FINANCIAL RISK PROTECTION AND UNIVERSAL HEALTH COVERAGE FOR ANAMBRA STATE NIGEERIA

ABSTRACT

The drive towards financial health protection and universal health coverage is at the centre of global discussion on health world-wide. Hence the need to assess financial risk protection and universal health coverage becomes necessary for a developing country like Nigeria with poor health outcomes. This study is a state level analysis with Anambra state as point of focus, the study assess the financial catastrophe and impoverishment from out-of-pocket payments  and associated factors that predict the vulnerability to risks in Anambra state. The Harmonized Nigeria Living Standard Survey was used for the analysis, it was discovered that about 1.6 per cent of Anambra households experience financial catastrophe, logistic regression was used to determine household vulnerability to financial catastrophe   and impoverishment, it was discovered that while 1.1 per cent of Anambra Households were pushed below poverty line as a result of out-of –pocket expenditure, factors associated with vulnerability include; household size, age, household head and socioeconomic status of household. The study indicates that financial protection is not adequate for Anambra state. The studies also assess the progressivity/regressivity of out-of-pocket payment for health and it was discovered that out-of- pocket payment is progressive across socioeconomic groups in Anambra State. The study further indicate that female headed households and rural areas spent more on health as a percentage of total income than other socioeconomic groups. The continuous dependence on out-of-pocket expenditure at point of seeking health care services will continue to result in inability of certain groups  especially  the  poor  and  rural  dwellers  to  have  access to  healthcare.  It  is  therefore suggested that aggressive community base health insurance to militate these financial health hardship for these socioeconomic groups be put in place by relevant agencies in Anambra state, Nigeria.

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

There exists a growing consensus among researchers and health policy makers that out-of-pocket expenditure on health is the most inequitable means of financing healthcare.   Omotosho & Ichoku (2016) noted that this is as a result of the catastrophic and impoverishing effect out-of- pocket health expenditure has on household living standards.

It has been estimated that over 150 million people suffer from financial hardship due to out-of- pocket expenditure on health and about 100 million people are pushed below the poverty line simply because they must seek and pay for healthcare services directly out-of-pocket (World Health Organization (WHO), 2013). However, equitable healthcare financing system should ensure financial  protection  of healthcare  service users  from  catastrophic and  impoverishing impacts and such a health system should ensure Universal Coverage (UC) of all persons (Omotosho & Ichoku, 2016).

World Health Organization calls for universal health coverage, especially but not exclusively for low and middle income countries, battling to make their healthcare system functional. The WHO defines Universal Health Coverage as ensuring that everyone gets access to good quality health services without experiencing financial hardship when paying for them (WHO, 2010). This implies that individuals should not be denied access to needed healthcare services on account of their inability to pay and should not risk impoverishment when using healthcare services. In other words, UHC ensures two basic priorities, which includes access to healthcare and financial risk protection (Onwujekwe, 2013).

The generally accepted premise upon which universal coverage is based is that health system should be financed based on ability to pay and benefits received in accordance with health care needs (Mills, et al 2012). The 2005 World Health Assembly (WHA) resolved that member states must pursue universal coverage for their populations (WHO, 2010), the main focus is to reduce reliance on out-of-pocket payments for health needs and to encourage prepayment mechanism

such as health insurance and other social safety net programmes (Onwujekwe, 2013). This will bring about increased access to healthcare services and improved population health status.

Nigeria as a country, is still very poor on the area of Universal Financial Coverage (UFC). It was observed that less than 5% of the entire population of Nigeria is covered by prepayment mechanism of health insurance, this is especially severe in the informal sector and among rural dwellers and coverage with most healthcare services are very low (Ichoku, Fonta & Araar, 2012; Odeyemi & Nixon, 2013; Onwujekwe 2013). WHO (2010) suggests that; financial protection which is demonstrated by a negligible incidence of financial catastrophe and impoverishment can only be achieved by a country only when out-of-pocket direct payments fall below 20% of total health expenditure. However, in Nigeria while public Health Expenditure (PHE) is only about

20-30% of the Total Health Expenditure (THE), Private Health Expenditure accounts for about

68% of THE, and greater portion of the private health expenditure comes from households Out- of-Pocket (OOP) expenditure accounting for over 95% (Ichoku et al 2012; Olaniyan & Lawson,

2010; WHO 2015).

Catastrophic health expenditure is a big challenge in Nigeria especially where about 70 percent of  the  population  are  living  below  the  1.25  dollar  per  day  (UNDP,  2005),  Out-of-Pocket spending will curb healthcare consumption, intensify the existing level of inequity in access to quality healthcare and affordable healthcare services and expose household to financial risk of expensive illness (Onwejekwe, et al., 2010). Hence, this shows that Nigeria has not achieved any measurable progress towards attaining UHC (Onwujekwe, 2013).   Financing edifice of a healthcare system can affect households’ living standards by widening inequalities in income distribution, thus unsettling their positions in the socioeconomic hierarchy (Van Doorslaer, et al

2006). This necessitated the WHO (2010) to advocate for “affordable universal coverage and access for all citizens on the basis of equity and solidarity”

Statistics  have  shown  that  in  Nigeria,  Total  Health  Expenditure  (THE)  is  0.7%  of  Gross Domestic Product (GDP), (WHO, 2010) compared with the WHO requirement of 4-5%. Less than 5% of the entire population is covered by National Health Insurance Scheme NHIS instead of the recommended 90% by the WHO, less than 5% coverage of the population with social and safety net programmes, instead of the recommended 100% by the WHO (Onwujekwe 2013; WHO, 2015).

