HEALTH AND THE WEALTH OF NATIONS AND THE CHALLENGE OF NATION BUILDING
Chairman of Council and Pro Chancellor
Of the University of Lagos
Vice – Chancellor
Provost of the College of Medicine
And Esteem Faculty of College
Very Distinguished Guests
Ladies and Gentlemen.
HEALTH AND THE WEALTH OF NATIONS AND THE CHALLENGE OF NATION BUILDING
I must begin with thanking the organizing Committee of the Professor Felix Dosekun Lecture Series, first for the thoroughness of their effort and then for finding me worthy to join the fraternity of those who have delivered this lecture in honour of an outstanding intellectual and statesman.
I do also want to place on record my appreciation of the College of Medicine for instituting this lecture series to immortalize a great pioneer, intellectual and statesman. I am actively engaged in trying to get people to pause and reflect on what constitutes a meaningful life in the midst of an extant culture of “My Mercedes is bigger than yours” and honour such as this does more to validate a meaningful life than the preaching of a thousand Pastors. With this lecture the College confers immortality on Professor Dosekun.
In a 1991 interview I had said that man’s purpose was the pursuit of immortality. I acknowledged two forms, material immortality – to live in the consciousness of men long after flesh has taken its place as dust like Shakespeare and Einstein do, and spiritual immortality, which for people of faith, is to see God face to face. Most wise people, I suggested, seek both. This lecture certainly helps bring this to Professor Dosekun long after the biggest money bags of his time have faded from even the memories of relatives. We need such to encourage people to seek the meaningful life so l am very pleased that the College has turned to such to honour its best.
Let me also note how pleased I feel that I am the first FOD lecture speaker from outside the discipline of Medicine, and I understand, the first indeed, not to have sat in a class under the spell of this man of knowledge and practice.
I am also pleased that this lecture series is being now used, in addition to remembering a hero passed, to endow scholarships and other purpose of enhanced academic pursuit in his area. I enjoyed the privilege of endowing prices for students in Economics for several years at the Akoka Campus and was pleased to hear that the former Vice – Chancellor Prof Oye Ibidapo – Obe who handed out some of the prizes and the late Deen of Faculty Prof. C. S. Momoh spoke generously of that enterprise. I do hope my friends who are here today try to do me one better at the College of Medicine.
Let me return to the core subject of the day, health care and policy to ensure effective delivery of health care in Nigeria. A few years ago, I was invited to the Teaching Hospital of Bisi Onabanjo University in Shagamu. As speaker, I was preceded by a Professor from the College of Medicine here at the University of Lagos. He had left after the morning session but his comments continued to resonate when I arrived and was called up to the podium. He was said to have described the healthcare system in Nigeria as a “man-made” disaster. Drawing from this I wonder if images of the struggle against a natural disaster, the earthquake in Haiti would be appropriate metaphor for the state of health policy implementation in Nigeria.
If you consider the following you may come to the conclusion that we are dealing with a man-made disaster with worse consequences than Haiti is suffering from the flattening of Port au Prince by the Earthquake of January 2010.
On one evening a few weeks before the earthquake an executive I know was evacuating his mother – in- law to South Africa for a heart ailment. Of his own came the volunteering of the rather scandalous comment that four other air ambulance he knew of left Nigeria that day. The calculations we got that one month cost of these air ambulance services for the benefit of a few, could provide for a quality midsize hospital. I remarked that it was an irony that as we had that discussion the President of Nigeria was lying in a Saudi hospital an irony made more painful by the fact that a few years ago most Saudi hospitals were staffed by doctors from LUTH and other hospitals in Nigeria.
Why does the effect of collapse of health care be compare with the horrific nature of the Haiti disaster. Atrocious health care breeds poverty which is a bigger mass killer than earthquake and Tsunamis. Indeed human progress in these times is predicated significantly on human capital. There are two sides to human capital, education and health care. Until we can build up skills and the capacity to produce and have the skilled well enough to apply their talent and knowledge to development, society stagnates. The consequent deprivation can leave more widespread harm to human beings than the occasional natural disaster causes.
