HEALTH INSURANCE – AN EVALUATION OF THE EFFECT OF HEALTH MAINTENANCE ORGANISATION IN THE NIGERIA ECONOMY (A STUDY OF HEALTHCARE INTERNATIONAL LAGOS)

ABSTRACT

 

This study focused on the operation and the evaluation of the effectiveness of the Health Maintenance organization. The aim of the study was to investigate if the Health Maintenance organizations who are the administrator of the scheme are running the scheme well in Nigeria. Further to investigate if access to medical care is cheaper with health insurance when compared to retainership. In order to achieve this, healthcare international as a health maintenance organization was studies. Literatures on health insurance were reviewed, questionnaires wee distributed to Healthcare international staff, hospital on the scheme, and enrolled population in the public and private organizations. The data collected were analyzed using percentage method The analysed data reveals that access to medical care is cheaper with health insurance but the health insurance scheme is yet to be properly operated in Nigeria as  there has not been enough awareness and understanding of how the scheme is operated. In conclusion it was recommended that Federal Government through the Nation Health  Insurance Commission and the health maintenance organization should create a mass awareness about health insurance and put in place measures on how is should be properly  operated in Nigeria.

 

 

 

 

 

 

TABLE OF CONTENTS

 

                                                                                                         Page                                                                                                          

Title Page                                                                                              i

Certification                                                                                                    ii

Dedication                                                                                             iii

Acknowledgement                                                                                          iv

Abstract                                                                                                v

Table of Contents                                                                                             vi

 

CHAPTER ONE

BACKGROUND INFORMATION

1.0     Introduction         …………………………………………………………. 1

1.1     Background Study of Healthcare International ……………………... 2

1.2     Significance of study ………………………………………………... 3

1.3     Scope of Study ………………………………………………………..

1.4     Research Question …………………………………………………... 3

1.5     Statement of Problem ……………………………………………….. 4

1.6     Objective of Study ………………………………………………….. 5

1.7     Limitation of Study …………………………………………………. 6

1.8     Determination of Terms …………………………………………….  7

 

 

CHAPTER TWO

LITERATURE REVIEW

2.0     Introduction ………………………………………………………….8

2.1     What is Healthcare …………………………………………………..8

2.2     What is Health Insurance ……………………………………………8

2.3     Managed Care ……………………………………………………... 11

2.4     Private Medical Insurance ……………………………………….....11

2.5     Health Maintenance Organization ……………………………….... 12

2.6     Forces for Change in Healthcare …………………………………...14

2.7     Financing Health Insurance ………………………………………. 14

2.8     Transformation of Healthcare Deliveries …………………………..16

2.9     Devices to Achieve Cost Control …………………………………..17

2.10   The Operation of Private Health Insurance ………………………...18

2.11   National Health Insurance Scheme ……………………………….. 19

2.12   Establishment of Health Insurance …………………………………20

2.13   Benefits to the Organization ………………………………………. 26      

2.14   Benefits to the Family/Enrollee …………………………………….26

2.15   Benefits to the Healthcare Providers ……………………………….27

2.16   Working with Healthcare Providers ………………………………..28

2.17   Quality Control Assurance ………………………………………….29

2.18   Healthcare Delivery and the Admin Implications …………………..31

2.19       Global Healthcare …………………………………………………..33

2.20       Conclusion ………………………………………………………….35

 

CHAPTER THREEE

RESEARCH METHODOLOGY

3.0            Introduction …………………………………………………………37

3.1     Research Instrument ………………………………………………...37

3.2     Population …………………………………………………………. 38

3.3     Questionnaire ……………………………………………………….38

3.4     Personal Interview …………………………………………………..39

3.5     Observation Method ………………………………………………...39

3.6     Sampling Techniques and Sample Size …………………………….39

3.7     Method of Data Analysis …………

 

 

CHAPTER FOUR

PRESENTATION AND ANALYSIS OF DATA

4.0      Introduction………………………………………………………..  41

4.1       Data Analysis and Interpretation………………………………….. 41 4.2       Data Presentation …………………………………………………. 42

 

CHAPTER FIVE

SUMMARY CONCLUSION AND RECOMMENDATION

5.0            Introduction ………………………………………………………..  65

5.1            Summary…………………………………………………………… 65      

5.2            Conclusion ………………………………………………………… 66

5.3            Recommendations …………………………………………………. 67

          Bibliography ……………………………………………………….  69     

          Appendices ………………………………………………………… 70

 

 

CHAPTER ONE

 

1.1                                                           INTRODUCTION

Internal Auditing is an independent appraisal activity established within an organization as a service to it. It is a control which functions by examining and evaluating the adequacy and effectiveness of other controls.

