The Impact Of Private Financing Of Health Care System In Nigeria

Project and Seminar Material for Public Health

The Impact Of Private Financing Of Health Care System In Nigeria


This study was conducted to assess the role of the private health sector in the provision of health care financial services in the Abuja Municipality of Nigeria. The study focused on the types of private health facilities in the municipality, the financial services provided by both public and private facilities, users of the health financial services, conformity of financial services provided with national standards and the challenges and prospects of the sector. The study adopted the case study design. Secondary and Primary data were gathered for the study. A sample size of 100 Household Heads was used for the study.

The study revealed that, eleven out of the thirty-five health facilities surveyed in the municipality were privately owned. Five of these are maternity homes, four are private hospitals and two are private Clinics. It was also revealed that the public facilities do not provide major and specialized financial services due to their nature and level as compared with the private facilities where major, specialized financial services and professional nurses and midwife training are provided. The study further revealed that Household heads and for that matter users of the health facilities are from all age groups with the majority being youthful and fall within the income group of Naira 100.00 – 299.00. Again, the study revealed that, all the private health facilities in the municipality are registered and supervised by the Nigeria Health Service on monthly, quarterly and annual bases as required by the National Health Policy. On the bases of the major findings, the study recommended the need for expansion of the existing health facilities and provision of a district hospital and effective collaboration between the public and private actors to ensure quality service delivery.

Chapter One


Health care financing system is a process by which revenues are collected from primary and secondary sources, e.g., out-of-pocket payments (OOPs), indirect and direct taxes, donor funding, co-payment, voluntary prepayments, mandatory prepayment, which are accumulated in fund pools so as to share risk across large population groups and using the revenues to purchase goods and services from public and private providers for identified needs of the population, e.g., fee for service, capitation, budgeting and salaries.

Ultimately, whether through OOPs, taxation or health insurance, financing for the health system originates mostly from the households. Therefore in a most basic form, health care financing represents a flow of funds from patients to health care providers in exchange for services. The way a health system is financed shows if the people get the needed health care and whether they suffer financially at the point of receiving care. A good healthcare financing strategies must be able to mobilize resources for healthcare; achieve equity and efficiency in use of healthcare spending; ensure that healthcare is affordable and of high quality; ensure that essential healthcare goods and services are adequately provided for [4] and most recently ensure that the money is spent wisely so that the millennium development goals (MDGs) could be achieved.

A health care financing mechanism should provide sufficient financial protection so that no household is impoverished because of a need to use health services. One-way of providing such protection is by incorporating a risk-sharing plan in the health care financing mechanism, whereby the risk of incurring unexpected health care expenditure does not fall solely on an individual or household. [5] One aim of universal health coverage (UHC) is how to ensure that all have adequate access to their health care needs without making significant OOP at the point of receiving care. [6] ,[7] One-way to achieve this is through risk pooling either through tax-funded or social health insurance (SHI). [6] ,[8] Introduction of National Health Insurance Scheme (NHIS): A SHI program, is one-way countries can enhance universal coverage. The NHIS was introduced in Nigeria in 2005 to guarantee accessibility to healthcare for Nigerians. Since the inception NHIS, only those employed in federal formal sector, which <5% of the working population of Nigeria have been enrolled. The plan was that state governments will adopt the program for their employees, and this action promise to expand the coverage of the insurance scheme. However, 9 years after its inauguration, only two states have adopted the program. Therefore, efforts are being made to devise a strategy to extend the coverage to other states as well as those employed in other formal sector outside this federal formal sector, as well as those employed in the informal sector. If such is achieved, the primary aim of NHIS, which is universal coverage, can then be achieved. Several approaches have been suggested of how to improve universal coverage in areas where those employed in formal sector are small. Among the options are “contributory schemes” like community-based health insurance (CBHI), where households in a particular community contribute to insurance scheme; another is tax-funded health scheme, where health services for those outside are funded from tax. [9] In neighboring the country; Ghana, has proposed the introduction of a “one-time NHIS premium payment (OTPP) policy” as an avenue to financial risk protection to those not employed in the formal sector. [10]

The way a country finances its health care system is a critical determinant for reaching UHC. This is so because they determine whether health services exist and are available and whether people can afford to use health services when they need them. This can be achieved by a well-planned combination of all healthcare financing mechanisms, which include: Tax-based financing, OOPs, donor funding, health insurance [1] exemptions, deferrals and subsidies.

