Health Insurance in Nigeria Infrastructure Project in Nigeria

AUGUST 2016

ABOUT THE AUTHORS

OLUMIDE OKUNOLA, What’s in a Name? a Senior Health Specialist, manages the Nigeria program of A Lot—When It’s “Community-Based” the Health in Africa (HiA) initiative. He previously managed a large health-care Health Insurance in Nigeria infrastructure project in Nigeria. As global policymakers have refocused efforts to promote universal health KHAMA ROGO, coverage (UHC), prepayment for health services has emerged as a key to Lead Health Specialist with the World Bank Group, is the achieving sustainable and effective health systems. Community-based program manager of the HiA initiative, leading its work in health insurance schemes (CBHIS) have addressed this need for about 20 nine African countries. years, but they fall short of the goal. Meanwhile, the Nigeria National

OLAMIDE OKULAJA, Council on Health (NCH) recently approved implementation of State- a consultant with the Nigeria program of the HiA initiative, Supported Health Insurance Schemes (SSHIS). These plans often include a has extensive experience working with several private “community” component, which has led to confusion of SSHIS with CBHIS. hospitals in information and communication technology This SmartLesson shares lessons from the implementation of critical reforms systems, financing, quality, human resource management, in Nigeria’s health systems and addresses the need to clarify the use of the and business development. term CBHIS in Nigeria.

APPROVING MANAGER lenges with initiation, sustainability, Michele Gragnolati, Practice BACKGROUND Manager and Global Lead for and scale-up; they usually are unable Population and Development, Since the 1990s, CBHIS have been imple- to reach high levels of population cov- World Bank Health, Nutrition, mented in several African countries, in- erage; and with small and fragmented and Population Global Practice. cluding Burkina Faso, Ghana, Rwanda, risk pools, they most often require sub- 1 Senegal, and Tanzania, and some peo- sidies for poor and vulnerable segments ple see them as an “ideal” risk-pooling of the population. mechanism for minimizing catastrophic payments in low-resource settings, and As Nigeria looks toward achieving UHC ensuring responsiveness to local health through a strategy that recognizes a 2 needs. However, despite some ma- role for the states, with support from a jor accomplishments in countries with central equity fund, it is imperative that strong national-government steward- the terms CBHIS and SSHIS are clearly ship, most CBHIS have been limited in defined in the Nigerian context—with scope and success: they face major chal- lessons for other countries that face the same set of dilemmas due to confusion 1 Odeyemi, “Community-based health insurance programmes and the national health insurance scheme related to terminology. of Nigeria: Challenges to uptake and integration,” International Journal for Equity in Health 13, no. 20 Below are lessons from the implemen- (February 21, 2014). http://www.equityhealthj.com/ tation of critical reforms supported by content/13/1/20. the World Bank Group’s Health in Africa 2 H. P. P. Donfouet and P-A. Mahieu, “Community- Initiative (HiA) at the Nigeria National based health insurance and social capital: A review,” Health Economics Review 2, no. 5 (2012). http://www. Health Insurance scheme and close in- healtheconomicsreview.com/content/2/1/5; and H. volvement in the design and implemen- Wang and N. Pielemeier, “Community-based health tation of state schemes in Ogun, Kwara, insurance: An evolutionary approach to achieving universal coverage in low-income countries,” Journal Lagos, and Delta states. The program of Life Sciences 6 (March 30, 2012): 320–29. also assisted with closing the Bank-

