The venture was conceived to solve a problem of medical claims management for several Lebanese insurers in 1991, right after the country’s civil war ended. Today, GlobeMed Group has 800 employees, is active in 12 markets and is hungry for more. 

The Beirut-based third-party administrator (TPA), known until last year as MedNet Liban in its home market, claims to be the region’s leading company in its field by a size margin of at least 30 or 40 percent over its nearest competitor. 

“The GlobeMed Group manages around 2.2 million lives and we have grown 10 times in six years. Lebanon, Syria and Saudi Arabia are the three biggest markets of the group,” says Walid Hallassou, general manager of GlobeMed Lebanon. 

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The TPA business model is a cross between healthcare and insurance. When Hallassou talks about “managing lives”, he refers to the insured who access medical services via a membership card. While it is not an insurance company, GlobeMed facilitates medical payments and patient benefits for these cardholders on behalf of its clients, which include private sector insurers, public sector entities and mutual associations or similar organizations that provide healthcare coverage.

An essential challenge for TPAs is to maximize cost efficiency of healthcare services for the insurers and the insured in a holistic way; that is, by doing more than just being an outsourcing and cost containment center for insurance companies that already employ bargaining power to control prices of medical services. 

What’s in a name?

According to numbers that GlobeMed disclosed to Executive, the group provides its services to more than 80 client organizations and generated a turnover of $70-plus million in 2012. It manages more than $500 million in health insurance premiums across its operations, which include 10 countries in the Middle East and North Africa, plus Nigeria and the Ivory Coast. 

GlobeMed rebranded itself on two levels in 2012. On the group level, it adopted a new logo and corporate motto to express the “spirit of the organization”, which Hallassou describes as oriented toward transparency, innovation, determination, openness and leadership in healthcare management services across the MENA region. 

In parallel, the Lebanese brand was aligned to the group identity by changing the local name to GlobeMed Lebanon from MedNet Liban.

Underlying the rebranding was a corporate ambition to be understood as more than just paper pushers, Hallassou says. “We want to be perceived as an organization that is not only managing claims on behalf of insurance companies, but we want to make sure that the whole healthcare industry in the region becomes better in terms of standards and the balance between the cost of healthcare and the quality of healthcare.”

While the idea to go regional was born with the establishment of GlobeMed Ltd in 2001, Lebanon remained the group’s largest market for several more years and accounted for at least three quarters of the firm’s 200,000 cardholders in 2006. 

Then, however, the invigoration of the Saudi market under a new insurance law in the middle of the past decade meant that some 30 new insurance providers were legally incorporated in the country. Many of the new insurers look to outsource their healthcare management to a TPA, and GlobeMed found a fertile field to the point that Saudi Arabia today is its largest market.    

Home is where the hospital is

Another motor of the company’s business was the propensity of the Lebanese diaspora to seek medical treatment at home. GlobeMed saw the demand for cross-border services early on, Hallassou says, and equipped its products with the functionality of allowing cardholders to come back to Lebanon and have medical procedures done here within their regular medical insurance coverage, or at least benefit from not having to pay extra costs out-of-pocket.

According to Hallassou, GlobeMed’s cross-border capability also made the TPA attractive to regional insurance companies due to demand from Gulf-based employers to have region-wide medical coverage for their employees. “We therefore wanted to create this ‘borderless’ TPA to ensure that all countries from Morocco to Oman are covered by a service that is recognized everywhere,” he says. Hallassou cites Kuwait-based Gulf Insurance Co and Lebanon-headquartered Arabia and MetLife Alico, a unit of New York-based MetLife, as examples for multi-country insurance providers in MENA that use GlobeMed. On the other hand, insurers with large medical portfolios, such as Tawuniya, Bupa and MedGulf in Saudi Arabia, are not on the GlobeMed client roster. 

Valuable relations

The third important component of GlobeMed’s success is its ability and preparedness to contract with state-owned provider organizations and insurance companies. This business model also sprang from the company’s dealings in Lebanon, where it has had to work with the mess that is the national healthcare system. 

Having to manage under overlapping competencies, competing and inconsistent admission requirements, and fill holes in the service capabilities of private insurers and public providers alike, meant that this TPA service had to evolve into a versatile and flexible tool. It equipped the company so that it can assume responsibilities for a wide range of insurance-typical aspects of medical coverage, or step back from things like underwriting and relinquish these aspects of provision to the private or public entity that contracts GlobeMed.

