How Single-provider Payment System Deepens Healthcare Barriers, Endangers Lives

With about 95 per cent of Lagos residents outside the state’s social health insurance coverage, according to the Commissioner for Health, Prof. Akin Abayomi, healthcare in Nigeria’s commercial capital remains largely a pay-before-care reality. Yet, even for patients with means, survival often depends not on medical urgency, but on how fast a digital payment clears. This logic underpinned Lagos State’s shift to electronic hospital billing and cashless payments, ostensibly to improve efficiency, boost revenue, and curb leakages. But by channeling all public hospital payments to a single vendor, chiefly to boost revenue and curb leakages, Lagos embraces a high-risk model that contradicts the core safeguards of Digital Public Infrastructure (DPI): resilience and continuity of essential public services, writes Omolabake Fasogbon

Globally, single-provider dependence in critical sectors has repeatedly proven dangerous. In the United States, a cyberattack on Change Healthcare, then the dominant billing and payment processor for hospitals, crippled patient care nationwide, precisely because hospitals lacked alternative payment rails. Despite such lessons and Nigeria’s own fragile digital ecosystem, Lagos has tethered life-critical healthcare to a system ill‑suited for an environment plagued by unreliable networks.

Already, patients pay the price when downtime inevitably hits Lagos’ sole vendor, stalling hospitals statewide and exposing weak backups and absence of substitute providers.  An investigation by THISDAY across Lagos public hospitals finds that while this arrangement enriches the state’s treasury, it widens health inequalities, deepens patients suffering, and endangers lives amid regulatory silence.

Relying on a single e-payment provider in a critical sector where payment determines treatment is risky.  London-based payment consultancy European Merchant Services (EMS) defines the single-provider model as a system in which “an organisation handles all its transactions through one payment provider”. In healthcare, this means that when the provider fails, patients are trapped, unable to pay, and therefore unable to receive care.

The risk is not theoretical. In 2024, a cyber-attack on a U.S. health-tech firm, Change Healthcare, which handles billing and payment for hospitals nationwide disrupted patient care, partly because affected hospitals relied solely on the provider.  Analysts described the breach as one of the most damaging in U.S. healthcare history. In Nigeria, where payment outages are frequent even without cyberattacks, the danger is magnified

Nigeria Health Watch, in an editorial, warned that failures in cashless payment channels negatively impact healthcare delivery, leading to avoidable tragedies. Experts worry that these tragedies are being quietly expedited by institutional dependence on only one bank or provider.

Digital Public Infrastructure principles explicitly warn against this. DPI, which has now been adopted by Nigeria as a national framework, emphasises multi-provider design, interoperability, and fail-safe mechanisms, especially for essential services such as healthcare.

Noting having a multi-provider payment system as the ideal thing, a Digital Health Advisor, Mr. Emeka Chukwu, cautioned that a contrary practice could create structural bottlenecks where a single outage can freeze public health corridor, disrupt emergency care, and erode patient trust.

“No critical investment should centralise payment around one agent. It is simply dangerous,” he stressed in an interview.

Lagos high-risk choice

Lagos State government, having relaxed internal finance departments, channeled payment collection across its 36 public hospitals to a single digital billing/payment platform, Megalek Nigeria Limited. Megalek, in turn, routes transactions primarily through one bank, sometimes two, and a single POS terminal provider, serving a population exceeding 30 million.

When Megalek’s platform, its partner bank or its POS terminal provider experiences downtime, as it inevitably does, health services across the state stall.  Patients are forced to scramble for cash, sometimes far from the facility, amid Nigeria’s tighter cash restrictions.

While the state gains from this arrangement through streamlined payments, enhanced accountability, and tighter control of leakages, vulnerable patients bear the cost, facing delays, pain, and in extreme cases, life-threatening outcomes at every hospital visit.

Chaos at pay point

On a Monday morning at Orile Agege General Hospital (OAGH), patients filled beyond capacity even before medics resumed, with more arriving in droves. Across departments, cases ranged from mild to chronic: one needing urgent lab test as lifeline, a pregnant woman on the verge of delivery, and another rushed in during emergency. One thing bound them all—payment, the process, which can take as long as care itself. At minimum, a mandatory N700 consultation fee before care, compulsory for patients outside insurance coverage.

Patients visiting multiple departments must pay at each point, as billing is neither unified nor consolidated, leading to repeated queues throughout a single treatment day.

Across selected Lagos public hospitals that THISDAY visited, the mission statement proclaims: “To deliver prompt qualitative, equitable and affordable healthcare service……” An element of the patients’ rights declaration further reads: “Right to receive urgent, immediate and sufficient care in the event of emergency…” In reality, the “prompt and urgent” clause above is not always as advertised.

