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Fiscal Space Analysis for Implementation of Lagos State Health Insurance Scheme

LSHS

This study presents an overview of the fiscal space available to Lagos State government with specific regards to the Lagos State Health Scheme (LSHS). The analysis is prompted by the need for increases in public health spending necessitated by the scheme, which forms a crucial demand-side intervention in the context of the Lagos State Health Scheme (LSHS) established recently by the Lagos State Health Scheme Law of 2015. While implementation of the scheme is currently in progress there is an existential need on the part of Lagos State Ministry of Health (LSMoH) to clearly analyze the fiscal implications of the scheme and identify options available to address these implications.

It is in this context that USAID’s Health Financing and Governance (HFG) project in collaboration with Centre for Health Economics and Development (CHECOD) was commissioned to provide support for estimating the fiscal space available to Lagos State, modeling the cost of scaling up LSHS, and relating the two estimates to inform the target setting, advocacy and planning needs of the LSMoH.

This study presents an overview of the fiscal space available to Lagos State with specific regards to the LSHS and analyzes its implications over a five-year period using different financing thresholds and scale-up scenarios. This is to provide decision-makers with options for informed choices.

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Research/Policy Brief

“Healthcare workers ability and willingness to work in response to Ebola pandemic: What does Nigeria need to do?”

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Ebola is a severe acute and highly contagious viral disease capable of spreading rapidly through the world.  Ebola is a viral illness of which the initial symptoms can include a sudden fever, intense weakness, muscle pain and a sore throat while subsequent stages are vomiting, diarrhea and – in some cases – both internal and external bleeding (World Health Organization 2014).  The current outbreak is the deadliest since Ebola was discovered in 1976.  The disease infects humans through close contact with infected animals, including chimpanzees, fruit bats and forest antelope. It then spreads between humans by direct contact with infected blood, bodily fluids or organs, or indirectly through contact with contaminated environments. Even funerals of Ebola victims can be a risk, if mourners have direct contact with the body of the deceased. Healthcare workers are at risk if they treat patients without taking the right precautions to avoid infection. People are infectious as long as their blood and secretions contain the virus – in some cases, up to seven weeks after they recover.  If this virus is able to replicate in humans, and be efficiently transmitted from one human to another, a pandemic already exist, with the potential to cause widespread morbidity and mortality across the globe. The Ebola outbreak in West Africa is the world’s deadliest to date and the World Health Organization has declared an international health emergency as more than 2,100 people have died of the virus in Guinea, Liberia, Sierra Leone and Nigeria this year.

The current Ebola outbreak has become a public health threat due to its associated morbidity and mortality. Among those at high risk for being infected with EVD, healthcare workers have been identified as the priority group whose preparedness is a critical element in the response to the pandemic. In addition to patient care, health care workers (HCWs) are involved in public health education, epidemiological surveillance, quarantine management, primary care clinics and more. Although the role of HCWs is important during Ebola emergencies, not all healthcare workers are ready or prepared to work with infectious patients that will expose them to death.

Willingness of healthcare workers to risk their lives

The willingness of healthcare workers to risk their lives for a patient with a potentially fatal, communicable disease is a major concern, especially during a pandemic where the need for adequate staffing is crucial and where the public atmosphere might enhance anxiety and fear of exposure.  Health-care workers have frequently been infected while treating patients with suspected or confirmed Ebola Virus Disease (EVD). This has occurred through close contact with patients when infection control precautions are not strictly practiced.  A man who flew from Liberia to Lagos in July was quarantined on his arrival and later died of Ebola – the first case in Nigeria. One of the nurses who treated him and an official who came into direct contact with him has since died. In West Africa, high proportion of doctors, nurses, and other health care workers who have been infected by the deadly disease. The current outbreak is of worrisome pandemic potential as the virus is already affecting capital cities as well as remote rural areas are affected, vastly increasing opportunities for undiagnosed cases to have contact with hospital staff.  To date, more than 240 health care workers – including prominent doctors in Sierra Leone and Liberia – have developed the disease in Guinea, Liberia, Nigeria, and Sierra Leone, and more than 120 have died thereby depriving these countries of experienced and dedicated medical care.

