Public HealthJul 27, 2023
Rethinking Lebanon’s Healthcare System Amid the Economic Crisis
- Fadi El-Jardali, Reem Masri, Zeina Sleem
This article is supported by the Friedrich Naumann Foundation Beirut Office. The opinions expressed here do not necessarily reflect those of the donor.
More than half of the Lebanese population does not currently benefit from any form of healthcare coverage, limiting access to affordable and comprehensive healthcare services and increasing out-of-pocket expenditures on health to more than 85% of household income. The World Bank has described the Lebanese economic crisis, now in its fourth year, as one of the top 10 most significant global crises since the mid-19th century, with inflation reaching 172% in 2023.
The economic crisis has only intensified an already overburdened healthcare sector and impacted the ability of all public funds to provide adequate social protection and healthcare coverage. The actual coverage of these public funds has become negligible due to the depreciation of the currency. Today, the National Social Security Fund (NSSF) can cover only 10% of the cost of healthcare services, with the beneficiary paying the remaining 90%. Consequently, beneficiaries have resorted to private insurance companies or out-of-pocket payments, which increased from 33.1% in 2018 to more than 85% in 2022.
The ongoing crisis has also heavily impacted access to essential medications. Despite the high spending on pharmaceuticals (accounting for more than 25% of healthcare expenditures), stocks of drugs have dropped by 50% since the beginning of the crisis, resulting in more than 70% of the Lebanese population with no access to critical medications.
The dire state that the healthcare sector has reached threatens the accessibility of health services for thousands of Lebanese, presenting a great opportunity to rethink the healthcare system. This article explores the challenges faced by the healthcare sector and proposes tangible and implementable recommendations to instigate reform.
At the governance level:
For decades, the Ministry of Public Health (MOPH) has struggled to regulate the healthcare sector. Weak organizational structures, insufficiency of qualified human resources, and poor infrastructure have hindered MOPH’s ability to fulfill its essential public health functions. Inadequate accountability mechanisms have led to corruption in the healthcare sector, which was exacerbated during the crisis. Consequently, the government has struggled to control the sale, distribution, and smuggling of counterfeit drugs, particularly for cancer medication.
The lack of coordination between various financing agents and service providers has also created siloed and disconnected operating mechanisms. Moreover, the absence of political will has been a significant barrier to strengthening the healthcare sector. A law for universal healthcare coverage (UHC) has been previously proposed and rescinded in 2023 due to gaps in the law. Currently, a revised draft for a UHC law has been submitted and is up for discussion in the health parliamentary committee.
Attempts to alleviate the effects of the economic crisis have been hampered by the lack of a shared vision among stakeholders in the healthcare sector, such as the MOPH and NSSF. Despite the urgency and magnitude of this problem, Lebanon continues to lack a comprehensive and well-defined national strategy to tackle the critical aspects of recruitment, training, and retention of human resources for health.
At the financing level:
Insufficient public oversight in the healthcare sector has resulted in inefficient resource allocation and a budgeting structure that doesn’t rely on performance indicators. This is evident in healthcare expenditure, whereby public healthcare services receive limited resources, particularly for primary and preventive care, while a significant percentage is spent on hospital-based care.
The Sin- taxation: A sin tax is an excise tax on specific goods and services due to their ability, or perception, to be harmful or costly to society fragmentation of Lebanon’s insurance funds and inadequate coordination among entities involved in healthcare financing and delivery have long plagued the healthcare system. For example, the NSSF, the largest public fund, has faced challenges due to weak accounting processes, under-declaration of salaries, and difficulties in providing coverage.
The devaluation of the national currency has led to increased medical costs and inflation, posing challenges for insurers and impacting access to private health insurance. Private insurers transitioned to accepting only USD payments, limiting access to higher socioeconomic backgrounds, while public insurance funds continue to accept subscriptions in the rapidly deteriorating Lebanese lira, resulting in limited coverage for beneficiaries' medical costs.
At the delivery level:
Lebanon's healthcare system is dominated by the private sector, focused largely on hospital and curative care. To counter this, the MOPH has partnered with NGOs and private entities to expand the network of primary healthcare centers (PHCs), reaching 245 centers in 2021. However, the dominance of the private sector limits the effectiveness of PHCs in acting as gatekeepers for regulating access to higher-level care.
Lebanon has historically faced a shortage of healthcare professionals, including nurses and family medicine practitioners, due to the absence of financial incentives and scarcity of relevant programs. This has led to professionals migrating in search of better opportunities. Thus, as the economic crisis deepened, the vast majority of healthcare professionals left in search of jobs that would offer better financial benefits and work conditions.
In terms of medication supply, local manufacturing has not been incentivized in Lebanon, resulting in only 12 local manufacturers. The preference for brand-name drugs over generics and reliance on expensive imported medications have made medicines inaccessible and unaffordable during the economic crisis.
