Growth of health maintenance organisations in Nigeria and the potential for a role in promoting universal coverage efforts.

: There has been growing interest in the potential for private health insurance (PHI) and private organisations to contribute to universal health coverage (UHC). Yet evidence from low and middle income countries remains very thin. This paper examines the evolution of health maintenance organisations (HMOs) in Nigeria, the nature of the PHI plans and social health insurance (SHI) programmes and their performance, and the implications of their business practices for providing PHI and UHC-related SHI programmes. An embedded case study design was used with multiple subunits of analysis (individual HMOs and the HMO industry) and mixed (qualitative and quantitative) methods, and the study was guided by the structure-conduct-performance paradigm that has its roots in the neo-classical theory of the firm. Quantitative data collection and 35 in-depth interviews were carried out between October 2012 to July 2013. Although HMOs first emerged in Nigeria to supply PHI, their expansion was driven by their role as purchasers in the government's national health insurance scheme that finances SHI programmes, and facilitated by a weak accreditation system. HMOs' characteristics distinguish the market they operate in as monopolistically competitive, and HMOs as multiproduct firms operating multiple risk pools through parallel administrative systems. The considerable product differentiation and consequent risk selection by private insurers promote inefficiencies. Where HMOs and similar private organisations play roles in health financing systems, effective regulatory institutions and mandates must be established to guide their behaviours towards attainment of public health goals and to identify and control undesirable business practices. Lessons are drawn for policy makers and programme implementers especially in those low and middle-income countries considering the use of private organisations in their health financing systems.<br/>