SMARTLESSONS — AUGUST 2016 1 supported Nigeria Pre-Paid Health Scheme pilot project with CAPDAN3 Box 1: CBHIS or SSHIS? in Lagos State. CBHIS have traditionally focused on rural and informal communities in the The extensive experience of the Ni- global South, empowering members to determine their benefits and partici- geria HiA in critical policy reforms pate in scheme management. This process is seen as revolutionary in reaching geared toward Nigeria’s UHC aspira- out to large swathes of underserved lower-income groups previously excluded from formal social security mechanisms. While CBHIS vary in design and orga- tions, and implementation of these nizational practice, they share five core characteristics focused on community state schemes provides insight for empowerment:a distinguishing clear differences between CBHIS, as described by the lit- • Community-based social dynamics and risk pooling, targeting individuals erature, and state-sponsored health who share common characteristics (geography, occupation, and so on); insurance schemes as increasingly • Solidarity, where inclusion is independent of individual health risks; seen in Nigeria. Establishment of • Community participation in decision making and management; the first wave of SSHIS in Nigeria has • Nonprofit character; and • Voluntary affiliation. substantial community involvement, although they do not qualify as tra- The CBHIS concept owes its success primarily to the principles of solidarity and ditional CBHIS. The term CBHIS is a trust, aiming to optimize social capital within the community to achieve max- misnomer as used in several schemes imum population coverage.b But CBHIS, as defined, mobilize insufficient re- in Nigeria. (See Box 1.) sources, lack the technical capacity to go to scale, and exclude the poorest and those most in need.c Despite substantial government in- SSHIS, on the other hand, are initiated and supported by state governments. volvement, communities also play a They are usually pro-poor risk pools and are run either as an agency of govern- major role in the running of SSHIS. ment or as an independent government-funded agency. SSHIS provide re- It is this feature that has stubbornly sources to ensure that the poor and vulnerable are cared for, provide mecha- led to the continued use of the word nisms to ensure sustainability and viability, and are backed by significant “community” in referring to them. technical capabilities. They also ensure the platform for implementation of the (See Table 1.) critical partnerships with the national government, as seen in the support of premiums for the poor by the NHIS through the implementation of the Basic Health Care Provision Fund. LESSONS LEARNED The state has significant institutional and governance responsibilities, including defining benefit packages, empaneling providers, bearing financial risk, Lesson 1: Community partici- and supporting the payment of premiums for poor and vulnerable people. In pation is required for imple- Nigeria, the most singular unique characteristic of SSHIS is the enabling legis- mentation of a successful lation, which clearly provides the legal instrument for setting up such schemes. state-sponsored health insurance scheme to promote social a. Wang and Pielemeier. b. Donfouet and Mahieu (2012). capital and ownership. c. B. Ekman, “Community-based health insurance in low-income countries: A systematic review of the evidence,” Health Policy and Planning 19, no. 5 (2004): 249–70. http:// One of the key principles of func- heapol.oxfordjournals.org. tional CBHIS is the solidarity and trust between members, which mo- tivates members who are suscep- trustees (chairman, secretary, treasurer, and four tible to risk to put together their resources for com- others), elected from within each community for mon use. The following three examples illustrate a four-year term, manages the funds accrued in how states have implemented SSHIS with community the accounts of each (public) provider, together involvement: with the local government administration (LGA) board, and runs its own scheme. Each board em- • Ogun State. To ensure community participa- ploys a salaried scheme manager to administer tion and ownership in the Araya SSHI program day-to-day activities, including addressing the management, the state government put in place complaints of enrollees and being accessible to several democratically elected boards of trustees the public. Board members receive token incen- to represent and manage each scheme in each tives and are entrusted with identifying the vul- community. Each scheme consists of a maximum nerable groups (poor, aged, under-fives). Using of 4,000 enrollees. A seven-member board of tools provided by the state, the proposed groups 3 CAPDAN = Computer and Allied Product Dealers Association of are then verified to receive “free” health care. Nigeria. (See Figure 1.)

2 SMARTLESSONS — AUGUST 2016 Table 1: Comparative Analysis of CBHIS and SSHIS

S/N Component CBHIS SSHIS 1. Funding Pooled at the level of the Pooled at the level of the state, with community significant government contributions 2. Membership Voluntary Voluntary/Mandatory 3. Reliance on an ethnic mutual aid/solidarity yes no 4. Legislative process no yes 5. Pro-poor component yes/no yes 6. Nonprofit objective yes yes 7. Risk pooling yes yes 8. Linked to a provider yes (usually public with no yes choice of private) 9. Donor support yes yes 10. Technical capacities and link to other state no yes institutions, such as Quality programs 11. Link to national/central governments/major no yes sponsor, such as the NHIS 12. Community participation for enrollment, yes yes marketing, and governance Source: Adapted from Donfouet and Mahieu (2012).

Figure 1: Levels of Community Participation in the Ogun Araya Program

Source: Nigeria HiA.

