By Chukwuemeka Uwanaka
The socio-economic lockdown that took place in Nigeria due to the outbreak of COVID-19 has further highlighted to the public and private sectors, the importance of a good healthcare system. With average life expectancy of 53.95 years, which is below the Sub-Saharan average of 56 years, the World Health Organisation (WHO) ranks Nigeria 187 out of 190 in the quality of healthcare system, translating to one of the fifth worst healthcare systems in the world.
Average spending and out-of-pocket payment is $6 per person and 72 per cent respectively, compared to $3,235 per person and 10 percent respectively in the United Kingdom. For example, there are only 100 psychiatrists in Nigeria i.e. 1 to 1.7mil as against 1 to 8400 in Canada. This is as one in five will need a psychiatrist at some point in their lifetime. Medical tourism, which costs Nigeria over $1 billion annually, is another outcome of the poor state of healthcare in the country.
The first confirmed case in the country on February 27, 2020 and subsequent cases, exposed a lot more, the vulnerabilities of the country’s healthcare system. The economic effects of the virus were responsible for the significant intervention of the private sector in Nigeria’s healthcare system, with the provision of isolation centres by THISDAY Newspaper at THISDAY Dome and GT Bank alongside financial donations and medical support such as N5 billion by UBA Foundation, N1.35 billion by BUA, and N1.5 billion by Dangote Foundation, among others. Some went a step further to begin the provision of permanent health structures, such as the 200-bed Infectious Disease medical centre at Imo State University Teaching Hospital by Seplat Petroleum. A lot of these private sector contributions, which by some estimates surpass the provisions of government, can be characterized as a part of their Corporate Social Responsibility (CSR). These actions are their philanthropic responsibilities, given that are under no legal obligation to do so. However, the realization of what poor response to the virus will mean to the economy where they do business, was also a motivating factor for their responses. A lot of these contributions were through the Central Bank of Nigeria (CBN)-led private sector Coalition against Covid-19 (CACOVID).
As countries shut their borders and restricted support to other countries, the realisation that countries should attain self-sufficiency in critical sectors such as healthcare became more pronounced. Indeed, Nigerians marveled at the speed with which private sector driven intervention in healthcare infrastructure were quickly developed. Working together, it demonstrated the quick goals that can be attained when the private sector works closer with government.
As no crisis should be wasted, the question therefore arises – what new approaches can be explored by government in partnering the private sector towards improving Nigeria’s healthcare system in a sustainable manner?
The challenges of healthcare in Nigeria are many, though a few stand out. They include insufficient financing, management and human resource shortfalls, insufficient drugs, lack of sufficient personnel, poor treatment of patients and infrastructure and poor hygiene. With insufficient financing and human resource shortfalls being the most prominent challenges in the healthcare sector, sections of the private sector that have excelled in financing and human resource management could possibly provide a good fit. The private sector being referred to here are the major financial institutions in Nigeria such as United Bank for Africa (UBA), Zenith Bank, GTBank and Access Bank, who also stand out as some of the largest contributors to government’s effort in managing COVID-19. The financial sector is one of the few sectors that have remained resilient despite GDP decline, as the sector’s contribution to GDP in Q2-2020 increased by 28.4 percent. It should also be mentioned here that some of these banks have in recent years, been publishing Annual Social Responsibility Reports in line with Nigerian Sustainability Business Principles (NSBPs) and the Global Reporting Initiative (GRI) standards.
Financing stands out as the main problem, as the national budgetary allocation for health in recent years has consistently been below the 15 percent recommended in the African Union’s ‘Abuja Declaration’ of 2001. In federal budget estimates for 2020, allocations to basic healthcare delivery and capital expenditure declined, when compared to the budget of 2019. This is as Nigeria records annual population growth of 3 percent, and therefore requires a growing health budget, not a reducing budget.
N46 billion was allocated for capital expenditure, compared to N47 billion in 2019, representing a 2.13 percent reduction. Similarly, the Basic Health Care Provision Fund (BHCPF) decreased by 13.12 percent from N51.22 billion in 2019 to N44.50 billion in 2020. With these, Nigerian prosperous financial institutions may just be best positioned to contribute in resolving some of these financial problems, as will be explained in later in this essay.