In my work I have offered a framework for understanding economic growth. Among the six critical sets of interdependent variables that result in growth is human capital. The others, Policy Choice, Institutions, Entrepreneurship, Culture, and Leadership share with Human Capital the vital transmission of human progress. In my 2006 book, “WHY NATION’S ARE POOR” I continue the tradition began in my 1998 book: “MANAGING UNCERTIAINTY: COMPETITION AND STRATEGY IN EMERGYING ECONOMIES” regarding the key role of institutions in advancing the goals of development. Sadly, institutions of health care provision have been subject to levels of neglect that made them the subject of coup day speeches in which hospitals were said to have declined to mere “Consulting Clinics”. They have come so far down that there is hardly enough power supply for basic services to be assured at Centres of Excellence such as our leading Teaching hospitals and can therefore be rightly described as a man made disaster.
If Nigeria is to be renewed and we are to go from the country of great promise that became paradise deferred but now on the track to paradise reclaimed we need some new sets of basic ideas that are implementable but fresh and refreshingly different. In the following discussion l offer a few of these ideas.
I do hope my comments will serve both as a source of productive impetus to debate, as well as a signal for policymakers whether in or outside office to encourage. Our public space is unfortunately benefit of quality discussion of such importance. To that end, I will make comments in a number of capacities, whose crossover points may not necessarily be immediately apparent. I will comment as a private citizen, self-interested personal and policy stakeholder, political leader, and finally, as a believer in the idea that entrepreneurial ideas, given sufficient heft by the appropriate business environment, can be a critical partner in solving many a seemingly difficult public policy question.
Given that context, now I believe it is best to start by stating up front that I am in full agreement with the broad theme recently emerging from the leadership of the Federal Ministry of Health. That message is that Nigeria’s healthcare industry is at a cross roads, and that the record of achievement from an outcomes perspective is poor. Thus, I cannot disagree with the Federal Government’s read of the situation. To that end, I will not inundate you with statistics such as how many Nigerians die every year from malaria. We all know the dimensions of the problem, though a number of you might be further jolted should we review the data in its bitter fullness. The Roll back Malaria Summit was one of the first health sector initiatives of the new Civilian Administration in 1999 because the Harvard Professor Jeffery Sach, author of the End of Poverty was on a crusade about how Malaria slows down economic growth in African. That influence remains in the concerns espoused by the Osotimen in Ministry of Health.
Where I part ways with the Honorable Federal Minister, however, is on how to solve the health challenge. It is my view that the current Yar’adua administration is approach is flawed in that it focuses on symptoms of the healthcare challenge, rather than structurally attacking the challenge. That policy logic is a continuation of the failure under the Obasanjo Administration. An illustration of that is the National Malaria control strategy which in my judgment overemphasizes the use of treated bed nets and donor funding, as opposed to seeking ways to use technology to eradicate the breeding grounds of the anopheles mosquito and the mosquito through a radical program of spraying as successfully deployed in South Africa in the past decade. The use of treated bed nets is a palliative that cannot substitute for a real end game strategy in malaria.
I made this point while speaking at a retreat for the Lagos State Ministry of the Environment two weeks ago. The old sanitary inspector role, the wole – wole factor remains the key. Involving the community in ensuring gutters are erected and drains flow is key.
I also hear platitudes about primary health care that is not supported by any clear strategy. As a young man courting a student here in Idi Araba 27 years ago, I recall that primary health care was the buzz of the neighbourhood, thanks to Professor Olukoye Ransome-Kuti. How much has the Federal Ministry of Health upheld the legacy of that former health Minister who was so influential as leading faculty on this campus back in those days?
Thus, today, I want to speak broadly about the healthcare system in Nigeria as opposed to a single therapeutic category or intervention, and my vision for transforming it. I believe that any change agenda in the healthcare space needs to be framed and executed on 2 dimensions: an efficiency and a strategic dimension.