From the foregoing, Nigeria is not close to achieving the goal of UHC even in the context of smaller African countries like Ghana. For instance, Odeyemi and Nixon (2013) study showed that Ghana have about 65% of her population covered by her health insurance scheme while Nigeria have less than 4% of her population covered by the National Health Insurance Scheme (NHIS).  If large proportion of a country’s population are excluded from financial risk protection mechanism of health insurance, Catastrophic Health Expenditure (CHE), defined as a situation where health payment exceeds a threshold level of household income necessitating households to forgo the consumption of other items necessary for their wellbeing, is deemed to occur (Onoka, Onwujekwe, Hanson, & Uzochukwu, 2011 Omotosho & Ichoku, 2016; Xu, et al., 2003) greater percentage of the households will fall below the poverty line hence becoming impoverished as a result of paying for health directly out-of-pocket (Omotosho & Ichoku, 2016) This is the case with Nigeria where households pay for every healthcare cost directly on a ‘cash and carry’ basis as a result of lack of health insurance coverage for the majority of the population (Ichoku et al

2011).

The most feasible approach to achieving human right to health is universal health coverage. Unfortunately, if the healthcare financing system is weak; the latter can only be achieved for an insignificant proportion of the population (Omotosho & Ichoku, 2016) this is the case with Nigeria where Household Health Expenditure (HHE) is the dominant means of financing healthcare services. It is on the basis of the foregoing that this study seeks to investigate financial health protection and universal health coverage in Nigeria with emphasis on Anambra State.

1.2 Statement of Problem

There is growing concern on the economic impact of healthcare expenditure on households who face illness, especially in an area where prepayment systems do not exist and households have to pay out of pocket for using health services (Xu et al. 2003, 2007; McIntyre et al. 2006; Onwujekwe et al. 2009). Nigerians are particularly at risk of incurring catastrophic health expenditures (CHE) because of the high level of prevalent user fees and predominant use of out- of-pocket spending (OOPS) to pay for health expenditures in the health system. User fees are mostly paid as out-of pocket spending (OOPS) in Nigeria and in many sub-Saharan African

(SSA) countries because of lack of financial risk pooling mechanisms (Onwujekwe et al., 2012). Nigeria introduced user fees for government health services within the framework of the Bamako Initiative revolving drug funds. As in many SSA countries in the 1980s, the introduction of user fees in Nigeria was arguably in response to the severe difficulties in financing health services. Despite efforts to increase the share of government expenditure devoted to health, private expenditure on health has remained very high in Nigeria resulting from user fees for health services. In Nigeria, households and firms have been shouldering around 70% of total health expenditure and 90% of these private expenditures are non-pooled as most of it takes place via OOPS.

In Southeast Nigeria, the use of health facilities tends to be more developed in high income groups than among their low and medium income counterparts. Alder and Estrove (2006) noted that the more socio-economically advantaged individuals are, the better their health. On the other hand, the poor are more likely to be ill, but are less able to access health care (Corner and Norman, 2001). The problem of low use of health facilities is so critical, according to Amobi Ilika, former commissioner for health in Anambra State, lamented that, although the state subsidizes health care for antenatal, malaria and infant treatments by 75% while HIV-AIDS, tuberculosis and immunization services are free in both private and public hospitals, yet associated illness and diseases are on the rise because use of these services remain very low (Ministry of Health, Anambra State, 2010).

Low government spending combined with weak institutions and lack of enforcement lead to inadequate health infrastructure and poor service quality. Due to the unwillingness to invest in health or prepay for health care, predictable revenue flow is unavailable for health providers to improve the supply chain leaving much of the country’s health infrastructure in a dismal state. Many  health  facilities  lack  access  to  clean  water  and  a  reliable  supply  of  electricity,  face shortages of medical equipment, and are lacking necessary medications or blood to treat their patients (Ministry of Health, Anambra State, 2010). In addition, there is a deficiency in qualified health professionals in particular in poor communities. Also, large disparities exist between urban and rural areas and between states due to the variation in remuneration packages for health professionals across states and between federal and state level, health professionals gravitate to

better paying federal facilities and states. Private providers mainly operate in urban settings where income levels are the highest. This situation results in a lack of qualified and competent health professionals for individuals who live in poor rural areas that tend to bear a greater disease burden.

