NATIONAL HEALTH ACCOUNTS OF NIGERIA,

Transcription

1 Health Policy Training and Research Programme, Department of Economics, University of Ibadan, Nigeria NATIONAL HEALTH ACCOUNTS OF NIGERIA, Adedoyin Soyibo Project Coordinator NHA Estimation Group; and Director Health Policy Training and Research Programme Department of Economics University of Ibadan Ibadan, Nigeria FINAL REPORT Submitted to WORLD HEALTH ORGANIZATION, GENEVA. October 2005

2 MEMBERS OF THE NHA ESTIMATION GROUP Adedoyin Soyibo, Project Coordinator; University of Ibadan Olakunle Odumosu, Project Manger; Nigerian Institute of Social and Economic Research, Ibadan Foluso Ladejobi, Federal Office of Statistics, Lagos Akanni O. Lawanson, University of Ibadan Bolaji Oladejo, Federal Ministry of Health, Abuja Semiu Alayande, University of Ibadan ACKNOWLDGEMENTS The Health Policy Training and Research Programme, Department of Economics, University of Ibadan, Ibadan, Nigeria acknowledges the contribution of the World Health Organization (WHO), Geneva, for providing the funds for completing this project and also for technical support in training some members of the NHA Estimation Group in Accra, Ghana. Initial funds for the project were provided by the Carnegie Corporation of New York and administered by the former International Health Policy Programme, an activity of the Pew Charitable Trust, the World Bank and the WHO; based in Washington DC. We are grateful for the support of all these organizations. 2

3 EXECUTIVE SUMMARY Resource allocation issues have been in the forefront of Nigeria s National Health Policy (NPH) since However, there are limited data to assess, for example, the extent of government funding of health care in country vis-à-vis other sources. Also there little or no information as regards the determination of the significance of the households in the funding of health relative to other private sector sources. In addition, very little, if any, is known about the adequacy or otherwise about the sharing of the burden of health funding by various stakeholders through the use resource and risk pooling. These and other issues can be addressed using the National Health Accounts (NHA) framework, the subject of this report. The NHA framework is one way of organizing, tabulating and presenting health sector expenditure information. It presents in an integrated way, health expenditure information on who pays, how much is paid and for what, as opposed to just separating the who from the what. This approach allows the separation of the financing of health function from that of the provision of health services. In particular, it also recognizes the financing function as being made up of two complementary activities: funds mobilization and funds allocation. Entities mobilizing health care funds are called financing sources while those allocating them and/or paying providers of health services directly are referred to as financing agents/intermediaries. The providers of health services are called uses (of health care funds). The study utilized administrative data collected from Federal, State and Local Government ministries and establishments. A survey of enterprises involving government parastatals and private sector companies (including insurance companies) was also conducted to determine the amount these organizations expended on health. In addition, data were collected from donor agencies and development partners as well as non-governmental organizations (NGOs) to determine their expenditure on health in Nigeria. In all cases, data were collected for the five year period The surveys were conducted in a sample of states selected using a representative sample of the socio-cultural groups of Nigeria in the six geo-political zones of the country. However, the study did not involve a survey of household health expenditure. Rather, it sponsored a part-analysis of the household health expenditure contained in the General Household Survey (GHS) conducted by the Federal Office of Statistics (FOS) in The GHS has a question on health expenditure. However, the questionnaire did not have any information on provider choice. Accordingly, the study adapted the provider distribution of household health expenditure from the Benue State household expenditure survey of 2001(Soyibo and Ladejobi, 2002). 3

4 MAIN FINDINGS Total Health Expenditure (THE) increased nominally from N157.1 billion in 1998 to N179.9 billion in 1999; and to N215.2 billion in It also grew by 19.09%, between 2000 and 2001when it became N256.3 billion. However, between 2001 and 2002 growth rate of THE slowed down significantly to 8.76% when THE became N278.7 billion. The average simple growth rate of THE over the period is 15.5%. Nigeria s THE as a proportion of GDP varied between the least value of 4.39% in 2000 and the highest value of 5.45% in 1998, with an average ratio of 4.78% over the period This does not compare favourably with the average ratio of 7.2% of THE/GDP for the Eastern and Southern Africa NHA Network (Nabyonga and Munguti, 2001). In fact it is poorer than the performance in less-endowed African countries like Rwanda (5.0%); Kenya (5.3%); Zambia (6.2%); Tanzania (6.8%) and Malawi (7.2%) while it is much lower than what obtains in South Africa (7.5%). Household out-of-pocket expenditure as a proportion of THE averaged 64.59% over the period with the least value of 60.35% recorded in 2000 and the highest value of 69.21% in This shows that households bear higher burden expenditure than other sources. The burden contrasts sharply with the situation in the Eastern and Southern African countries reported by Nabyonga and Munguti (2001) where the corresponding value varied between the least of 26% in Mozambique and the highest value of 63% in Kenya. It is also much higher than the range of 40-50% in non-socialist low-income countries reported by Berman (1999). Health insurance as a proportion THE grew steadily over the period of study. It grew from the least proportion of 1.79% in 1998, rising to 2.38% in 1999, 3.45% in 2000, 4.47% in 2000 and to the highest value of 4.96% in The contribution of government to THE in Nigeria varied between the least proportion of 14.96% in 1998, rising to 16.61% in 1999 and peaking at 27.22% in 2001 before dropping to 21.60% in On per capita basis, Nigeria s THE varied between N 1,446 or $16.96 in 1998 and N 2,5,66 or $21.26 in Among financing agents, private entities dominate in channelling funds to and/or paying providers of health services directly. In 1998, for example, Outof-Pocket health expenditure of households, Health Insurance and NGOs together of accounted for a total of N116.0 billion which is 73.9% of THE. This means that just a little over a quarter of THE was channeled through public entities in the year while health insurance alone accounted for just 1.79% of THE. This pattern is replicated in other years under study. The functional classification of THE in this study is only approximate because data at the federal level could not be disaggregated. Accordingly, we took the liberty to classify all federal health expenditure under the category of others. Besides, due to lack of information to the contrary, we assumed that household and insurance health expenditures are basically for curative 4