Dimension 1: Pursue Efficiency Improvements to Reduce Cost per User
First, efficiency improvements are necessary to improve the productivity of current assets in the system ranging from skilled medical personnel to MRI machines to inventory of medication. Today, a great deal of waste exists in the system. It is pertinent to ask what percentage of the proposed US$1 billion 2010 federal healthcare budget will actually be spent on improving outcomes. What percentage of the budgets in the past 3, 5 and 10 years was actually spent improving the quality of patient lives for example, or investing in expanding the capability of medical personnel to heal? Was 25% wasted? It is hard to determine because we cannot analyze what we do not measure.
Today, waste comes from a variety of sources ranging from poor scheduling of physicians and pharmacists to poor management of patient records, leading to more benign situations in which the time spent achieving a specified patient outcome is materially higher than it should be. In the worst case, waste and inefficiency have led directly to the death of patients and the attendant destruction of family dreams and aspirations. It is important to underline that waste can also come from medical personnel and resources sitting idle during a strike, and as you all know, we seem to live constantly under the threat of a strike.
As professionals and stakeholders, our goal from an efficiency improvement view is to reduce such waste, and therefore, improve the output of the overall health system. That output can be measured in terms of absolute output e.g. number of patients successfully treated per physician, number of patients per physician man hour, or in terms of quality. In the latter category, we can track levels of patient satisfaction, with the goal being to do more at a lower price point each year i.e. boost overall productivity of the heath system. The overall message nonetheless, is that as a broad logic, we should aim to do more with the little we have. Increasing the productivity of labor, capital and technology assets is a necessity in order to systematically engineer improvements in patient lives.
Dimension 2: Develop and Execute a Strategy That Drives Change
In the longer term, what strategic initiatives will Nigeria need to pursue in order to change its healthcare system? Or put differently, what does Nigeria need to do in order to deliver a competitive healthcare system to her citizens? In my opinion, there are 4 critical strategic themes or organizing principles Nigeria needs to pursue in the coming decade. These are:
1. improving access to healthcare by expanding the healthcare infrastructure in the country
2. changing the funding mix and economics of healthcare by recognizing that a healthy society confers both private and public benefit
3. expanding the pool of healthcare personnel at the skilled and semi-skilled level
4. nurturing and creating a culture of innovation in all aspects of healthcare
Strategic Theme 1: Improve Access to Healthcare
We should work to improve access to healthcare to all our citizens. There are a number of dimensions to improving access. This includes access to primary, specialist and support medical staff. It also includes access to hospital facilities and support equipment on a timely basis. There are a variety of ways in which we can measure access levels and the quality of such access e.g. density of medical services per square kilometer, or distance traveled to reach a physician, or time between arrival and attendance in an emergency room.
With an aspiration to increase the density of medical staff, facilities and equipment, broadly defined on a per patient basis, we can now focus public policy discourse on how to achieve that. For example, the current policy with respect to the National Health Insurance System (NHIS) is designed to improve access for employees in the formal labor markets to healthcare, even though the capitation levels effectively work against access expansion. The recently announced Federal policy of sending physicians to the rural areas is also supposed to improve access to doctors by village communities.
My view is that we have to use a portfolio of incentives and flexible structures to improve access. From tax credits for builders of hospitals to innovation grants to physicians practices who create new treatment protocols to reviving the mobile medical services networks to allowing supermarkets such as Shoprite to place mini-clinics in their stores, we must be open minded about how we extend care and at what price point. Our goal is to keep per patient costs as low as possible and on a steady decline pathway after initial rise to reflect new capital investments, while ensuring that service is broadly available.
That may lead to a situation in which, should I find myself in government again, I would argue for loosening some of the cost restrictions and capitations in the NHIS regulation. We have to make healthcare delivery both financial attractive to certain types of investors, as well as affordable to patients. We should also discuss ways in which macroeconomic policy that reduces the cost of capital due to a shift in long term inflation expectations can spur an expansion in investor willing to invest in the healthcare sector from hospitals to MRI centers to pharmacies.
