Another Year in Nigerian Digital Health — 2018 Review and Prediction
You may want to read the review for 2017 as the trends are largely the same.
The Nigerian macro-economy provided the backdrop to all activity in healthtech in 2018 and it didn’t differ much from last year that was generally difficult for all sectors. While we officially exited recession early in the year, growth is still rather low and the average person has seen real disposable income shrink as inflation continues to be double digit. This means, as usual, people ignore health spending until it’s late and absolutely necessary. With only 6–9% of the population covered by health insurance, that late spending often becomes catastrophic or impoverishing.
To plug some of the health funding gaps, the Federal government looks set to implement the BHCPF which will apportion more revenue to primary health care provision. This is obviously a positive step and the regular health budget needs to increase in lockstep to eventually approach 15% (currently at around 4%) of the country’s annual budget as stipulated in the Abuja declaration made 17 years ago.
State Health Insurance schemes
Like last year, state health insurance schemes continue to flourish. At last count, there were about 22 states with a scheme of some sort. Lagos launched its version in December with much pomp. It’s yet to be seen how much uptake and penetration these schemes will have. Great kudos must go to the folks like those at Pharmaccess who have championed this work. For healthcare to improve, it’s clear that demand must be better organized via pooling of funds. Nigeria is strange in that we spend over ₦1 trillion on health, more than the recommended total per capita spending on health ($97 against the target of $86), yet have terrible outcomes. The challenge is that our largely out-of-pocket spending is unorganized, inefficient and skewed towards expensive care.
With the launch of the state schemes, I’m unsure how all this affects the existing HMO industry. Are the current HMOs going to help administer the pooled funds or aid in strategic purchasing? Are they going to exist side by side with the state schemes? Having multiple siloed fund pools often results in private outfits taking the cream off the top and leaving the more vulnerable ‘dregs’ for the state scheme. This may spell doom for the state especially if the scheme has poor penetration and is poorly managed. In any case, these schemes provide new opportunities for Healthtech startups to apply data and clinical knowledge to appropriately price and account for services in a cost/ clinically effective manner.
Brain Drain
The exit of skilled health care workers continues unabated. There are stories of full teams of doctors from consultants to house officers migrating in one fell swoop. Similarly, there are tales of full clinical teams consisting only of Nigerian doctors parading the wards in UK hospitals. Nurses are also making the move leaving many wards in Nigerian hospitals desolate.
This widening gap of health care worker availability provides an opportunity for startups in the telemedicine area as fewer professionals exist to treat the teeming Nigerian population. Many telemedicine players already exist but none have reached a critical mass. Kangpe which started out in this space has been subsumed into a larger health insurance play and is looking to play in more areas of the healthcare stack. It seems that to truly capture this telemedicine opportunity, the providers have to look to integrate more aspects of the healthcare stack rather than isolated efforts as is currently the preference.
The brain drain also begs the question of how do we train more professionals to fill the gap? Telemedicine can only do so much. We need actual numbers on the frontline doing the physical work required to deliver healthcare. I hope we see more innovative approaches to training health care workers and that regulators permit the inevitable changes in the regulations required to foster this.
Funding
This year saw more investor funding come into the Nigerian health tech sector. Companies such as Mdaas global, Helium health, Reliance HMO Lifebank and Sonocare cumulatively raised millions of dollars in funding. There were also several grants and competition successes by startups. Techcabal’s state of healthtech report launching in January of 2019 details over 60 startups operating in Nigeria and the amounts they’ve raised.
Overall, however, funding in Nigerian healthtech remains very poor. Entrepreneurs in the sector struggle compared to their fintech counterparts who continue to be the darling of investors. Farther beyond, the healthtech sector in the U.S is currently attracting record levels of funding. Sadly, it will be a while yet before Nigerian healthtech receives similar attention. A lot of work remains to be done around policies to enable the sector to improve and become more attractive. Improvements needed include better organizing health demand, regulations incentivizing healthtech adoption and better public health education to overcome cultural barriers to adopting modern medicine. Encouragingly some of that work is currently being done and the bellwether seems to indicate that more funding is on the way.