5 purposes. For expenditure items that can be easily classified, curative care dominates accounting for 72.3% and 70.52% of THE, in 1998 and 1999, respectively; for example. Preventive care was a distant second, accounting for 0.05% and 4.8% of THE, in 1998 and 1999, respectively. The pattern is similar for other years of study. IMPLICATIONS AND RECOMMENDATIONS There is a need to reduce the burden of high health care costs on households by improving and enhancing other sources like government, at all level, particularly for public health programmes as well as using resource and funds pooling approaches like health insurance. This is because at the point of consumption, payment is not made or is reduced. With appropriate safeguards, like co-payments and deductibles, as well as capitation it should be possible to reduce the problems of moral hazard and adverse incentive on the part of consumers and providers in the in the implementation of the scheme. There is also a need to improve expenditure data collection, storage and retrieval system of governments, particularly at the Federal level. Several studies have lamented this problem. But it is yet to abate. Rather, it seems to be intractable. It is surprising that several years into the democratic dispensation, the country is yet to resume the publication of the budget document which was done last in Budget of government should not be a secret. It should always be in the public domain. Lack of access has, for a long time adversely affected the exercise of estimating the NHA of Nigeria. Getting access to government data in the required format can also enhance the estimation of the NHA by line budget item for the public sector. In this connection, it will be necessary to modify the chart of accounts now currently in use in a way that will be suitable for NHA data collection. There is also a need to do a full-scale estimation health expenditure at the household level in order to improve on the accuracy of our NHA estimate, particularly in relation to regional differences in provider-choice by households. This will also help to provide NHA matrices by location/geographical or geo-political zones. It will be possible through it to capture the contributions of households to health insurance, however marginal. 5

6 I NATIONAL HEALTH ACCOUNTS OF NIGERIA, INTRODUCTION In 1988, the Federal Government of Nigeria formally launched the nation s first National Health Policy (NPH). The NHP identified Primary Health Care (PHC) as the cornerstone of the national health system and four main strategies for its implementation: promotion of community participation in planning, management, monitoring and evaluation of the local health system; health care to be accorded high priority in the allocation of the nation s resources; health care facilities to be equitably distributed giving preference to those at greater risk to their health and the under-served communities as a means of social justice and concern; and Emphasis on preventive and promotive measures which shall be integrated with treatment and rehabilitation in a multi-sectoral approach. Later, in September 1995, a National Health Summit was organized by the Federal Ministry of Health and Social Services. The summit aimed at examining critically and in-depth, the factors militating against improvement in the nation s health status and charting a remedial course of action for the country in the following decade and beyond. At the end of the summit, a ten-point communiqué was issued which emphasized, among others, the retention of PHC as the cornerstone of Nigeria s health care delivery system and the revision and modification of the first NHP to include adequate provision for private sector participation in health policy development in order to improve services in the areas of drug supply, consumer satisfaction and empowerment, health care financing, availability and accessible minimum health package affordable to every Nigerian. A direct result of the Health Summit is the National Health Policy (NPH), , which states that government should promote the provision of a minimum health care package that is available, accessible and affordable to Nigerians. As can be observed from the foregoing, resource allocation issues are in the forefront of Nigeria s Health Policy. However, a number of questions readily come to mind as regards the implementation of this aspect of the NHP. First, what the extent of government funding of health care in Nigeria relative to other sources? What is the significance of the households in the funding of health vis-àvis other private sector sources? How adequate is the burden of health funding shared by various stakeholders through, for example, the use of resource and risk pooling? How well is Nigeria meeting its goal of funding preventive and promotive health through adequate funding? These and other questions can be answered using the National Health Accounts (NHA) framework, which is the subject of this report. 6