Strategic Theme 2: Change the Funding Mix
Healthcare is a good with both private and public benefits. A healthy work force benefits the individual as well as society at large. To that extent, we all have a clear stake in transforming the funding of healthcare. Today, what we have is a weak system of funding. At one end are informal sector works such as mechanics enrolled in subsidized health insurance programs, or with no coverage at all. We estimate that about 80 million Nigerians are in this category. At the other end are private employees of formal sector companies who can afford to pay for the services of private networks such as CRI/UNIC and Hygeia. In between are public servants who rely on the new HMO system as well as public and private hospitals. These latter groups make up another 50 - 60 million citizens. What is clear is that the majority of Nigerian’s are not happy about their options and want a policy that comprehensively redesigns the funding and use of healthcare system.
It is my view that the NHIS system regulations need to be revisited in order to spur investment; current cost caps are not working i.e. we cannot ration our way out of the problem. A revised policy whether housed in the NHIS system or another system should seek to create a public health insurance option that exists side by side with competitive private options, with health insurance liberated from employer focused plans. The individual should be able to buy insurance at a competitive price including for pre-existing conditions, with the Federal Government providing a backstop funding support especially for catastrophic cases. That way, the general risk pool is not distorted and insurance costs will remain competitively priced for the majority of Nigerian citizens. I anticipate that as policy and the enabling law is rethought, new financing initiatives will emerge that seek to leverage a broad balance of private capital and focused public funding to make sure Nigeria’s 140 million citizens are covered.
I have on previous occasions proposed a community-based cooperative society health insurance scheme that can broaden access to the poorest of the poor at the bottom of the pyramid on a care for profit basis. What it takes is thinking out of the box like most bottoms of the pyramid schemes
Strategic Theme 3: Expanding Healthcare Personnel
To create broad based access for all citizens in rural and urban areas, it is critical that we develop a rich portfolio of clinics, hospitals, specialized health centers and laboratory services. Achieving that will require a revision of certain existing regulations related to the establishment of hospitals, pharmacies and specialized support services.
We believe that the rules will need to be rewritten to allow all classes of medical and support personnel to maintain within clear ethical guidelines, private practices and offices. Doctors and laboratory technicians, for example will be allowed to maintain their own businesses and practices in addition to their current day jobs as physicians at a teaching hospital. The key word in all of this is incentives. We need to use a new system of incentives to align private profit and public good, while more efficiently managing risk and reward tradeoffs.
It is also important that the thousands of Nigerian healthcare professionals who have left the country return. Even if we are successful in attracting only 25% of the broad pool of medical personnel who left since 1985, the impact would be material for Nigeria. I anticipate that such personnel will return with some capital as well as their wealth of world class experience and insight, and equally as important, relationship networks. That should lead to a blossoming of medical personnel access across the republic. I anticipate that as proposed changes in healthcare financing, insurance and support for entrepreneurial innovation occurs in parallel, access whether through traditional one-to-one visits, or new telemedicine platforms, will improve.
Finally, in parallel, we should review the pre-existing sector reviews and recommendations regarding the training of new healthcare personnel from lab workers to pharmacists to radiologists to surgeons and nurses. Many a federal committee has provided an expert view of the changes and reforms required, but little in the way of implementation has occurred. I recommend we review such counsel with an eye to amending as appropriate given today’s context and the need to use more entrepreneurial incentive mechanism to shift behavior. In addition, it is critical that we create new forecasts of our need for personnel, and redirect public and private funds to prepare for such a future. I commend the Universities Commission for its stance on boosting private university licensing; such a mindset should be more broadly followed as the population requiring care is likely to further expand in the next 20 years.
Strategic Theme 4: Building a Culture of Innovation
Beyond the interventions to solve the basic access, payment and network issues lie the longer term, and ultimately, less structured realm of innovation. It is important to understand that innovation driven by both basic and clever research is what lies at the heart of the global healthcare system.