 

It can also be defined as a control established within an organization, originally concerned with the financial records, investigative techniques developed by the control is now applied to the analysis of the effectiveness of all parts of an entity’s operation and management.

 

In any organization, the management usually sets out the plans including control procedures while the internal auditors supervise monitors and reviews as well as ensures compliance with such plans and control procedures.

 

However, large organizations are faced with various problems of co-ordination, control, public and employee relationship and general management. The development and maintenance of internal control system which is under the watchful eyes of internal audit staff is therefore of great important in this regard.

 

Internal control system can be defined as “a whole system of controls, financial and otherwise established by the management in order to carry on the business of the enterprise in an orderly and efficient manner, ensures adherence to management policies, safeguard completeness and accuracy of the record.

 

An internal Auditor must be free to review the whole internal control system of an organization. However, there is a sharp distinction between internal and external auditing.

 

The Auditing Practice Committee (APC) defined External Auditor’s duty as “Independent examination of and expression of opinion on the financial statement of an enterprise by an appointed auditor in the pursuance of that appointment and in compliance with any relevant statutory obligation. While an Internal Auditor’s duty is to prevent and detect errors and frauds by the management, the detection of frauds is only indicated in the case of external Auditors.

 

For an effective internal auditing program, the internal auditor must be independent; the independent of internal auditing department is to be responsible to an officer of sufficient rank in the organization to ensure a broad scope of activities and adequate consideration of an effective action on the findings and recommendations made by him. He should not develop and install procedures and prepare records which he would not be expected to review and appraise.

 

1.2                                                           STATEMENT OF PROBLEMS / PROBLEM ANALYSIS

 

Over the years, doubts have been expressed over the effectiveness of internal audit, in the Armed Forces. Some of the factors responsible for internal audit ineffectiveness could be;

1.                 Does the ineffectiveness of internal audit result from shortage of professionally qualified personnel?

2.                 Is the head of internal audit department independent? Is he responsible to the assistant director or to the commander?

3.                 Does the account department prepare books on time so that the internal audit staff can carry out post-payment auditing?

4.                 Does the management give prompt attention to the audit queries issued by the internal audit department?

 

1.3                                                           OBJECTIVE OF THE STUDY

In this research work, efforts are made to find the root causes of the multi-various problems being encountered by the internal audit department in the Armed Forces.

 

Intellectual universal remedy shall be offered to, as the ineffectiveness of internal audit in the Armed Forces.

 

The central purpose of this research work lies on the fact that an Internal Auditor is concerned with measuring and evaluating the continuous effectiveness of the internal control system. Therefore, if the internal audit department is reluctant, this may mean that;

 

a.                 The policies, plans and procedures set down by the management may not be complied with by the organization’s staff

b.                 The information required by the management to make decision may be incomplete and unreliable.

 

Recommendations shall be made as to the way by which internal auditing can be effective so that it can make a proper review of the operations, procedures and records of Nigeria Air Force’s Pay and Accounting Group.

 

1.4                                                           SIGNIFICANT OF THE STUDY

As this research work is being carried out about the gap in human knowledge as regards the Nigeria Armed Force accounting department and effectiveness of their internal control system.

 

At the end of this study, procedures will be provided to follow and executed properly in order to make an end to misappropriation, mismanagement of funds and as well fill in the gap in human knowledge as it will also boost the morals of the forces personnel

 

1.5                                                            SCOPE AND LIMITATION OF THE STUD

This research work shall be limited to the Nigeria Air Force, Pay and Accounting Group alone which has been chosen as a case study.

 

However, it will be practically impossible to reach all the three arms of the Armed Forces in Nigeria in view of this, effort shall be concentrated on Headquarters Pay and Accounting Group.

 

1.6                                                            STATEMENT OF HYPOTHESIS & RESEARCH QUESTIONS.

In order to make this research, project a result oriented-one, the following hypothesis are developed

 

HYPOTHESIS I

 

H₀:              Poor staffing is not responsible for the ineffectiveness of the internal audit department in the Armed Forces.

 

H₁:              Poor staffing is responsible for the ineffectiveness of internal audit department in the Armed Forces.