7 The NHA framework is one way of organizing, tabulating and presenting health sector expenditure information. It presents in an integrated way health expenditure information on who pays, how much is paid and for what, as opposed to just separating the who from the what (Berman and Cooper, 2000). This approach allows the separation of the financing of health function from that of the provision of health services. In particular, it also recognizes the financing function as being made up of two complementary activities: funds mobilization and funds allocation. Entities mobilizing health care funds are called sources while those allocating them and/or paying providers of health services directly are referred to as financing agents/intermediaries. The providers of health services are called uses (of health care funds). In the next section of this report we state the terms of reference (TOR) of the study and specify which of the expected output, the data collected for the study permitted. In section III, we discuss briefly, the methodology of the study while the NHA estimates are presented in Section IV. In section V, where we conclude, we discuss some characteristics and trend analysis of the estimates, and make some recommendations. II TERMS OF REFERENCE The final output of the study was expected to have the following matrices for five years; : Financing Sources x Financing Agents Financing Agents x Providers Financing Agents x Functions(Public Sector only) Providers x Functions (Public Sector only) Financing Agents x Location (Urban/Rural, Public/Private) Financing Agents x Income Quintiles(Public/Private) Financing Agents x Resource Costs ( Public Sector only). However, as will been seen later, the limitations of the data collected for the study, made it impossible to have the type of disaggregation that can generate all the seven matrices specified by the TOR. Accordingly, only three of NHA matrices specified in the TOR could be generated for the years under study. These are: Sources x Financing Agents (S x FA); Financing Agents x Providers (FA x P) ; and Financing Agents x Functions (FA x F). The Sources of health care funds used in this study are: Government at all levels, consisting of Federal Government (FG), State Governments (SG) and Local Governments (LG); firms; households and donors. Sources are defined as entities which mobilize funds for health care expenditure. Financing agents, consist of the Federal Ministry of Health and its parastatals as well as other Federal Ministries/Agencies that spend funds whose primary objective relates to health improvement. Among these are Ministry of Defence, Ministry of Police Affairs, 7

8 Ministry of Women Affairs, and Prisons. The functions used in the study are curative care, preventive care, rehabilitative care, occupational health, capital formation for health care provider institution, education and training of health personnel, research and development in health, and others. III METHODOLOGY AND LIMITATIONS OF STUDY Data for the study were derived from a number of surveys using a representative sample of the socio-cultural groups of Nigeria. The country is divided into six geo-political zones. In choosing the state from each zone, the following criteria were used: states with former regional headquarters as capitals were selected (i.e. Enugu (SE), Kaduna (NW), Oyo (SW)). These states tend to be more cosmopolitan than most other states and hence will likely be more representative of the different socio-cultural groups in the country. Lagos and Abuja are self-representing samples. Lagos, being the former capital of the country and Abuja, the current capital, are included being the source of most of the data at the national level. In selecting the other states, balance in religious representation was taken into consideration. The states selected based on these criteria were Oyo in the South-West, Enugu in the South-East, Akwa-Ibom in the South-South, Bauchi in the North-East, Kaduna in the North-West, and Benue in the North-Central. Of course, Lagos and Abuja are self-representing. In effect, data were collected from seven states and the Federal Capital Territory. Administrative data were collected from Federal, State and Local Government Ministries and establishments. A survey of enterprises involving government parastatals and private sector companies and insurance companies was also conducted to determine the amount expended on health. In addition, data were collected from donor agencies and development partners as well as non-governmental organizations (NGOs) to determine their expenditure on health in Nigeria. In all cases, data were collected for the five year period The study did not involve survey of household health expenditure. However, it sponsored a part analysis of the household health expenditure as contained in the General Household Survey (GHS) conducted by the Federal Office of Statistics(FOS) in The GHS has a question on health expenditure. However, the questionnaire did not have any information on provider choice. Accordingly, the study adapted the provider distribution of household health expenditure from the Benue State household expenditure survey of 2001(Soyibo and Ladejobi, 2002) for the entire country and period of study. This is a great limitation of the study. This assumes that the Benue State is representative of the country which cannot be true. For example, being a rural state, households did not report any health expenditure through health insurance; neither were there reimbursement of health expenditure to households by firms and other employers. 8

