Dr. Kelechi Ohiri is the new Director General of the National Health Insurance Authority (NHIA). In this exclusive interview with NKECHI ONYEDIKA-UGOEZE in Abuja, Ohiri spoke on his agenda for the authority, why health insurance coverage is still low, planned Basic Minimum Package and tariff increment, among other issues.
What is your agenda for the NHIA?
For the NHIA, our agenda is in line with the overall government agenda and that agenda is predicated on the fact that everyone should have access to good quality healthcare. This has been articulated to the president when he signed the health sector renewal investment initiative that the Coordinating Minister of health and social welfare has been driving. NHIA’s part of that is to ensure financial access to all and my mission is to reduce health poverty. One is that I want to make sure that the poor who can’t afford healthcare can afford it and pay and second thing is that those who can afford it but currently are just one catastrophic illness away from being plunged into poverty are protected and to achieve this, the target is to reduce out of pocket expenditure.
When you look at the way we pay for healthcare in Nigeria, 70 per cent of it is paid out of pocket because roughly 72 to 75 per cent is private and private is largely out of pocket and government and the public sector expenditure roughly account for 30 per cent. So, the problem is when you don’t have a pocket, how can you pay? That is the overriding problem and to combat this we have tried to articulate certain key pillars and objectives for the NHIA to drive now. The first is to expand coverage because insurance works through the principle of pooling risk. We all pool our risks together so when someone is sick other people can cross subsidise. It is like what we do with ‘Isusu’; at some point when one person has a need and because other people have keyed into it, it is easier for the person to afford that and so that is really important to highlight. If you look at how much it cost me and can it be afforded; it is not affordable; the average cost differs from the actuarial cost. Actuarial cost means you are factoring in the risk in determining the cost thereby expanding access. This has been enabled by the fact that the law has made it mandatory for everyone to get health insurance but of course the challenge now is: How do we collaborate with all the relevant institutions to enforce that mandate and make it work?
The second thing is to expand coverage, create more awareness. As we know, we are not a society that embraces insurance for healthcare and secondly we have a relationship with healthcare where most people only encounter the healthcare when they are sick and so anything that reminds you of illness you want to avoid it and most people if you are healthy you want to stay away from the health system as much as possible. When you are sick you want to get well as quickly as possible. An awareness that of one paying for health insurance is not just about you saying you are going to be sick or predicting ill health to yourself but it is a way of ensuring you have financial protection anytime you want to encounter the system and encountering the system is not just about sickness, it is also about promoting your health.
The third part of expanding coverage is about building that trust and confidence in the system. We want to do this by making sure that when people have complaints, when people feel they are not getting the service they want, that we enforce and respond to these complaints. For instance, last year, we addressed over 92 per cent of complaints we received and this is because we play a big role in mediation between multiple stakeholders, the facilities that provide healthcare, the HMOs and sometimes the NHIA as well. We find out as well because insurance sometimes can be complex because hospitals incur cost; some hospitals may be more efficient than others, so there is this variation in cost etc. So we find ourselves coming in to reconcile. But what I believe is that the trust is critical because when I am insured I need to have the confidence to know that if I go to a hospital, first you will attend to me and my illness or whatever it may be would be covered and secondly, I am not going to pay out of pocket for it. That is what builds trust and if that is broken, it is hard to convince anyone to insure and then it is harder to expand coverage for health insurance. So those three things – enforcing the mandate, creating awareness and building that trust – are the first thing.
The second thing we want to do is equity. It is not just enough for only those that can pay to be the ones that have insurance. It is also important to think of the poor and vulnerable. The government has done well through the National Health Act by creating the Basic Healthcare Provision Fund and more recently through the NHIA Act, the Vulnerable Group Fund. The intent is clear – to help the poor and vulnerable and vulnerability also includes other groups, sometimes the elderly, the internally displaced person, the physically challenged person and even prisoners.
Third is the quality of care. Trust is built when you go and get care that is of good quality. So this is where we are collaborating with primary national healthcare agencies. We accredit and they also accredit; so we are unifying our accreditation processes.
How are you dealing with the issue of current premium and inflationary trends?