 

HYPOTHESIS II

 

H₀:              Poor accounting system and non-compliance to the accounting concept and convention is not a barrier to effective Internal Audit in the Armed Forces.

 

H₁:              Poor accounting system and non-compliance to the accounting concept and convention is a barrier to effective Internal Audit in the Armed Forces.

 

HYPOTHESIS III

 

H₀:              Ignorance of Internal auditors’ service and duties of prevention and detection of fraud is not a barrier to the success and effectiveness of internal audit department in the Armed.

 

H₁:              Ignorance of Internal auditors’ service and duties of prevention and detection of fraud is a barrier to the success and effectiveness of internal audit department in the Armed.

 

HYPOTHESIS IV

 

H₀:              Engagement of average skilled personnel instead of more professional personnel in the Internal Audit Department do not amount to poor performance of the Internal Audit Department of the Armed Force.

 

H₁:              Engagement of average skilled personnel instead of more professional personnel in the Internal Audit Department amounts to poor performance of the Internal Audit Department of the Armed Force.

 

HYPOTHESIS V

 

H₀:              Non-Independent (dependency) of the Head of Internal Audit Department is not responsible to poor performance of the department.

 

H₁:              Non-Independent (dependency) of the Head of Internal Audit Department is responsible to poor performance of the department.

 

HYPOTHESIS VI

 

H₀:              Irregular/infrequent auditing is not responsible for ineffectiveness of Internal Auditing in the Armed Forces.

 

H₁:              Irregular/infrequent auditing is responsible for ineffectiveness of Internal Auditing in the Armed Forces.

 

HYPOTHESIS VII

 

H₀:              The system of government practiced in Nigeria is not a limiting factor to effectiveness of the audit department of the Armed Forces.

 

H₁:              The system of government practiced in Nigeria is a limiting factor to effectiveness of the audit department of the Armed Forces.

 

1.7                                                           DEFINITION OF TERMS

Definition of terms relevant to this research study is given below:

 

COMPLIANCE TEST

These are test designed to ensure that the internal controls on which the auditor wish to rely on are working properly in practice. An internal auditor should carry out compliance test on which he wishes to rely on, are functioning effectively throughout the period.

 

If compliance test disclose no exceptions, the auditor may reasonably place reliance on the effective functioning of the internal control test.

 

SUBSTANTIVE TEST

These are test which seek direct evidence of the correct treatment of a transaction, a balance, an asset, a liability on any item in the books or the accounts. In other words, they are tests of transactions and balances and other procedures such as analytical review, which seek to provide audit evidence as to the completeness, accuracy and validity of the information contained in the accounting records or in the financial statements. For example, to test a balance in a deposit account, direct confirmation must be obtained from the bank.

 

INVESTIGATION

This is when audit staff are not asked to report on special situation to managements. The basis and scope of investigation can be incorrect with a proposed purchase of a business, suspected fraud or of a back advancing credit or in a number of other situations.

 

 

 

AUDIT PROGRAMME

This is the over all plan or work which an internal auditor intends to follow in his attempt to gather sufficient evidence to permit him to offer an informal opinion. It is both the summary of all that must be done before he will be satisfied that all aspects of the financial data have been investigated and also a list of detailed instructions to his assistance.

 

Audit program provides a guide in arranging and distributing the work and a check against the possibility of omissions. It facilitates controls and review by managers and supervisions and provide a record of works done.

 

PRE-AUDIT

This is referred to as, pre-payment audit. It is the examination of transactions before payment. It may include an examination of contracts prior to arrival, scrutinizing of all vouchers before payment and review of all cheques before payment.

Pre-audit provides that;

1.                 Expenditures are not upon their face unreasonable or extravagant.

2.                 Sufficient frauds are available for enablement of the voucher.

3.                 There has been compliance with budgetary, civil service, legislative and legal requirements.

 

PORT AUDIT

This is sometimes referred as post payment audit, it represents an after the fact examination. Hitherto, post audit was concerned primarily with control of cash and the verification of revenues. Today, its general scope involves the review and appraisal of overall performance measured against established goals.

 

 

1.8                                                           HISTORICAL BACKGROUND

 

THE NIGERIA AIR FORCE (NAF)

The idea of establishing of an Air Force for Nigeria was first mooted in 1961 following the Nation’s participation in peace-making operation in Congo and Tanganyika (now Tanzania), during the peace-keeping operation, foreign air forces were employed to air-lift the Nigeria Army Regiment to and fro the theaters of operations. The Nigeria government at the time, no doubt recognized the urgent need to establish an air force activity supported by modern facilities to provide full complement of forces to enhance the nation’s military positively. Early in 1962, the government agreed in principle that the NAF be established. Parliament therefore approved the establishment of the NAF and recruitment of cadets commenced in June 1962.

