Odds against Privatisation of Teaching Hospitals

On 06/Sep/2019 / In Medical News

As the Federal Government mulls concession of teaching hospitals to transform the sector and increase access to healthcare, some professional unions in the sector say the proposed initiative will only escalate the cost of health services in the country, reports Vincent Ikuomola.
It is an open secret that Nigeria’s health system is sick and moribund. From lack of modern infrastructure to obsolete equipment to poor working conditions, the health sector is, indeed beleaguered, with myriad of problems, which successive administrations seem to have been unable to solve. Perhaps this explains why the sector is the most protest-plagued in the country.
Besides contributing to the poor health indices of the country, experts believe that the deplorable condition of the health sector is also a major factor fuelling medical tourism, which bleeds the country’s economy by an estimated $200million annually. All these anomalies may have to stop soon, as the federal government is considering involvement the private sector in the funding and management of 22 teaching hospitals in the country. According to its proponents, as part of efforts to improve health services and access, the idea of running public hospitals on a public-private partnership (PPP), a model that is generally believed to be more efficient and effective, will ensure better funding as government annual budget for the sector is too meager to provide the minimum requisite facilities to deliver the services.
That is what the recent nod by the Infrastructure Concessions Regulatory Commission (ICRC) to commence the concession of 22 tertiary hospitals seeks to achieve in the country. According to ICRC, which issued the Outline Business Case (OBC) Compliance Certificate to the Federal Ministry of Health for the rehabilitation and concession of 22 teaching hospitals, the hospitals will be run on a PPP arrangement, with the ultimate aim of improving access to quality healthcare services in the country. It will also bail out the tertiary health facilities from their dire straits, as better funding and efficient management will signal an end to lack of modern working tools, inconsistent power supply and above all low morale. In all these, it is the masses who gain through better access to healthcare in a country without functional health insurance that caters for all citizens.
While presenting the compliance certificate in Abuja recently, the Director-General of ICRC, Mr. Chidi Izuwah, argued that the PPP initiative, if seen through, would transform Nigeria’s tertiary health institutions, improve access to healthcare, reduce medical tourism and create direct and indirect employment. He stressed that the OBC has been thoroughly reviewed to ensure its viability, adding that ICRC has confirmed its bankability for optimal delivery of quality healthcare services to Nigerians. He explained further that the project would be fully financed by the private sector; while the medical services operations and delivery would still reside with in-house consultants, nurses, midwives and technicians.
He argued that the success achieved with the experiment of equipment standardisation of 14 teaching hospitals in 2003 is a pointer to the gains of the PPP initiative. Therefore, with public health institutions in a state of disrepair, the PPP arrangement is being revived to fast-track the modernisation and upgrading of the facilities and help build capacity of health personnel, especially in the area of new equipment and technology. “Under this PPP arrangement, the private sector is responsible for investing, operating and maintaining those facilities over a period of time and recover their investment from a combination of user fee and potential revenue paid by government,” Izuwah said.
The Director, PPP and Diaspora Unit in the ministry, Dr. Omobolanle Olowu, said what is next is to realize initiative this year is to raise a memo to seek the approval of the Federal Executive Council (FEC). She added that the project would cover 22 teaching hospitals and a 500-bed capacity Super Specialist Hospital in Abuja.
However, an idea some assume will be greeted with cheers is now being rubbished as another tool to further exploit already impoverished citizens, as critics say providing access to healthcare services should be a social responsibility that the government should not shy away from. Those against the PPP premised their argument on the fact that the National Health Insurance Scheme (NHIS) only covers about five per cent of the about 180 million population. Therefore, privatising the apex hospitals will amount to overburdening the masses, as it will further deny the poor access to healthcare services.
Condemning the proposed PPP arrangement, Comrade Josaih Joy Biobelemoye, president of the Joint Health Sector Unions (JOHESU), said privatising federal health institutions is never a solution to the challenges bedeviling the sector. He described the PPP initiative as a fraud and bad omen for the health sector. Though he admitted that he has not seen the ICRC document, the union president noted that the unions are very much against any form of privatisation of public health institutions in the country, stressing that the idea of PPP is a cover-up by those who have mismanaged the health sector in the last three decades.
“It is just a way by those who have mismanaged the health sector in the past three decade to cover up their inefficiency and ineptitude,” he said. The JOHESU president noted that rather than concession the health institutions, government should focus on concessioning other critical infrastructure like road and Mambila power projects while health facilities remain in the hands of government. He therefore described as suicidal and fraud the idea to concession the health institutions, citing examples from the developed world.
Biobelemoye also blamed the rot in the health sector on the decision of past administrators to remove hospital management from the hands of health administrators, stressing that arguments that funding will be better under the PPP are not tenable, as the plan will end up defrauding and denying Nigerians access to health.  The PPP  “is the biggest fraud and that will be worse than the privatisation of NEPA (National Electricity Power Authority) and the Nigerian Telecommunication (NITEL)  or any other government institutions that has ever been sold, he stressed.