The foundation of every good healthcare system is Primary Health Care (PHC). Nigeria has 30,000 PHC facilities across the 774 local governments of the country. A lot of these PHCs are in a state of disrepair with only 20 percent of them in working condition, thereby restricting access to healthcare for the populace, and putting undue pressures on the secondary and tertiary healthcare institutions.
With 75 per cent out-of-pocket spending rate and 4 percent health insurance coverage, the National Health Act (NHA) of 2014 which led to the establishment of the Basic Health Care Provision Fund (BHCPF) that aims to remove financial barriers to accessing primary healthcare, particularly for the poor and the vulnerable, alongside Primary Health Care Under One Roof (PHCUOR), has not yielded the desired results, six years after.
The outcome of these poor choices and management approaches also reflects in vital human resource migration, with less than 20,000 out of the 33,000 registered doctors in Nigeria practicing, while a staggering 40 percent have migrated, due to lack of required investments. Another 4,000 doctors might leave Nigeria between August and December of 2020 according to the Vice-President of Resident Doctors, even as Nigeria struggles to manage not only COVID-19, but also existing healthcare challenges. The recent Nigeria Health Workforce Country Profile shows an increase in the number of doctors seeking migration from 656 in 2014 to 1551 in 2018.
What then can both the government and private sector do, practically?
As these big banks have demonstrated capacity in managing many branch networks and agents across the 36 states, FCT, 774 LGAs and foreign countries, such expertise should be deployed in the management of PHCs. A lot of their CSR activities can be streamlined into PHCs, which will also serve as contact points for state and community health insurance scheme contributions. In return, the PHCs can serve as part of the branch networks for the banks, a win-win situation. These banks therefore will have the responsibility of providing clean and maintained environments that they are known for, with a real estate agreement that will ensure equitable ownership. While it provides a cost effective means for bank expansion and financial inclusion as part of the National Financial Inclusion Strategy (NFIS 2012), it will also lead to a drastic reversal of the eyesore that are many PHCs in Nigeria. Communities where traction on community health insurance subscription has been hindered by trust issues will feel more comfortable with depositing their health insurance contributions at PHC located banks. This will therefore reduce out-of-pocket payments and contribute to increased financing for the healthcare system.
The increased presence of banks at rural areas that will come with this proposition also allows for a more structured approach in enrolling the informal sector of Nigeria, estimated at 65 percent, into the health insurance pool. The informal sector is mostly found in agricultural production, mining, quarrying, small-scale building and construction.
The management expertise of the big banks can also be deployed to stemming the outbound migration of healthcare workers that are most needed. That these banks have proved adept at not only making significant financial returns, but also retaining well trained staff, is a pointer to their ability to provide management support that can reverse the trend of migration among health workers. While some will question the relevance of the management knowledge and experience in the financial sector being applicable to the health sector, it is important to note that managers and Ministers of Health in many developed countries with high average life expectancy, do not have medical background, but management backgrounds. Jeremy Hunt, the longest serving Health Minister in British political history as well as Andrew Lansley, his predecessor and Matt Hancock his successor, who do not have any medical background, come to mind. The United Kingdom (UK) remains one of the main medical tourism destinations, as well as destination for migrating Nigerian medical professionals, especially under the recently introduced ‘Health and Care Visa’ policy that makes it cheaper, quicker and easier for healthcare professionals to migrate to the UK.
Indeed, it was during the tenure of Prof. Eyitayo Lambo, an economist, as Nigeria’s Minister of Health that very significant improvements were made in health insurance coverage through the implementation of the National Health Insurance Scheme (NHIS), about 40 years after conception.
To be clear, the PHCs are not being converted to full blown bank branches. The economic activities in rural locations where many of these health centres are located do not make a business case for full branches. However, sufficient banking presence for cash and other financial transactions will compel the banks to make the necessary investments in the environment of the health centres, even as they have to maintain their brand image. The banks will deploy their expertise in rural and agent banking, in not only improving health insurance coverage, but also supporting primary healthcare. PHCs can become payment locations for health insurance subscriptions and agent banking, as most of the big banks have insurance arms which can also play the role of Health Management Organisations (HMOs).
