of people that are being crowd funded for end up dying because the intervention happens so late that they can’t be saved.
We can do better by helping people get health insurance cover than by contributing to crowd funding initiatives in a last-minute attempt to snatch people from the jaws of death.
Even if the government hasn’t made it mandatory, everybody should go get a health plan now. It really is for your own good. It saves you money and gives you access to quality care when you need it. Without a healthcare plan, a bout of fever will have most Nigerians self-medicating and visiting pastors in order to save cost. Worse still, some people simply ignore symptoms out of a reluctance to pay “unjustifiable” hospital bills. These are all dangerous. All fevers are not malaria.
Another value in subscribing to a health plan is that you benefit from preventive care and early medical intervention. Regular medical checks are how most serious illnesses get spotted early. It’s easier to deal with a problem if it is noticed on time and a healthcare plan affords one the opportunity to do this.