9 Besides, using the estimated household health expenditure for 2002 for all the years under study also assumes that the basket of health goods and services consumed by households remained constant for the five years under study and that it is affected only by inflation and population which are assumed to vary with time. Accordingly, the study used the 2002 health expenditure to estimate health expenditure for the other four years covered in the study by deflating the 2002 estimate to respective year estimates using the consumer price index for each of the years and cumulating by population. The data collected on the health expenditure of the Federal Government and its agencies were highly aggregative and could hardly be broken down into budget line items, functions and providers. This made it difficult to estimate NHA matrices by functions, by providers in which Federal Government values were adequately disaggregated. The household health expenditure used was not disaggregated by location and income quintile as well as providers. Accordingly, the study could not estimate NHA matrices disaggregated by location and income quintiles. The NHA matrices in this report were estimated using the NHA Version 2 Software (Berman and Cooper, 2000). IV POLICY ISSUES THAT NHA CAN ADDRESS 1 The World Health Report, 2000; expanded the concept of health system performance to include explicit goals beyond population health improvement, such as protection of the population from financial risk and equity in health and financing. The report noted that governments have a stewardship role to play in guiding the improvement of health system performance. The NHA Producers Guide asserted that financing evidence can contribute to improved performance. For example, financing information is an essential input for strengthening health system performance. It also contributes to the measurement of outcomes of the system and the factors that explain these outcomes. Among the many policy questions which NHA can answer are: Who pays and how much is paid for health? This is an important question for evaluating health system results and for developing strategies to improve performance. Knowing on whom the burden of financing falls and how large it is relative to their means illuminates financial protection and fairness of financial burden. Knowing who contributes to health spending is valuable for information in designing policies and interventions. Who are the important actors in health care financing and health care delivery and how significant are they in total expenditure? Understanding both the financing and the delivery of health and health-related services is important for understanding health system performance. How 1 This section borrows substantially from The Producers Guide to National Health Accounts for Low and Middle Income Countries, 2002(WHO, World Bank, OECD, USAID, SIDA). 9

10 expenditures are distributed among the different financing entities and health care providers is one way of gauging the overall role of each in the health system. It also contributes to developing strategies for reform. NHA is particularly useful in contrasting the size and role of government, health insurance and private expenditure on health. How are health funds distributed across the different services, interventions, and activities that the health system produces? The commitment of health resources to health functions is one valuable measure of the actual priorities of the health system. What share of spending is claimed by collective public health interventions relative to inpatient services, or by interventions for infectious diseases relative to maternal health or cardiovascular conditions? Measures like these are also excellent indicators of whether policies to shift resources are working. NHA can also contribute to the analysis of cost-effectiveness an health service efficiency, by linking expenditure with outputs and outcomes. Who benefits from health expenditure? Knowing where health expenditure lands in terms of their financial value is one important measure for assessing fairness in distribution. There are a number of important dimensions that have great relevance to policy, such as socioeconomic, gender, age, and geographical distribution. The results presented and analyzed in the next section attempt to direct attention to some of the policy issues identified in the forgoing, where appropriate or possible. V RESULTS 5.1 The 1998 NHA Estimates Tables 1-3 show different matrices of the 1998 estimates. Total Health Expenditure (THE) in Nigeria in 1998 was N billion or 5.45% of GDP. However, the expenditure is largely borne by households, spending N or 69% of THE (Figure 1). Total Government Health Expenditure (TGHE) was 15% of THE with Federal Government contributing 10%, States 4% and Local Governments just 1%. It is interesting that Donors spent more than any of the tiers of government in 1998, contributing 13% of THE. Total private Health Expenditure (TPHE) was N113.0 billion or 3.92% of GDP. In contrast, TGHE was just N 23.5 billion or 0.82% of GDP. Health expenditure by Donors was N20.6 billion which is 0.71% of GDP. Among financing agents, private entities also dominate in channelling funds to and/or paying providers of health services directly. Thus, Out-of- Pocket health expenditure of households, Health Insurance and NGOs together of accounted for a total of N116.0 billion which is 73.9% of THE. This means that just a little over a quarter of THE was channelled through public entities in Health insurance alone accounted for only 1.79% of THE (see Figure 2). 10

11 Figure 1: Sources of Health Financing in Nigeria, 1998 (%) Fed Govt. State Govt. Local Govt. Firms Donors Households Figure 2: Percentage Share of Total Health Expenditure by Financing Agents, 1998 (%) Fed. Mins. State Mins. LGA Health Dept. Health Insurance Out of Pocket NGOs

12 Most of the health expenditure in 1998 was expended in non-government facilities. Of these, private facilities made up health care facilities at the primary, secondary and tertiary levels, dominate; accounting for a total expenditure of N42.5 billion or 27.1% of THE(table 2). The total health expenditure in government facilities in 1998 was N24.9 billion, which is 15.8% of THE. Chemists and pharmacies accounted for a total health expenditure of N22.0 billion or 14.0% of THE. The health expenditure in Mission/NGO facilities in 1998 was N15.4 billion which is 9.8% of THE while Nigerians spent over N6.6 billion as health care expenditure with traditional health care providers in This was 4.2% of THE. For other health care services/provision like selftreatment/home care, administration of health, research or education and training, the estimated expenditure in 1998 was N45.7 billion or 29.1% of THE. The presentation of health expenditure by functional classification is only approximate because of our inability to obtain disaggregated data at the federal level. Accordingly, we took the liberty to classify all federal health expenditure under the category of others. Besides, due to lack of information to the contrary, we assumed that households and insurance health expenditures are basically for curative purposes. Accordingly, they are classified under curative care. For expenditure items that can be easily classified, curative care dominates accounting for a total expenditure of N113.6 billion or 72.3% of THE. Preventive care is the next most important functional area in terms of health expenditure accounting for a total of N782.0 million or 0.05% of THE. Table 1: 1998 NHA Matrix; Sources to Financing Agents (Naira, millions) Sources State Federal Financing Agents Government Governments. Local Governments Firms Households Donors TOTAL Federal Ministries State Ministries LGA Health Departments Health Insurance Out of Pocket NGOs Total

