Private health care at risk: challenges and solutions

Private health care at risk: challenges and solutions

May 3, 2023

According to several international studies published by the World Health Organization and Bloomberg, Lebanon’s healthcare was ranked in the top tier class among healthcare systems in the world in both 2015 and 2017. To illustrate this point, the Lebanese living abroad prefer to be treated in Lebanese private hospitals as the quality of care is comparable to high international standards and waiting times to perform procedures are close to zero (it is even several months in some developed countries such as France, Canada and the UK).

Thanks to its high ratio of qualified physicians, private investment, hence the availability of the latest treatments and medical equipment, Lebanon was able to score extremely well in all major international health indicators such as life expectancy, maternal and infant mortality, and disease control. This situation was key in addressing the Covid-19 pandemic which was relatively well managed in Lebanon. For these reasons, the consequences of the economic crisis took longer to impact the healthcare system.

The 2020/21 subsidization policy of the Central Bank provided short-lived relief, though it was an expensive policy for the government and caused shortages, imbalances, and the hoarding and smuggling of medication. Today, the Lebanese health sector remains among the top performers in the country in terms of quality medical care and the availability of services, although it is facing serious threats.

Hospitals, patients out-of-pocket
In Lebanon, a large portion of the population historically has been covered by employers of the private sector, while the other portion is covered by the government and individuals. As all public services (including the National Social Security Fund) have not adequately adjusted their payments since the Lebanese pound’s decline, most Lebanese are left with practically no medical coverage. The absence of the NSSF and governmental co-payment coverage, along with the soaring costs of hospitalization, is resulting in substantial out-of-pocket payments for hospital services, exams, and medication, jeopardizing the access to care for the poor, the very ill, and uninsured population. Along with this financial coverage issue, the sector witnessed shortages in medication due to the unintended consequences of the subsidization policy of the central bank. The high cost of oncology drugs and the partial lifting of subsidies in 2021 has left countless cancer patients without treatment and dialysis patients with the terrible prospect of having no access to care.

Along with financing problems and medication shortages, another serious threat to the healthcare system is the brain drain, as physicians and nurses are departing “en masse” towards better-paid jobs and better living and working conditions abroad.

Private-sector healthcare providers nevertheless have been innovative in circumventing the consequences of the crisis. Better salaries and job flexibility – such as the ability to partially work abroad – have been offered to healthcare workers. Prices have been revised to adapt to the high costs. Solar panels have been installed to reduce energy costs. Mergers and acquisitions have also been trending in the sector. Cash flow has improved by the de facto reduction in payment delays resulting from cash transactions. By the end of 2021, the private insurance companies converted their prices into US dollars and had obtained substantial discounts from hospitals, allowing them to gain important market share and provide coverage to middle- and upper-class populations.

At Mount Lebanon Hospital University Medical Center, there has been a massive brain drain. Since 2019, 120 physicians and about 150 nurses have left. The hospital has been fighting to avoid shortages in life saving medication, which it did at a high cost (by direct imports and high inventory which ultimately resulted in expired products being discarded). For the past two years, chemotherapy drugs have been unavailable for numerous patients and remain so today.

In order to retain our existing staff, salaries have been offered in US dollars, alongside medical insurance and schedule flexibility. The hospital has also had to reduce the number of beds by 20 percent, down from 250. Another catastrophic issue that we are facing is the unaffordable costs of dialysis sessions, which cost hospitals $60 per session and are currently reimbursed at 2.5 million Lebanese pounds (equivalent to $25 per session). Several attempts have been made to increase the prices and index them to the dollar and improve the payment delays to prevent further losses, but negotiations are stalling and payments are pending since the beginning of 2023. The official reason is that the NSSF board is not meeting to renew the budget. Dialysis patients are extremely vulnerable and cannot skip any of their sessions and are in an absolutely devastating situation.

The hospital is looking for an alternative financing scheme through private insurances, international franchising projects and diversification into paramedical activity lines, in a hope to overcome these challenges.

Alternative insurance schemes
Several initiatives are being studied by an expert group at RDCL – the Lebanese Business Leaders Association – health GPA committee, whereby the private sector is proposing a project that conceives complementary, employer-sponsored, mandatory private insurance for the employees of the private sector with proper governance.

Despite these efforts, the challenges resulting from the Lebanese pound devaluation and the slow pace of change in prices of healthcare services is putting pressure on hospital costs. The increasing cost of fuel, supplies, maintenance, and salaries, along with shortages in medication, and shortages in qualified healthcare workers are creating worrisome challenges. In such precarious conditions, hospitals will no longer retain competent healthcare professionals, be able to pay maintenance fees, or update their equipment.

This will cause a contraction in the sector, leading hospitals to reduce the number of beds or even to close while avoiding any additional investment in equipment. The aggregate offer for healthcare services will decline, driving costs higher and reducing quality. We will end up with the waiting queues that the Canadian, British or French experience. This is a serious threat to the population and will foremost affect vulnerable groups, but also citizens’ ability to work, produce and grow. It may well induce social unrest.

Several objectives should therefore be envisaged for the long-term sustainability of the system:

1- Guaranteeing access to basic healthcare for most of the Lebanese population – in an optimized and equitable manner – without having them endure financial hardship;

2- Ensuring medication availability and access throughout the country;

3- Providing a healthcare workforce retention strategy to prevent further losses of human resources;

4- Supporting and upgrading the healthcare system’s infrastructure to ensure continuous quality care.

The Lebanese health sector deservedly has been described as a flagship in the region. Before it is too late, this vital sector should be rescued from the claws of the financial and economic crisis.

Roula Gharios Zahar is co-founder and deputy general director of Mount Lebanon Hospital

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