Health expenditures
increased by 70 percent in 16 years

Significant shortage of nurses

Health expenditures increased by 70 percent in the last 16 years, according to the ‘Lebanon Economic Report’ published by the World Bank.

Health spending per capita rose from $361 in 1995 to $621 in 2011, which is higher than the MENA average of $220. As a share of the Gross Domestic Product (GDP), the country’s health expenditures remain quite high despite falling from 10.7 percent in 1995 to 6.6 percent in 2011.

According to the Ministry of Public Health (MoPH), the health bill is $3 billion per year and the ministry’s contribution is around $300 million. In 2011, public spending on health represented around six percent of Government spending. MoPH allocations from the Government’s budget (excluding debt) dropped by 41 percent from 5.9 percent of total Government expenditures in 2005 to 3.4 percent in 2012.

In 2011, private spending represented 75 percent of total health expenditures and five percent of GDP. Out-of-pocket (OOP) spending constituted 37 percent of total health expenditures. According to World Health Organization (WHO) criteria, countries with OOP shares between 15-20 percent of the total health expenditures are able to ensure financial protection for their citizens. Given that the country’s OOP spending is higher than WHO macro criterion for financial protection suggests that further reforms need to be taken to ensure financial protection for citizens.

In the public sector, there are 28 public hospitals with a bed capacity of 2,550, in addition to dispensaries and primary health centers that provide healthcare across the country. The private sector dominates with 168 hospitals comprising 84 percent of hospital beds. Private hospitals’ bed occupancy rate is around 58 percent.

The total hospital bed to population ratio is 3.5 beds per 100 people, which is significantly higher than the MENA average of 1.5 beds.

Lebanon has an imbalance in the supply of healthcare providers. The number of physicians per capita has increased from 1.7 physicians per 1,000 people in 1981 to 3.5 physicians in 2010. The country faces imbalances in health and human resources with significant shortage of nurses, and an oversupply of pharmacists.

Half of the citizens have insurance coverage (50.1 percent) under the three main insurance schemes: The National Social Security Fund (47.8 percent of insured), public schemes covering mainly public sector employees and the armed forces (30.8 percent), private sector (16.3 percent), and others (5.1 percent). MoPH provides a package of hospital services for the uninsured who belong to low income groups.

The limited fiscal space suggests that the country will need to rely on efficiency enhancing reforms to improve health outcomes. The overall fiscal deficit is forecast to widen from 6.6 percent of GDP in 2014 to 7.2 percent, 7.9 percent, and 10.1 percent of GDP, in 2015, 2016 and 2017, respectively.

Several reform initiatives have been implemented in the past decade focusing on increasing systems efficiencies, controlling cost and improving quality of care. These reforms have successfully contributed to improving health sector performance. Bahij Arbid, Advisor at the MoPh, said: “The ministry is putting efforts to improve the quality and access to primary healthcare services for low income groups.” It established a network of primary healthcare centers, in the 1990s, consisting of 230 centers run mostly by NGOs and municipalities.

In 2000, MoPH reforms included hospital accreditation program aimed at improving quality of care. The ministry set a new strategy in 2013 aimed at expanding health coverage to the uninsured. The strategy has been put into practice in 2015 through the Universal Health Coverage (UHC) program, targeting first poor households. The MoPH recently launched several measures to contain the escalating cost of drugs.