13 Table 2: 1998 NHA Matrix; Financing Agents by Providers (Naira, Millions) Financing Agents Providers Federal Ministries State Ministries LG Health Departments Health Insurance Out-of- Pocket NGOs Total Government Facilities Private Facilities Mission/NGO facilities Chemists/Pharmacies Traditional Health Care Others Total Table 3: 1998 NHA Matrix: Financing Agents by Functions(Naira, millions) Financing Agents Functions Federal State LG Health Health Out-of- Ministries Ministries Departments Insurance Pocket NGOs Total Curative Care Rehabilitative Care Preventive Care Capital Formation for Provider Institutions Education Training Research & Development in Health Others Total The 1999 NHA Estimates THE in 1999 was estimated as N179.9 billion or 5.41% of GDP(table 4). This is 14.52% more than THE in 1998, yet it is a lower proportion of GDP. Again households bore more of the burden of health care expenditure, spending N118.8billon or 66% of THE. In contrast, the share of Federal expenditure on health declined to 9.4% while that of the states also declined to 3.6%. In the case of the Local Governments, their share of THE rose significantly from 1% in 1998 to 3.6% in 1999 (Figure 3). TGHE in 1999 was N29.9 billion or just 0.90% of GDP. In contrast, the private sector expended a total of N125.1 billion (3.77% of GDP) on health during the year. Of this expenditure, households contributed N118.8 billion (3.58% of GDP or 94.95% of TPHE). Donors contribute a total of N24.9 billion or 0.75% of GDP. Again the burden of health expenditure continues to rest squarely on households. 13

14 Figure 3: Sources of Health Financing in Nigeria, 1999 (%) Fed Govt. State Govt. Local Govt. Firms Donors Household Figure 4: Percentage Share of Total Health Expenditure by Financing Agents, 1999 (%) Fed. Mins. State Mins. LGA Health Dept. Health Insurance Out of Pocket NGOs

15 Just like it was in the 1998 NHA estimates, private and non-governmental entities dominate as financing agents in the 1999 estimates. Thus, they accounted for the channelling of a total of N127.5 billion or 70.88% of THE (see Figure 4). Household out-of-pocket expenditure constitutes 94.75% of this amount. In contrast, only a total of N52.4 billion or 29.13% of THE is channelled through governmental financing agent entities. Within the governmental financing agent entities, federal entities dominate channelling a total of 36.8 billion or 70.23% of the amount channelled through governmental entities(table 5). On important observation relates relative low impact of health insurance so far in Nigeria. In 1999, health insurance accounted for just 2.38% of THE. This will, however, be seen to be an improvement over the performance of the entity in Only about N26.7 billion or 14.84% of THE was expended in government facilities in the year. In contrast, private facilities accounted for a total of N47.8 billion or 27.12% of THE while N16.9 billion was spent in Mission/NGO facilities. This is 9.39% of THE. Nigerians expended N24.2 billion (13.45% of THE) in Chemists/Pharmacies in the year while for Traditional Health Care the amount spent was N7.3 billion or 4.05% of THE. Self/home care, administration of health care, education and training as well as research and development in health, classified as others, gulped a total of N57.1 billion or 4.06% of THE during the year. Curative care also predominates in health care expenditure in They accounted for a total of N126.9 billion or 70.52% of THE (table 5). Preventive care is in a distant second position among functions, which can be classified given the level of disaggregation of our data set. It accounted for a total expenditure of N8.7 billion or 4.82% of THE (table 6). Capital formation of health care institutions does not appear to be getting the necessary attention that the functional classification deserves. Thus it accounted for only a total N609.8 billion or just 0.34%. It is not surprising therefore that the landscape of Nigeria s health care facilities, particularly in the public sector, is dotted with dilapidated and decayed infrastructure and outdated and broken down equipment. Similarly education and training of health personnel as well as research and development in health need to given more adequate attention 2. 2 We recognize that there may be some underestimation here due to our inability of disaggregating Federal Government data. However, being unable to do this will not likely result in any significant difference, given the results of other studies like Soyibo(2003) and Soyibo and Maghereni(2001). 15

