Medical Cost Control in an Oilfield Service Company, Nigeria

Medical Cost Control in an Oilfield Service Company, Nigeria Uche Okorocha Uche Okorocha Schlumberger Search for other works by this author on: This Site Google Scholar Paper presented at the SPE International Conference on Health, Safety, and Environment in Oil and Gas Exploration and Production, Calgary, Alberta, Canada, March 2004. Paper Number: SPE-86850-MS https://doi.org/10.2118/86850-MS Published: March 29 2004 Cite View This Citation Add to Citation Manager Share Icon Share Twitter LinkedIn Get Permissions Search Site Citation Okorocha, Uche. "Medical Cost Control in an Oilfield Service Company, Nigeria." Paper presented at the SPE International Conference on Health, Safety, and Environment in Oil and Gas Exploration and Production, Calgary, Alberta, Canada, March 2004. doi: https://doi.org/10.2118/86850-MS Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex Search Dropdown Menu toolbar search search input Search input auto suggest filter your search All ContentAll ProceedingsSociety of Petroleum Engineers (SPE)SPE International Conference and Exhibition on Health, Safety, Environment, and Sustainability Search Advanced Search AbstractIn an oilfield service company in Nigeria that provides free health care for its employees and their dependents, the cost of health care was found to be extremely high, largely because of abuse by the employees, and also because of exploitation by the hospitals. A health management consultant was hired who introduced measures aimed at reducing the cost without compromising the quality of health care. The cost dropped by 30% in the first year, and by an additional 32% in the second year.IntroductionIn Nigeria, because of the lack of a functional national health care program in the face of poverty and disease, one of the attractions of working in the oil industry is free health care for the employees (nationals) and their dependents. The companies usually provide free health care through a retainer agreement with private hospitals. For the hospitals, it is also a major breakthrough in business to be retained by an oil company.In our company, with the downturn in the industry in 1999, a closer look at the enormous cost of health care became necessary. This led to the hiring of a health management consultant primarily to control the cost of health care.Cost Escalation FactorsThe following were identified as factors leading to high medical bills:Abuse of free medical by the employees.The company provides free medical care for the employee, spouse, and up to four biological children under 21 years of age. It was regular practice for employees to take other people outside those covered by the program to the retained hospitals for treatment at the expense of the company. These other people might have been parents, neighbors, or friends.There was also a general tendency to make frequent or unnecessary visits the hospital.Since the controls were lax, employees often presented forged receipts for medical expenses and got reimbursed.In some cases, the employees collected cash from the doctors who in turn sent bills in the employees' names to the companyAlternative treatment. Huge costs were also incurred by the employees by patronizing herbalists, native doctors (juju men), bonesetters, spiritual healers, traditional birth attendants (TBAs), etc. The employees simply produced receipts and got reimbursed. Very often, the cases got complicated and eventually the patients had to return to the hospital, further increasing the cost.Too many hospitals retained by the company. The company operates in three locations in Nigeria (Port Harcourt, Warri, and Lagos) where it retained the services of 36 hospitals. Each of these clinics sent monthly medical bills to the company.Abuse by the hospitals. The hospitals were overinvoicing the company. This could hardly be questioned since the authorities within the company lacked the professional competence to evaluate the treatments given and challenge inflated charges. Company employees and dependents were being hospitalized unnecessarily to try to justify high bills.Cost-Control Measures IntroducedThe following measures were introduced in January 2000 to reduce health care costs:Streamlining of hospitals through an audit process. This measure reduced the total number of retained hospitals from 36 to 10. The selected clinics are given strict guidelines by the company's doctor.Standardization of rates through negotiation in order to provide benchmarks for invoicing and to check arbitrary charges.Each employee or dependent was issued a personalized hospital attendance identification card from the company. This checks the treatment of non entitled persons. Keywords: proposal, nigeria, society of petroleum engineers, medical cost control, typhoid fever, medical bill, statistics, spe 86850, health care, clinic Subjects: Health This content is only available via PDF. 2004. 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