DECENTRALIZATION OF HEALTH INSURANCE

Background

Globally, protection of the population against the financial risk of health problems is one of the fundamental objectives of the health system and health insurance has been recognized as the most effective mechanism for achieving this. It is a social security system that guarantees the provision of needed health services to persons on the payment of token contributions at regular intervals.

Health insurance can be defined as coverage that provides for the payments of benefits as a result of sickness or injury. It involves spreading the risk over numerous persons. It can cover the whole or a part of the risk of a person incurring medical expenses.

The main purpose of health insurance is to receive the best medical care without any strain on finances. Health insurance plans offer financial protection against high medical costs.

Over the years, there have been considerable efforts aimed at strengthening the health system to ensure delivery of effective and efficient services at all levels and achieve better health outcomes. One of such effort is the establishment of the National Health Insurance Scheme as a corporate body under Act 35 of 1999 by the Federal Government of Nigeria with the mandate to ensure Nigerians have easy access to healthcare, ensure Universal Health Coverage and to regulate and manage all stakeholders of the scheme.

The Scheme had sought to establish a realistic health financing system that has the capacity of meeting the health system goals of improved health status of Nigerians, financial protection of citizens against cost of illness, fair financing of health services, and responsiveness of health care delivery to the needs, demand and expectations of the citizens.

New Efforts

Nigeria operates a Federal System of Government with three administrative levels: The Federal, State and Local Government Areas/Councils (LGAs). The country’s health system is three-tiered and designed around the administrative levels comprising of primary, secondary and tertiary health care levels. The governments at the different administrative levels have responsibility for providing primary, secondary and tertiary health services respectively.

Despite considerable efforts over the years, the health system is not achieving its objectives. National health outcomes remain poor with low population coverage with health insurance and high Out of Pocket Expenses (OPE). However, with the wave of global momentum on UHC, the country is making considerable efforts towards improving financial protection of citizens against cost of illness, fair financing of health services, and responsiveness of the health care delivery system to the needs, demands and expectations of the citizens.

Reforming the health system with UHC through decentralization of the National Health Insurance Scheme (NHIS) is one of the current efforts.

There has also been widespread movement among the states towards establishing State Social Health Insurance Schemes (SSHIS) to pool risk and fund service delivery. Against this backdrop, the NHIS in collaboration with the relevant stakeholders is developing a coherent and coordinated strategy to support states with the technical design and implementation of SSHIS mechanisms. It also involves identifying and monitoring new and existing streams of demand-side financing, and ensuring broad alignment and consistency in the expansion of prepaid-pooled health financing coverage in Nigeria. 

This represents a policy shift to decentralize the coverage of demand-side (DSF) or insurance financing for basic health care services to the state level. Likewise, the establishment of SSHIS Agency is also a requirement for states to access the Basic Health Care Provision Fund, as outlined in the NHA 2014.

The Nigeria Constitution positioned health on the concurrent legislative list, thus allowing the states and LGAs to legislate for health. The implication is that, by this provision, which is akin to constitutional autonomy, the States and the LGAs are allowed different, independent and complementary processes, roles and responsibilities in the health system.  Similarly, the NHP and the NH Act provided for a three-tied health system and assigned the responsibilities for secondary and primary health care to the States and the LGAs respectively.

These provisions are well intended to advance the decentralization of the health system. However, it could constitute a considerable constraint in the governance of the health system if not well managed. In the face of the evolution of the SSHISs, NHIS will exercise very significant stewardship role in the SSHIS and will be required to evolve an effective mechanism and strategies that will enable it to play effective stewardship role of providing coherent and coordinated strategic support to the states.

The SSHIS Framework 

The SSHIS framework describes a system in which each state and FCT will have a single pool of funds.  In each state, resource mobilization will be through multiple sources and means; and the pool will contain funds from formal and informal sectors. 

Funding for coverage of the poor and vulnerable will be through equity contributions of not less than one percent of the consolidated revenue of the state. Funds generated are to be pooled together to increase cross subsidy and reduce premium costs. These funds will be used to purchase services from healthcare providers on behalf of the citizens/residents of the state.

NHIS plans to facilitate a mechanism for integration of state pools using ICT to reduce the effects of fragmentation. In addition to the integration role, it will also function as a regulator and promoter of the whole process.

Currently, thirty-five (35) states including FCT have enacted the law on State Social Health Insurance (SSHIS) Bill. Only Rivers and Taraba States are outstanding in this respect. However, available report indicates that enrollees are accessing care under SSHIS in only ten (10) states (27%). The states are Anambra, Bayelsa, Delta, FCT, Kano, Lagos, Ogun, Ondo, Osun and Oyo states ⁽⁴¹⁾

The Milestones

Milestones or indicators required for implementation of SHIS include:

1. Draft of the SSHIS Bill
2. Passage of SSHIS Bill into law
3. Appointment or Deployment of staff to SSHIA
4. Appointment of a Board
5. Development of Operational Guidelines
6. Development of benefit package
7. Release of take-off grant
8. Release of equity fund
9. Payment of premium by civil servants
10. Commencement of enrolment
11. Access to health care services under SSHIS

Considerable progress is being made across the 36 states and FCT towards the ultimate goal of improving access to health care services under SSHIS.

The ultimate goal of the whole process is improved access to affordable, quality and cost-effective health care services. However, quite often, in monitoring KPIs, too much emphasis is placed on the processes at the expense of service delivery outcomes and impact.

Under SSHIS, the KPIs would need to address this concern.

Health Insurance Under One Roof (HIUOR)

In other to strengthen coordination and regulation of social health insurance, NHIS, under the new leadership, has introduced Health Insurance Under One Roof (HIUOR) for the implementation of a decentralized health insurance system in Nigeria.

The HIUOR Conceptual Framework consists of eleven (11) strategic domains identified as follows:

1. National Health Insurance Scheme- Coordination and Regulation (Monitoring, Supervision and Evaluation) (roof)
2. State Social Health Insurance Scheme- Regulation (Monitoring, Supervision and Evaluation and Implementation (lintel)
3. Political Economy (Pillar)
4. Legal and Institutional Framework (Pillar)
5. Information, Communication and Technology (ICT) including IEC (Pillar)
6. Innovative Financing and Sustainable Investment (Pillar)
7. Strategic Stakeholders’ Engagement and Partnerships (Local and International) (Pillar)
8. Private Insurance and HMOs/TPAs (1st layer of the Floor)
9. Health Care Providers (2nd layer of the Floor)
10. Benefit Package (3rd layer of the Floor)
11. Enrolees/Beneficiaries (4th layer of the Floor)

Health Insurance Under One Roof Conceptual Framework

As the chief steward of health insurance in Nigeria, the basic areas of NHIS stewardship should include the following:

1. Defining the vision, mission, goal, strategies and directions
2. Exerting influence through oversight, regulation and advocacy
3. Creating a robust HMIS/ICT Framework – that ensure linkage with HMIS, State enrolment data, and efficient management of pooled resources.
4. Creating a robust Monitoring and Evaluation framework - collecting and using information.