The main thrust is how to generate adequate revenue to finance health services from a diversified group of people, without over tasking the formal sector workers. Since in Nigeria, the formal sector workers are the group that their contributions are its tax or agreed deduction, can easily be access from source and this constitutes 47% of the working population. The situation is different when informal sector (about 53% of the working population) is considered, due to infective tax collection system, inefficient formula to calculate the amount to collect, and lack of confidence on those that will be mandated to collect the fund.

In Nigeria, revenue for financing the health sector is collected majorly from pooled and un-pooled sources. The pooled sources are collected from budgetary allocation, direct and indirect taxation as well as donor funding. However, the un-pooled sources contribute over 70% of total health expenditure (THE) and this can be: OOPs in the forms of fees (informal or formal direct payments to healthcare providers at the time of service) about 90% and payments for goods (medical products such as bed-nets, or condoms) and about 10%. Despite these health financing options in Nigeria, the finances are still disproportionately distributed across the health system and with regional inequity in healthcare expenditure.

Therefore, achieving successful health care financing system continues to be a challenge in Nigeria. This review draws on available and relevant literature to provide an overview and the state of public health care financing in Nigeria.

Data for this publication were generated through two approaches: A review of relevant literature and the authors’ experiences. A systematic review of the literature, policy documents and grey articles was conducted. Documents reviewed provided information on health care financing, especially in Nigeria. We searched PubMed, Medline, The Cochrane Library, Popline, Science Direct and WHO Library Database with search terms that included, but were not restricted to health care financing Nigeria, public health financing, financing health and financing policies. Further publications were identified from references cited in relevant articles and reports. We reviewed only papers published in English. No date restrictions were placed on searches. Extra information was obtained from the experiences of the authors. These comprised of experiences gathered from working with different level of health care: Primary, secondary and tertiary health care, as well as interaction with private health sectors workers, participating in workshop and conference presentations and interaction with the population during field work. One focus group discussion was organized during which the authors discussed their different experiences with regards to UHC and overview of Nigeria health care financing. Their contributions were included in the different thematic areas.

Background to the Study

The enjoyment of health is one of the fundamental rights of every human being. Health is a precondition for wellbeing and the quality of life. It is a benchmark for measuring progress towards the reduction of poverty, the promotion of social cohesion and the elimination of discrimination (WHO, 1998). Every nation exists to assure the collective survival as well as the socio-economic development of its citizens. Chapter six section two of the 1992 constitution of Nigeria mandates the President of the Republic of Nigeria to ensure the realization of basic human rights, a healthy economy, the right to education and work, and the right to good health. In this regard the Ministry of health has been established to assure good health in Nigeria and reduce the impact of ill-health on socio-economic development of the country (GOG, 1992; MOH, 2007).

Over the years Government and Development Partners have sought in various ways to provide the necessary environment and inputs towards improving health delivery. Nigeria, like most developing countries in recent times has embarked on Health Sector Reform Programmes. These programmes are aimed at addressing the poor state of health in the country especially at the rural and deprived communities. In these communities, Christian Health Association of Nigeria (CHAG) facilities are situated by choice, and based on experience in serving such communities. Financial services are provided based on Christian operation of service to the poor, marginalized and disadvantaged (MOH, 2006, Abdullah and Vanessa, 2009).

The government‟s recognition of the role of the private sector in national development, the demonstrated commitment of CHAG to national health goals and outcomes, the evidence that government alone cannot meet the health needs of the people calls for closer collaboration between Government Agencies and all stakeholders in the private health sector. This collaboration recognises the pivotal role of the private health sector, which provides about 42 per cent of Nigeria‟s health care financial services and has been growing rapidly in recent times, as the engine of growth in the country‟s socio-economic recovery programme (MOH, 2007).

Faith-based health financial services in Nigeria provide approximately 40 percent of the available health care. The church health care facilities in Nigeria numbered 56 hospitals and 83 clinics as at 2005 (Abdullah and Vanessa, 2009).

Statement of the Problem

Good health is fundamental to sustainable economic growth. Intersectoral investment for health not only unlocks new resources for health but also has wider benefits, contributing in the long term to overall economic and social development. Investment in outcome-oriented health care improves health and identifies resources that can be released to meet the growing demand on the health sector (WHO, 1998).

