Lebanon’s economy and its healthcare sector may be struggling with a crisis, but private diagnostic centers and laboratories are doing just fine. Facilitated by the fact that there is no legal limit to their number per population density, and relative ease with which they can apply for a license, these centers have multiplied in recent years, making Lebanon, and Beirut in particular, one of the most up-to-date markets for diagnostic technology in the Middle East.
Based on data from the Ministry of Public Health (MoPH) and the World Health Organization (WHO), Lebanon’s government issued 2,585 licenses for the opening of new health facilities in 2010 alone. This figure, the latest available, represents an average of 6.5 new health structures per 10,000 population and goes up to 7.8 per 10,000 in the Beirut area.
According to the 2012 National Health Statistics Report in Lebanon, published by the Institute of Health Management and Social Protection at the University of St Joseph (USJ), the highest number of licenses (995, in the same year) was granted to new centers in the Mount Lebanon region, 111 for radiology. The same category of centers accounted for 34 new licenses in Beirut and 256 (0.65 per 10,000 residents) in the entire country.
An abundance of sophisticated tech
Another USJ study, from February this year, highlights Lebanon’s high level of sophisticated technology, stating that according to the Organization for Economic Cooperation and Development (OECD), Lebanon has 6.25 magnetic resonance imaging (MRI) machines per million population, versus a 4.7 average in OECD member countries, as well 15 computed tomography (CT) scanners per million population versus a 12.2 OECD average.
“In Lebanon we are saturated,” says Dr. Anis Nassar, who directs the Doctor Center in west Beirut’s Hamra district. “We have the highest number of MRIs per person and this affects prices.” According to Nassar, prices of scans, which are usually in line with the coverage set by social security or private insurance companies, may be kept lower in some centers in a bid to attract clients.
“An exceeding number of centers is good for prices,” he says, referring to the fact that competition among centers prevents prices to the public from growing too high. “But some centers do not change their equipment as regularly as others do.”
Nassar says that an MRI machine produced by international technology brands such as Siemens or Toshiba, among the most imported in Lebanon along with Philips and General Electrics, should be replaced within a maximum of 7 years, but is usually changed after 3 years on average.
“Lebanon is a very sophisticated market,” says Maher Abouzeid, chief executive officer with General Electric (GE) Healthcare and Healthymagination in the Middle East, North Africa and Turkey. “It is an upper market with some of the best technicians [in the region] and a mushrooming number of centers which compete to attract the best technologies.”
Abouzeid told Executive that, despite being a small market in volumes, Lebanon is among the first in the Middle East to attract new medical devices when they are produced. “When we launch a new machine, we sell it first in the United States, then in the Middle East, and Lebanon is always the first market in the region.”
Based on data provided to GE by market research institute COTIR, investment in medical devices amounted to around $30 million last year in Lebanon. This compares with $800 million in the entire Middle East region and $345 million in Saudi Arabia alone. The lack of regulations limiting the number of diagnostic centers that can be licensed in the same area makes it easy for new competition to enter the market. “In other countries there are policies establishing how many centers can be opened per number of residents and in the same areas, whilst in Lebanon everyone can get a license and open one,” says Abouzeid.
He adds that, when buying new machines, centers look at both costs and safety. They also sign service contracts with the provider in order to get regular preventive maintenance. “If you buy an MRI you pay around $2 million and you don’t want it to stop in two weeks time.” Comfort is also an increasingly requested feature for equipment such as intimidating MRI machines, where patients can spend up to 45 minutes surrounded by a very loud noise.
GE, Abouzeid says, has sold four silent MRI machines in Lebanon. They are on average 10 percent more expensive than regular ones but centers have the option to upgrade old machines for a lesser cost.
Training for doctors and technicians is also provided by technology suppliers when centers purchase their devices. Some of these programs, Abouzeid says, are included in the price. Others may be requested by the center when new staff joins, and they don’t come for free.
Bringing in patients
Doctor Center in Hamra, which has been in the business for the past 14 years, employs six radiologists and five cardiologists, which is well above the minimum requirement of one qualified doctor and a license from the MoPH necessary to open a diagnostic center in Lebanon.
Nassar told Executive that the center’s staff is regularly trained and, while some sessions are organized for free by technology providers, courses done on request have an average cost of $1,000 per day.
In order to face such costs, centers need to keep a constant influx of patients. Although he declined to reveal how many clients his center serves, Nassar said that the number is highly influenced by the political situation, as a significant part of demand comes from southern Lebanon.
Nassar says that even hospitals, such as the American University of Beirut Medical Center (AUBMC), often refer their patients to the center. “Radiology is not only done by machines, but also by people, and you may trust centers’ staff more than that of hospitals in some fields,” he says.
Trust is an important element in helping diagnostic centers stay in the business despite a growing number of competitors. Some of the oldest centers in Lebanon are still operating and they get cases from doctors and hospitals, as well as single patients who decide to take simple exams such as blood check-ups even without prescription while paying from their own pocket.
When Lena Racoubian joined the St Marc Medical and Diagnostic Center near Beirut’s Lebanese Hospital in Geitawi in 1991, high tech imaging scans were still not very common in Lebanon, which had just started recovering from 15 years of civil war.
The center, founded in 1976 as a medical laboratory, kept working during the war, becoming the country’s first diagnostic business in 1978.
“When I joined as a laboratory technician, the civil war had just ended and there was no automation,” Racoubian recalls. “I used to work manually, then, little by little, progress came about.”
Now the administrative manager of one of Lebanon’s biggest diagnostic and medical centers, owned by her husband Sam Racoubian and divided into two branches in Geitawi and in Zalka, plus a medical laboratory in Bourj Hammoud, the former technician admits that most of the family business’ revenue comes from lab tests. “Laboratory is the sector where we have the highest number of admissions,” she says.
“With some tests it is impossible to make a profit if you don’t have the numbers,” Racoubian explains. “You can spend up to 800 euros [$1,100] on a reagent for some tests.”
An example of this is the anti-Müllarian hormone (AMH) test, which is normally requested by gynecologists to check on women’s ovulation process. The test, she says, costs the lab no less than $60 per patient and is sold for $100.
Keeping up with the game
“If you don’t have enough load you don’t make a profit,” Racoubian says. “We make profits from other tests. Glucose, for instance, costs $1 per test and you sell it for $2, but you do 300 tests per day while you do only one or two AMH per week.”
The molecular PCR test, used to diagnose leukemia and other malignant diseases, is also not performed by many laboratories in Lebanon due to the high cost of each test. While big established hospitals and centers like St Marc can afford to test their samples, small laboratories may prefer to send them abroad.
“It is not a profitable analysis but we want to keep it to provide our patients with a better and quicker service while we profit more from routine exams,” Racoubian says.
St Marc employs 60 technicians and around 20 doctors, but the center’s administrative manager admits that one of the main financial challenges the business faces comes from the radiology machinery.
“When technology changes, we have to follow and upgrade ourselves,” she says. “This process is very expensive, because you discard your previous machine with a negligible price, while you pay a high price for the new technology which you are buying. A new MRI, for example, costs around $1.5 million.”
Additional costs come from the need to provide clients with an online system that allows them to check their results online. “The server charges us no less than $1,000 per month and we spend another $6,000 yearly for software maintenance,” she says. “A small laboratory could never afford that. Once you have grown big, though, you can never go back and maintaining yourself is not that easy.”