Lebanon: $18m World Bank loan to support crumbling public health sector

The aim of the loan is to make health care more affordable for patients without insurance

A worker disinfects a room where patients undergo tests for the coronavirus disease (COVID-19), at Rafik Hariri University Hospital in Beirut, Lebanon October 1, 2020. Picture taken October 1, 2020. REUTERS/Issam Abdallah
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About $18 million of a World Bank loan will be allocated to Lebanon’s crumbling public health sector in an attempt to reduce inflated bills for vulnerable patients, Health Minister Firass Abiad told The National on Thursday.

Lebanon’s Public Health Ministry normally foots 85 per cent of the bill for hospital patients without private insurance, but this amount has dropped significantly with the massive devaluation of the Lebanese pound in the past two years caused by the country’s economic collapse.

To cover extra costs incurred by the devaluation, hospitals have raised their bills by up to five-fold, pushing a large number of Lebanon’s poorest out of the healthcare system. Mr Abiad estimated that the ministry covers the healthcare costs of more than 40 per cent of the population.

The central bank has not removed the official peg of 1,500 Lebanese pounds to the dollar despite market rates hitting 23,000 Lebanese pounds to the dollar this week. Public bodies such as the Health Ministry, work with an exchange rate that is 15 times lower than the cost of most imported goods, paid for in cash dollars.

In an attempt to bring down hospital costs, as well as the final bill issued to patients, the ministry and the World Bank announced in a joint press conference on Thursday morning the launch of a support programme with a budget of between $16 and $18 million, to be disbursed over the next six to eight months, said Mr Abiad.

“Hospitals are finding it very difficult to retain staff, doctors … due to the financial situation in the country,” World Bank regional director Saroj Kumar Jha said at the press conference.

The World Bank will tap into a 2017 loan to Lebanon’s health sector of $120 million, nearly half of which has already been disbursed to fight the coronavirus pandemic in Lebanon.

The health ministry plans to reimburse 3.5 times more to hospitals treating patients under its coverage than it used to — still working with the official exchange rate. This will not cover all the extra costs incurred by hospitals but it is expected to partly alleviate their financial burdens.

“It’s very difficult to tell hospitals to not ask patients to pay extra,” said Mr Abiad, who used to direct Lebanon's largest public hospital prior to his ministerial nomination. “A better step is to make sure they receive financial incentives which may act as leverage in future negotiations.”

Updated: December 02, 2021, 4:30 PM
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