PEER TO PEER FUNDED HEALTHCARE MODEL: A SYSTEM THAT WORKS FOR EVERYONE
- How does medical insurance work
- Why universal health care
- The Nigerian healthcare ecosystem (HMO, NHIS etc.)
- Funding the Nigerian healthcare through peer contributions- The idea
- Peer to peer funded healthcare in Nigeria- The future
How does medical insurance work
Just like with any other insurance scheme, this is a system that enables someone to get access to medical treatments without bearing any or all the cost of it. Let’s say Mr. A gets insured by an insurance company and he then needs medical treatment. Mr. A goes to the hospital and get treatment and the bills are sent to the insurance company.
Mr. A doesn’t have to worry about making any out of pocket payment/ expenses towards his medical bills. This is pretty straightforward…Yeah? Only that it isn’t. Mr. A needs to pay a Premium either monthly or quarterly or yearly or as agreed with the insurance company.
Also, the insurance company could decide were Mr. A gets treatments from and there may be certain illnesses that are not covered by the scheme (these are called exclusions e.g. cancer treatments, organ transplant etc.). Under most medical insurance schemes, Mr. A would be required to pay some money towards the cost of treatment called deductibles.
For example, let’s say the insurance policy has a deductible clause of $2,000 and a co-insurance of 20%; what this means is that Mr. A would need to pay up to $2,000 out of pocket for the duration of the insurance cover (mostly a year) and then bear 20% cost of each treatments and the insurance company pays the rest.
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What this means is that Mr. A needs to be able to afford to pay a premium, the deductibles and co-insurance bills while under a medical cover. This is not cheap. The idea of not paying out of pocket when getting treatments under a private medical insurance is mostly a mirage. This discussion is not on private medical insurance but it is worth making an introduction of it as this is a broad composite of our discussion.
Why Universal Health care?
This is a form of medical insurance which tries to balance the pros and cons of private medical insurance. The most significant aspect of this scheme is that everyone in the region of the cover is insured and guaranteed healthcare services regardless of economic means.
Under most universal health care, all citizens or residents are covered and do not have to pay any deductibles or co-insurance and have access to an opportunity to enjoy a fair level of health. This is the broad idea or concept of universal healthcare.
However, being that healthcare services cost money, funds for universal health care must be generated and sustained. Universal health care varies from countries/ regions. It is state owned in some countries while in some countries, it is partly private but government regulated.
Where it is government owned, (almost) every citizen is covered. In regions where it is partly private, only those who purchase a plan are covered. It is argued that universal health care is by far better than (private) medical insurance in that more people are either covered or are able to afford a cover but it also has its cons including the reduction in flexibility of choice of services.
Universal Healthcare is mostly free at point of use in that if Mr. A were to be under a universal healthcare, he is not (in reality) required to pay anything while receiving treatment. However, Mr. A would be required to pay his tax or national insurance or pay for a policy.
What this means is that the funds for the universal health care is generated either through tax, a different social insurance contribution (national insurance in the UK) or by a paid policy (e.g. Obama care).
Like I said before, there are different models of universal health care each tailored to fit the uniqueness of the region but sharing the same concept of affordable healthcare for all. How money for this is generated and sustained is different in these regions. But let’s use the system in the UK as an example.
The National Health Services (NHS) is a national treasure of the UK which is an organized network of government/public funded hospitals and health institutions providing an almost free healthcare to all residents of the UK. In 2018/2019, The budget of NHS England was £114 billion. This fund is largely from taxation and a small part from National insurance (NI) contributions.
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The UK spends about 24% of her budget on the healthcare/ NHS. Apart from paying tax in the UK, every employer and employee pays this monthly contribution which is used to fund social/welfare benefit schemes, pensions, unemployment benefit schemes, NHS, etc. People relocating into the UK either for work or school also have to pay an immigration health surcharge (IHS) which is about £400 per year. This money also goes into funding the NHS. IHS has generated around £900 million since it was introduced in 2015.
The Nigerian healthcare ecosystem
The healthcare ecosystem in Nigeria is quite chaotic. But for sure, Nigeria does not have a functional universal healthcare cover even though the national health act of 2014 appears to provide for one. The federal government of Nigeria budget allocation for healthcare is 4.16% for 2020 leading to underfunded health institution already diseased with mismanagement of funds and looting.
Healthcare in Nigeria is a combination of government and private sectors. The federal government through the ministry of health runs federal medical centres, federal university teaching hospitals and other tertiary health organizations while the state government through various state hospital management boards run state hospitals including general hospitals etc. Local governments run dispensaries (primary healthcare) including local maternities etc. regulated by the federal government under the Primary Healthcare Development Agency (NPHCDA).
The private sector has hospital littered everywhere with a majority of single ownership badly equipped hospitals and a few organized well equipped and managed hospital especially in major cities like Lagos, Abuja, Enugu etc.
The National Health Insurance Scheme (NHIS) was created in 1999 by a legislative act and amended in 2004. It aims to provide medical cover to Nigeria. However, since it’s inception, NHIS only covers 5% of Nigerians. Those covered are mostly government workers, youth corps members etc. NHIS is widely accepted in government hospitals with private hospital being reluctant in accepting persons under NHIS covers. The reason being the inability to fulfil payment obligations and bottlenecked bureaucratic procedures.