>>>>Click here to download the brief here<<<<

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Assessing the Economic Costs of Ebola Prevention, Control and Treatment Programs in Nigeria

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The Ebola outbreak would put at risk the health of millions. The economic impact of the pandemic has the potential to be disastrous. The recent outbreak of the EVD which started in 1976, has raised concerns about a new global pandemic. Even in its early stages, Ebola has already caused significant economic damage. This is primarily due to the damage to the trade, tourism and agricultural sector.  In Liberia, Sierra Leone and possibly Nigeria, the economic – macro and micro – impact of the pandemic will be felt for years to come. The Ebola pandemic may lead to a reduction of both human and physical capital. Investment could drop significantly, and remain low possibly over a long time. Deaths caused by EVD will reduce the work force and lower the human capital of these countries. For many years after the pandemic, there is likelihood that the GDP growth of some of them may be lower than in a case without a pandemic.  Of course, there is also the psychological impact of the pandemic which cannot be modeled easily but could be ignored because of its long-lasting effects.  For example, investor’s decision to remain in Nigeria is built on confidence in the country’s growth potential. Indeed, the Ebola pandemic if spread very rapidly around the country could shake that confidence and lower future investment. For other effects, business losses may be significant as importers, exporters, and service industry see a significant drop in demand. Revenues and foreign exchange levels are down while Airlines and ships are reducing movements to countries like Liberia and Sierra Leone. Development projects are being cancelled, and business people have left these countries. These will force many businesses to close, also lower future investment and employment.

At the microeconomic level, assessment of economic costs on the demand side would not only include the preventive, control and coping strategies adopted by the public and private sectors to avoid or reduce illness and death, comprising also prevention and potential treatment of infected people. The most immediate economic impacts of the EVD might arise not from actual death or illness but from the uncoordinated efforts of private individuals to avoid becoming infected. Over-reaction to the actual threat can result in panic behaviors and thus the economic impact could be magnified.  Conclusively, on one hand the demand for health related products – masks, gloves, antimicrobials and other sanitary improvements – will increase, while on the other hand the demand on other areas – bush meat, restaurants, hotels, leisure and tourism would be reduced

As the outbreak is fast moving, the potential costs will likely vary in components and increase slightly.  In such a changing context, generation of pertinent information is important to target the fight against Ebola infection as effectively as possible. Economic costs are examples of such information. Indeed, assessing these costs, its different components and their relative importance is a central element in designing public health policies and identifying priorities. Assessing these costs enables various comparisons, for instance, between prevention and treatment costs.  Similar study on rapid assessment of the economic costs of HIV/AIDS in Namibia concluded that no sector of the Namibian economy will escape the impact of AIDS(Kenneth Ojo and Mary Delany 1997). The epidemic according to the findings will definitely tax hospital, public health, private and community resources, and these substantial burdens underscore the need for coordinated long-term planning.

 

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BlogOngoing Research ProjectsResearch/Policy Brief

Economic Burden of Expanding Health Insurance Coverage for the Informal Sector: Who will carry it?

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Recent developments in the health insurance landscape have witnessed a movement towards universal health coverage (UHC). The momentum generated by UHC coupled with the increasing commitment of global and national actors in the health sector to it its achievement seems to have made it the key health goal in the post-MDG development framework[1]. However, moving towards UHC with a view to covering the entire population and improving their health outcomes and financial resilience is strewn with encumbrances that require among others a transformation of health financing at country level to adequately accommodate those in the informal sector. As such, ensuring improved access to quality health care and extending financial protection to those in the poorest wealth quintiles and vulnerable groups continue to be a challenge to advancing and achieving the potentials of UHC[2] – particularly in the informal sector where the anguish of poverty aggravates their characteristic low health status, high morbidity and sufferings from illness[3].

Available evidence has shown that over 90% of the people who are unable to seek appropriate care live in low-income countries with high dependence on the informal sector occasionally regarded as “missing middle”. The key challenge therefore is to establish sustainable health financing policies, systems and institutions that could facilitate the equitable access of this segment of the population to needed health care without exposing them to the risks of financial catastrophe and impoverishment[4]. However, the burden of protecting and ameliorating the health and financial risks faced by those in the informal sector must be borne. Who is to carry the burden? Is there a “free launch”? The answer is possibly yes from the perspective of those who are to receive subsidy or total exemption in the informal sector but no from the standpoint of the sponsoring stakeholders – government, community, philanthropic organizations, etc. The distribution of the burden among stakeholders and an assessment of their carrying capacities also raise issues for reflection to be addressed in the brief.

In line with the afore-stated concerns, this project intends to undertake economic and financial assessment of the liability of providing health insurance to those in the “missing middle” underscoring the importance of factors that influence policy options, implementation and outcomes of expanding health coverage to them. It will focus on the contextual arrangements of carrying the burden as it relates to the division of responsibilities of the relevant stakeholders, political commitment to key strategies, opportunity cost or trade-off of allocating scarce resources to target informal sector, etc. In specific terms, the brief will report on the results of model simulation of the likely expenditure outlays and revenue flow potentials of health insurance coverage, evaluation of the source(s) of the financing gaps, analysis of alternative health financing and health insurance pathways and assessment of the sustainability of the system over a period.  It will also evaluate the capacity of identified streams of resource flows to indicate alternative courses of action.