16 Table 4: 1999 NHA Matrix; Sources by Financing Agents (Naira, millions) Sources Financing Agents Federal State Local Government Governments Governments Firms Household Donors Total Federal Ministries 16, , , State Ministries 6, , , Local govt. Depts. of Health , , , Health Insurance 4, , Out-of-Pocket 2, , , NGOs 2, , Total 16, , , , , , , Table 5: 1999 NHA Matrix: Financing Agents by Providers (Naira, millions) Financing Agents Providers Federal State LG Health Health Out-of- Total Ministries Ministries Departments Insurance Pocket NGOs Govt. Facilities 2, , , Private Facilities 43, , Mission/NGO Facilities 4, , , Chemists/Pharmacies 24, , Traditional Health care 7, , Others 36, , , , , , Total 36, , , , , , , Table 6 : 1999 NHA Matrix : Financing Agents by Functions (Naira, millions) Financing Agents Functions Federal State LG Health Health Out-of- Total Ministries Ministries Departments Insurance Pocket NGOs Curative Services , , , Preventive Care 4, , , Rehabilitative Care Educational &Training of Health Personnel Capital Formation for Health Care Institutions Research & Developments in Health Others 36, , , , , Total 36, , , , , , ,

17 5.3 The 2000 NHA Estimates Tables 7 9 show that THE in 2000 was N215.5billion or 4.38 % of GDP, less than the proportion in 1998 or However, nominally it was 19.63% higher than the 1999 value. TGHE was N 40.4 billion. As a proportion of THE in 2000, it was 18.77%, up from 16.61% in Households still bear the highest burden accounting for a total expenditure of N139.9 billion or 60.35% of THE (Figure 5). As a proportion of GDP, TGHE was 0.82%. In contrast, TPHE was 2.85 % of GDP while donors spent a total of N34.9 billion or 0.71% of GDP. As in the previous two years the 2000 NHA estimates show that nongovernmental financing agent entities channel the largest proportion of health care funds for ultimate use(s). Thus all non-governmental financing agents, outof-pocket household expenditures, health insurance and NGOs, accounted for a total of N143.2 billion or 66.54% of THE (see Figure 6). In contrast, governmental financing agents accounted for the balance proportion of 33.46% of which federal ministries and agencies took 24.0%. Health insurance in Nigeria is very much at its infancy, accounting for just 3.45% of THE. This tends to exacerbate the suffering of households who had to pay for health at the point of consumption without little or now transfer of risks except through the intervention of large firms. The good news is that there is a progressive improvement in the performance of health insurance in the financing of health care in Nigeria. There is also a preponderance of service delivery through nongovernment facilities. Thus, only N28.9 billion (or 13.42% of THE) is expended in government facilities. In contrast, a total of N55.0 billion (25.5% of THE) is expended in private clinics and hospitals. While, a significant amount of health expenditure of the order N18.6 billion (8.6% of THE) was channelled through Mission/NGO facilities. In the year, the performance of chemists/pharmacists was better. Health expenditure with this group of providers in Nigeria in the year amounted to over N26.5 billion which is 12.31% of THE. A total of about N8.0 billion, about 3.7% of THE, was expended for the provision of traditional health care. Others comprising Self/Home Care, administration of health care, education and training of health personnel as well as research and development in health consumed a total of N78.2 billion or 36.33% of THE in the year. The classification of THE by function shows that curative care consumed the largest chunk Thus a total of N142.6 billion( or 66.26%) was expended on curative health care in the year. Just like the previous years, preventive care was a distant second(among the functional categories that can be disaggregated) accounting for a total spending of N2.3 billion or 1.07% of THE, while spending on Education and Training of Health Personnel was N1.7 billion or 0.79% of THE. Next in order of rank is spending on rehabilitative care with a total of N657.1 million or 0.31% of THE. The others which accounted for N67.7 billion or 31.46% is relatively high because our inability to collect disaggregated data at the federal level as in other levels of government. 17

18 Figure 5: Sources of Health Financing in Nigeria, 2000 (%) Fed Govt. State Govt. Local Govt. Firms Donors Household Figure 6: Percentage Share of THE by Financing Agents, 2000 (%) Fed. Mins. State Mins. LGA Health Dept. Health Insurance Out of Pocket NGOs 18

19 Table 7: 2000 NHA Matrix; Sources by Financing Agents (Naira, millions) Sources Fed. State Local Firms Households Donors Total Financing Agents Govt. Govts. Govts. Federal Ministries 22, , , State Ministries , , LG Health , , , Departments Health Insurance 7, , Out of pocket 2, , , NGOs 3, , Total , , , , , Table 8: 2000 NHA Matrix: Financing Agents by Providers (Naira, millions) Financing Agents Providers Federal State LG Health Health Out-of- Total Ministries Ministries Departments Insurance Pocket NGOs Govt. Facilities 2, , , Private Facilities 7, , , Mission/NGO Facilities 18, , Chemists/Pharmacies 26, , Traditional Health care 7, , Others 51, , , , , , Total 51, , , , , , , Table 9: 2000 NHA Matrix: Financing Agents by Functions (Naira, millions) Financing Agents Functions Federal State LG Health Health Out-of- Total Ministries Ministries Departments Insurance Pocket NGOs Curative Services 1, , , , , Preventive Care , , Rehabilitative Care Educational , &Training of Health Personnel Capital Formation for Health Care Institutions Research & Developments in Health Others 51, , , , , Total 51, , , , , , ,