What is also envisaged is that with a solvent health financing sector in place, financial institutions can be encouraged to invest in the education and training of medical professionals and health economists, who are required for Nigeria’s growing population. They will as well support vaccine production and manufacturing of medical equipment.
Quite a significant portion of Nigeria’s health professionals in the diaspora are desirous of contributing to Nigeria, as exemplified by the number of medical missions they conduct. The involvement of these financial institutions can provide them with more confidence and structure to optimize their interventions.
Is there bound to be push back? Most likely, especially from the unions. What is therefore required is an engagement process that highlights the benefits of this proposition. The current situation where 80 percent of PHC facilities are not functional, and health insurance coverage remains at 4 percent with large scale migration of medical professionals cannot be an option. Private healthcare facilities already account for between 60 – 70 per cent of health services in Nigeria, and the current poor public health situation cannot be allowed to suffice, especially with shrinking government revenue.
Beyond the possible resistance from organised labour, this proposition will require a revised approach to healthcare regulation in Nigeria. The involvement of financial institutions will entail the participation of the CBN in the sector, and then a new policy framework for collaboration and regulation will have to be developed. CBN regulation has led to improved performance of many banks, which has seen them go international and create jobs outside of Nigeria, which is a positive sign. While the reverse is the case with the healthcare industry, the financial industry especially tier 1 banks should be encouraged and partnered with to deploy relevant skills that will not only stop outbound migration of medical professionals, but also attract medical talent and patients into Nigeria. The University College Hospital, Ibadan used to have patients from the Saudi Royal family in the 1950s – 60s, which is no more the case due to declined performance in the sector.
There is no perfect Public-Private-Partnership approach. ‘Near perfection’ can however be achieved if these private organisations increasingly work dedicatedly with the government, as part of their social responsibility towards resolving many of the challenges in the Nigerian healthcare system. Dedication is vital, due to the challenges that may arise in interactions with government.
Waiting for the desired foreign investment has not always yielded the desired results. Heavy reliance on donor funds for critical healthcare is a national security issue, given how rich countries were scrambling for Personal Protective Equipment and other supplies at the outbreak of Covid-19. This also brings into perspective, the heavy reliance of the Nigerian government on the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) and Global Fund, for most of the funding for HIV/AIDS, tuberculosis, malaria and the Resilient Systems Strengthening for Health (RSSH) in Nigeria. The Global Fund has committed the sum of USD$2.586 billion since 2002 to operations in Nigeria, with $2.436 billion or 94 percent accessed so far. Funding of these critical healthcare issues, forms part of the financing strategy that this collaboration aims to address.
To summarise, COVID-19 provides an opportunity for the mainstreaming of CSR by major financial institutions, towards health reforms. These reforms will be characterized by more efficient and increased health insurance coverage, a revamping of PHCs, more strategic management of medical professional and attainment of the National Financial Inclusion Strategy. The Ebola outbreak in 2014 with its crippling economic effects means that public health crises do arise, reiterating the need for a sustainable approach. And to mention that though companies such as Dangote and BUA contributed to COVID-19 response, industries such as cement may not fit, as PHCs are not ideal location for cement trade. Their contributions can however be structured through their banking partners.
Nigeria’s experience with reforms that has involved the private sector constructively has been beneficial. Examples include telecoms, where telephones have grown from 400,000 fixed phone lines and less than 200,000 regular internet users in 1999, to 190million phone users and 122million internet users in 2019, with the sectors’ contribution to GDP has rising from 0.67 percent in 2001 to 11.48 percent in 2019. Same can be achieved if banks are involved in increasing health insurance subscription and coverage. This is without prejudice to HMOs.
As the time to act is now, the federal government through the Federal Ministry of Health should begin consultations with the CBN and big banks, to ensure that PHCs and other related infrastructure are put to better use. This will make the social responsibility of leading financial institutions more constructive, in delivering more sustainable results and engagements. The private sector will also see, not just the financial benefits, but also the existential benefits, as COVID-19 has demonstrated that without a good healthcare system, there is little or no profit to be made. A better situation for sustainable collaboration and health reforms may not be found.
Uwanaka, a policy analyst, writes through firstname.lastname@example.org