Dr. Raymond Kuti, National President of the Guild of Medical Directors, warned that the medical profession is facing a critical survival juncture due to the unsustainable 33% bank loan rates, which hinder hospitals’ ability to thrive.
He advocated for a dedicated health bank, independent of the Treasury Single Account, to address this challenge.
Kuti made this call at the 2024 National Annual General Meeting of the GMD, themed “From Profession to Industry Practice in a VUCA Environment”, held at the Federal Palace Hotel from June 26 to 28, 2024.
The Treasury Single Account, managed by the Office of the Accountant General of the Federation, consolidates government revenues and payments, posing a significant obstacle to the medical industry’s financial viability.
Shedding light on TSAs, Kuti stated, “This bank would manage funds collected and provide single-digit loans to hospitals and doctors for necessary equipment and supplies. Hospital businesses can’t thrive under the current 33 per cent bank loan rates.
“Standardising medical services and care is paramount and should apply uniformly across private and government medical institutions.”
Kuti also described the business environment in the health sector as volatile, uncertain and ambiguous.
“Just last week, two hospitals in Abuja closed due to unfavourable conditions. The cost of operating medical facilities has skyrocketed, while patients’ purchasing power has significantly declined. Health Maintenance Organisations have not adjusted tariffs for over two years and the National Health Insurance Authority has not revised prices in a decade.
“Most hospital necessities and consumables are dollar-denominated, with exchange rates increasing by over 300 per cent. These factors have made it nearly impossible for hospitals to deliver the required high-quality services,” he lamented.
Dr. Raymond Kuti, President of the Guild of Medical Directors (GMD), emphasized the need for the government to establish trust in the insurance scheme, ensuring that healthcare providers play a vital role in shaping policies and decision-making processes within the National Health Insurance Agency (NHIA).
Currently, the NHIA lacks representation from healthcare providers. Despite the challenges, Kuti expressed his faith in medical professionals and directors, who remain committed to delivering exceptional and high-quality care to patients.
Meanwhile, Dr. Ladi Alakija, Chairman of the Local Organising Committee of the GMD’s Lagos State Chapter, shed light on the concept of VUCA, which describes the volatile, uncertain, complex, and ambiguous nature of policies and the hospital business environment in Nigeria, a term first coined in 1978.
He also stated that hospital directors have been finding it difficult to “survive in this VUCA environment”, describing it as hostile to business.
Alakija also added that the GMD is responsible for the care of 60 per cent of hospital and clinic visits by patients, stating that it gets doctors who are experts in the medical practice and business.
“We are encouraging that the medical profession be run as a business as we can’t afford to have hospitals closing down. Salaries are going up, lab tests are going up but we still have to run business professionally,” the doctor stated.
Demola Sogunle, CEO of Stanbic IBTC Holdings PLC, highlighted the healthcare sector’s minimal contribution to Nigeria’s GDP.
He noted that a significant 90% of private hospitals in the country are small and medium-scale enterprises, which makes them highly vulnerable to economic fluctuations and challenging for regulators to oversee.
“There is a need for key reforms in this sector and this audience, this distinguished gathering, is one of the places where you can start. Someone once said, I think it was Nelson Mandela, ‘If you don’t think about the absurd, you cannot achieve the impossible.’
“What is outside is that there are too many hospitals, and the numbers will overwhelm anyone. They are small and would soon be blown out. Every doctor cannot have a clinic or hospital. Despite the key reforms we are in the health sector how come we have not seen a significant jump? It is because the structure and infrastructure are not right,” Sogunle highlighted.
He highlighted that the challenges in the health sector offered opportunities for public-private partnership, collective intelligence, partnerships for collaboration, healthcare deployment and health education, and can further lead to increased investment in the sector.
“We need to find a way to see opportunities in rural healthcare development, opportunities in health insurance expansion, opportunities in health education, health-based and digital health solutions, and health workforce development. These are opportunities and lessons for the healthcare sector. Overall, performance improvement and capacity enhancement is very key,” he mentioned.
Demola Sogunle, CEO of Stanbic IBTC Holdings PLC, advocated for strengthened regulations to restore trust and confidence in the healthcare sector.
He also encouraged strategic partnerships with key industry players and suggested merger and acquisition opportunities, as well as backward integration, to create a robust, well-funded, and consolidated healthcare sector.