 

Consequently, the NAF was officially established by the statutory Act of Parliament in April 1964 to serve four (4) main purposes, namely;

 

1.                 To achieve a full complement of the military defense system of the Federal Republic of Nigeria both in the air and on the ground.

2.                 To ensure a fast versatile mobility of the Armed Forces.

3.                 To provide close support for the ground-based and seaborne Forces in all phases of operations and to ensure the territorial integrity of a united Nigeria.

4.                 To give the country the deserved prestige this is invaluable in the international matters.

 

Following the expansion of the NAF over time and the need to enforce all international law convention relating to space activities in the Nigeria airspace, the Federal government promulgated Decree 105 (Armed Forces Amendment Decree of 23^rd August 1994) which provided additional roles which includes;

 

a.                 Enforcing and assisting in coordinating the enforcement of international law conventions practices and customs ascribed and acceded to by Nigeria airspace.

b.                 Coordinating and enforcing all national and international air laws acceded or ascribed to by Nigeria airspace.

c.                  Delineating, demarcating and coordinating all aerial surveys and security zones of the Nigeria airspace.

 

It was in 1962 that the drive for the required manpower for the planned force started. Simultaneously with this development, government in dialogue with source friendly nations on the possibility of training Nigeria Air Force personnel in various specialist fields.

 

The first batches of 10 cadets were enlisted in 1962 to undergo training with the Ethiopian Air force. The second set of 16 cadets was enlisted in February 1963 to undergo training with the Royal Canadian Air force. The stage was set for the training of its personnel in country. Consequently, several countries were approved but the lot fell on the German Air force to provide technical assistance for the local training of NAF personnel and this materialized in 1963.

 

The Nigerian Air Force is currently made up of three commands namely;

1.                 Tactical Air Command

2.                 Training Command

3.                 Logistic Command

 

The tactical command was established for the purpose of centralizing of command with a view to providing joint operation doctrine for the use of the tactical forces. The training command on its own was established for the purpose of planning and coordinating the administrative and operational command of all training activities in the NAF while the logistic command was established to supply and maintain all the operational equipment as well as infrastructural facilities required for the effective accomplishment of NAF assigned tasks.

 

In addition to the three major commands, there are some other formations which are directly answerable to HQ NAF. These are the Pay and Accounting Group, personnel management center and the aero medical centre.

 

THE NIGERIAN ARMY (NA)

 

The Nigerian Army has the largest recorded history among the three components of the Nigeria Armed Forces. The force emerged out of the West African Frontier Forcer (WAFF) years after undergoing transformation such as Nigerian soldiers immense participation in series of peace-keeping operations; the 4^th August 1914 war that involved Great Britain and by extension its overseas territories and throughout the duration of the war, Nigeria was contacted to make sacrifices wither in fighting soldiers or as agricultural produce for the sustenance of the Britain war effort and the Britain economy. Many Britain officials joined the imperial force, West African Frontier Force (WAFF)

 

The incident which started the was occurs at Sarajevo, the capital of Bosnia, on the 28^th June 1914 following the assassination of Archduke Ferdinand the heir to the Australian throne and his wife by a Bosnian student. The Serbian were held responsible for the murderer.

 

On 3^rd July 1914, the Australian government sent an ultimatum to the Serbian government demanding a satisfactory answer within forty-eight hours. Serbian accepted other conditions given by the Austria but refused to allow Austrian police in the Serbian territory to enforce the Austrian on Serbian. On the 28^th July, 1914, Austria declared war on Serbian. On the outbreak of war between Austria and Serbian, Russia mobilized her troops in favour of Serbian; German declared was on Russia on the 1^st August 1914 when he demand for the withdrawal of Russia force was not headed to. Germany also declared war on France when she refuses to give a guarantee of her neutrality. In August 1914, Great Britain declared war on German when German force invaded Belgium in complete defiance of the treaty of 1839 which guaranty the neutrality of Belgium. The entry into the war by Britain on the side of the Allied Forces brought all her colonies into world war.

 

Nigeria soldiers distinguished themselves in many of the campaigns in Cameroon’s and the East Africa.