There are two important things that we are looking at. A lot of complaints we have received is that premiums are low so the tariffs are low. We know that there has been an unprecedented inflation in medical cost, particularly drug cost. So, what we have done so that we don’t react arbitrarily is that we have commissioned two separate actuarial studies to know what are the true costs of the benefit packages we have and for the risk pool we have so that we can come up with a more realistic assessment. There is a lot of agitation but you can’t just make decisions without evidence and in insurance, particularly health insurance, actual cost helped us get there and in February we commissioned it. So, it is ongoing and it will take a while and we are hoping that by July we will have the result out and we would be able to sit with stakeholders to be able to align our revised tariff to cover people because it makes no sense to have sub-optimal coverage of care because you are going to keep cost low but at the same time it doesn’t mean the higher the cost, the better.
There are countries that spend the most on healthcare but don’t necessarily have the best outcome but using evidence is what we want to do and that is what we have started already by commissioning this cost to actually happen. So that is one big thing we are doing.
The second one we are looking at is to begin to define what the benefit package should be for the different population to define what is the mandatory minimum so people can add more if they want; different HMOs and states can add more but there should be a minimum. We can’t say I am covered for malaria but if I have gastritis I am not covered. You can’t say you are covering for one disease versus another. So, we are trying to say if you are covered by an insurance package, it should mean something and that means that I am covered for at least some of these things. At least what is the basic minimum benefit package which we call the mandatory minimum to standardise what people get. There are a lot of schemes going around saying we cover malaria, we cover just pregnancy and when the pregnant woman delivers and falls ill she isn’t covered again. So, we have to make sure our role as regulators will define what the standard is.
The fourth and last pillar we are looking at is making the insurance market work better in Nigeria. We have a mixed insurance market; we have private sector and public sector. Public sector is largely NHIA and the state health insurance schemes.
Let me speak on the public sector for a little bit. Now we are happy to announce that almost every state has enacted laws to set up insurance. The most recent state was Rivers State and we are in a good position to start. We recognise that not all states are on the same level. Some states are doing very well; they have sophisticated systems but a majority do not and so we are working with them to build capacity because as a regulator you also want them to do well, you want to promote, you want to support them and so we are working very closely with them.
On the private side we have HMOs and administrators. The interesting thing is that historically it actually preceded the establishment of NHIA or then NHIS so they have a lot of experience understanding insurance and client management. So, they have a strong role to play in driving things in the system. So, our prospective as NHIA is that we most work with them but in a way that creates more of a positive equilibrium where we are all targeting growth and expansion so we can cover more people leveraging the expertise, bringing innovation, bringing technology because that is the way we are going to reach more people and get more people covered. I envision a system where we have both public and private sector players driving that but in a way that is efficient.
The NHIA itself needs repositioning.
We used to be a scheme which means we were running a programme. Now in addition to running that programme for the public sector we are now a regulator and the Act mandates us to promote, regulate and integrate; which means that our skills and capabilities, our mindset and the way we operate have to change. So, we are doing a lot of work on strengthening financial management systems, strengthening human resources and the way we have organised ourselves. We are also looking at building the technology that is needed to ensure that we can actually do these things as a regulator. So those are the three things in terms of ‘how do we do that’. So, that is the path we have and hopefully we feel these things will help us in expanding coverage in reducing the financial burden of healthcare to most Nigerians.
You talked a lot about ‘out of pocket’ spending. One of the problems people still face is that most times, when they get to health facilities, they are told that the drugs are out of stock and they end up paying out-of-pocket. Are there mechanisms in place to check this?
That is a very important point and it speaks to that element of trust I mentioned; if you are insured, you should be insured. We get complaints and what you said is not untrue. One important thing is that hospitals need to have not just drugs but the right human resources as well so that you can see people when you go there. There is a lot of efforts being made on the supply side to make primary healthcare facilities in particular to get to a certain standard where they have the right components including a lot of efforts to recruit human resources on the supply side and that is why we can’t be successful alone from the demand side if the services are not available. The shelves are empty, the health workers are not there then it becomes no point that you are covered. If you go to the facility in some areas you have the choice of going to another but in some areas, like the remote areas in the country, there is the only facility. That is why we are working with them. What is the minimum requirement? We are aligning our minimum benefit package to the minimum service package with MPT. So that is one of the things we have to look at.