The strategic direction of improving human capital makes health central to Nigeria‟s development efforts; only a healthy population can bring about improved productivity and subsequent increase in GDP, and by doing so ensure economic growth. Hence the old adage “a healthy population is a wealthy population” (MOH, 2007).

However, the lower middle income status attained is being threatened by health problems such as; poor environmental conditions, the poor quality of air, water and soil in the country which is mainly due to improper disposal of waste, emission of dangerous gases from industries and vehicles, and smoke from burning of waste and bush fires (MOH, 2007). Despite this situation, the measures for controlling these problems have not been effective. Infrastructure for management has not kept pace with the population growth. Only a third of the waste produced in the urban centre is collected. Access to potable water is also a problem. Less than half of the population in the country has access to potable water, leaving the rest to obtain water from streams and rivers, which are often contaminated with organic and inorganic substances from household and industrial pollutants (MOH, 2007). Poor lifestyle together with known environmental factors most of which are preventable, manifest in a high level of morbidity and mortality in the country (NDPC, 2009).

The majority of the conditions leading to out-patient attendance at clinics in Nigeria are malaria, diarrhea, upper respiratory tract infection, skin disease, accident, hypertension, eye infection, pregnancy related conditions, helminthiasis and osteoarpathy (MOH, 2007, GHS, 2009). Over 90 percent of these diseases and conditions could easily be prevented if appropriate environmental and lifestyle measures were taken. The programmes and projects of the Ministry of Health have focused on curative care, leading to failure of the ministry to make significant impact in the development of promotive and preventive health to the benefit of its people (NDPC, 2009). Coupled with these is the problem of inadequate health personnel which is due to brain drain leading to limited productivity.

The deprived state of public facilities indicate that the public sector alone cannot provide the necessary health financial services to solve these problems in order to improve upon the health of the citizens. Hence the involvement of the private sector of which Private health care institutions form part (MOH, 2007, MHD 2010). The private health institution in the Municipality cater for all the serious health issues and are the most equipped facilities in the municipality and serve as referral centres.

In 2006, a memorandum of Understanding and Administrative Instructions between the Ministry of Health (MOH) and Christian Health Association of Nigeria (CHAG) on the collaboration between Government agencies and all stakeholders in the private health sector focused more on the operations of CHAG members at the expense of individual medical practitioners.

Private facilities have provided health financial services at the individual and institutional levels in Abuja municipality. However, little is known about their performance in the municipality due to the absence of adequate documentation on their operations (Obuobi, 1999). The research therefore seeks to fill this gap by assessing the role private health institutions, play in the provision of health financial services. The assessment intends to bring about best and poor practices in health financial services provision by private health facilities in the municipality.

Research Questions

  1. What types of private health facilities are available in Abuja Municipality?
  2. Are the financial services relatively different from the financial services offered by the public sector?
  3. Who are the beneficiaries of private health facilities?
  4. Are the financial services provided in conformity with the National health care standard?
  5. What are the challenges and prospects of private health institutions?

Objectives of the Study

The main objective of the research is to assess the role played by private institutions in the provision of health financial services and make recommendations to inform policy.

Specific Objectives

The research seeks to achieve the following specific objectives, to

  1. Identify the types of private health facilities available in Abuja municipality;
  2. Ascertain the differences in financial services provided by the Private and Public sectors;
  3. Determine the category of people who utilize the financial services of private health institution;
  4. Assess the extent to which financial services provided by Private institutions meet National health care standards as required by the National Health Policy.
  5. Assess the challenges and prospects of private health institutions in health financial services delivery; and
  6. Give recommendation to inform policy formulation.

Scope of the Study

Geographically, the research is limited to Private and Public health facilities in the Abuja Municipality in Nigeria of Nigeria.

Context-wise, the research seeks to study the financial services provided by private health facilities and covers the types of private health facilities that are available in Abuja, whether there are differences in the financial services offered by the private and public sectors, the users of private health facilities, whether the financial services provided conform to the provisions of the national health policy and what the challenges and prospects of private health institutions are.

Significance of the Study

The research has become necessary because private health facilities exist and provide health care financial services and serve as referral centres versus public health facilities in the Municipality.