Ecosystem activity
While funding activity remains slow, more interest and activity took place in the general ecosystem throughout the year. A health innovation hub launched in Abuja and several other hubs took more interest in health tech. Impact hub and cchub are two of a few that did. The latter accepted Doctoora into its incubation program and announced a project with the Nigerian Institute of medical research looking at smartphone based Direct observed therapy for TB.
The team at Digital health Nigeria hosted a few meetups and published a survey report looking at the viability of the online pharmacy model in Lagos. A snapshot of the startup landscape was also done in February that showed a diverse group of startups working in many areas of healthtech.
Epiafric hosted another one of its health meets tech hackathon in Abuja. This time around it was focused on Infectious Diseases. An innovative wristband that delivers alcohol for hand hygiene won the hackathon.
To get a more granular sense of ecosystem activity month to month, you may go back and read the monthly Digital Health Nigeria newsletters from the year. Sign up to have them delivered to your inbox each month next year.
If you followed the newsletter throughout the year, one name that popped up consistently was Lifebank. From raising funds at the start of the year to launching an oxygen delivery service later in the year, Lifebank had a stellar year. Check out a recap of their year via their twitter handle.
Predictions for 2019
Back in 2016, I predicted what 2017 would bring for healthtech rather accurately and provided a list of 3 startups to watch. All 3 have gone on to grow, win accolades and become relatively successful. This year I’m resting on my laurels and opting to get a more rounded sense of what others think 2019 will bring. I reached out to several health tech founders to gather their thoughts, here’s some of what they said.
Lanre, founder of Babymigo feels that 2019 will see more money come into the ecosystem to fund existing and new healthtech startups.
Simpa of APMIS, a digital healthcare platform as a service (DHPaaS) provider, predicts that EMR adoption would increase significantly. Being in a position himself to affect this it could very well be a self-fulfilling prophecy that the ecosystem needs urgently. What better way to predict the future than to create it yourself. I’m rooting for Simpa and other EMR providers.
Chike from Hellocare predicts that in the coming year we will move closer to solving the health payment puzzle in Nigeria.
‘With the acquisition of mobile money license by MTN and other Telcos, payment for health services and insurance will be more streamlined.’
Debo of Doctoora points to the emergence of a new e-health policy that will provide more regulation and may see many EMR companies faced with issues relating to data management. He anticipates increased penetration of healthtech solutions and more focused health innovation hubs springing up across the country. Like a couple other founders I spoke to, Debo also expects more money to come into the ecosystem.
Judging by the state of most post revenue start-ups in the space, I anticipate a decent influx of capital into the health innovation market in 2019.
Ayomide of Wellvis predicts that more health insurance companies will look to infuse more technology into their processes. He opines that this will create a B2B opportunity for companies to create tech platforms and services to power the health insurers.
The piggybank/Avon partnership is an eye opener. More of them will begin to take or invest in such projects.
Mayowa of Doctornow is of the opinion that there will be more activity in health insurtech and an increase in specialized health tech talent as opposed to the current preponderance of generalists. Working in telemedicine himself, he thinks that many more telemedicine startups will die and there will be more enterprise and traditional adoption of telemedicine led by a few companies. This will give rise to hybrid Tech+brick-and-mortar models.
Wale a healthtech all-rounder thinks that 2019 will herald acquisitions in the ecosystem. He dropped this prediction via twitter.
Conclusion
Generally speaking, 2018 was a good year for Nigerian healthtech. Judging by the disposition of many founders I spoke to, 2019 is set to be even better. I can’t help but be optimistic myself and look forward to seeing more growth in the coming year.
To keep abreast of everything health tech and innovation across Nigeria and Africa, Sign up for my monthly digital health newsletter. Would love to hear your thoughts and predictions, let’s continue the conversations in the comment section or via twitter.
Have a great new year!
