Nigeria is currently facing severe budgetary constraint to provide adequate health for the majority of its citizens. The declining budgetary trends are generating serious concern about the equity,
efficiency and sustainability of public subsides as a mechanism in health sector financing. The NHA 2003-2005 estimates for Nigeria shows that about 70 percent of the total expenditure on health is through out-of-pocket payments by households. The catastrophic consequences of this have pushed
some households into poverty. It then becomes necessary for the governments of Nigeria and other stakeholders to aggressively embark on policies and programs that will reduce the burden of household health expenditure and guarantees equitable access to health services, regardless of
individual income or social status. These necessitated the establishment of Voluntary Contributors Social Health Insurance Programme (VCSHIP) for those who are not currently covered by any existing NHIS programme. But with declining economy and rising level of poverty, there is the possibility that the lower income groups may not have the ability to pay. Moreover, experience has shown that households in the low income brackets are more sensitive to price changes in health care services. Consequently, policy should be directed on how to price health services that will take account of
demand or people’s willingness and ability to pay. It is important to know whether the households are willing to pay for health insurance and if so, how much? What factors determine their willingness to pay? Does the average households’ willingness to pay match or exceed the cost of their health care?
This informed the decision of NHIS to conduct a study on willingness to pay for VCSHI. The broad aim of conducting this study was to explore the factors that are responsible for willingness to pay for VCSHI in Nigeria. The idea was to generate evidence to help guide policy on financial protection for
millions of Nigerians. We also aimed to gain insight into the options available for equitable implementation of the VCSHI program.
The results from this current study have shown that people are very enthusiastic about joining in the voluntary contributor social health insurance scheme. Indeed, Nigerians are willing to make some financial sacrifice to pool resources against catastrophic cost of illness. With high degree of acceptability, willingness to enroll and contribute, there is a high interest in VCSHI. The result from the survey shows that19.29 million or 97.3% out of the total households of 20 million support its establishment. This is also the case for employers and their employees where approximately 74% of the sampled enterprise accepted the scheme. It is therefore, obvious that there is potential demand for health insurance in Nigeria which will require further research. While there is such high enthusiasm in joining, this is not always carried through to the decision to pay for the scheme. Cautiously, the amounts indicated by the respondents should be viewed as only evidence to support the hypothesis that the Nigerians are willing to pay and not as the exact amounts, they will be able to pay at time of implementation.One of the major barriers to paying for the scheme is access to financial means of payment. Only a few proportions of employers and individuals are willing to pay at least N1200 per individual per month to join the scheme. Majority of the sample were willing to pay less than N400 per individual per month to join in the scheme. This raises a lot of policy questions that need to be looked at.
The first issue relates to income generating capacities of households and businesses. The informal sector makes up a large proportion of the labour force in Nigeria. With the exception of a few, this category of people earns relatively meagre incomes. This is one of the reasons why they have indicated that they are only willing to pay an amount that is less than that prescribed by the
government. Another issue is that people react to past outcomes in making present decisions. This relates to the level of trust in the management of the funds. For sustainability and good governance, there is an overriding need to guarantee Nigerians that their contributions in the insurance fund will be
secured and a minimal level of quality care will be available on demand.Such trust issues are relevant and needs to be addressed in order for the scheme to be able to raise sufficient funds.
Because the amounts households and informal sector workers are willing to pay are small, there will be a need for the government to guarantee some transfers to the scheme in order for it to operate efficiently and effectively. This is even reinforced by the result that shows that financial consideration
was one of the most important reasons for not willing to contribute to the VCSHIS across the zones. The government can decide to cover the cost of care for those that are unable to pay for the scheme. Because the mean amounts that households and employers are willing to pay vary by geopolitical
zones, such transfers should reflect the deficiencies that exist in each geopolitical zone. At the minimum, subsidy should be given to the very poor who may not be able to access health care services given their low level of income, vulnerability to diseases and poor health seeking behaviors.
But over the last three decades there has been growing concern on the effectiveness and performance of government interventions in financing health care in Nigeria. In response, the overwhelming suggestion has been on reducing the role of government and on reforming public management by
adopting aspects of private sector practice. This position is predicated on the possibility that private sector expansion may be able to correct current imbalances and government failures and mobilize additional resources for health sector investment. But with the introduction of VCSHIP, what should
be the role of government? In particular, the role of NHIS needs to be carefully defined in terms of policy objectives and the limits of its capacity as a regulator and a provider. With the demand for increasing role of the private sector in health insurance in Nigeria, government will have to improve its capacity to take on a new responsibility to regulate and develop incentive mechanisms to promote cost control, quality assurance, equity and access for the poor. As an
outcome of this study, it is recommended that government should take on the role of coordinator, facilitator, supervisor and regulator of private sector health insurance activities. This will enable government to address potential problems of over-provision, moral hazard and adverse selection. The
involvement may also include the creation of incentives for cost-sensitive provider/consumer behavior (for example, capitation payments, co-insurance), tax relief for private providers located in rural areas
as well as training programs for HMOs and other stakeholders in Nigerian health insurance sector. Notwithstanding, many outstanding policy questions still need to be carefully addressed in order to ensure effective implementation of the VCSHIP.