 

It was after the transformation and others from 1863 when the British government of Lagos Lt. Glover of the Royal Navy organized 18 Northern Nigerian’s into a small local force to positive expedition in the Lagos hinterland and to protect British trade routes around Lagos. The force was expanded to perform both police and military duties for the colonial government. They existed in constabularies with slightly deferring emphasis, these constabularies were to keep internal peace in the newly annexed colonies to ensure the flourishing of legitimate trade and for suppressing the then dwindling slave trade.

 

In 1897, the idea of a West African Frontier Force (WAFF) was received and fully established. The amalgamation of the Northern and Southern protectorate in 1914 by Lord Lugard, all the native forces in Nigeria were unified and named Nigerian Regiment. By 1956, it was renamed the Queen’s own Nigerian Regiment (QONR). In the same year, WAFF became regionalized and each military force became independent of the others. As a result of this development, the Nigerian Regiment became the Nigerian Military Force (NMF). When Nigerian became independent in 1960, the NMF was renamed the Royal Nigerian Army (RNA), this was again changed to the Nigerian Army in 1963, following the attainment by the country of her republican status. The decade between 1955 and 1965 witnessed a lot of the force; some Nigerians were commissioned officers in the NA after having undergone officer cadet training usually in the military institution in Tashi Abana, Mous Cadet College Aldershot and the Royal Military Academy Sand Hurst, England.

 

In 1959, the Nigerian Military training college at Kaduna was established for the training of other ranks. It became the potential source of securing officers, NCO’s and technician for the army. Also during the period 1955-1966, the Nigeria Army participated in a number of peace-keeping operations in 1960 and 1964 respectively. The outbreak of civil war in 1967 in Nigeria was another milestone as well as turning point in the history of Nigeria Army.

 

However, the Nigeria Army is never idle since the end of the civil war, it has engaged regularly in UN peace-keeping operations such as the UNIFIL in Lebanon, UBNPROFOR in Yugoslavia, Uunosomin Somalia and further served as members of observers team in Iraq /Iraq, Uganda / Rwanda, Angola/Kuwait among others. The beginning of the 90’s has seen Nigeria Army as a force to reckon with both peace-keeping and peace enforcement operations in different parts of the world.

 

It has formed the backbone of the ECOWAS Peace Monitoring Group (ECOMOG) deployed to quell the crises in Liberia while in Rwanda; it is part of the UNAMIR. At home apart from efficiently standing as a deterrent force against eternal attacks such as the situation in Bakassi Peninsular.

 

THE NIGERIA NAVY

The Nigeria Navy came into existence in 1958. on 26^th March 1958, the House of Representatives approved the establishment of the Navy, it was initially called the Nigeria Naval Force. It was created out of a former quasi-military force which was known as the Nigeria Marine and which was under the ministry of transport for maritime policing duties.

 

The authorization of the Nigeria Navy as a branch of the Armed Forces in 1958 came as part of the pre-independence Nigerian nationalism which demanded that Nigeria ought to be an independent nation state and have corresponding independent Armed forces to defend its sovereignty and to protect its economic resources.  That was the year the name Nigeria Naval Force was changed to the Royal Nigerian Navy (RNN).

 

On its creation, as a Naval force in 1956, only 11(eleven) assorted boasts and harbour crafts and about 200 officers and men were transferred to it by the defunct Nigerian Marine.

 

On Nigeria’s attainment of Republican states in 1963, the word “Royal” was dropped. The Navy Act passed in 1964 removed the limitation of the Nigeria Navy to the country’s territorial waters by assigning to it the following roles:

 

a.                 Naval defense of Nigeria

b.                 Assisting in the enforcement of the custom laws of Nigeria.

c.                  Making Hydrographic surveys.

d.                 Training in Naval duties.

e.                  Such other duties as the council of ministers may from time to time direct.

 

There are three main commands in the Nigeria Navy today; the Western and Eastern Naval command are the two operational commands with Headquarters at Apapa and Calabar respectively while the third command is the Naval training command. To meet the roles, the Nigeria Navy concept of operations remains the total commitment to protect the economic life wire of the country by organizing to arrest economic sabotage and other forms of illegalities in out waters.

 

Secondly, is the determination of deter-external aggressions in West Africa sub-region and Africa in general. For the future, the Nigeria Army is looking forward to improving its sealift capability so that it can launch the Army from the seaboard when the need arises, improving the capability in the name of sub-marine.

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