Evolution of National Health Insurance Scheme in Nigeria

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Chapter 2 presents the historical account of the emergence of NHIS in Nigeria. It traces the historical trajectory of the evolution of NHIS. It also assesses the law and policies of the Federal Republic of Nigeria as it relates to the establishment of NHIS. In addition, the chapter discusses the operational guidelines of the scheme in relation to programmes, standards and accreditations, records and information, penalties for offences under the NHIS Act and legal proceedings.

Evolution of National Health Insurance Scheme in Nigeria

The first bill for the establishment of a national health insurance in Nigeria dates back to 1962 when the former federal minister of health Dr. Majekodunmi presented a bill to the National Parliament in Lagos for its establishment. The national health insurance was presented to the parliament at the time health care was tax financed and Nigerians health care needs were readily met without charges by government health facilities. Therefore, people did not see any reason to reform the health care system, and thus the bill was abandoned because it did not receive much support in the parliament. The idea re-emerged in the 1980s due to limited government resources to continue the provision of ‘free’ health care delivery for all. This prompted the National Council on Health led by the former minister of health Admiral Patrick Koshoni to commission a study headed by Prof. Diejomaohon on the idea to establish national health insurance in 1984.The reports of the study found national health insurance feasible and practicable in Nigeria (Awosika, 2005).
In 1989, the former Minister of Health, Prof. Olikoye Ransome-Kuti commissioned a committee chaired by Dr. Emma Umez-Eronini on the feasibility of a national health insurance in Nigeria. The committee came up with the possibility of establishing of a national health insurance, and thus, recommended the template for the establishment of the NHIS. However, the formal launching of the scheme was delayed due to lack of political will by the successive government and inter-professional rivalry among the stakeholders. In 1995, the National Health Insurance Submit reiterated the need to begin the national health insurance (NHIS, 2006; 2015). The enabling law instituting NHIS as a social security system was promulgated in 1999 under Decree 35 (now Act). However, intermittent activities were carried out from 1999 to 2004. Nevertheless, the launching of the formal sector programme took place in 2005 with the official opening by the former president, Chief Olusegun Obasanjo (Awosika, 2005; NHIS, 2015; (www.oauife.edu.ng/…/NATIONAL-HEALTH-INSURAQNCE-SCHEME-IN-NIGERIA).

National Health Insurance Scheme Act Cap 42 Laws of the Federation of Nigeria, 2004

