Lebanon’s Healthcare: Sickness is Forbidden

Following the latest wage increase in Lebanon, private hospitals and practitioners want to increase the rates of medical services, but the National Social Security Fund cannot foot the bill.

On Monday, private hospitals in Lebanon stopped admitting patients covered by the National Social Security Fund (NSSF). These hospitals are trying to secure an increase in the rates of medical services they render to those who enjoy the state’s health coverage.

While the NSSF recognizes the legitimacy of an increase in rates, the major problem is lack of funds at the NSSF itself. The NSSF estimates that an 18 percent increase in hospital costs will amount to Lebanese Lira (LL) 135 billion (US$90 million).

This controversy has been repeated annually while NSSF patients are the ones that pay the price.

In a show of support for the hospitals’ decision, the Syndicate of Private Hospitals and the Order of Physicians staged a sit-in outside the government’s headquarters at the Grand Serail in Riad Solh Square.

NSSF director-general, Mohammad Karaki, says that “the fund negotiated the issue of hospital rates based on the legitimacy of the demand to increase them for the first time in nearly 16 years. But this needs its own mechanism and regulations.”

In this context, “it was not possible to be lenient over an issue that impacts social security. In 2008, the medical advisory committee proposed an increase. It was adopted by the health ministry and a decision was made,” says Karaki.

What actually happened is that other social funds, such as the health ministry’s fund and the cooperatives of state employees and security forces, were able to receive funding from the treasury and apply the increase, but not the NSSF.

Article 66 of the NSSF regulating laws stipulates that such funding should come from employer and employee contributions through salary taxes.

This current situation dates back to a Cabinet decision of February 2009 calling for an increase in hospital rates. Hospitals had threatened to stop receiving patients covered by the NSSF but backed away days later.

It was clear that the NSSF would be unable to cover the increased costs without a decision by a tripartite board of directors – made up of 10 employers, 10 employees, and 6 state representatives – to be followed by a government decree.

At the time, the government had implemented a partial wage correction of LL200,000 (US$133). This led to an increase in employer contributions to the NSSF by LL60 billion (US$40 million). But the financial deficit in the fund swallowed this increase.

Following the recent wage hike, hospitals are again demanding an increase in rates. To add more pressure, the Syndicate of Hospitals says it will not raise employee and nurses wages unless there is an agreement on the higher rates.

Officials say the syndicate wants to impose a periodic increase in rates. It sent its demands to the health ministry and the NSSF several times. Health Minister Ali Hassan Khalil raised the demands to the Cabinet, which is now considering them. In the NSSF, Karaki called on the medical advisory committee to meet.

Over three sessions, the medical advisory committee discussed increasing hospital rates based on two recommendations. The first was the syndicate’s demand of a 32 percent average increase in rates. The second concerned the studies of the actuarial office in the fund, which was recommending an 18 percent increase. It calculated the cost of the rate increase to be LL56.487 billion (US$38 million), added to the LL78 billion (US$52 million) increase in 2009. The total cost would reach LL135 billion (US$90 million).

Spending this kind of money requires locating funding sources. The current rate of contributions to the NSSF does not cover all expenses. This has forced it to regularly borrow from the end-of-service indemnity account since 2002.

According to studies, the 2008 wage hike led to a LL60 billion (US$40 million) increase in NSSF revenues and the 2012 wage hike will lead to a LL89 billion (US$60 million) increase, totaling LL149 billion (US$100 million).

However, the NSSF has been suffering from an annual deficit since 2002. Its family compensation, sickness, and maternity departments have racked up loans exceeding LL850 billion (US$567 million).

Financing the loans would swallow the whole LL149 billion (US$100 million), while the NSSF will still have to pay LL135 billion (US$90 million) to fund the increase in hospital rates.

It is left with no choice but to implement article 66 to reinstate fiscal balance. This requires increasing average contributions to cover the deficit and financial reserves as legally stipulated.

The study that Karaki raised to the NSSF board of directors last week indicates that funding the increase in rates and reinstating financial balance forces an increase in the financial cap subject to contributions (that is the salary cap subject to the calculation of average contributions) from LL1.5 billion (US$1 million) to LL2.5 billion (US$1.67 million).

This will provide the amount necessary to fund the deficit and increase hospital rates but it is dependent on a decision by the board of directors.

Nevertheless, in the last meeting about the issue, the hospitals’ representative asked to hold off on passing the demand for increasing rates. This suggests that there is more to the issue than what is being publicly demanded.

In any case, it is not the first time that hospitals have disregarded the rights of beneficiaries. They are not enforcing the contracts signed with the fund that require them to receive all NSSF patients without delay and have unilaterally decided only to admit emergency cases.

Syndicate of Private Hospitals President Suleiman Haroun demands that the necessary funds guaranteeing “the rights of workers at hospitals” be provided through increasing the rates.

He has also warned hospitals against violating the decisions of the general assembly. He says, “whoever defies them puts himself under suspicion of illegal activities.”

Haroun therefore believes that receiving patients covered by the NSSF is an illegal act.

However, statistics by the NSSF reveal that hospitals have actually “violated” Haroun’s new law. All hospitals in the south admitted NSSF patients, except three. In Greater Beirut, seven adhered to the decision, and five in the Bekaa. Only hospitals in Keserwan and el-Matn fully adhered.

The NSSF is awaiting the decision of the board of directors and an emergency meeting called for by Health Minister Ali Khalil that will be attended by Labor Minister Salim Jreissati next Wednesday to address the problem of hospital rates.

In the next couple of days, the NSSF is planning to undertake measures to deal with the escalation by hospitals and doctors.

It plans to deprive hospitals that refrain from receiving NSSF patients of monthly advances and to campaign for the enforcement of their contracts.

It is also studying other options, including sending patients to public hospitals.

This article is an edited translation from the Arabic Edition.