Roadmap to Recovery
Envisioning a Comprehensive Law for Essential Health Services
To overcome the healthcare sector’s current challenges, the government must implement robust system-level reforms focusing on universal health coverage. To achieve this, the current proposed law should be revised to ensure that it is comprehensive and does not contain any loopholes that would impact its implementation. The law should also mandate the formulation of basic health insurance packages to cover essential services.
Strengthening Governance and Public Oversight for Effective Change
Strengthening accountability and transparency mechanisms is crucial to achieving health reforms. This can be achieved by establishing an independent committee comprised of specialized stakeholders from the healthcare sector, which would enhance accountability mechanisms and ensure proper governance. This committee could mobilize public pressure to ensure the implementation of anti-corruption legislation, such as Law No. 189-2020: The Financial Disclosure and the Punishment of Illicit Enrichment Law.
Despite the vital role of the private sector in the healthcare system, it is also crucial to control its proliferation. Mechanisms should be established which harness the power of the private sector, but also strengthen the regulatory and monitoring frameworks set by the government. This would involve establishing clear rules and standards for healthcare providers, ensuring that healthcare facilities are licensed and regularly inspected.
Adopting Strategic Financial Measures to Build a Sustainable System
Several measures should be implemented to address the financial challenges and promote sustainability. As a first step, standardizing Lebanon’s medical insurance funds and introducing common basic packages and tariffs would reduce inequalities in healthcare coverage. This would require implementing long-awaited reforms on the funding and reimbursement schemes for all funds, such as the NSSF’s sickness and maternity fund, to enhance its effectiveness.
Cost-containment measures, for example, should be implemented to reduce resource waste. In addition, adopting value-based procurement methods would rationalize expenditure on health and ensure that healthcare resources are allocated effectively, with patients receiving the most beneficial treatments. The government can leverage the expertise of multinational companies to implement value-based procurement methods and digitize the health sector to further optimize resource allocation and improve efficiency.
In the short term, financial resources should be allocated directly to patients who cannot afford essential medications, rather than relying solely on the ministry to subsidize selected medications. This can be achieved by implementing a tiered coverage system, where financial assistance is provided based on the patient’s needs and the importance of the medicines. This approach ensures that limited resources are allocated effectively and efficiently by targeting assistance to those who need it the most. For example, implementing a national pharmaceutical card for all Lebanese citizens instead of continuing to subsidize medication would streamline access to healthcare services. Moreover, stringent pricing schemes should also be adopted to limit fluctuations in the cost of medicines. Additional revenue streams to the healthcare sector, such as sin-taxation, should be explored to finance the healthcare sector.
Building a Stronger Healthcare System through Primary Care
Reorienting the healthcare system towards preventative and primary healthcare and expanding the scope of services to meet evolving health needs is a necessity. This would require mobilizing political support to prioritize investing in and endorsing PHCs, which would result in equipping the PHC system with a robust gatekeeping and referral system that will decrease the burden on the healthcare system and reduce costs. Also, raising awareness and altering the health-seeking habits of the population through targeted campaign advertisements emphasizing the importance of preventative care over curative care would enhance the healthcare sector.
Harnessing Local Capabilities and Potentials
Investing in local manufacturing of essential generic drugs is crucial to reduce import dependency and ensure affordable medication availability. One recommendation would be to certify local manufacturers by reputable international entities like the World Health Organization (WHO) to guarantee the quality of locally produced medications and increase citizens' trust in these products.
Achieving Impact through Enhanced Coordination among Different Actors
To improve coordination among actors in the humanitarian sector that deliver healthcare services, it is crucial to establish a common platform for humanitarian actors and NGOs. Similarly, establishing governance arrangements that would stimulate joint planning and multi-sectoral actions for a more effective response is another approach to leverage the roles of the different actors in the healthcare sector. For example, collaboration with academia to institutionalize data and evidence in decision-making in government and other organizations that affect the health system.
The economic crisis and the dreadful impact it had on the healthcare sector in Lebanon presents a great opportunity for decision-makers to implement robust and radical reforms at a system level to rebuild the sector. Strengthening governance and public oversight, implementing efficient financial measures, improving collaboration among relevant actors, and shifting the narrative towards prevention and promotion of healthy habits are crucial to create a more sustainable and effective healthcare system that would improve population outcomes.
1- Sin- taxation: A sin tax is an excise tax on specific goods and services due to their ability, or perception, to be harmful or costly to societyFadi El-Jardali(Ph.D., MPH), Founder & Director of the Knowledge to Policy (K2P) Center, Director of the World Health Organization (WHO)Collaborating Center for Evidence-Informed Policy and Practice, Co-Director of the Center for Systematic Reviews in Health Policy and Systems Research (SPARK), and an Adjunct Professor at McMaster University in Canada.Reem Masri (LD, RD, MPH) is an Evidence Lead Specialist at the Knowledge to Policy (K2P) Center at the American University of Beirut.Zeina Sleem (MPH), is an Evidence Lead Specialist at the Knowledge to Policy (K2P) Center at the American University of Beirut.