SMARTLESSONS — AUGUST 2016 3 • Lagos State. The Ikosi-Isheri Mutual Health plan to facilitate enrollment. In recognition of its in- was initiated to target the informal population novative engagement with the community, the in the catchment areas. The management of the Kwara State program recently won an FT/IFC plan is by the board of trustees, which includes award for achievement in sustainable develop- representation from the Lagos State Ministry ment in the area of maternal and infant health of Health, LGA, a technical insurance specialist, with its implementing partners PharmAccess. and members of the community, predominantly from Olowora.4 (See Figure 2.) Inclusion of com- Lesson 2: Successful schemes benefit from munity members not only engenders loyalty to extensive learning and knowledge transfer. the scheme but also is a marketing strategy to brand the concept and create a strong emotional • Ogun State. The team benefited from a study 5 bond with the community. According to a 2011 tour to Kwara state, facilitated by HiA. The report, the pilot witnessed enrollment rates in Kwara State insurance scheme is supported excess of 10,000 enrollees—just three years after by the state government and managed by the its launch! Kwara SSHIS established by law, with technical oversight from PharmAccess Foundation and the • Kwara State. The state-supported scheme has Hygeia Community Health Care. an enrollment figure of over 139,000. Critical to the success of the Kwara scheme is the influ- The Ogun team’s key learnings from the Kwara ence of the traditional ruler in Shonga, where tour included the benefit of legislation in ensuring the pilot was launched. He is a retired public- sustainability, the need to wean off donor support health physician and a huge proponent of the early, the creation of an equity fund to support the scheme. The emir’s leadership position also pro- enrollment of poor and vulnerable people, the use vided leverage for the wide dissemination of the of private providers in service delivery, and the use Kwara State-supported CBHIS to other parts of of technical partners to put in place several of the the state. He became the face of the scheme and operational guidelines to facilitate quick takeoff. supported the efforts of the state in spreading A detailed comparative analysis of both programs it to surrounding communities, using his rela- shows great similarities. tionships with other traditional rulers, and was always at the forefront of any advocacy visits • Lagos State. The HiA collaborated with the NHIS to organize a study tour to Rwanda. The tour pro- 4 A. Onyemelukwe, B. Obonyo, et al., Improving Pathways to Health: vided a solid foundation for the passage of the Rapid Assessment of CBHIS Schemes in Lagos State (Lagos, 2011). Lagos State Health Management Bill and the sub- 5 Ibid. sequent development of its operational processes.

Figure 2: Overview of Lagos State Scheme Funding and Involvement of Boards of Trustees

Source: O. Akaoma, et al., Rapid Assessment of CBHI Schemes, Lagos State, PATHS2 (July 2011).

4 SMARTLESSONS — AUGUST 2016 • Delta State. Passage of the bill that institution- Despite being heavily funded, the project never ex- alized health insurance in the state was sup- ceeded 46 percent of its intended target population, ported by a learning process. Key stakeholders, and there was a gradual decrease in enrollment when including top government officials and a num- premiums were increased as subsidy payments de- ber of technical partners, attended an HiA/IFC- creased. Uptake also declined following an increase facilitated workshop on state-supported health in copayment to compensate for the gap created by insurance, where several states elaborated the reduction of project funding. The CAPDAN project illustrated the need for government budgetary on the different stages in attaining passage allocations to insurance schemes to ensure sustain- of their bills, with technical partners guiding ability; as soon as donor funds dried up, the scheme them. This workshop equipped the Delta State ceased to exist. Having a competent technical partner team members with the requisite knowledge to implement the scheme did not guarantee its sur- to implement their SSHIS. Since then, the state, vival, because the state government had no skin in with assistance from the HiA-IFC team, has es- the game! tablished not only its SSHIS but also the implementing agency directly under the office of the Institutionalization of schemes through passage of executive governor! a state law: Following approval from the National Council on Health on the implementation of SSHIS, Lesson 3: To enhance continuity and the NHIS extended technical support to interested ownership, it is essential for governments states by providing a legal-document template to assist in the drafting of their bills. Key factors include to create a policy environment conducive to the following: the support of any health-insurance scheme. • Mandatory nature of the scheme Use of line budgets: The CAPDAN pilot scheme sub- • Establishment of an equity fund sidized the insurance premium for low-income em- ployees (and families) of small businesses in CAPDAN • Commitment of government funds to the in Ikeja, Lagos. The project benefited from funds re- scheme ceived from GPOBA.6 This pilot represents another • Use of both private and public providers variant of community-based schemes, albeit without the significant government presence seen in Kwara. Relationship with other state agencies: Lagos State, (See Table 2.) in the implementation of its health-insurance scheme, understood the critical role that other state govern- 6 GPOBA = Global Partnership on Output-Based Aid of the World Bank ment parastatals can play. In a bid to prevent redun- Group. dancies in the state, the honorable commissioner for