Still, the bureaucracies posed by the state-adopted pay-through-one-provider model, amid other systemic inefficiencies, make this promise unrealistic, rather stretches patients’ waiting time beyond the four -to eight- window that recent local media studies found as current norm.

Such delays, warned Public Health Researcher, Dinah Limiri, “raise mortality and readmission rates, worsen clinical outcomes, delay medication and, in extreme cases, lead to death.”

Far from theory, these risks are playing out in real-time, with the poor disproportionately affected, although data are scarce.

At the laboratory unit, chaos mounted as the queue lengthened. The challenge: POS terminal failed midway; the alternative, bank transfers, were not instant to withstand the surging crowd.  Aside from the fact that many arrived prepared to use ATM cards, each successful transfer still required cashier confirmation through a call to a distant third party before a receipt was issued, further delaying care that triggered patients’ anger.

Trapped at the pay point, elderly patient misses a vital test deadline

As the delay in the laboratory stretched on, murmurs and grumbles rippled through the line. “They have started, how I wished I came with cash,” one patient grumbled. “For how long more will I wait?” another whispered.

Among the restless crowd stood 78-year-old Tunde Salami. Sweating and hapless, he remained glued to the pay point, clutching his ATM card, hoping network restores to the terminal.

Once defrauded after his phone was stolen, Salami avoids mobile transfers. He needed a fasting blood sugar test for a 10:00 a.m. deadline; missing it meant returning the next day.

“They said transfer or cash, but I stopped using mobile banking after my money was stolen. I always use my card here, but it’s not working today,” Salami said, his voice trembling.

“I waited, hoping the network would return. I feared that if I left to find cash, I would miss my 10:00 a.m. window. It’s already late and network is still down. I have to return tomorrow,” he lamented.

To Chukwu, Salami’s predicament alongside others could have been avoided with a multi-provider system.

“This will best cushion patients against enduring network breakdowns,” he said.

Nigeria recently launched its DPI framework to align with global efforts on accelerating progress of Sustainable Development Goals (SDGs). Yet, healthcare remains the least prepared sector, according to Healthcare Advisor, Chukwu.

Lagos Agencies Decline to Comment

Questions on Megalek’s sole agency, payment security, downtime contingency, and expansion of digital collections in Lagos public hospitals were sidestepped by all relevant agencies who initiated the payment model, leaving key queries in this report unanswered.

A direct call and WhatsApp message to Lagos State Ministry of Health’s Tunbosun Ogunbanwo ended with a referral: “Direct your questions to Health Service Commission (HSC) pls,” he wrote.

Contacting Mr. Moses of HSC to whom Ogunbanwo referred THISDAY to, he gave a polite but evasive reply: “Hummmm. Please, dear colleague, don’t you think these questions are better directed to the HC Information? To give full authenticated information… viz., the State Government. Or, can you have a word with the current PS, HSC? To give you her no, so you direct such questions to her. Or, to the former PS… under whose tenure the whole process emanated.”

He declined to answer further questions. THISDAY then reached out to the Permanent Secretary, Ministry of Health, Dr. Olusegun Ogboye, with the same enquiry, but he never responded to calls and WhatsApp messages.

Near-death averted by privilege

A potential e-payment disaster at a Lagos general hospital (name withheld to protect the source, a state worker, from being traced as the incident was recent), was narrowly averted, not because the hospital was proactive, but because the patient’s relative had a professional connection; even then, access was far from easy.

In this case, the patient, Mr. Tunde Owoseni, was rushed into the emergency ward after he slumped during a church service and failed to respond to first aid.

Owoseni’s relative, Dr. Smith (not his real name), who rushed him to the hospital, is himself a medical doctor at another Lagos State general hospital. Still, neither his professional status nor his ties to the state swayed hospital staff, who insisted on registration payment before treatment could begin, since Owoseni had no insurance cover.

“Unmoved, they insisted I must register the patient first. I pleaded with them to commence treatment being an emergency, but they flatly refused. I was forced to disclose my identity, which I usually don’t do, yet it didn’t move them. Only until a few doctors who recognised me intervened was the patient passed for treatment while I completed registration,” he recalled regretfully.

Smith’s ordeal intensified at the pharmacy when the sole payment provider glitched. Transfers failed, and no alternative bank option was available.

“I was told I can only pay with my ATM card, forcing me to return to the car parked far away to fetch my card.

“Returning, network had seized on POS terminal and was asked to bring cash. It was a huge sum I hadn’t planned for, and on a Sunday when banks were shut, with no idea where to find POS operators. My plea to release the lifesaving medications while I dropped my card as security until the network was restored fell on deaf ears until a colleague intervened,” he recounted.

