Adesimbo Ukiri, the Chief Executive Officer and Managing Director of Avon Healthcare Limited, with years of experience spanning financial services, and telecommunications, has over the past five years, nurtured the company into one of Nigeria’s leading HMOs. She spoke with OBOKOH ANTHONIA & MICHAEL ANI on a number of issues including why Avon is leading the charge to penetrate the retail sector with affordable health insurance packages and the state of affairs in Nigeria’s health sector. Excerpts:
When Avon HMO announced its entry into the Health Insurance market, the brand’s Unique Selling Point was to crack the retail sector. Four years down the line, how has Avon fared in meeting this objective?
First, let me clarify that our business model is hinged on the Managed Healthcare model as opposed to the Health Insurance model. The difference is that the typical health insurance company underwrites people individually. For instance, they will assess the risk profile of an individual and charge a premium based on the risk assessment. However, another customer of exactly the same age but with a different health risk profile will be charged a radically different premium by the same company.
What Avon does is to manage people’s healthcare based on their subscription to specific health plans. So, unlike the health insurance model which underwrites people individually, our model is to get a pool of people together and make some assumptions about their health status like; how many people will be ill at any point in time within the pool, what kind of illness they will have, etc. That way, everybody pays exactly the same fee as long as they are subscribed to the same health plan. The bottom-line is that the system doesn’t discriminate. For us, no matter the health plan you choose you will pay only what others in that particular category are paying.
Now to your question about Avon’s efforts in cracking the retail sector; prior to our entry into the market, there were about 70 licensed Health Maintenance Organizations (HMOs), many of which had been in existence for about 10 years or more. However, none was able to penetrate the retail sector. When we started operations about five years ago, penetration was low. I think we had less than three percent of the total population covered at the time. But we also knew that in Nigeria, the informal sector is way bigger than the formal sector and we saw that as a great opportunity. Therefore, we came into the market with health subscription offerings specifically tailored to meet the needs of people in the retail sector. That is not to say that we turned our backs on the corporate segment of the market. However, while our peers were busy looking for the corporates, we studied the retail sector and came up with bespoke health plans that answered their specific needs.
Not too long ago, we announced the introduction of new plans to meet the needs of unserved Nigerians who do not fit into the traditional HMO target market. We have gotten excellent feedback from these efforts.
You mentioned earlier that Avon HMO recently introduced a new bouquet of Health subscription plans specifically designed for un-served Nigerians. What makes them different from the array of plans already existing in the market?
Avon HMO came up with about six plans that are specifically created for the retail sector to ensure that Nigerians get quality access to affordable healthcare.
We have the Life Starter plan, which is very affordable and is mostly targeted at the younger demographic. There is the Couples plan targeted at people who are into committed relationships. One of the unique things about the plan is that it offers pre-marital medical tests like blood group, genotype, etc. After 18 months on this plan, subscribers are entitled to fertility tests and access to maternity cover. The Life plus Plan has a wider coverage compared to the previous two plans; it offers higher benefits and is mostly targeted at people approaching middle age. Premium Life is also targeted at people who fall into the middle-age and above category and it offers a robust cover of advanced diagnostic tests, extended benefit of annual wellness tests amongst others. The Boss plan provides access to some of the best hospitals in the country while the International plan takes care of individuals who travel a lot and who want to access health care whilst abroad. It also includes emergency air evacuation outside the country.
At Avon, we looked at the retail sector segment of the economy and came up with these plans that will cater to each person’s healthcare needs depending on what stage of life they are at. Also, we looked at the different plans for Small and Medium-size Enterprises (SMEs) in ways they can afford it so that their staff can be productive. We are more than just a HMO. We are committed to looking after the health of our clients’ staff.
There have been allegations that hospitals discriminate against HMO enrolees. The perception is that they treat patients who pay out-of-pocket better than patients covered by health insurance plans. Do you agree with this?
To be honest, what you just mentioned used to happen in the past; say five to seven years ago. Now, most hospitals have identified the financially stable HMOs who pay their bills on time and in full as contracted. The reason why it happened in the past was that some HMOs were in the habit of defaulting on payment of their claims and capitation fees due to the hospitals. When they do pay, they arbitrarily slash the hospitals’ fees. However, the pressure on non-performing HMOs from the ever-vigilant press and the regulator (Nigerian Health Insurance Scheme) has been huge and this has forced a change of attitude. Now hospitals prefer patients with HMOs that pay promptly. I can say categorically that all hospitals working with Avon HMO give preferential treatment to our enrolees and the reason is because we pay as and when due.
Universal health coverage remains a key deliverable for most countries including Nigeria. Stakeholders have said that it calls from collaborative efforts between the public and private sectors. What are Avon’s contributions towards achieving this objective?
Universal health coverage is the dream of every country and only a few countries like Sweden and Netherland have achieved the feat. Bringing it home to Nigeria, we can only achieve UHC with the appropriate political will. We need to put in place an efficient and effective network of healthcare facilities to meet the needs of the populace. Bringing it down to the HMO space, I think all operators, need to take a critical look at the attendant issues to make the industry more efficient in order to attract foreign and local investors into the sector. Remember that one of the core responsibilities of HMOs is enabling accessibility to quality and affordable healthcare which is also a key component of Universal Health Coverage. So, by simply doing our jobs better, HMOs will be contributing in no small measure towards the actualization of the UHC.
Finally, taking a bird’s eye view of the happenings in Nigeria’s health ecosystem, what would be your assessment of the industry?
Let me start with my primary constituency. The NHIS, our regulatory body, has done very well in providing health cover for public civil servants at the federal level and they deserve commendation for that. However, it must be said that penetration at the private sector level has been poor. We have less than 10 percent of coverage in the country today and the bulk of that is from the public sector. So, we need to ramp up the numbers. Then, there is the issue of healthcare financing. The fact is that government expenditure on health is totally insufficient and simply cannot meet the health needs of the country’s growing population. The Minister of Health did promise to renovate 10,000 Primary Healthcare Centres and that is a very bold move. Still, we will achieve more if both the private and the public sector collaborate. It’s time we stopped seeing health as a social investment and approach it as a business that is worth investing in. We cannot continue waiting for the government.
In America, healthcare is probably one of the biggest business sectors and Nigeria should be no different. There are bountiful opportunities in the health sector for investors and if the right incentives can be put in place, people will invest in any venture that will give them good returns.