Despite the above problems, many of the researches carried out on this subject, focus mostly on Nigeria, geo-political regions, local government and using two state as a case study etc.  Ichoku et al (2009) assessed the redistributive effects of direct health care financing in Nigeria, Olaniyan and Lawson (2010) examined health expenditure and health status in northern and southern Nigeria, Ewenuka, Onoka and Onwujekwe (2013) examined the socioeconomic groups and geographical differences  in payment coping mechanism for health services in the southeast Nigeria, Ichoku and Fonta (2006) examined the redistributive impact of health financing in Nigeria with Enugu and Anambra state as the case study, Olaniyan et al (2013) evaluate equity in out-of-pocket spending for Nigeria households and separately for the six geopolitical zones using kakwani indices, Onoka et al (2011) examined the incidence of catastrophe health expenditure amongst households of different socioeconomic status quintiles using Enugu and Anambra as case study, Onwujekwe et al (2010) assessed the socioeconomic determinants of out-of-pocket expenditure on health and the strategy to cope with health care in urban, semi urban and rural areas within the southeast Nigeria and Omotosho and Ichoku (2016) examined the distribution of households  health  expenditure  across  socioeconomic  groups  in  Nigeria  etc.  None  of  these research focuses on single separate state, therefore this present study will take a new path, to investigate the level of financial protection and universal health coverage among the low, middle and high income groups in Anambra state, Nigeria. This has become necessary in order to understand individual health burden within the state and its implications to the State government.

1.3 Research Questions

1. What are the determinants of catastrophic health expenditure in Anambra state, Nigeria?

2. How is the distribution of out-of-pocket expenditure across socioeconomic groups and across the local government areas in Anambra State, Nigeria?

3.  What  is  the  impoverished  effect  of  out-of-pocket  health  expenditures  on  socioeconomic groups across the local government areas in Anambra state, Nigeria?

1.4 Objectives Of The Study

The broad objective of the study is to access financial risk protection and universal health coverage in Anambra state. However, in order to achieve the broad objective, the sub-objectives include:

1.   To examine the determinants of catastrophic health expenditure in Anambra state, Nigeria

2.   To measure the levels of distribution of out-of-pocket expenditure across socioeconomic groups and across local government areas in Anambra State, Nigeria.

3.  To assess the impoverishment effect of out-of-pocket expenditure across local government areas in Anambra State, Nigeria

1.5 Research Hypothesis

Ho1: There are no significant determinants of catastrophic health expenditure in Anambra state, Nigeria

Ho2: There is no significant level of distribution of out-of-pocket expenditure across socioeconomic groups and across local government areas in Anambra State.

Ho3: There is no significance impoverishment effect of out-of-pocket expenditure in Anambra

State, Nigeria.

1.6 Significance of the Study

The significance of this study arises from the need to understand financial health protection and universal health coverage for Anambra State, Nigeria.  The study will bring out the determinant of catastrophic health expenditure in Anambra State, Nigeria. This study will bring out the number of households or persons within Anambra State that are pushed below the poverty line. That is, how many households are made impoverished as a result of paying for healthcare directly out-of-pocket in Anambra State, Nigeria? Finally, this study will identify the socioeconomic groups that are mostly affected by the burden of out-of-pocket expenditure on health. This will provide information that would be required for improved financial accessibility and equity in financing within the public healthcare system especially the primary healthcare system which constitutes the corner stone of the Nigerian healthcare system.

The study will provide policy recommendations or measures to be adopted to tackle the inequity prevalent in the Anambra State Health System and by implication the Nigerian health system and how to ensure equitable healthcare delivery based on needs. In designing a health system knowledge of the factors that determines what makes households  suffer catastrophic health expenditure  is  needed.  This  study  provides  will  provide  such  information.  This  study  is significant because it will help policy makers to create a new policy direction or approach towards reducing burden of out-of-pocket health expenditure amongst the poorest socioeconomic groups in the state.

This study will also serve as a major indicator that will motivate government and other private institutions to increase their yearly budgetary allocation and contribution towards improving the health facilities in Anambra state. The study will serve as a guide for State Planning Commission (SPC) and State Ministry of Health (SMoH) to adopt appropriate measures towards improving environmental sanitation, provision of portable drinking-water, equipping health facilities, improving welfare of households in rural area by building road networks and provision of health infrastructural facilities. The study will provide policy recommendations or measures to be adopted to tackle the inequity prevalent in the Anambra State Health System and by implication the Nigerian health system and how to ensure equitable healthcare delivery based on needs. The study will further orient the generality of the people in the state about the importance of universal health  coverage  and  the  limitations  of  national  health  insurance  scheme  (NHIS)  of  not introducing new programs that will capture the ordinary Nigerians who are not government workers. It is on the basis of this that the study marshalled out the following questions below.

1.6 Scope of the Study

This study will look at Financial Protection and Universal Health Coverage for Anambra State, Nigeria. The study will make use of secondary data from the Harmonized Nigerian Living Standard Survey HNLSS 2008/2009. This study focuses on out-of-pocket health payments by the Anambra State Households.

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