In view of this, results of the research would help shape government‟s visions on social policy and local experiences of social welfare especially relating to health in the Municipality and the Country at large. Also, the research results would serve as input for effective, efficient and improved financial services provision in the municipality.

In many locations, private organizations have been in the forefront or alone in the struggle to reduce the suffering of people from diseases. However, little scientific knowledge exists concerning how private organizations, in themselves, influence risk prevention strategies and responses to health at the individual, community, and societal levels. Furthermore, little is known about what aspects of this influence may be unique to the “faith” dimension of such organizations. A scientifically focused knowledge base will contribute to an improved understanding of the factors driving health risk, prevention, promotion and care in the country. This will also lead to the development of innovative prevention, educational, promotional and care strategies that build on the strengths and unique features of private organizations (NIH, 2004).

Organization of the Study

The study is organised into five chapters. The first chapter introduces the topic and states the problem, the research questions, the objectives to be achieved, the significance of the study and the limitations associated with the study.

The second chapter discusses the literature in relation to the issues under investigation. It analysis the key concepts of the research and concludes with the conceptual framework for the study.

The third chapter discussed the profile of the study area and established a clear methodology for conducting the study.

The fourth chapter dealt with data collection and analysis as well as presentation of major findings. Finally, Chapter Five deals with summary of findings, recommendations and conclusion.

Chapter Five

Recommendations and Conclusion


The World Health Organization, Government of Nigeria, Non-governmental Organization, Religious Bodies and Philanthropists should assist to expand and equip especially the private non-for profit health facilities to enable them cater for more complex situations by the end of 2015. This is in view of the fact that, Abuja is a market centre for the sub-region where traders from other regions and neighbouring countries of Nigeria come to trade. Therefore, the health sector in Abuja municipality has a very great responsibility to service all residents and the non- residents who come to trade. In addition, there is the need for government to establish a District Hospital in the municipality to ease the pressure on Holy Family Hospital which is the major service provider and referral centre. This is because as the work load increases on Holy Family Hospital, eventually, the quality of satisfactory service provided will diminish leaving patients without any option.

Also, the Ministry of Health and the National Health Insurance Authority should facilitate reimbursement of funds to enable accredited service providers to provide the needed financial services to clients.

The Municipal Health Directorate in collaboration with the various Health Administrators should see to an effective cooperation between the public and private and the various private actors through regular meetings and experience sharing.

Finally, the Nigeria Health Service and the Information Units of the various health facilities should educate the public on the need to regularly visit health facilities most especially pregnant women to prevent the occurrence of maternal mortality by December, 2015


In conclusion, the existence and operation of both public and private health facilities in the municipality has made health financial services accessible and affordable to all categories of people both residents and non-residents. Their existence has also broadens people choice of health facility in the event of illness. However, it is worth noting that, the private facilities play the major role in providing specialized financial services and professional training.
The case of Abuja Municipality is in contrast to the norm where the public facilities are believed to be the most resourced, equipped and staffed in the provision of health financial services.

How To Get The Complete Material For “The Impact Of Private Financing Of Health Care System In Nigeria“

Project Material Download

3,000 Naira

The Complete Material Will Be Sent to You in Just 2 Steps

Quick & Simple…

Step One Purchase

Make Payment (Through Transfer) of ₦3,000 to Any of the Account Below

Access Bank Plc Acc No: 0811003731
Samphina Academy
Current Account
Zenith Bank Acc No: 1225513212
Samphina Academy
Current Account
PalmPay Main Logo Acc No: 8143831497
Samphina Academy
Digital Account

Or CLICK HERE To Pay With Debit Card

CLICK HERE To Purchase Material ($15)
Make Payment of 80 GHS to 0553978005 | Douglas Osabutey | MTN MoMo

Step Two Purchase

Send the Following Details on WhatsApp ( 08143831497) After Payment

  1. Payment Details

  2. TOPIC: The Impact Of Private Financing Of Health Care System In Nigeria

The Complete Material Will Be Sent To You On WhatsApp After Receiving Your Details
T & C Apply

  Contact Our Help Desk

Need a Different Topic? Perform a Quick Search

List of Related Works

Click on Any Topic to Preview the Content

Samphina Academy

Samphina Academy is an Online Educational Resource Center that is aimed at providing students with quality information and materials to aid them in succeeding in their academic pursuit.