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Friday, December 8, 2023

Private hospitals struggle to survive as subsidy removal makes patients too poor to pay

  • Electricity takes 50% of running costs

The Association of Nigerian Private Medical Practitioners says the amount of money spent on power supply from the national grid and diesel or petrol constitutes more than 50 per cent of the overhead costs in private hospitals monthly.

The ANPMP said many hospitals are now struggling to stay afloat.

President Bola Tinubu during his inaugural address declared that there would no longer be petroleum subsidy. Tinubu said the funds for subsidies will be diverted to other things like public infrastructure, education, health care, and jobs.

Barely 38 days after his declaration, pump price of Premium Motor Spirit, popularly called petrol, was raised from N537/litre to N617/litre, all the way from N195 when he took office May 29.

Since the withdrawal of subsidy on petrol and the floating of the naira against the dollar, marketers have continued to claim that the cost of PMS could rise to as high as N700/litre.

According to the National President of the ANPMP, Dr Kayode Adesola, there are about 8,000 private health facilities in the country with various capacities, hence energy needs vary.

“How much is spent on energy has become so big and significant that it now constitutes about 50 per cent or more of the overhead cost per month. Many hospitals are struggling to stay afloat as the majority of the patients are heavily impoverished now they can hardly afford even the old bills, not to talk of the well-deserved needed increase.

“Tariffs from the health Insurance sector have stagnated for years as if ignorant of the galloping inflations. All these and more frustrate health care delivery, causing more morbidity and mortality. We are anxiously praying that President Bola Tinubu will deliver on the power sector revamping,” Dr Adesola said.

He said attempting to estimate the amount spent on power supply in private hospitals is quite tough as some spend several millions per month, while some as low as N20,000 depending on the size, location, and needs of the hospitals.

“However, the amount spent on diesel or petrol will be nothing less than three times of what is spent on the power supply from the national grid and it can run into millions depending on the size and capacity of the hospital.

“Big hospitals spend millions of naira on electricity, most of them will not spend less than N5m monthly but it’s difficult to estimate the amount. Some private hospitals have their transformers but smaller hospitals may not spend up to that amount and of course, about 15 per cent of the hospitals can be classified as big hospitals,” he added.

Already, the fall of Nigeria’s naira against the United States dollar, coupled with the recent rise in global crude oil prices, is making Nigerians apprehensive of a possible hike in the pump price of petrol.

Nigeria’s headline inflation rate accelerated for the sixth consecutive time to 22.79 per cent in June 2023, according to data by the National Bureau of Statistics released in July.

The inflation rate in Africa’s biggest economy rose to a new 17-year high of 22.79 per cent in June 2023 from 22.41 per cent in the previous month.

The NBS report read, “In June 2023, the Headline inflation rate rose to 22.79 per cent relative to May 2023 headline inflation rate, which was 22.41 per cent. Looking at the movement, the June 2023 headline inflation rate showed an increase of 0.38 percentage points when compared to May 2023 headline inflation rate.

“On a year-on-year basis, the Headline inflation rate was 4.19 percentage points higher compared to the rate recorded in June 2022, which was 18.60 per cent. This shows that the Headline inflation rate (year-on-year basis) increased in June 2023 when compared to the same month in the preceding year (i.e., June 2022).”

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