Secondly, the cost of medicine, in some places, even when they have the medicine they make people pay because they say that capitation being provided doesn’t cover that and there are two things to that. First is the pooling mechanism that I talked about in insurance. If we have 10,000 people covered by insurance, somebody incurs a cost of ten N10,000, I wouldn’t be worried because I can afford it because more people have paid via only 10 people no matter what you are paying. One person incurs a cost of N10,000; by the time the second and third person incurs, you are like ‘no I am losing money’. So, insurance has to work with a risk, which is what we also have to look at.
The more that number grows, the more you see that it becomes healthy, risk-free for the provider, particularly based on the capitation system. So, the third thing to that is that we have seen an unprecedented rise in the prices of drugs. Some medicines have gone up more than 450 per cent. It is unprecedented the way drug prices have gone up that is why I was in Lagos recently and part of the meeting in Lagos was how do we incentivised more local manufacturers because if you keep importing most of our drugs and Active Pharmaceutical Ingredients (APIs) we are susceptible to changes in foreign exchange that increases the prices of drugs and over the last couple of months we have seen those prices go up significantly. So, the government has something called the Presidential Committee on Healthcare Value Chain that is trying to work with pharmaceutical companies locally, to expand local production, reduce the volatility in price and bring it down. Therefore, we would have more stability in price. As I said, if you cost a drug today and pay, what happens tomorrow and the day after? Some will equalise through risking while some others will just look at the more macro issues we are facing and with all these things I am positive that we will get some stability in pricing.
The NHIA Act, which makes health insurance mandatory for all Nigerians and all legal residents, is already two years old. Where are we now? How far with the states? Are more people embracing health insurance?
The act is two years and it is definitely an important time to reflect and so starting this new job also gives me an opportunity to see how far we have gone. Are we where we should be now? Are we positioned to make it better? Has there been progress? Absolutely! As I told you, since the passage of the Act, every state in Nigeria has passed laws establishing their health insurance and they have started. Some took the basic healthcare provision fund, set up their schemes and started running. Many of them have begun to bring in their workers into it because we need a pool that has everybody and some have actually contributed equity funds and counterpart funds. So, we are on track to getting to a point where health insurance begins to work in every state. Trust me, I am more inpatient than everybody; I wish it could happen at a much quicker time and faster pace than it is but we need to understand that this is in spite of us being in a more difficult time financially as government and state. So, the right foundations are being set and we just have to make sure we encourage the states and support them to expand coverage; and also make sure that the ones the government has put its money to that we actually spend it well.
How many Nigerians are currently covered by health insurance?
As at the last estimate, because people drop off and people come in, it was about 16 million people and this in all states, federal, public, private but I don’t have the latest breakdown. But I believe in the nearest future I would be able to provide that because what we do is that we review this monthly to be sure that it is updated.
Is it not too low for a country of over 200 million? Why are people not embracing health insurance?
Yes it is low but the reasons are there are people that can’t afford it; there are people that can pay but choose not to for so many reasons. It was voluntary before it became mandatory. So, if it is voluntary why are you complaining that people are not doing it? They can exercise their right not to do it. In many countries, you can’t even go to school without having health insurance. We were doing it voluntarily for a long time but the Act has now made it mandatory.
The same way in taxing, everybody has to pay tax but does everybody pay tax? There is a whole issue around informality; we have a very large informal sector. If you are a government worker there is a deduction in your salary, a contribution for you to pay but if you are an okada rider how do you deal with that? Except we begin to work with other agencies to make it mandatory it will be hard to enforce the mandate. But I don’t believe in just enforcement alone; we should help people get to the point of awareness and that is why a lot of awareness is important.
What do you want to achieve within the next four years? What is your target?
My targets are to make sure more people are enrolled and a functioning health insurance industry, which means that whether I am there or the next person comes in we have a system that is functional both public and private that is fit for Nigeria. Every country has its system but we need the one that will work for us and we would try out best and build the necessary foundations for health insurance to thrive in Nigeria.