Ukachukwu: Why Sterling Bank is Investing in Healthcare

Divisional Head, Health and Education sectors with Sterling Bank Plc, Mr. Obinna Ukachukwu in this interview, speaks on why Revitalising the Nigerian health sector is at the heart of Sterling Bank’s strategy on investments in the economy and how health insurance can be used to boost expansion in the healthcare industry. Nume Ekeghe presents the excerpts.

What is the current state of pharmaceutical and healthcare finance in Nigeria?

Healthcare financing in the country is still at the infancy stage for many reasons; the principal of which is that the economics around the health service business is especially faulty. The pricing for the service is not sufficient enough to sustain the chain. Now, this can be surprising because we keep talking about driving down the cost of healthcare in the country.

The challenge is mostly that we do not have enough people that are able to pay for health services in a way that can sustain the industry and the only way we can solve this problem is by rethinking and recreating the health insurance business. For instance, we can crowdfund financing for healthcare services and thus enable healthcare providers the opportunity to price the service in a manner that is sufficient to attract capital.

According to a Price Waterhouse Cooper’s report, Nigerians spend $1 billion annually on medical tourism, with 60 percent of it on oncology, orthopaedics, nephrology, and cardiology. How can the country stem this tide?
This medical tourism spend is actually a fraction of the over $18 billion spend in public healthcare. So, while it is good to find a way to claw back the spend on medical tourism, we should wonder more what is happening to the $18 billion. I would say that we should try to solve the fragmentation in the space. If we consolidate our demand and supply, we can find ways to begin to provide for the services that people often travel for. Again, the only meaningful way to aggregate demand is through a sustainable insurance plan.

How can the country’s health sector be sustainably financed to develop infrastructure and reduce medical tourism to improve its contribution to GDP growth?
Legislation should make it mandatory for everyone to have health insurance. The government should then de-emphasise spend on health infrastructure and use the leftover from the budget to fund service delivery by ensuring everyone in the country has a health insurance plan.

Do you think private sector participation can break down the political, social and institutional barriers preventing the achievement of universal health coverage in Nigeria?
There is no succeeding at this without the private sector. The country can leverage the efficiencies, the commercial thinking and approach of the private sector to create a sustainable social health intervention. There will, however, be a need for the right legislative support in the health insurance space. No doubt, the execution of the plans will be heavily reliant on the capacities available in the private sector.

Revitalising the Nigerian health sector is at the heart of Sterling Bank’s strategy on investments in the economy; what inspired this unique specialisation?
One day, we will all grow old and will need to draw a lot from the health system. At that point, we will regret that we had the opportunity to make a difference and we did not. This sums up our inspiration for this strategy. We knew that most financial institutions would not support the sector because of their lack of understanding of the space. It is one major reason why we invested in sector specialisation.

What activities have been undertaken by the bank to improve Nigeria’s dire healthcare situation in the last two years?
A lot, but as you can guess, we would not start without attempting to contribute our quota to improving health insurance. Hence, we partnered HMOs to launch a robust monthly paid plan where we encourage people to try out for free in the first month. We also worked with the government to build various tech solutions that helped with the management of Covid-19, hospital digitisation and health insurance development.

What is Sterling Bank’s vision for using technology and data to improve healthcare sector efficiency in Nigeria?
Our vision is to improve the access and quality of healthcare through technology. We believe that, if applied rightly, technology can help close the service gap in the space as well as drive down costs.

Which issues should government resolve quickly to improve the healthcare business climate in Nigeria?
The government should make health insurance mandatory and then make premium payments on behalf of the vulnerable.

Are the incessant strike actions by doctors and other health workers a function of healthcare financing deficit or other latent issues? How can the country overcome this personnel crisis?
The solution lies in health insurance. If the pool is expanded, staff will be paid well and the strikes will cease.

Given the rampant sub-optimal care in health centres due to infrastructure challenges and long waiting time, how can MSMEs meet the medical needs of millions of poor and vulnerable Nigerians facing primary healthcare challenges?
Again, it still points to the need for a viable health insurance industry.
The key to securing access for individuals and businesses at scale lies in the implementation of a robust and thorough health insurance scheme across board. This will cater to the needs of individuals and businesses, irrespective of size of family or business alike.

What type of financing would you recommend for health sector MSMEs to build capacity in order to serve more people; equity, debt or mezzanine?
I will say a combination of a mezzanine. A mezzanine essentially is a middle ground between debt and equity financing. At Sterling Bank, we believe the solution to financing the different strata of healthcare businesses in Nigeria requires a mix of these and we respond based on the specific need to match scale.

How can the widespread practice of out-of-pocket payments for primary healthcare services, which excludes the poor and most vulnerable, be reduced to the barest minimum across the country?
The legislative arm of government should seek for the amendment of the NHIS Act in order to make health insurance mandatory for citizens.
This way, healthcare becomes readily accessible without the constraint or fear of paying out-of-pocket by the citizenry, and the practitioners are guaranteed payment for the services they render.