The former Head of State General Abdulsalami Alhaji Abubakar signed the National Health Insurance Scheme into law on May 10, 1999 under Decree 35 Laws of the Federation of Nigeria (LFN); presently it is called Act Cap 42 LFN, 2004. The Act is divided into 9 parts and 49 sections. Part I Section I states that:
“There is hereby established a scheme to be known as the National Health Insurance Scheme (in this Act referred to as « the Scheme ») for the purpose of providing health insurance which shall entitle insured persons and their dependants the benefit of prescribed good quality and cost effective health services as set out in this Act” (NHIS Act, 2004: 3).
Section 2 focuses on the establishment of the NHIS as a body corporate to provide quality and affordable health care for Nigerians. It also discusses the establishment of the scheme’s governing council to include the chair, a representative from the Ministry of Finance, Health and office of the Establishment and Management Services etc. This part also highlights terms of appointment of members of the governing council including tenure of office and conditions for appointment and removal of any members.
Part II highlights the objectives, functions and the powers of the scheme. The objectives of the scheme include:
a) “Ensure that every Nigerian has access to good health care services” (NHIS Act, 2004: 5).
b) “Protect families from the financial hardship of huge medical bills” (NHIS Act, 2004: 5).
c) “Limit the rise in the cost of health care services” (NHIS Act, 2004: 5). 15
d) “Ensure equitable distribution of health care costs among different income groups” (NHIS Act, 2004: 5).
e) “Maintain high standard of health care delivery services within the Scheme” (NHIS Act, 2004: 5).
f) “Ensure efficiency in health care services” (NHIS Act, 2004: 5).
g) “Improve and harness private sector participation in the provision of health care services” (NHIS Act, 2004: 5).
h) “Ensure adequate distribution of health facilities within the Federation” (NHIS Act, 2004: 5).
i) “Ensure equitable patronage of all levels of health care” (NHIS Act, 2004: 5).
j) ”Ensure the availability of funds to the health sector for improved services” (NHIS Act, 2004: 5).
The functions and responsibilities of the scheme include:
a) “Registering health maintenance organisations and health care providers under the Scheme” (NHIS Act, 2004: 5).
b) “Issuing appropriate guidelines to maintain the viability of the Scheme” (NHIS Act, 2004: 5).
c) “Approving format of contracts proposed by the health maintenance organisations for all health care providers” (NHIS Act, 2004: 5).
d) “Determining, after negotiation, capitation and other payments due to health care providers, by the health maintenance organisations” (NHIS Act, 2004: 5).
e) “Advising the relevant bodies on inter-relationship of the Scheme with other social security services” (NHIS Act, 2004: 5).
f) “The research and statistics of matters relating to the Scheme” (NHIS Act, 2004: 6).
g) “Advising on the continuous improvement of quality of services provided under the Scheme through guidelines issued by the Standard Committee established under section 45 of this Decree” (NHIS Act, 2004: 6).
h) “Determining the remuneration and allowances of all staff of the Scheme” (NHIS Act, 2004: 6).
i) “Exchanging information and data with the National Health Management Information System, Nigerian Social Insurance Trust Fund, the Federal Office of Statistics, the Central Bank of Nigeria, banks and other financial institutions, the Federal Inland 16 Revenue Service, the State Internal Revenue Services and other relevant bodies” (NHIS Act, 2004: 6).
j) “Doing such other things as are necessary or expedient for achieving the objectives of the Scheme under this Decree” (NHIS Act, 2004: 5).
Section 7 of the provision inter alia empowers the council to manage day-to-day activities of the scheme such as to determine its overall policies including the financial and operational procedures and effective implementation of policies.
Part III of the Act discuses appointment of staff members of the scheme including the appointment of the Executive Secretary by the President of the country on the recommendation of the Minister of Health. In addition, the functions and conditions of service of the Executive Secretary were highlighted. This part also explains the responsibility of the council for the appointment of directors and other employees at the scheme. The conditions of service for all employees at the scheme include among others entitlement to pension and gratuity as stated in the pension Act were discussed in Section 10.
Part IV highlights provisions for the management and maintenance of the scheme under the council. These include money received from the HMOs, federal, states and local governments, private organisations and donors among others (Section 11(2)). This Section also highlights the use of the accrue fund for cost of the administration, payment of allowances to members of the council, payment of salaries to the employees and maintenance of property among others (Section 11(3)). Section 14 explains, “The council shall keep proper account of the scheme and appoint an auditor to audit the account in line with the guidelines supplied by the Auditor General of the Federation” (NHIS Act, 2004: 9). Section 15 explains the scheme’s exemption from tax.
Part V discusses contributions into the scheme, health care providers’ registration and payment mechanisms, and registration of public and private HMOs. Section 16 explains that “an employer who has a minimum number of employees not specified may pay contributions to the scheme as may be determine from time to time” (NHIS Act, 2004: 11). Section 18 details payment mechanism namely capitation and fee-for-service for accredited providers with the approved benefits package. Section 19 highlights the conditions for the accreditation of HMOs; these include that the HMOs must be financially viable before and after registration, have account in at least a bank approved by the council and insured with insurance company approved by the same council among others. Section 20 emphasises the functions of the HMOs including collection of contributions from the enrolees, payment of providers and ensure that the providers give qualitative care by establishing quality assurance system.
Part VI of the Act emphasises the establishment of zonal health insurance offices in the country and their functions. Section 21 states that “the council shall divide the country into such number of zones as it may, from time to time, determine, and establish in each one, a Zonal Health Insurance Office” (NHIS Act, 2004: 11). Section 21 also explains the responsibilities of the zonal offices including general administration of the scheme, maintaining a register of health care providers and planning for a success of the scheme’s implementation among others. Section 23 provides financial provisions relating to the zonal offices. These include grant from the scheme, government and donors. The section also explains that the zonal offices shall use the money at their disposal to run the zones such as payment of salaries and training of members. Section 24 mandates the zones to prepare annual report at the end of each financial year and submit such reports to the council with the audited account.

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1.1 Background to the Study
1.2 Statement of Problem
1.3 Research Questions
1.4 Research Objectives
1.5 Significance of the Study
1.6 Thesis Structure
2.1 Introduction
2.2 Evolution of National Health Insurance Scheme in Nigeria
2.3 NHIS Act Cap 42 Laws of the Federation of Nigeria, 2004
2.4 Standard and Accreditation
2.5 Records and Information
2.6 Offences, Penalties and Legal Proceedings
2.7 Conclusion
3.1 Introduction
3.2 Health Sector Reform
3.3 Structural Adjustment Policies and Health Sector Reform
3.4 Risk Sharing Model
3.5 National Health Insurance Policy
3.6 Health Financing Policy in Nigeria
3.7 National Health Insurance in Nigeria
3.8 The Limits of existing Literature
3.9 Conceptual Framework: Key Design Issues in the Health  Financing Functions
3.10 Conclusion
4.1 Introduction
4.2 Research Design
4.3 Study Area
4.4 Study population
4.5 Sampling Techniques 83 4.6 Research Instruments and Pilot Testing
4.9 Fieldwork Challenges
4.10 Ethical Consideration
4.11 Conclusion
5.1 Introduction
5.2 Health Care Financing and the Emergence of NHIS in Nigeria
5.3 Revenue Collection
5.4 Risk Pooling
5.5 Purchasing/Provision
5.6 Administration and Management Efficiency
6.1 Introduction
6.2 Socio-Demographic Characteristics of the Respondents
6.3 Enrolees Method of Financial Contribution
6.4 National Health Insurance Scheme Health Package
6.5 Conclusion
7.1 Introduction
7.2. Health Maintenance Organisations
7.3 Health Care Providers
7.4 Conclusion
8.1 Introduction
8.2 Knowledge about National Health Insurance Scheme
8.3 Attitudes and Perceptions about NHIS
8.4 Conclusion
9.1 Introduction
9.2 Overview of the thesis
9.3 Thesis’ Contribution to Knowledge
9.4 Policy Recommendations
9.5 Area for Further Research

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