Table 1 Characteristics of major health financing mechanisms in Nigeria
| Â | Resource generation | Pooling and management of funds | Purchasing of health services |
|---|---|---|---|
Government budget | Share of statutory allocation from FAAC Internally generated revenue from income tax, value-added tax, tariffs, sale of government bonds, etc. Special intervention funds | Funds are pooled into the federation account from where budgetary allocations are made. Disbursements are made quarterly from Ministry of Finance to Ministry of Health through the Central Bank | Health services are purchased through the Ministry of Health and related agencies for line items and global budget. |
Out of pocket payment | Individual and households generate funds for health through: (i) income from paid employment and business, (ii) borrowing from family and friends, (iii) charity and philanthropy | Pooled within the household and managed by the head of the household or a representative. There is no central pool for revenue generated for OOP. | Individuals and households make direct cash payments at the point of accessing health care. Some health services like investigations and drugs could be provided through a third party such as diagnostic laboratory, pharmacy shop or patent medicine vendor. |
FSSHIP Formally launched in 2005 Covers only Federal government employees and beneficiaries | Designed to be contributory – 10% from employers and 5% from employee of basic salary. However, only the employer is currently contributing (i.e. 10%). | Pooling is done centrally by NHIS into a dedicated Bank account | Health Maintenance Organizations (HMOs) are contracted to purchase health services (within an approved package of care) from accredited providers |
Community-based health insurance | Funds are generated through contribution of premiums by registered enrolees. | Each scheme has its own pooling mechanism. | Depends on the design, but purchasing can be done directly from service providers or through third parties such as HMOs. |
Donor funding | UN agencies through UNDP’s NEX Bilateral agencies - Country tax revenue Development Banks – contributions of member countries Other sources – philanthropists, donor cooperation, etc. | Each donor agency pools its fund separately and channels it through grants and concessional loans using aid modalities such as technical assistance, project financing, and little or no direct budget support. Development aid that is sent through regions to respective countries are managed by designated parastatals, specifically Ministry of Budget and National Planning in Nigeria. | Services are purchased through different models depending on financial risk assessment of recipient parastatal/organization. Direct implementation (by donors) or reimbursement models are used if financial risk is high, while direct transfers are used when financial risk is low |