More importantly, is the fiscal capacity and related solvency issues in financing deficit from health insurance fund balance in individual countries which are key economic determinants of sustainable investment in universal health insurance coverage[5].  The institutional challenges of governance and organization structures, eligibility criteria, monitoring quality health care service delivery, accreditation of purchaser and provider of service etc. associated with scaling up health related expansion of health insurance raises another concern for inquiries within the scope of this project.  Appropriate initiatives that countries might take to expand coverage to the uninsured especially those in the informal sector will be recommended.

>> Download the brief here<<

 

[1] The world health report 2010. Health systems financing: the path to universal coverage, Geneva, World Health Organization, 2010.

[2] The world health report 2010. Health systems financing: the path to universal coverage, Geneva, World Health Organization, 2010.

[3] Ojo, K., C. Nwali, and O. Smile. 2013. “Is Community Based Health Insurance Scheme possible in Gombe State?” CHECOD Working Paper 2013 – 9, Centre for Health Economics and Development, Nigeria

[4] Health Policy Brief: Health Insurance Exchanges and State Decisions,” Health Affairs, July 18, 2013

[5] Ojo, K., C. Nwali, and O. Smile. 2013. “State Initiated Health Insurance Schemes in Nigeria: Whose fiscal responsibility?” CHECOD Working Paper 2014 – 3, Centre for Health Economics and Development, Nigeria

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BlogOngoing Research ProjectsResearch/Policy Brief

How cancerous and endemic is corruption in the health sector? Evidence from a Cross-Country Assessment”

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The issue of corruption – defined here as ‘the abuse of public office for private gain’[1] or “enticement to wrong by improper or unlawful means,”– in the health sector is a concern to policymakers in all countries. It is a broad concept that covers a wide range of practices and each form of corruption may have different causes, consequences and solutions. Despite the variations in definitions and interpretations on what constitute corruption, there is a broad consensus and much anecdotal evidence that the presence of corruption in any form in the health sector can be detrimental to a country’s ability to improve the health of its population. It might have the impact of reducing the resources effectively available for health, discouraging people to use and pay for health services and ultimately limiting population access to quality healthcare and financial protection. While corruption affects the entire population, it is typically the poor who are most susceptible.  When corruption is endemic, residents in poor and middle-income areas report more waiting at public clinics and a higher frequency of being denied access to immunization services than residents in rich locations[2]

Significant proportion of it in the health sector is a reflection of general problems of governance, public sector accountability and other forms of institutional inefficiency – political instability, bureaucratic red tape and weak legislative and judicial systems. Studies have shown that in the context of weak governance, high levels of health spending do not necessarily translate into improved health status[3]. Countries where there is broad adherence to the rule of law, transparency and trust, effective public sector structured on strong accountability mechanisms are less likely to be prone to health system corruption. Therefore governments have a responsibility to create sound institutional structures, processes and policies to establish and promote anti-corruption measures to enhance universal health coverage for the population. The brief will assess situations in countries and suggest course of actions to follow in establishing anti-corruption platforms.

[1] World Bank (1997) Helping Countries Combat Corruption: The Role of the World Bank. Washington, DC: World Bank

[2] Omar Azfar and Tugrul Gurgur, ‘Does Corruption Affect Health and Education Outcomes in the Philippines?’, Working Paper (College Park: IRIS Center, University of Maryland College Park, 2004), available at www. iris.umd.edu.

[3] Deon Filmer and Lant Pritchett, ‘Child Mortality and Public Spending on Health: How Much Does Money Matter?’, Policy Research Working Papers, World Bank, 1997; Vinaya Swaroop and Andrew Sunil Rajkumar Swaroop, ‘Public Spending and Outcomes: Does Governance Matter?’, World Bank, Policy Research Working Paper Series, 2002.  Lindelow, M., I. Kushnarova and K. Kaiser. 2005. “Measuring Corruption in the Health Sector: What We Can Learn from Public Expenditure Tracking and Service Delivery Surveys in Developing Countries.” Washington D.C.: World Bank

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Ongoing Research ProjectsResearch/Policy Brief

State Health Insurance Scheme in Nigeria

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As equitable access to quality health care continues to occupy the policy agendas of state and national government in Nigeria, the single greatest barrier to the health system is the absence of effective institutional arrangements for universal health coverage. The policy makers are saddled with the pressure of how to reconfigure and strengthen the health system to align it with the objectives of UHC, so as to bridge the presently identified gaps and meet the projected health needs of the people of Nigeria over the next decade. Of course, this will require political and financial commitment from the federal as well as state governments through increasing the proportion of government general revenue allocated to health care. Therefore, instituting a system of UHC for Nigeria will require a flexible architecture to deal with inequities in health outcomes, regional and sociocultural diversity, the differential health insurance coverage and health care needs of populations in different locations.

By K. Ojo, C. Nwali and O. Smile (2013)

>>>Click here to download the Executive Summary<<<

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