By Victor Ogiemwonyi
I was watching an episode of Fareed Zakaria’s Global Public Square (GPS) some days ago while he interviewed Michael Lewis, a Wall Street former bond trader at Salomon Brothers now turned author.
Lewis was talking about his new book: Government. His statement that “government should do what the private sector cannot do,” got me making a list of those things that government should compulsorily do.
It occurred to me that if governments focuses on those things—because it is better equipped to do them effectively, the results will be amazing.
Governments at both federal, state and municipal levels can get out of the many things they do now with poor results. There is need to jettison many things they should not be doing and are currently jack of all trades but master of none.
Clear thinking on what governments should focus on will narrow the choices to four key pillars with some major affiliate services:
Healthcare Is Number One….
Government should lead on healthcare revolution. Afterall, only a healthy population is able to work, contribute to the economy and aspire to, and pursue happiness.
This is not a case of the government not doing anything in Healthcare now, it is a case or reorganising everything and doing it better with a bigger budget, that signals it’s intentionality.
At the very top of government’s social services to society is the provision of healthcare which remains the single most important service needed by citizens of any nation. No matter, who you are. When we say health is wealth, that is because without it everything else is meaningless. Healthcare is a public good every citizen should have access to with reasonable affordability.
This is probably why every major country in the world invests so much into health care.
The number one budget item in all the advanced economies is healthcarep whether it is the U.S, the UK, or any other.
Similarly, healthcare spending in Nigeria needs to be the biggest part of our budgets. However, even beyond the annual budget, there is an urgent need to reorganise the sector for more efficiency and effectiveness. Spending on healthcare needs to be better tailored towards the highest areas of need.
Restructuring The Healthcare System
The federal government’s budget for health should go into revamping major infrastructure in the sector, with the balance shared proportionately between states to augment their own spending. This will allow them focus on recurrent expenditure, especially hiring, training, and paying salaries and allowances of healthcare personnel, in addition to buying consumables like drugs. The federal government has no business buying drugs and distributing them to states.
It must sto meddling in areas where the states should have total control, because they are nearer to the problem and can better carry out the needs assessment in their health facilities.
The Federal Medical Centres and Teaching Hospitals, for instance, should be infrastructure the federal government should continue to focus on to enhance healthcare facilities across the country, where needed, and limit itself to that. Such facilities should thereafter be handed over to the states they are located in. The recurrent cost of running them should also be given to various states to manage as part of their overall responsibility for healthcare provision to their citizens.
It is important to reiterate that healthcare facilities in any state, including teaching hospitals, be managed at the state level and supported by the appropriate budgets. The Federal Government, through its Ministry of Health will then be empowered to become a strong regulator to monitor and ensure states are doing the right thing. The duplication of activities at the federal and state levels is inefficient and unnecessarily costly.
Imagine, the cost savings that will accrue when states purchase medicines in bulk for healthcare facilities within their domain—teaching hospitals, Federal Medical Centres, State Hospitals and Primary Health Centres. The savings will be enormous, just as the standardization of purchase will ensure quality control and huge discounts.
States will have the buying power to negotiate with pharmaceutical companies, whose drugs can also be better managed for quality, while eliminating fake products, and getting rid of the current multiple supply contractors who sometimes provide low-quality and contaminated products.
Also, healthcare personnel management, including doctors and nurses will be better handled and even better paid and trained, while allowing for constant upgrades of facilities, which will be less cumbersome and efficient.
Similarly, the current national unionization of doctors and other health workers will need to be re-examined. In my view, the national spread of these unions will then make bargaining with state medical workers’ unions unnecessary as comparisons will be among peers in other states. In that way, labour relations will be better managed.
The current situation where a union has misunderstanding with one state and it becomes a nationwide industrial action is not sensible and a great risk. States can then localize their union contracts and negotiate better with greater flexibility based on local peculiarities. It can also become a basis of peer-to-peer comparison of standards, efficiency and effectiveness.
This will free up the federal government to focus on other equally important areas and concentrate on ensuring a better healthcare system that will serve us all.
Healthcare Is A Right
It must be understood that healthcare is one of the social services that deserves the biggest subsidy and, possibly be made free for all citizens at the point of delivery. Healthcare should be a fundamental human right which every government should provide because it is a key pillar on which any society is built, and only governments can adequately provide it.
Let me make it clear that this does not in anyway forbid private participation in health care. In fact, private participation in our health sector should be complementary, providing the competition against which government provision of this service can be measured.
Nigeria is currently experiencing a revolution in private healthcare provision. This should be encouraged.
A Levy For Universal Healthcare Coverage
One of the most profound legacies of ex-President Olusegun Obasanjo’s administration was the establishment of the National Health Insurance Authority (NHIS). Despite its terrible management by successive administrators at NHIS, the scheme is defying all odds and still growing. It needs proper management if the agency, is to enhance its ability to achieve its goal and provide strong regulation.
Ensuring that everybody has health insurance is one area of healthcare infrastructure that the federal and state governments need to focus their attention on. Every possible effort by all governments should be made to ensure all citizens are covered by health insurance.
This is one area I will recommend the government create a minimum levy that will ensure healthcare is a shared risk, just like funds pooled by way of insurance premiums .
This tax can be effectively collected, and will be a very light burden on everyone, compared to the benefits it will bring to our society. It is a progressive tax, that the payers of this levy, will be able to pay, and be willing to pay.
The overall efficiency of this proposal will be a synergy of exponential benefits that will far out weigh the burden of this new Tax.
My proposal is that a health insurance tax of 1% be levied on all VAT-able purchases nationwide. An additional 1% + current VAT of 7.5% , will total VAT to 8.5%.
The extra 1% will be used to underwrite healthcare costs for everybody, and make healthcare free for all citizens. This will be a major step in the right direction.
Going by the N7.2 trillion collected as VAT in 2024, 1% will equal about N72 billion annually, and will grow, in addition to the current budget provisions in both public and private sectors of the economy. This is an expedient way to make it meaningful and ensure quick implementation of free healthcare for all.
This huge allocation to our healthcare sector will be meaningful, with huge multiplier effect with healthy citizens contributing to the society and the economy. This is viable and the results will be quickly evident.
Making healthcare a priority and focusing on it will be good for all. Thankfully, we already have the building blocks, all that is now needed is to get rid of the inefficiencies hindering progress and effectiveness in the system.
I will next look at another pillar of what governments should compulsorily do and what efficient ways to do it.
Ogiemwonyi a retired Investment Banker writes via Marketconversations.substack.com