“Owoseni might have died without my intervention. A competing provider or alternative bank option could have prevented this,” he said.

Smith worried that a 48-hour free emergency care policy largely exists on paper, convinced still that enforcing it could avert tragedies fuelled by e-payment failures.

He recounted several distressing incidents at the hospital he works, noting their plights are complicated by insufficient pay points.

“With just one or two cashiers, patients queue to pay, risk a failure, then queue again to see a doctor. The process is just too exhausting, and I’m moved to pity seeing this. Government should consider reinstating finance departments or engaging additional providers to streamline payments and reduce queues,” he suggested.

Technology that deepens care barriers

Increasingly, barriers to healthcare are extending from financial constraints to flawed payment technology which, designed to hasten and improve access, now compounds patients’ woes like Owoseni and Salami, threatening progress toward Sustainable Development Goal (SDG) three on good health for all.

While cases above were managed, a graver tragedy struck in a Bonny Island hospital in Rivers State, where young Nnamdi (real name undisclosed) died pleading for care, not because his caregiver lacked funds, but because repeated network glitches stalled a payment the hospital insisted on before treatment.

In a viral Facebook video posted by Bonny Info TV, grief-stricken Nnamdi’s caregiver, Linda (real name undisclosed), narrated how network delay and hospital’s inaction quickened Nnamdi’s death.

“I brought him here alive, he was breathing,” Linda said, trembling. “They demanded N40,000 and N2,000 for a hospital card. I pleaded with them to begin treatment, assuring money wasn’t the problem, only that my Opay network had failed. Still, they refused,” she wailed.

By the time the transfer was successful and the hospital confirmed payment, Nnamdi was already dead. This is the extent of the havoc a faulty payment system could wreak.

Cases like Linda’s are not uncommon. In March 2025, The Guardian Nigeria reported that Mrs. Bukola Attah’s online transfer for a critically ill relative failed, leading to the patient being discharged without treatment.

Warning by Nigeria Deposit Insurance Corporation (NDIC) against single-bank dependence underscores that Nnamdi’s death and other victims’ ordeal may have been prevented should victims and, crucially, hospitals maintain accounts with alternative banks to withstand outages.

“Account holders should maintain alternative accounts across different banks to ensure quick access to funds in the event of bank distress,” the corporation cautioned.

Corroborating the regulator’s stance, Finance Analyst, Chris Browning, advised, “Try not to keep all your accounts at the same bank. In case technology fails at one institution, for example, you have accounts at other banks to fall back on.”

One downtime, statewide health service disruption

A cashier at Island Maternity Hospital, who requested anonymity, said staff also struggle when payment channels falter or the provider faces downtime.

“It is stressful for us too; it multiplies our task,” he said.

The cashier briefed that minor hitches do occur almost daily, while major downtimes, typically triggered by high transaction volumes and network issues, recur on a near-monthly basis.

The cashier hinted that it is worse when the only POS terminal provider suffers total downtime, which includes midnight, an occurrence he said, would usually co-occur in all the 36 state hospitals.

“When a major downtime occurs, it can take five hours to resolve,” the cashier stated. “Patients naturally become agitated when services stall, we switch to cash during this crisis, but this often takes time and requires a cumbersome manual reconciliation later. And when patients make transfer, it takes time to first confirm via a phone call to another colleague, before issuing a ‘DDA’—a temporary receipt to let patients proceed with treatment.

“However, reconciling this later on the system is like processing the same payment three times. If we don’t, it’s flagged as fraud. To avoid working late, we often juggle this heavy back-office task, while still attending to patients,” the cashier shared.

True to the cashier’s claim, THISDAY confirmed a pattern of statewide disruption on December 22, 2025. Visits to Ifako-Ijaiye General Hospital and OAGH revealed both facilities simultaneously were unable to process bank transfers, an interruption alternative bank or secondary payment provider could prevent.

On-site, THISDAY witnessed relatives of two emergency patients scramble for cash outside the hospital.

“Transfer is not working. You can only use your ATM or bring cash,” the cashiers snapped, as this reporter posed as a patient at both hospitals.

A situation like the above is deliberately avoided at Federal Medical Centre (FMC), Abeokuta, Ogun State, which, as experts posited, engaged two vendors for patients’ transactions, each with on-site cashiers to ensure seamless payment.

A supervisor at FMC Finance unit simply identified as Mr. Femi, said, “Having two vendors creates a safety net. If one system goes down, the other stays active, ensuring that payment issues never block patients’ access to urgent care.”

Single-provider model may not plug leakages after all

Findings indicate that Megalek, engaged by Lagos State to curb financial leakages in public hospitals, may itself be creating new vulnerabilities, raising questions about whether the single-provider model is as leak-proof as projected. Before the arrangement, patient payments were handled internally by hospital finance departments.

