Power crisis: Hospitals groan as electricity costs soar, warn of higher healthcare costs

…Operators seek govt relief, tax incentives to sustain investments
By Chioma Obinna

Rising electricity tariffs and mounting operating costs are putting hospitals under severe financial pressure, with healthcare operators warning that the burden could stall expansion, undermine quality care and ultimately force up medical bills for Nigerians.

The Managing Director and Chief Executive Officer of Iwosan Lagoon Hospitals, Olubisi Oyeniran, said electricity had become one of the biggest costs of running a hospital, despite being critical to the delivery of safe and quality healthcare.

Oyeniran, who spoke during the commencement of medical operations at the hospital’s new outpost clinic in Alaro City, Epe, Lagos, called for government intervention to cushion the impact of rising energy costs on healthcare facilities.

He said hospitals could not afford unreliable electricity because life-support equipment, diagnostic machines, laboratories and cold-chain facilities require uninterrupted power.

“Generally, we need an enabling environment for investments to thrive. For instance, power is one of the biggest issues in running healthcare because it comes at a huge cost. Medical equipment is imported with forex pressure, and this comes at a huge cost. The government can help,” Oyeniran said.

He urged government to consider targeted energy subsidies, direct power relief and other policy measures to reduce the operating burden on healthcare providers.

According to him, the pressure from electricity costs is being compounded by foreign exchange challenges, which have increased the cost of imported medical equipment and other healthcare inputs.
He warned that unless the cost pressures were addressed, providers could be forced to pass them on to patients through higher charges, potentially making quality healthcare less affordable.

The warning came as Iwosan Lagoon Hospitals commenced operations at its new outpost clinic in Alaro City, a 2,000-hectare master-planned residential and light industrial development in Epe.

The clinic currently provides general outpatient and emergency services, but the operators said it is designed to grow with the expanding community.

The Managing Director of Iwosan Lagoon Outpatient Clinic and Iwosan Wellness Centre, Oluwatomi Kogo, said the facility would be expanded into a larger hospital within the next 12 months.

“Within the next 12 months, we intend to develop into a larger hospital. This means we will have at least 10 beds to admit, a full laboratory and a radiology unit,” Kogo said.

She said the expanded facility would provide 24-hour emergency care, general outpatient services, comprehensive annual health checks and family medicine.

Specialists would also periodically attend to patients with underlying conditions such as hypertension and diabetes, while those requiring more specialised care would be transferred to other facilities within the healthcare network.

Oyeniran said the Alaro City clinic was designed as an entry point into the wider Iwosan healthcare system, which includes Paelon Memorial Hospital, Euracare and Iwosan Wellness.

“This clinic will function as one of our outposts and one of the doors into the Lagoon healthcare system and the Iwosan Healthcare,” he said.

He explained that as the city grows and healthcare needs increase, the group plans to develop secondary and tertiary healthcare facilities within the community.

“As the city and healthcare demand grow, our vision is to build secondary and tertiary healthcare facilities here in Alaro City. We are working with the development plan of the city,” he said.

Also speaking, Managing Director of Paelon Memorial Hospital, Ngozi Onyia, also called for an enabling environment that would support continued investment in healthcare.

Onyia urged the Lagos State Government to consider favourable policies, targeted tax relief and dedicated funding to make healthcare investment more sustainable.

She said Iwosan Lagoon Hospitals brought internationally recognised quality standards to the new development, noting that the group secured its fifth Gold Seal of approval from the Joint Commission International, JCI, in 2024.

According to her, the organisation was the first hospital in Nigeria to achieve JCI accreditation and has maintained other quality benchmarks, including SafeCare Level 5 standards, as well as collaborations with institutions such as Mayo Clinic in the United States.

She said sustaining such standards required policies that recognised the high cost of operating healthcare facilities.

The Head of Corporate Affairs, Alaro City, Oluwaseyi Ashade, said integrating healthcare into the development from the beginning was part of the city’s strategy of building critical infrastructure ahead of population growth.

She noted that major infrastructure, including an eight-lane main boulevard, had been completed before residents began moving into the area.

“For a city that is growing, healthcare is important. If we are building a community where families can go to work, go to school, you need a partner like the Iwosan Lagoon Hospitals that understands that shared vision where you are building infrastructure ahead of demand,” Ashade said.

The operators said the Alaro City facility was expected to provide immediate access to essential healthcare services while creating a foundation for the development of more comprehensive medical infrastructure as the community expands.