20 5.4 The 2001 NHA Estimates Estimate of THE in 2001 was N billion of which TGHE was 27.2%, the highest proportion during the five year period under study. As a proportion of GDP, THE was 4.5%. Of this, TPHE which was N172.3 billion contributed the largest share of 3.02% of GDP. In contrast TGHE was only 1.22% of GDP. As in the other cases, households continue to bear the highest burden of health care expenditure among all sources. As a source of health care expenditure, they accounted for a total of N157.6 billion, which is % of THE or 2.76% of GDP. Donors spent a total of N14.3 billion or 5.57% of THE and 0.25% of GDP in 2000(tables & figure 7). A total of N80.4 billion of health expenditure (or 31.35% of THE) was channelled through governmental financing agent entities in 2001 (Figure 8). Of this Federal Government entities channelled a total of N48.5 billion or 18.94% of THE. State and Local Government entities channelled respectively about N24.0 billion (9.34% of THE) and N7.8 billion (or 3.07% of THE). Out-of-pocket health expenditure dominates the N175.9 billion of health expenditure channelled through non-governmental financing agents. It accounted for a total of N160.8 billion or 62.74% of THE while health insurance channelled a total of N11.5 billion or 4.47% of THE, an improvement of about 1% share over its performance in Our analysis of the classification of health expenditure by providers, for classifiable data, shows that expenditure in private facilities dominates; accounting for a total of N69.3 billion or 27.06% of THE. A total of N34.5 billion or 13.46% of THE was expended in government facilities. Chemists/pharmacies are next in order of importance accounting for a total of N32.2 billion or 12.55% of THE. For traditional health care, Nigerians expended nearly N9.7 billion or 3.76% of THE in In contrast, self/home care, administration of health, education and training of health personnel(classified as others ) gulped a total of N88.1 billion or 34.39% of THE in the same year. A total of over N175.5 billion or 68.49% of THE was spent on curative care. In contrast, the next among classifiable functional activities that our data allow, is preventive care on which over N2.2 billion or 0.09% of THE was expended. Capital formation for health care institutions is in a very distant third position with a total expenditure of N806.3 million. The others category accounted for a total of N76.7 billion or % of THE. This is a significant proportion of health expenditure and points to the problem of data storage and retrieval in Nigeria s health. In spite of many years after the launch of the Health Management Information System, it is surprising that the country still experiences difficulty in accessing health financial data. 20

21 Figure 7: Sources of Health Financing in Nigeria, 2001 (%) Fed Govt. State Govt. Local Govt. Firms Donors Household Figure 8: Percentage Share of THE by Fianancing Agents, 2001 (%) Fed. Mins. State Mins. LGA Health Dept. Health Insurance Out of Pocket NGOs 21

22 Table 10: 2001 NHA Matrix: Sources by Financing Agents (Naira, millions) Sources Financing Agents Fed. State Local Firms Households Donors Total Govt. Govt. Govt. Federal Ministries 45, , , State ministries 20, , , LGA \Health , , , Departments Health Insurance 11, , Out of pocket 3, , , NGOs 3, , Total 45, , , , , , , Table 11: 2001 NHA Matrix: Financing Agents by Providers (Naira, millions) Financing Agents Providers Federal State LG Health Health Out-of- Total Ministries Ministries Departments Insurance Pocket NGOs Govt. Facilities 2, , , Private Facilities 11, , , Mission/NGO Facilities 22, , Chemist/Pharmacist 32, , Traditional Health care 9, , Others 48, , , , , , Total 48, , , , , , , Table 12: 2001 NHA Matrix: Financing Agents by Functions (Naira, millions) Financing Agents Functions Federal State LG Health Health Out-of- Total Ministries Ministries Departments Insurance Pocket NGOs Curative Services 1, , , , , Preventive Care , Rehabilitative Care Educational &Training of Health Personnel Capital Formation for Health Care Institutions Research & Developments in Health Others 48, , , , Total 48, , , , , , ,

