By Zoe Hughes
Chronic underfunding, weak implementation, and persistent governance challenges in Nigeria’s public health system are the core concerns that have led to the dominance of the private sector. It is estimated that up to 70% of healthcare services in Nigeria are delivered by the private sector. However, the extent to which private-sector–led service delivery supports the goals of Universal Health Coverage (UHC)—particularly in ensuring affordable and quality care—remains contested. This concern largely stems from the sector’s inherently profit-driven orientation. In this blog, I discuss the tension between private health providers making profits and, at the same time, providing care consistent with the goals of UHC.
The Tension Between Profit and Universal Health Coverage
UHC means everyone has access to quality health services without facing financial hardship. Traditionally, the public sector has been seen as the main provider, with the private sector playing a supporting role to be engaged by the government. However, in countries with private-led healthcare systems, this view does not fully align. This is because the profit-driven nature of private healthcare can conflict with UHC goals, leading to overtreatment, inflated prices, compromised quality, and the selective treatment of the most profitable patients and services. Typically, for-profit healthcare is only accessible to those who can afford it, which may also lead to catastrophic out-of-pocket health expenditures.
Capitalism Unchecked: Dangers of Healthcare Privatisation and Lessons from the US
Criticisms of private healthcare often centre on capitalism’s strong, extractive profit incentive, however the private sector operates very differently across countries and their health systems, shaped as much by universal market incentives as it is local cultural and economic contexts. In the U.S., private-sector involvement has driven significant medical innovation but has also contributed to the country having the most expensive healthcare system in the world. The U.S. healthcare market is estimated to be worth $5 trillion. To compare, Nigeria’s healthcare market is estimated to be worth $18 billion, 0.36% of that of the U.S.. In Nigeria, profitability in healthcare is constrained (relative to high-income markets) by low effective demand for healthcare arising from widespread poverty, combined with a reliance on out-of-pocket due to low health insurance penetration. Nigerian firms operate in contexts of limited state capacity, infrastructural deficits and constrained access to capital.
