Is the Gamechanger to The Nigeria Healthcare Sector finally here?

Yesterday, the Lagos State Government launched a mandatory health insurance scheme; this is a welcome development because it will create a bullwhip effect in the industry and significantly boost the healthcare contribution to Lagos state GDP. Many industry watchers have been waiting for the take-off of the scheme for almost 15years when the administration of Asiwaju Bola Tinubu first mooted the idea. Last week, I was discussing with my executive students in Operation Management class at #EDC of #LagosBusinessSchool, there, I mentioned various disruptive innovation in healthcare and that a major disruption will happen in the Nigerian healthcare sector. I argued and emphasized the need for strong collaborations among Nigerian healthcare entrepreneurs if they do not want to get displaced by the foreign players who will massively invest in the sector once they see the green light (now the green light is here). The reason for the disruption is not far-fetched given the array of opportunities presented by the current challenges in the industry. Some of the challenging opportunities are: large population, only 6% of our current population have health insurance, healthcare currently contribute less than 1% to our national GDP, though Africa is responsible for 25% of the global health burden but we only account for 1% of global healthcare spending and a paltry 3% of the global health workers, Africa’s population is projected to reach 2.5billion by 2050, and finally Nigeria’s population will be 400million by that time. If nothing is done before then, the country will almost be unlivable giving the current high incidence of unemployment, poverty, illiteracy and poor healthcare indices.

 In my article of October 30, 2018, The Future of Healthcare in Africa: The Need For Urgent and Radical Innovation. I articulated some of the measures that the government must take, chief among which is to redefine their role and limit it to that of the regulator while setting aside current budgetary allocation to fund health insurance for the extreme poor. I am glad to note that Lagos will set aside 1% of the consolidated income to subsidise health insurance for the extremely poor. There are other problems that the successful take-off of the Lagos Insurance scheme must address, to create accessibility, there is need to address the issue of shortage of healthcare workers, part of the 1% set aside for the insurance can be applied to give scholarship and educational loan to healthcare students and workers. Initially, we expect that there will be a massive migration of healthcare workers from other states to Lagos state since there will be the availability of healthcare jobs with a better condition of service and work environment, this will cause a massive distortion to the already troubled shortages of healthcare workers in those states.

 The current NHIS has failed, given that it is compounded with an array of problems: incompetence, nepotism, corruption and weak legal framework, the Lagos scheme should be positioned to address all the endemic problem associated with the NHIS. The Lagos scheme should be the gamechanger however for that to happen, some measures must be taken

1.    Strengthen oversight function: the government must improve on the oversight to ensure that value is delivered to the people. Lagos state government must show a keen interest in the healthcare supply chain management to ensure that corruption and sharp practices are reduced to the barest minimum. For instance, there is a prevalence of counterfeit drugs and healthcare supplies in Nigeria. World Health Organisation (WHO) report of 28th November 2017, estimated that one in every ten medical products is substandard or falsified and 42% of these products are located in Africa. Most of these drugs are however in Nigeria. The government should also hold the HMOs and Hospitals accountable.

2.        Lagos state must work with the federal government to reduce the import tariff on medical devices and supplies to reduce the cost to the patient

3.        The issue of multiple taxations is a disincentive to investors, a strong harmonised and effective tax regime should be put in place to reap the benefit of the new scheme.

4.    The aggregate cost of care will be reduced if strong emphasis is laid to preventive health, Cuba has a great framework which the government can learn from.

5.     To attract quality healthcare investment, tax holidays should be given to investors for the first 10years of this scheme 

6.    Nigeria Healthcare entrepreneurs who are currently in practice need to be protected either through access to a credit line for expansion or a requirement that forbids 100% foreign ownership on any healthcare institution and that part investors there must be practitioners who currently have an accredited practice. if this is done, there will be knowledge transfer and harmony in the industry.

As we watch this development, we should begin to look out for those game-changing innovations in medical devices, Healthcare information technology, manufacturing of healthcare drugs and consumables. I expect a massive disruption in this sector which will forever alter the way healthcare is practised in Nigeria. In the next 15years, the healthcare sector should be able to contribute a minimum of 10% to the national GDP, while the naysayers may doubt this we should never forget to learn from history.