To buttress his point, he posited that countries that have private-driven health system have worse health indices in terms of cost, infant and maternal mortality rate. “When you go to the advanced countries like United States, compared to their own likes, you can’t compare it with France and United Kingdom. America is private sector-driven health system, using up to two to nineteen per cent of its Gross Domestic Product on health; yet its indices are poorer when compared to countries like France, and the Scandinavian countries – Denmark, Sweden and Norway that spend less but are public driven.
“These are countries where health is about 70-80 public driven, they have better resources than America. So why would you go to borrow something, or introduce something to a society that is already poor. You want to bring in high cost of health system in a country where NHIS is non-functional. These countries we are talking about are places where their own health insurance system is working,” he said.
Like his part JOHESU counterpart, Mr. Godswill Okara, chairman of Assembly of Healthcare Professional Association (APHA), also carpeted the PPP initiative. He argued that concession of tertiary hospitals will only escalate the cost of health services in the country, citing the geographical location of majority of Nigerians who live in the rural areas. Okara was of the opinion that the current practice of commercialisation and outsourcing of core health services to business outfits in the name of PPP is an aberration. “In modern management principles and practice, ancillary services are outsourced in order to maximise effort on the core business of an organisation. Any attempt to outsource or privatise the core business means there is a total failure of management or what may be termed the obituary announcement of the business,” he said.
While reminding proponents of PPP initiative that enterprises and companies are driven by business goals and profit rather than the public good, he stressed that privatisation of healthcare services will lead to increased cost of drugs and services. “The effects of out-of-pocket-costs cause hardship and discourage most patients from accessing healthcare services. Privatising tertiary health institutions will in no way achieve universal health coverage.
“The concession of tertiary hospitals will escalate the cost of health services and further deprive the poor and less privileged citizens of our nation access to the specialist care these hospitals are supposed to provide. The issue of affordability is a cardinal consideration in universal health coverage. The bulk of Nigeria’s population lives in the rural areas. If those championing and driving the process of concession in the health sector are sincerely and genuinely concerned about accessibility and affordability of health services to Nigerian citizens, they should rather be advocating and pushing for private sector participation and intervention at the primary healthcare level in the rural areas where the bulk of our people live. They are merely interested in making profit from public tertiary hospital facilities, taking advantage of the gross mismanagement of these hospitals in the past thirty-four years.
“The truth has to be told that, unless we retrace our steps to where we missed it in 1985 when professional health service administrators were removed from managing hospitals as chief executive officers, we will never get it right. All this experimentation of privatising public tertiary hospitals will not solve the problem of access and affordability of health services to those who need them most, the teaming rural and urban citizenry of our nation. All over the world, professional health service administrators manage hospitals, while healthcare professionals concentrate on giving their core professional services to the best of their training, ability and professional mandate,” he said.
According to him, a major problem that should attract the interest of those in government should be the issue of how to ensure proper management of the country’s health institutions. “Without proper management of our hospitals, whatever financial or infrastructural investment made in the system whether by private investors or governments will never yield the desired maximal outcome. Even if all the money in the financial capitals of the world is invested in these hospitals, without prudent management by skilled managers, it will amount to a colossal waste of resources. It takes proper management skills and leadership ability to utilise and galvanise manpower, money and materials or equipment to deliver the desired outcome. The volume and trend of medical tourism will continue despite the concession, so long as the mismanagement of these hospitals is not addressed squarely and boldly by the government,” he said.
He also added that factors affecting medical tourism also drive brain drain. When professionals are not sufficiently motivated and well managed, they tend to seek alternative employment where their skills and efforts would be adequately appreciated, recognised and rewarded, he said. If PPP is needed in the health sector, Dr. Okara said it should be in the area of equipment placement, arguing that a kind of partnership can be forged in that respect. “There is no gainsaying that twenty-first century healthcare practice is technology and equipment driven. There is a critical lack of modern equipment in our public healthcare facilities. This is more so in diagnostic imaging and medical laboratory services. The concept and practice of PPP in medical laboratory services should key into partnership arrangements with equipment manufacturers and manufacturers’ representatives in Nigeria for wet lease agreement as it obtains abroad.
“This enables manufacturers to deposit their equipment in public health facilities with guarantees of purchase of reagents and consumables for such equipment by the facilities over a sustained period of time. This ensures that the manufacturers or their agents have a sustained market for their products which guarantees profitability over time. It also ensures constant service and maintenance backup for the equipment by the manufacturers. When newer and upgrade models of the equipment are introduced, the manufacturer will usually replace the old one through a trade-in arrangement. This type of partnership arrangement will avoid escalation of the cost of diagnostic tests, therapies and laboratory investigations, which often put services out of the reach of most patients and clients,” he said.

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