Shifting Towards a Healthier Future in Africa’s Most Populous Country
August 20, 2018
Hopeful Prospects for Better Access to Healthcare
Nigeria was, for a few years, among the fastest growing economies in the world. Unfortunately, this has not translated into better living conditions for the general population. While a few individuals benefited massively from oil-generated wealth, which powered Nigeria’s GDP growth to an average of 5.7% per year between 2006–16, income inequality has risen dramatically and exacerbated social and economic conditions for most of the population in a country where most people lack access to primary needs such as healthcare.¹ Years of poor policies, marked by corruption and diminishing public investments, have intensified the Nigerian precarious healthcare situation. On the bright side, however, recent changes in regulations, in conjunction with heightened activity within the private sector, generate hopeful prospects for better access to healthcare for the general population.
Framing the Healthcare Sector in Nigeria
It is not unusual for patients to be misdiagnosed and for their conditions to worsen before they initiate the appropriate treatment.
Focusing on creating efficient and replicable primary care models, the utilization of enabling technology and the allocation of private investments throughout the entire healthcare chain may be the first steps towards a more inclusive healthcare system.
Healthcare is a particularly sensitive issue in Nigeria because it affects the entire population. The country has a very fragmented system that is organized into primary, secondary and tertiary levels, which are regulated by local, state and federal governments, respectively. Recent data indicates that there are a growing number of private healthcare facilities (hospitals, diagnostic centers and laboratories) in Nigeria’s main cities, which provide over 65% of the healthcare services to the general population (72% for the poorest quintile). The private-healthcare sector is particularly fragmented, as institutions are typically owned and operated by single proprietors, who try to capture as much value for themselves as possible, therefore excluding any inter-hospital referral arrangements. The public-healthcare system, on the other hand, operates under a decentralized model characterized by a lack of organization and funding at all levels, which has contributed to the deterioration of its quality, particularly at the key level of primary care. According to research published in the Nigerian Medical Journal, most healthcare facilities lack the necessary equipment, drugs and staff.² Despite these challenges, as indicated in the diagram below, recent efforts to create an integrated model have improved, or at least simplified, the country’s healthcare structure.
The establishment of the National Primary Healthcare Development Agency (NPHCDA) in 2014, and the National Program on Immunization, both supported by international development partners, has facilitated some improvements, but not enough to materially increase access of the general population to healthcare. Even after the aforementioned changes, around 90% of Nigerians still perceive their country’s healthcare services to be of low quality.³ Negative perceptions are generally associated with the lack of accreditation, absence of clear clinical protocols and low confidence that the right treatment will be provided. In sum, healthcare services in Nigeria are typically of low-quality, and generally provided by private institutions, which translates into higher costs to patients. While middle and upper income populations with superior purchasing power typically travel abroad to the U.S., Europe, or neighboring countries for medical assistance, lower income populations have adapted their patient journey to circumvent Nigeria`s inefficient system.⁴ Low-income Nigerians report that they typically visit a pharmacist, chemist and/or a traditional herbalist before scheduling a doctor consultation in a healthcare facility. As a result, it is not unusual for patients to be misdiagnosed and for their conditions to worsen before they initiate the appropriate treatment.
To make matters worse, Nigeria has one of the lowest insurance penetration rates in the continent. The national health scheme, which was created in 1999 and then updated in 2004, represents the government’s attempt to provide universal coverage, and has grown since inception to cover only 1.5% of the population. The main programs available are summarized below, but in total, only about 5% of the population benefits from health insurance.⁵
Looking on the bright side, various other African countries have demonstrated that there are innovative mechanisms to improve insurance penetration. Ghana has expanded healthcare coverage to over 40% of the population by implementing multiple initiatives (e.g., value added tax, establishment of premiums charged on informal sector subscribers, establishment of an active National Health Insurance Fund, etc.).
The mixture of rapid population growth, intensified urbanization and growing disposable income has been driving the increasing demand for healthcare services. The existing public healthcare infrastructure in Nigeria is not equipped to meet this increasing demand. Expansion of universal insurance coverage in the country will certainly contribute to improving access to healthcare, but private sector involvement will be essential to helping the country improve healthcare facilities, lower costs and increase the quality of services (as evidenced in other countries). The current landscape creates multiple interesting business opportunities which might help address the country’s precarious situation. Focusing on creating efficient and replicable primary care models, the utilization of enabling technology and the allocation of private investments throughout the entire healthcare chain may be the first steps towards a more inclusive healthcare system.
Public and Private Sector Intervention
While the public healthcare system seems to be incapable of handling this situation alone, private capital providers have demonstrated their interest in supporting entrepreneurs who propose innovative solutions for the country’s persistent healthcare problems.
