The Lagos State Health Insurance Scheme …The Much Awaited Panacea?

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Wednesday, May 17, 2017 5:32 PM /Meristem Research

Towards the tail end of 2016, the Governor of Lagos State, Akinwunmi Ambode, intimated the public of his administration’s plans to roll out the highly anticipated Health Insurance Scheme for the state in the early part of 2017.

The scheme would involve the establishment of an agency by law to ensure that optimum healthcare is readily accessible across the state.

In achieving this objective, the state government intends to partner with private organizations including insurance companies to ensure the success of the scheme.

The long-term goal of the scheme is to minimize the financial strain on Lagos residents as regards their healthcare needs whilst transforming the state into the medical tourism centre for Sub-Saharan Africa.

Outbound Medical Tourism: The New Normal

According to the Nigerian Sovereign Investment Authority (NSIA), Nigerians spend about USD1bn annually on medical tourism.  

This exceeds the total healthcare allocation for the year 2016 by about 20%.  

This rampant trend amongst Nigerians can be attributed to the widespread lack of confidence in the competence of Nigerian healthcare professionals as well as the dearth of quality healthcare infrastructure in the nation.  

The most common medical conditions which Nigerians travel out of the country to attend to centre majorly on the areas of oncology, cardiology and orthopedics.  

India, Germany, and the United States have been cited as the most popular destinations visited for medical tourism.  

This substantial funds outflow by Nigerian medical tourists has contributed immensely to the poor state of development witnessed across the healthcare and pharmaceutical industry.  

Inbound Medical Tourism: The Beginning of a New Era?

Axa Mansard Insurance Group together with African Capital Alliance and International Finance Corporation (IFC) has proposed the development of an ultra-modern 150-bed multi-specialty hospital and two 10-bed primary health care centres in Lagos State.

This revolutionary development is in line with the Lagos State government’s plans to prioritize healthcare by revitalizing the quality of healthcare services provided and subsequently moderating the costs of said services so that they are affordable for all.  

It is expected that the success of the proposed hospital will spur more of such investments across the state and possibly other top cities in the country.  

Also, given the LASG’s commitment to engender the development of the sector and the state as a whole, we expect to see several incentives to stir investment in that direction. 

Therefore, more public-private partnerships are anticipated.

Universal Health Coverage: Where are we now?

The National Health Insurance Scheme (NHIS) which officially flagged off in 2005 but was established by law in 1999, was created by the Federal Government of Nigeria to enhance healthcare delivery by providing a sustainable alternative source of funding healthcare services.  

The scheme aims to foster the continuity of the society by providing financial security to Nigerians in times of ill health.  

The scheme comprises programmes that cover formal sector workers, informal sector workers and the vulnerable groups.  

The National Health Act, which was to address the health insurance needs of the vulnerable groups, is yet to be implemented.  

However, some improvement has been recorded in the private health insurance business.  

After almost twelve (12) years of operation, universal health coverage which was promised by the scheme, remains a mirage.  

As at 2016, only a measly 3-4% of the Nigerian population were covered by health insurance.

Lagos State Health Insurance Scheme: The Game Changer

The LASG’s plans on the health insurance scheme is a step in the right direction not just for Lagos State for the Nigerian healthcare sector in its entirety.  

Besides being the most populous city in the region, Lagos is also known as one of the top commercial hubs in the continent.  

Increase in the demand for healthcare services and pharmaceutical products has been closely linked with developments in health insurance.  

With thorough implementation and barring any political and bureaucratic stalling, which may drag the potentials of the scheme, we expect to see a significant boost in both top-lines and bottom-lines of healthcare companies likewise insurance companies.  

Well-coordinated implementation of the scheme should address not just the physical well-being of Lagos residents but also contribute towards the enhancement of their standard of living.

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