Health Management Organisations (HMOs) beyond just serving as facilitators to people to access health services, HMOs need to be innovative and embrace technology that will help attract people to health insurance. In this interview, Managing Director and the Chief Executive Officer of Avon Healthcare Limited, Mrs. Adesimbo Ukiri, spoke about achieving a sustainable health insurance in Nigeria.
One of the childbirths of globalization is health insurance which is being adopted in Nigeria now, do you see the HMOs in the country being innovative enough to make health insurance attractive to people?
Over the years, I think innovation has not played a leading role in how Health Insurance and Health Management sector has evolved in Nigeria. Right now we have over 70 licensed HMOs for a population of about 170 million people and still the market hasn’t grown. Across all the players in the market, you have HMOs offering more or less the same kinds of health plans with the same levels of benefits. On the average, the HMOs in Nigeria would offer to companies and individuals plans that range between what is a ‘bronze’ to ‘platinum’. And if you take 10 HMOs in the country and you compare the kind of plans they have, you will see that most of them offer the same thing at their core. So it really begs the question if there has been any innovation around product development. It high time we started seeing innovation with respect to product development in the industry.
Apart from innovation in product development, in what other areas do we need to see innovation in the Health Insurance Industry?
Again, when you think about the channels to market; the way in which the HMO products have been offered to the market, you will see that there are really no innovations. Everybody in the market at the moment has direct sales teams who go out and offer these plans to companies. You can’t see new channels being opened up. So when you talk about innovation, you talk about access to new markets and the ability to offer new technology.
In Nigeria today, the market amongst the HMOs is still very much what we call the public sector business, which is business that the NHIS has control over. This is the business of the Federal Government ministries and agencies. It hasn’t grown because it is a limited market and there are only so many employees that the Federal Civil Service has.
In addition to that you have the corporate segment. Those are the large companies. That is a pretty mature and saturated market right now. And then there is the frontier, the new market area that is the retail segment. Nothing much has happened there. No HMO has been able to crack open that segment. And I think it’s down to lack of innovation.
Let me add that technology and automation can radically transform what we do in this industry and how we do it. Many of the processes within the industry are still very much manual and dependent on people and a lot of paperwork between the hospitals and the HMOs.
But that is not to say that things are not happening. Avon has come into this market intending to set new standards in the way we operate and as we move on, Nigerians will begin to appreciate and feel that there is a new player in the market that is listening to them and is ready, willing and able to meet the needs of the market.
Our regulator, the National Health Insurance Scheme (NHIS), has also made some commendable strides in recent times around the use of technology. There is an E-NHIS project that is still in the works. I believe that at the end of the process we will see some fantastic Innovations around technology in the sector. But we are not waiting for that. Discussions are still on-going. We are in the forefront of innovations in terms of products and services being offered and access to new markets being opened up.
Statistics show that penetration level of the Health Insurance Industry is still quite low with only about five percent of Nigerians having Health Insurance cover. What is the correlation between the poor penetration levels and the lack of innovation in the industry that you pointed out?
I think there is a direct correlation. There is a large portion of the market who would like Health Insurance services but they simply can’t because they can’t be reached. I am talking about the large informal sector. So how can you reach people and enable them to have access to information about the products and services in a manner that is convenient for them? How do they enrol? How does the whole process happen and occur? It certainly can’t be through the reliance on paper forms being filled and submitted. In any case how many offices would you need to have around the country in order for people to walk in and submit the forms? In other words what kind of structure is needed to provide accessibility to people so that they can avail themselves of the products and services that will cater for their health insurance needs? These and other details that has to be worked out and innovation is the way to go.
So I do believe that lack of innovate is the key part of the reasons why majority of Nigerians haven’t been able to subscribe to Health insurance plans and why the penetration is so low in Nigeria.
We are witnesses to the era of globalization in critical sectors in the country. What role will globalization play in the growth of the health insurance industry especially for indigenous HMOs?
I can tell you that Globalization is crucial when you are discussing innovations. One of the key things that came out recently at a session during this year’s BusinessDay CEO Forum tagged “Globalization and the Challenges of Innovation’ was the research commissioned by General Electric. The research was carried out in over 25 countries across the world including Nigeria. The research specifically asked how to accelerate innovation and 90 per cent of the respondents believed that collaborative innovation is the way forward. Now collaboration has to be on a global level. And what drives people’s decision to collaborate on a global level? It is access to new technologies, access to new systems, process and access to new markets.
A key part of what is missing in the Health Insurance and Health Management sector in Nigeria is simply that ability to scale up. But also importantly, do we have the processes and the systems to handle that level of scale?
That is why I feel that discussions around globalization are crucial for this industry to succeed and reach the levels this government wants it to, which is the universal coverage. There urgently needs to be capacity around underwriting and actuarial modelling. These are skills that are not yet very robust in this country especially as it pertains to Health Insurance. There are underwriting skills and capabilities in other areas of insurance but when it comes to Health Insurance, it is an area where generally speaking, as a country, we do lack the required levels of skills and capabilities. So globalization and innovation should be discussed in equal breath when we are discussing what we want to see happen in the health insurance sector in Nigeria.