Healthcare financing in Nigeria – an analysis of the Islamic model

Abstract

Background: Healthcare in Nigeria is poorly funded. Most payments are out of pocket. This has affected the quality of health of the populace, as the majority of the populace cannot access basic healthcare. A recommendation to bridge this wide gap is through the establishment and utilization of health insurance, especially through the National Health Insurance Scheme (NHIS). Currently, it is only the formal sector social health insurance programme (FSSHIP) that accounted for only less than 5% of Nigerians, that is in operation. This study proposed Islamic healthcare financing as a viable alternative model.

Methodology/Results: A review of Islamic healthcare financing (Takaful), as an exceptional faith-based model, provides an alternative model of healthcare financing. The analysis of Takaful, as a unique value proposition for healthcare financing, is literarily an Islamic insurance model. In this model, the clients or participants make their contributions to the Tabarru (donation) fund while the Takaful company, acting as their agent, invests the funds in Shar?‘ah compliant investments such as Sukuk and other permissible investments. The unique features of Takaful make it suitable for Islamic health financing in Nigeria.

Conclusion: The analysis revealed that the Islamic health insurance through Takaful is viable option for Muslims and the public at large, to reduce the low coverage of the current model. It recommended the establishment of more Takaful companies, and their utilization as a unique healthcare financial model.

Key Words: Islamic, health, financing, takaful, insurance