Health Maintenance Organisations (HMOs) are quite popular in Nigeria providing private medical insurance to a vast majority of employed Nigerians especially those in the private sector. HMOs policies are characterized by a monthly contribution from both the employer and the employee, restriction to specific service providers and exclusions of certain illnesses.
While this is a popular healthcare cover in Nigeria, the vast majority of unemployed Nigerians are covered under this scheme. Recently, HMOs have extended their services to SME business owners, sole proprietorship business owners, members of associations etc.
However, their monthly premiums are not always easily affordable. The types and extent of services covered also depend on the premium paid with most people on basic covers excluded from even very essential services like x-rays, CT scans etc.
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While data is not available as to the number of Nigerians under an insurance cover, but a common sense projection/ estimate will show 70-80% Nigerians are either not covered or poorly covered. What this means is that a vast majority of Nigerians will need to pay out of pocket for every healthcare service they receive.
Funding the Nigerian healthcare through peer contributions- The idea
The biggest problem facing the healthcare sector in Nigeria is corruption and mismanagement of funds and not necessarily the absence of funds. N44.5 Billion was earmarked for Basic Health Care Provision Fund (BHCPF) in 2019. N13.775 Billion of that money was allegedly disbursed to states through the NHIS gateway.
That amount of money is being pumped into the healthcare but the effect is like pouring water into a basket. It leaks away without trace. As far as I am concerned, the government sector of the healthcare system in Nigeria is irredeemably corrupt. No amount of money put into it will yield any positive results. My interest is in the organized private healthcare sector.
The private hospitals account are most widely used in Nigeria. If you are lucky to have a well-managed private hospital, chances are that it will be fairly well equipped and accountable for both patient safety and utilization of funds. Sadly most of these hospitals are for profit with investors and banks lurking around for take homes thereby leading to high charges and costs.
Hospitals like Reddington and St Nicholas Hospitals will give you good services but the bills are expensive. It is understandable that investors and business owners as well banks will expect return on their investments/ money and it is the patients that will pay.
My idea is simply to attract Nigerians into a scheme that generates money through their contributions and channeling that money into building and maintaining health facilities.
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This scheme I have termed People for People. For example, if 1m Nigerians contribute N1,000 each every month, we will have N1billion each month and in a year, N12billion. N12Billion if managed properly can sustain 2 general hospitals in each state fully equipped with MRI and CT scanner and functioning theatre as well as pay doctors and nurses and other healthcare professionals.
Peer to peer funded healthcare in Nigeria- The future
Like I said before, funding isn’t necessarily the biggest challenge facing healthcare in Nigeria. No matter the amount of money you raise and pump into a system that lacks proper management and accountability, the money will only serve the purpose of enriching those looting the funds. It becomes very paramount that more emphasis be laid on organizational structure, management, accountability and due process.
My idea of peer to peer funded healthcare system in Nigeria does not seek to immediately replace the systems in place at the moment. This scheme People for People will be a group of Nigerians coming together to volunteer their time, energy and resources towards creating a system that develops and sustains access to good healthcare for all people within their society through collective efforts.
People for People will be a registered public trust and fund the trust through voluntary cash donations as well as other resources (both intellectual and material) as they deem fit.
This system will be based in states and each state that adopts it will be compartmentalized into health districts. Each health district will have Peoples Health Trusts Foundations. Each Health Trust Foundation will own and managed hospitals that are not for profit and are neither government or private owned. This is basically the people funding, building, running and managing their own hospitals and health facilities.
Let me explain this further for easier understanding.
A state is divided into 4 health districts. Assuming there are 4 million people sign up to the People for People and make a contribution of N1,000 monthly. The generated revenue of N4 Billion monthly is distributed among the 4 districts meaning that each district gets an estimated N1 billion monthly funding.
The district will have 4 Peoples Health Trust Foundations registered as a public trusts under the People for People and will receive direct funding to build, manage and maintain hospitals and primary care centres (PCC).
The primary healthcare centres will be allocated to groups of 10,000 residents across the state (both rural and urban). Residents will be registered at these PCC who will coordinate first point of call doctor consultations and manage referrals to people trust hospitals.
Management plan:
Board Chairman – Peoples for people (Voluntary unpaid role): The Peoples for People will be managed by a 7 member board of directors headed by a Chairman. Membership to this board is by nomination from the people for a period of 2 years. This role is unpaid and voluntary. The board will in consultation of the people develop the operations to guide all aspects of the healthcare management under the people for people.
District Health Director – Health Districts (Voluntary unpaid role): The Chairman will appoint directors to head each health district from the board of directors. Each District Health Director will be directly in-charge of coordinating the Health districts and reporting to the board of people for people directly.
Trust Board Director- People Trust foundations (unpaid role): Each trust foundation will consist of a local 7 member board of directors functioning independently and headed by a director. The trust shall oversee the management of the hospitals and primary care centres appointing hospital directors and centre managers but only involved in audits and compliance with people for people operations.
Hospital Directors – Trust Hospitals (Paid role): The Hospital Director will be appointed by the People trust foundations and rectified by a board of directors of people for people. The hospital director will be top level experienced Health management professionals and will directly manage the hospitals and make internal appointments as appropriate.
Centre managers – Primary Care Centre (Paid): Centre managers will be appointed by the Peoples Trust Directors and will manage and run the PCCs. PCCs are independent and receive funding directly from the People Trust Foundations.
Written by:
Chiemeka Iroegbu (Specialist Radiographer/Healthcare Technology Consultant)