Table 2: Comparison of Health Insurance Plans S/N Factor Kwara Ogun Lagos Delta CAPDAN 1. State Supported yes yes yes yes no 2. Donor Supported yes yes no no yes 3. Creation of line in annual yes yes yes yes no budget 4. CBHIS Act yes yes (In progress) yes yes no 5. Use of both private and public providers to deliver yes yes yes yes no services to public 6. Community involvement yes yes yes yes yes (Ownership) 7. Pro-poor component Targeted at the Creation of an Creation of an yes no poor (rural) equity fund. No equity fund without contributions financed by ≥1% involvement of required from of the State CRF to urban dwellers. indigents. cater to vulnerable Also with and indigent copayment groups Source: Nigeria HiA

SMARTLESSONS — AUGUST 2016 5 health (HCH) approached other ministries, sustainability, the Ogun State Ministry through executive council meetings, to of Health invited the 20 LGA chair- assist in the implementation of the La- men to a consultative meeting where gos State Health bill. The Health Facilities the scheme was discussed to improve Monitoring and Accreditation Agency was awareness of its policies. This not only assigned the role of accrediting facilities stimulated support from the 20 LGAs and ensuring quality services within the but also led to the signing of a commu- scheme, while the Lagos State Residential niqué in which they promised to con- Registration Agency was saddled with the tribute ₦1,000 for every enrollee that responsibility for ensuring the mandatory contributes to the scheme. These con- nature of the scheme and the registration tributions are to be set aside to pay the and enrollment of residents. premiums of indigents.

Lesson 4: State-supported schemes In Delta and Kwara states, the state benefit from high-level leadership: governors were directly involved at various stages of program design and Involvement is bottom-up; implementation—providing substantial commitment is top-down! input to legislation, flagging off the program at several communities, and Beyond extensive community participa- ensuring that government contribu- tion, SSHIS exhibit strong relationships tions are paid on time. Such high-level with national and subnational govern- commitment guarantees sustainability. ments. For instance, the National Health Insurance Scheme in Nigeria, as part of efforts to expand coverage, now rec- CONCLUSION ognizes the power of states to set up their SSHIS through a memo approved The NHIS has provided the required by the National Council on Health in leadership for setting up the state March 2015. By this action, the National schemes, providing a template for leg- Health Insurance Scheme in Nigeria, be- islation, and offering to build the re- sides serving as a regulator, also serves quired ICT infrastructure, which will as a sponsor for the poor and vulnerable go a long way toward offsetting the by supporting the states in subsidizing impact of fragmentation in the devel- the premiums of such populations. The opment of the several state schemes. newly established SSHIS will also play an Enforcement of these back-end activi- important role in the implementation of ties through substantial financial incen- the National Health Act—a scenario un- tives is a good omen. Adoption of com- likely with small CHIS-type schemes. munity structures in governing these schemes, as inherited from the original Commitment of the leadership of the state CBHIS designs, represents an essential was also important to the sustainability of innovation for marketing, enrollment, the program. Besides engaging with the identification of the poor, and some- legislature to pass the required legisla- times prevention of fraud. DISCLAIMER tion, the executive arm has a crucial and SmartLessons is an awards However, despite the significant state program to share lessons learned paramount role. For the Araya scheme, the in development-oriented state governor committed to a risk-pooling involvement mentioned above, the in- advisory services and investment mechanism with its attendant long-term tegration of the elements of community operations. The findings, participation into the state schemes has interpretations, and conclusions benefits, rather than implementing a “free expressed in this paper are those health” scheme. The wife of the state gov- led to the continued misuse of the term of the author(s) and do not ernor also became a champion in the drive CBHIS. The next time you read about necessarily reflect the views of CBHIS in Nigeria—or other developing IFC or its partner organizations, for increased use of services and market- the Executive Directors of The ing efforts. The Ogun State team’s study countries—be sure to find out what ex- World Bank or the governments tour to Kwara State included a joint team actly is being referred to. It might well they represent. IFC does not be SSHIS with extensive community par- assume any responsibility for the of State Ministry of Health officials led by completeness or accuracy of the the HCH and members of the Ogun House ticipation and involvement, as distinct information contained in this Committee on Health. from CBHIS, which in most cases are document. Please see the terms and conditions at www.ifc.org/ unsustainable, mostly nonprofit, and smartlessons or contact the To further engender participation from without the technical capacity expected program at [email protected]. the lower levels of government to ensure in insurance schemes.

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