An initial basic innovation I believe Nigeria needs is creation of electronic patient records and treatment management system. Such records are in many respects an efficiency gain, but given our context may be treated as an innovation. The records should be in a secure database that authorized physicians and other healthcare workers can have access to. Combined with a regulatory ruling requiring only prescriptions for certain categories of medication for example, patient safety and well being will be enhanced irrespective of the patient’s location in Nigeria. Creating the records will also give Nigeria better access to health intelligence as well as create the data to drive innovations in patient management e.g. wellness programs.
In the medium to longer term, our focus should be on encouraging the types of innovation that will create jobs and wealth in Nigeria. A review of most global patent databases show that Nigeria is not considered an innovative nation. The culture of R&D designed to advance the frontiers of knowledge, and create new wealth is sorely lacking. Or where such R&D exists, such as we often find in long forgotten federal institutes and labs, it is simply ignored by the government, nor is it backed by venture capital due to a broad environment that has failed to link ideas and commercialization in our institutions of higher learning. We now need to urgently inspire a generation of scientists and risk takers to once more try to break the code on sickle cell disease, as well as stake their claim in gene based therapies.
We also need to enthusiastically work to own the R&D frontiers on a range of tropical ailments, as well as the process of disease management and patient treatment from computerized patient databases to social support and counseling networks. A critical element of our shared future is the ability to deploy existing knowledge as well as create new knowledge. Much of the diseases and concerns Nigerians have such as cholera, malaria, river blindness etc do not receive sufficient attention. We need to transform our funding of such so called orphan diseases, and profit as a society materially and spiritually from such work.
By championing innovation and the network of innovators whether in small research labs and corporations, or giant medical conglomerates, Nigeria will be helping invent a future for some of her most talented citizen’s, as well as simply keep them alive! I propose that the Federal Government, through a risk based funding system that aligns the national research objectives with the capabilities of Nigerian institutions, should start offering “Health Challenge Grants.” These should be competitive grants that cover both the needs for capital equipment and funding of personnel on specific diseases.
It is important that such funds also be available to research-focused healthcare start-ups and universities as venture funding for well-designed initiatives to commercialize research. American universities from Stanford to Georgia Tech to Chicago have done an excellent job of licensing technology or spinning them off; we should allow Nigerian researchers to have part ownership in their own inventions so that risk and reward are appropriately aligned, with specialized university technology development corporations focused on licensing these technologies, or professors allowed to go and start new ventures to bring new drugs and technologies to market.
I propose the need for a new and creative approach to commercialization of such knowledge. The Federal government should grant the researcher and host university or corporation a right to use the findings of the research for example in drug creation on an exclusive basis for 20 years, provided clear guidelines on investment into commercialization are met. In return, the Federal government will have an irrevocable right to 10%-20% of the profits generated from the sales of any drugs or non-drug innovation emerging from such labs e.g. a new database system for managing patient records using mobile phone systems. Only by unleashing the energies of Nigeria’s most talented and diligent can we start to surmount a number of our public policy challenges.
Conclusion
Today, Nigeria seems unhealthy and frail at many levels. A cursory review of her health statistics from the state, local and federal levels show that much remains to be done. Mortality levels are at unacceptably and morally shameful levels. Yet, the will to act seems missing, despite ever growing budgetary commitments to the sector. I believe that what is missing is an integrated view that places at its heart, a system of ideas anchored around individual themes of improving productivity, and leveraging a willingness to embrace risk as a step towards transformation. Only by bringing new ideas into the public space for healthcare interventions can we address the needs of Nigerians, while using the space as a platform for promoting entrepreneurship, risk taking and double balance scorecard initiatives. I urge all stakeholders to embrace the idea of incentives, ideas and entrepreneurial insight to drive the transformation we all want in the healthcare market. It has been my distinct pleasure to join you today and I do hope that you will join me in pushing for a transformative agenda that rewards solutions not the rhetoric of change.
Thank you.
Patrick Okedinachi Utomi
January 27th, 2010





