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Background  Various attempts to examine health financing mechanisms in Nigeria highlight the fact that there is no single mechanism that fits all contexts and people. This paper sets out findings of an in-depth assessment of different health financing mechanisms in Nigeria.    Methods  The study was undertaken in the Federal Capital territory of Nigeria and two States (Niger and Kaduna). Data were collected through review of government documents, and in-depth interviews of purposively selected respondents. Data analysis was guided by a conceptual framework which draws from various approaches for assessing health financing mechanisms. Data was examined for current practices, what needs to change and how the change can happen.    Results  Health financing mechanisms in Nigeria do not operate optimally. Allocation and use of resources are neither evidence-based nor results-driven. Resources are not allocated equitably or in a manner that minimizes wastage and improves efficiency. None of the mechanisms effectively protects individuals/households from catastrophic health expenditure. Issues with social health insurance cut across legal frameworks and use of Health Maintenance Organisations (HMOs) as purchasers. The concomitant effect is that attainment of Universal Health Coverage is greatly compromised. In order to improve efficiency of health financing mechanisms, government needs to allocate more funds for purchasing health services; this spending must be based on evidence (strategic), and appropriately tracked. The legislation that established National Health Insurance Scheme should be amended such that social health insurance becomes mandatory for all citizens. Implementation of the latter should be complemented by revision of benefit package, strict oversight and regulation of HMOs.    Conclusion  In order to improve health financing in the country, legal and regulatory frameworks need to be revised. Efficient utilization of resources could be improved through strategic purchasing arrangements and strict oversight.

Exploring effectiveness of different health financing mechanisms in Nigeria; what needs to change and how can it happen?