It is estimated that only 20% of the 30,000 primary care hospitals (PCH) in Nigeria are in operation, which is particularly concerning since 80% of ailments are typically treated in such institutions.⁶ Given this state of affairs, the first step to achieving a high-quality, accessible healthcare system in Nigeria is to focus on developing more efficient PCH operating models that could be easily replicated to serve a broader portion of the population. The inclusion of the National Signing Bill provision in the NPHCDA 2014 contemplates the creation of a Healthcare Provision Fund, focused on funding primary care initiatives. Even though this should help accelerate public investments in the sector, institutional factors, such as corruption and misalignment of interests, could compromise the original strategy. Private investors could play a significant role by encouraging the implementation of more efficient processes to increase productivity in the sector, and by facilitating governance, which should minimize corruption risk.
Local entrepreneurs have been trying to address the country’s healthcare issues through business models that rely on efficient processes and are supported by enabling technologies. This could become a viable solution for Nigeria if these companies manage to secure the funding required to replicate successfully. PurpleSource was founded with that goal in mind. After extensive experience in public health abroad, Olufemi Sunmonu decided to return to his home country and create a business model to address Nigeria’s inaccessible, unaffordable and low quality primary care system. PurpleSource is implementing a retail model that focuses on efficiently treating a narrow set of conditions and can be integrated laterally with secondary care providers and downstream with pharmacists and chemists. The company hopes to build patient-centric clinics that are designed to screen, diagnose, treat and manage basic conditions without long wait times for the patients. By lowering overhead costs, PurpleSource is able to charge patients a small flat fee, making their services more accessible to the entire population. The company is building processes that are supported by sophisticated technology, which will play a significant role in the operation’s success. Digitization of care and processes will enable the company to streamline clinical service provision, inventory management, supply procurement and administrative functions, and manage electronic medical records of patient data, . The digital platform will also generate data on relevant KPIs which will allow the company to focus on quality improvements.
Technology has been doing more than just improving the efficiency of business processes. One of the many methods in which technology has been transforming healthcare in Nigeria is by improving access of low-income populations to basic diagnostic services. Nigeria-based MDaaS has been building a network of low-cost diagnostic centers that aim to offer quality services to the low-income population. The company imports used (but high-quality) medical equipment from the US market, refurbishes and then operates them in their own facilities. This strategy is enabling MDaaS to charge patients fees substantially lower than those charged by mainstream healthcare institutions in the country. Future technological developments may also mean that diagnostic equipment will no longer be exclusively reserved for doctors, but might someday be utilized directly by the patients. Other startups have been exploring diagnostic tools such as augmented autism apps and portable allergen detectors, which facilitate the dissemination of basic healthcare services.
Africa records, on average, 100,000 deaths that arise from counterfeit drug ailments annually, and Nigeria is responsible for a large portion of that.
Even though this article suggests that more investments in the healthcare sector are required, specifically in improving efficiency of processes and in technology implementation, it is important to note that there are multiple bottlenecks across the entire healthcare chain that pose additional obstacles to an accessible and high-quality system. The most critical situation is perhaps related to drug sourcing. The pharmaceutical industry in Nigeria is highly fragmented, and supply chain gaps often lead to complexities in the drug procurement process, leaving pharmacies and hospitals stocked-out of key medication. High-quality drugs are usually imported and their prices are heavily marked up due to inefficient logistics that require the participation of various layers of distributors. As a result, healthcare facilities typically procure medication from various sources, including open-air markets, and the lack of standards at these venues generates material inconsistencies in the acquired drugs. Counterfeit drugs represent a significant issue in the country, where around 17% of pharmaceutical products are reported to be fake.⁷ Africa records, on average, 100,000 deaths that arise from counterfeit drug ailments annually, and Nigeria is responsible for a large portion of that.⁸ Pharmacies and hospitals typically accept sub-standard drugs because they are very price sensitive and this contributes to the problem. Various Nigerian companies have been founded in recent years to tackle this and other related issues. DrugStoc is developing a platform that provides hospitals, clinics and pharmacies with quality drugs supplied by large international manufacturers. The company is removing intermediaries from the drug procurement process and is designing an efficient logistics plan, guaranteeing more affordable and high quality products to its customers. The increase in number of such companies along the healthcare chain should be very beneficial to achieving the goal of developing a high-quality, affordable and accessible healthcare system in Nigeria.
Nigeria has certainly been facing some challenges in recent years as it seeks to improve its healthcare system and reach universal access, and this has been exacerbated by rapid population growth, which poses a sense of urgency in addressing this issue. While the public healthcare system seems to be incapable of handling this situation alone, private capital providers have demonstrated their interest in supporting entrepreneurs who propose innovative solutions for the country’s persistent healthcare problems. Despite the many structural obstacles, I remain confident that appropriate steps are being taken and we should witness positive developments in Nigeria in the coming years.