23 5.5 The 2002 NHA Estimates Tables show that THE in 2002 was estimated to be N278.7 billion or 4.7% of GDP. Nominally, this is 8.76% higher than the value for TGHE was N60.2 billion or to 21.6% THE. This was lower than the share in Also nominally it was 13.70% lower than the corresponding value in As proportion of GDP, TGHE was 1.02%. In contrast, TPHE was N billion or 3.40% of GDP. Donors contributed a total of N17.1 billion or 0.29% of GDP. Households continue to bear the burden of health care expenditure accounting for 65.87% of THE (figure 9) or 3.10% of GDP. The channel of health funds continues to be dominated by nongovernmental financing agent entities in Thus, out-of-pocket expenditure of households topped all financing agents with a total of N187.6 billion or 67.30% of THE. Governmental financing agent entities channelled total expenditure N71.3 billion or 25.58% of THE. Among, private financing agents, health insurance continues to improve its contribution to THE. In 2002, it pooled a total of N13.8 billion, which is 17.34% more than its contribution in This is also 4.96% of THE, marginally higher than 4.47% in Nigerians continue to patronize private facilities more than government facilities, although our inability to disaggregate federal data made the others category to dominate the expenditure category with N82.6 billion or 29.82% of THE. In contrast, private facilities accounted for a total of N81.37 billion or 29.19% of THE. A total of N39.73 billion was spent in government facilities in This is 14.27% of THE. Chemists/pharmacies accounted for a total expenditure of N37.5 billion or 13.46% of THE. Mission/NGO facilities and Traditional health respective gulped N26.3 billion (9.42% of THE) and N11.3 billion (4.04% of THE). Curative care topped the expenditure classification by functions accounting for a total of N205.1 billion or 73.57% of THE in 2002, about 5% higher than the corresponding proportion in Among classifiable items by functions, preventive care is again a distant second, accounting for N2.8 billion (about a tenth of expenditure for curative care and 1.01% of THE). Just like in the case of the year 2001, capital formation for health care institutions is next in order of rank account for N902.6 million or 0.32% of THE Rehabilitative care and research and development in health respectively consumed N416.7 million and N349.0 million. The class others, consisting mainly of Federal Government health expenditure and other non-classifiable items consumed N68.6 billion or 24.62% of THE. 23

24 Figure 9: Sources of Health Financing in Nigeria, 2002 (%) Fed Govt. State Govt. Local Govt. Firms Donors Household Figure 10: Perecentage Share of Total Health Expenditure by Finanacing Agents, 2002 (%) Fed. Mins. State Mins. LGA Health Dept. Health Insurance Out of Pocket NGOs

25 Table 13: 2002 NHA Matrix: Sources by Financing Agents (Naira, millions) Financing Agents Fed. Govt. State Govts. Local Govts. Sources Firms Households Donors Total Federal Ministries 34, , , State Ministries 20, , , LG Health , , , Departments Health Insurance 13, , Out-of-pocket 3, , , NGOs 6, , Total 34, , , , , , , Table 14: 2002 NHA Matrix: Financing Agents by Providers (Naira, millions) Financing Agents Providers Federal State LG Health Health Out-of- Total Ministries Ministries Departments Insurance Pocket NGOs Govt. Facilities 1, , , Private Facilities 13, , , Mission/NGO Facilities 26, , Chemist/Pharmacist 37, , Traditional Health care 11, , Others 38, , , , , , Total 38, , , , , , , Table 15: 2002 NHA Matrix: Financing Agents by Functions (Naira, millions) Financing Agents Functions Federal State LG Health Health Out-of- Total Ministries Ministries Departments Insurance Pocket NGOs Curative Services 1, , , , , Preventive Care 1, , , Rehabilitative Care Educational &Training of Health Personnel Capital Formation for Health Care Institutions Research & Developments in Health Others 38, , , , , Total 38, , , , , , ,

26 VI TREND ANALYSIS OF HEALTH EXPENDITURE, DISCUSSION AND RECOMMENDATIONS Table 16 shows the characteristics and trend of Nigeria s NHA over the period From the table, it can be observed that Nigeria s health expenditure as a proportion of the GDP varied between the least value of 4.39% in 2000 and the highest value of 5.45% in 1998, with an average THE/GDP ratio of 4.78 % (see also Figure 11). This does not compare favourably with average ratio of 7.2% of THE/GDP for the Eastern and Southern Africa NHA Network (Naboyonga and Munguti, 2001). In fact many less endowed countries of the sub region performed better than Nigeria as regards THE as a ratio of GDP. Among these are: Rwanda, 5.0%; Kenya,5.3%; Zambia, 6.2%; Tanzania, 6.8%; Malawi, 7.2% and South Africa, 7.5%. Table 16 : Characteristics and Trend Analysis of Health Expenditure in Nigeria Health Expenditure (Millions) Total Health Expenditure (THE) 15, , , , , General Govt. Exp 23, , , , , Federal 15, , , , , State 6, , , , , Local 2,141 6, , , , Private Expenditure 113, , , , , Firms 4,308 6, , , , Household 108, , , , , Donors 20,551 24, , , , GDP (million N) ,322,030 4,902,800 5,702,650 5,927,680 Population (thousands) , ,911 THE/GDP Govt/THE HHD/THE Per Capital THE 1, , , , , Nominally, THE is on an upward trend over the period , covered by the study. Thus THE grew by 14.52% from N157.1 billion in 1998 to N179.9 billion in Corresponding it grew by 19.63% to N215.2 billion between 1999 and Growing by 19.09%, between 2000 and 2001, THE became N256.3 billion in However, between 2001 and 2002 growth rate of THE slowed down significantly to 8.76 %(Figure 11).The average simple growth rate over the period is 15.5%. 26