Why health insurance is not working well in Nigeria, by HCPAN – Guardian

• Blames rising cost of health and services, low reimbursement by HMOs in private health insurance
• Says health care providers bear almost 100% risks across board
• Says 76.6% of total health finance costs still remain out of pocket payment

The Health Care Providers Association Of Nigeria (HCPAN) has provided reasons why the National Health Insurance Scheme (NHIS) is not functioning optimally in the country.

According to the association, since the beginning of Private Health Insurance, the private Health Care Provider Facilities have remained the greatest and heaviest cross bearers across the country. HCPAN stated that Health Care financing uses out of pocket means of payment, which has become a serious injury to the average Nigerian family. The body also mentioned that about 76.6percent of Total Health Care financing still remains out of pocket payments in Nigeria.

The association also stated that actuary valuation and determinations seem faulty and unacceptable as appreciate pricing tools for health care services going by the way it is being bathed in our health system. It is therefore not a tool of voluntary and trusted subscription by Nigeria Health Care Providers in the majority, and more especially the private health sector.

The association however, stated that premium were in this way arbitrarily determined, while some Health Maintenance Organisations (HMOs) now undercut their peers in a desperate bid to get some accounts to work with.

“Some HMOs that are becoming insolvent are giving out their outfits to bidders and fresh undertakers (Buyers) who were not thoroughly in the true picture of correct status of assets and liabilities of what they come to acquire. The consequences are to the extent that what the new management team has come to inherit cannot really stand the test of time economically to break even. As they service the liabilities, what is left does not appear reasonable on a monthly basis to meet the settlement and reimbursement of the services rendered by Providers.” They said.

HCPAN also stated that after a lot of protest meetings, press releases and others for tariffs adjustment to be structured and reviewed. Its leadership set up a national committee of about 36 eminent and experienced practitioners across the country. “Of which they met for about eight months and came up with carefully reviewed tariffs that, if adopted, can just keep the provider facilities practices barely survive in view of the balancing factors and market forces with demand and supply responses. However, the COVID-19 saga has made it more imperative that even preparation to see and examine the patient will have drained capitation or it will make the issue of tariffs reimbursement grossly affected as inadequate.

“The agreed tariffs as released by the end of year 2020 were the minimum as no one is allowed to charge less than this. However a top up agreement by individuals and groups can be negotiated as the environment of practice may dictate,” the association said.

The association also stated that on December 15th 2020, HCPAN reviewed tariffs were released. “But for fairness, and to give the HMOs a further grace to renegotiate with their corporate clients in private health insurance relationship, HCPAN waited for one extra year till December 7th 2021 yearly General Meeting, to give effect to the total implementation of the reviewed Tariffs.

The association revealed that a clarion call was recently made as open letter to the Minister of Health that it was important to do immediate review on the astronomical rise in the cost of health goods.

The association also noted that following the inflationary trends in Nigeria, no one has thought it normal or fair to review the reimbursement mechanism and valuation for the private health sector, where the practitioners like the Guild of Medical Directors; Guild of Medical Laboratory Scientist Directors, the Community Pharmacists, Nurses (especially the Private Practitioners), among others should be thought of as deserving review of their service reimbursement.

The Association however, said that to retain a health worker to stay for an average of four months free of attrition, the employer would need to pay three to five folds of what their wages and salaries used to be.

HCPAN however, stated that with the various groups and members, especially those who have business to do with private health insurance in Nigeria to hereby resolve as follows:

It stated that all existing tariffs and contracts of private health insurance business with our association and members nationwide are due to expire January 31th 2022. They are therefore necessary for immediate adjustment effective February 1 2022.

It also stated that the tariffs released by HCPAN recently are the minimum acceptable to HCPAN across the country. Stating that a need for periodic review of the tariffs may be with or without further notification as the current trends of increased costs of goods and services of health care in the country has not given room for long and predictable market forces.

The association also mentioned that the HMOs across the country should see the intention and purposes of HCPAN as a product of fairness in good faith to keep the health insurance initiatives in Nigeria afloat.

It also stated that the HMOs should call for an adjustment of the hitherto existing contract documents as they relate to tariffs and adjust same using the HCPAN tariffs just released as benchmark.

In their statement, HCPAN said, “where any groups or valuation are not captured in the tariffs, the HMOs are advised to go into discussions and dialogues immediately with that group to meet the expectation of such groups as the issues involved may be so broad and price changes may be equally unpredictable.”

It also stated that where the HMOs feel the tariffs are not translating into premiums, HCPAN feel the HMOs have had enough elasticity of timing, in demand and supply forces, to have had reasonable dialogues and negotiations and renegotiations with such corporate organisations who are their immediate clients.

They also addressed the issue of time value of money, they said, “our various facilities are threatened by serious attrition and fortification of qualified professionals if such workers and employees are being continuously poorly paid, more so with the trending devaluation of the naira. The time value of money is now key.

They also stated that members across the country, who may be unduly maltreated or victimized e.g. undercutting of service tariffs by colleagues or unjust demobilization of their enrollees should report such groups or members for infamous conduct via bodies like GMD, GMLSD, PSN, NMA, ANPMP, MDCN, Association of Private Nurse and Midwives Practitioners, Radiographers Board, NDA, among others.

The association also frowned at the debts being owed providers in excess of 30 days. “We have records of those being owed for the range of 6 to 9 months. Some are being owed for as long as 12 calendar months. Such HMOs will not only pay what they owe but will be equally expected to pay the cumulative interest on such debts.” They said.

HCPAN however addresses the issue of late submission of bills by any of her members in excess of agreed terms in the contract documents. Stating that such may attract sanction.