Lagos State’s push to digitise hospital payments and address longstanding allegations of fraud and revenue diversion among finance staff saw it outsourced payment to Megalek as a third-party agent, an arrangement said would have been beneficial to the public if democratised, inclusive and flexible as DPI prescribes.

The agent’s earnings, commissions tied to the volume remitted to the government account, the reporter learned, has incentivised cashiers to prioritise “payment before treatment,” often with little or no regard for National Health Act 2014, which mandates emergency care without upfront payment.

Although a cashier at Lagos Island Maternity Hospital disputed this, insisting emergency care remains a priority, accounts from staff at other different facilities corroborated reporter’s findings, who cited fear of revenue loss and patients default.

“Leave law aside; nobody wants to run at a loss. Patients must pay because we earn on commission,” said a cashier at General Hospital, Odan.

The cashier added, “Some colleagues once passed emergency patients during network failures, but many never returned to pay. We won’t repeat such.”

More investigations revealed some agents exploit glitches to divert payments into personal accounts, somehow robbing the state.

During a visit to Lagos State University Teaching Hospital (LASUTH) when the facility experienced a payment outage, THISDAY approached a tall dark male agent (no name tag) for details of an alternative bank, he simply replied: “There is no alternative, failures happen once in a while.”

He thereafter offered to accept payment into his personal account, asking the reporter to return the next day as he was closing, since the case was not an emergency.

“Patients talk too much, that’s why we don’t help them. If you agree to remain discreet, come tomorrow, I will help you,” he said. Circumspect, he withheld his phone number but asked for a time to meet him at the Paediatric Department the following day.

The reporter did not return. But the offer itself points to a loophole that could deprive the state of revenue meant to improve public healthcare services.

Delayed, denied refunds

Patients, not just the state, also suffer from the system’s flaws, often denied refunds for services paid but not rendered, a major fallout of a single provider model, alongside absence of competition and data exposure risks that experts warned about.

Chukwu said, “This model potentially introduces opacity in pricing, refunds and revenue sharing, ultimately undermining the openness that DPI represents.”

One patient, Mrs. Biola, recalled paying for a laboratory procedure she later discovered was not available at the facility.

“Despite following all refund steps, including writing to accounts, I forfeited the money after months of failed attempts,” Biola said.

THISDAY found common cases requiring refund, including payments for tests never needed but prescribed erroneously, and duplicated tests prescribed by different doctors, among others.

As for the latter reason, a laboratory staff in General Hospital, Odan, that cannot be named for security reasons, said this occurs from oversight or when doctors on ward rounds fail to carefully review earlier prescriptions by a relieving colleague.

“Refunds are a major issue. Patients are often told refund letters have been sent to Megalek, but these are rarely honoured because agents work on commission already calculated.

“Sometimes we help by transferring a pending refund to another patient needing the same test, but when that fails, patients face a process whose outcome cannot be ascertained,” the staff hinted.

Withholding patients’ refund not only violates Central Bank rules requiring funds be returned within 48, hours but also breaches global DPI safeguards meant to protect rights and guarantee redress in digital services.

Regulatory gaps

The Nigeria Inter-Bank Settlement System (NIBSS) opened payment infrastructure that enabled fintechs and agents like Megalek to operate and innovate. However, institutions retain discretion over the payment models they adopt.

Globally, countries may design DPI frameworks to suit local realities, they are expected to adhere to universal safeguards that prioritise redundancy and resilience.

As per Lagos public hospitals, there is no evidence of state-led redundancy despite repeated advice, patients remain dependent on vendor-arranged limited procedures, which leave patients waiting longer.

Following a disruption that affected large part of the U.S. health system, CEO of Clearwater, a U.S.-based cybersecurity firm, Steve Cagle, told a healthcare industry publication, Chief Healthcare Executive, that key lesson is that health organisations must maintain in-house contingency plans independent of vendor technology.

“Hospitals should have a plan if a critical vendor goes down. What if you have a vendor that’s down for an extended period of time?” he warned.

A NIBSS source who pleaded anonymity due to not being in a position to comment, admitted it is not ideal for hospitals to depend on one agent or bank. “A system without redundancy has no protection,” he said, noting that neither NIBSS nor the CBN regulates how many payment providers institutions may engage.

Experts hold that clear regulations are crucial for creating a safe, equitable environment, defining the roles of service providers, protecting consumer rights, and fostering competition.

Attempts to reach the CBN through calls, SMS, WhatsApp, and email for comments failed as all inquiries were ignored.

This report is produced under the DPI Africa Journalism Fellowship Programme of the Media Foundation for West Africa and Co-Develop.