Helt App: An alternative to health insurance in Nigeria
The problem of health insurance in Nigeria is settled in the minds of every Nigerian — it is the people’s fault, not the insurance organizations. “People are wrong for their beliefs and their embrace of culture. Organizations shouldn’t be blamed”. This discussion feels like a struggle between a fundamentalist and a modernist’s outlook on life. The fundamentalist is perceived as being backward while the modernist is on the side of the saints. What if we turned the perspective knob a little bit and looked at the health insurance business and infer why Nigerians are skeptical about it?
The Law of Large Numbers… so large
The Law of Large Numbers theorizes that when there are a large number of results, the average of these results will closely mirror the expected value, and that difference narrows as more results are introduced — Investopedia. This means that insurance organizations can predict the number of claims from policyholders (customers). It also enables them to structure their premiums and forecast profits, and losses to a good degree of accuracy.
In essence, they win whether you are sick or not. Casinos use this law to structure their businesses in order to make profits — they win no matter the outcome. You might think these things are far apart, but when a Nigerian micro-health insurance company brags about it to advertise a new plan, you get the idea (or like Nigerians say, “you get the jerk”).
“Come and cheat us dears, we are your mugu” — WellaHealth
A percentage of the money paid by policyholders is then used to invest in assets pending when a claim is made. They count on Nigerians not to utilize healthcare services to earn. Due to low numbers of policyholders, insurance companies (HMOs) can delay payments to pharmacies and other healthcare facilities to maximize the interests that come from accumulated capital. Current HMOs and the National Health Insurance Scheme mostly cover civil servants and few private-sector workers leaving out a large number of Nigerians who don’t have health insurance.
Reducing the premium for health insurance might be seen as helping people access healthcare, but this leads to price wars with a race to zero which is not sustainable as health costs increase. Also, as long as the model does not reflect the context of the country, it would not solve the problem.
Why are Nigerians skeptical about Health Insurance (The problem)
An article about the research conducted by my team and I can be viewed here.
The reasons:
- Poverty
Low-income households generally go for cheaper options (Foods and services). They find ways to cut costs by prioritizing essential things — daily needs. These groups of people see healthcare as costly and do not utilize health facilities until a grave emergency leads them to crowdfund from family and friends. The idea behind it is that since they don’t get sick often and go to pharmacies when they do get sick, why should they pay for a health insurance plan? This can also be seen at all income levels probably due to a cultural evolution based on the environment and mistrust of the system. Education around health insurance is not readily available and when it is, it is confusing.
- Price vs perceived value
In developing countries, companies adapt to this reality by making services and commodities to fit the market, and they are usually cheap. HMOs continually reduce the price of insurance in the hopes to capture more market size but the devil is usually in the details of the coverage plan. With little education on health insurance, people usually don’t know what they are getting for the money they pay. These organizations have caveats to services which people don’t pay attention to and can cause a lot of frustration for service users when they want to utilize healthcare services. Lowering prices only makes the competition increasingly steep with products that don’t fit the market need.
- Trends
- On average Nigerians go to the pharmacy about 4 times a year.
- People are more likely to go to a pharmacy compared to the hospital.
- Issues with hospital bureaucracy, time, and cost are the main reasons they don’t go or can’t stay for the duration of treatment.
- They are increasingly aware of their healthcare needs but don’t have enough information on health insurance to purchase a plan.
- Nigerians have begun to favor subscription-based models like Netflix, MTN data subscriptions, and PHCN meter subscriptions for electricity. It is based on value, you pay for what you get.
- Nigerians are more communal and have traditional monthly savings rotation and credit systems known as “Adashi” in Hausa. This communal way of life is reflected in the culture of pooling risk among families and individuals for security, food, goods, and services. The current health insurance model in Nigeria has an individualistic spin and Nigerians see through it.
The current health insurance model in Nigeria does not embrace the changes or the realities on the ground. It uses a model that hasn’t worked effectively since its inception. How do we then create something that encourages people to take control of their health and embrace these realities?
Helt App is the Alternative
Helt is an app that gives users value-based options in reducing their financial risks due to out-of-pocket health payments. They can save for emergencies, pay for medication for common illnesses before they happen, and crowdfund for grave illnesses.
Savings
The Helt app enables people to save for possible health emergencies. It allows them to schedule when they want to withdraw cash for their medical expenses.
Medication subscription
This is the main focus of the app. People can subscribe to get medication from well-known pharmacies or pharmacies with good track records for a selected number of illnesses (Malaria, Diarrhea, stomach-ulcer, etc.). They can as well use prescriptions from their doctors although this will be partially covered with a subscription-based plan. They get exactly what they pay for. If they subscribe for 4 pharmacy visits, they can go to the pharmacy to use it. The caveat is that there is already a package of drugs specified for these common illnesses which makes the price of the subscription predictable and affordable. It also protects the user from getting fake medication. Only when an individual has a prescription does he/she buy more expensive drugs. Helt covers a sizeable percentage of that.
Crowdfunding
Since it is common knowledge people seek healthcare when it is absolutely necessary, this can help people who can’t afford very expensive procedures. They can crowdfund for their illnesses or on behalf of friends or family members.
Helt wants to help Nigerians not only understand the importance of health and saving for emergencies, but it also wants to give people options and the freedom to choose a sustainable alternative to insurance or a supplement to their health current insurance plan. Sign up here to stay up to date with events and stories before it launches and be a pioneer when it does launch.
Contact us
If you would like to know more about this product or invest you can contact me at tonye@heltapp.io.