In utilizing its versatility in service of public sector entities, the company has recently signed an agreement with the Dubai Health Authority in the United Arab Emirates by which it assists public hospitals in billing insurance companies; it also is a bidder for a state-aligned TPA contract in Qatar under the Supreme Council of Health. 

But the most outstanding example of a successful implementation of a public sector partnership is found in Syria. GlobeMed has scored contracts with government entities that continue to perform to date even as the country is mired in crisis.  

“We are still getting new clients and our claims are still coming in and we are paying the providers. Things are still working on a minimum basic level of normalcy,” Hallassou says of the Syrian operations. He explains this continuity as a result of the Damascus regime’s keenness to provide healthcare to its public sector employees in order to retain their loyalty.  

Part of the group’s versatility is that GlobeMed offers its clients the settlement of claims in conjunction with specialized auxiliary services that range from cross-border settlement to calculating the premiums by its insurance mathematicians, or actuaries.  

Optimistic about growth

In managing its expansion, the company used to move in what appeared to be mix of adapting to the needs of its shareholders and the strategy to cover the MENA region. In the initial thrust into the Saudi market and also in the out-of-area migration into Ivory Coast, GlobeMed followed its stakeholder Pharaon Group, the Lebanese conglomerate headed by Michel Pharaon that owns Libano-Suisse Insurance, along with stakes in Saudi and Ivorian insurers.   

According to Hallassou, the current expansion priority is for weaving the still missing strands into the MENA blanket, where Iraq and Oman are the last two important markets in the Middle East and Morocco, Algeria, Tunisia and Libya are on the markets list for North Africa. 

A second perspective for consideration is opportunistic expansion, into markets where senior management sees an opportunity and may pursue it on the basis of a feasibility study and an expected minimum addressable number of insured that GlobeMed could aim to manage in a country. These windows and areas of opportunity are far flung, with the company casting its eyes on central Europe and southeast Asia, but as yet are not developed into a specific expansion plan. 

“We are also contemplating going to Turkey. All of these are not finalized. We have interlocutors with whom we are trying to understand the markets and determine if we will go there,” Hallassou says. 

While the locations of GlobeMed’s future launches may not be certain yet, the ambitions for the number of managed lives are certain, Hallassou confides. “We should be able to double another time in the next couple of years. We should be around 4 to 4.5 million in the next two years.”

Previous expansion moves were implemented almost entirely by starting a new unit from scratch and acquiring the necessary licenses, but the company is also ready to move into markets by merger or acquisition. Wherever the company takes its expansion, it will reflect positively on its Lebanon operations. Here, GlobeMed has its most sophisticated operation, a strong human capital source, training resources and a market for implementing new products. 

Headhunting headache

Lebanese talents with a knack for insurance and knowledge of healthcare, then, should have no worries about finding employment. Depending on the locations where GlobeMed will go, it will increase its headcount from the current 800 to 1,000 or 1,200 in the next few years, Hallassou estimates. Staffing this expansion will be the biggest mission for the company; in Hallassou’s perception, potential employees find working in insurance more enticing than third-party administration. 

This is a bit of a menace, then, given that most insurance managers say they cannot find enough talent as graduates are chasing jobs of greater allure, such as banking and finance careers. GlobeMed, which has already some experience with providing qualification through a training program in medical coding, has plans for an “academy” to offer exploratory experiences with the company and qualification options toward a future career in TPA for the graduates it seeks. Finding human capital is the company’s paramount challenge and a supreme headache, Hallassou admits. “IT [information technology] is not, financial is not; the only challenge is human resources.”

Dr. Roger Sfeir is one of Lebanon’s leading cardiovascular surgeons and has been a key advisor on national healthcare reforms. International bodies such as the World Bank and United Nations Development Program have sought his expertise for a number of studies. Executive sat with him to discuss recent developments in the sector and the problems that continue to beset healthcare in the country.

Is there an over-reliance on private sector financing for healthcare in Lebanon?

Provision of healthcare is nearly 90 percent private and the expenditures mainly go to these centers, so yes, it is skewed to the private sector.

What are the implications of that?

Well, we need to look at the financing, from where the money comes. Before 1998, the public hospitals were incredibly inefficient so in that year a law was passed called the Law of Autonomy of Public Hospitals, where they changed the legal structure of these hospitals.

So instead of being directly managed by the Ministry of Public Health (MoPH), each hospital had a board and a general manager under the supervision of the ministry, but it was supposed to operate like a private hospital, with its own budget. Its income would come from billing the government for the patients it serves.

Has the law been successful?

Not really.

Why not?

When this law was written, we were aware that as long as the manager and the board were appointed by the politicians then the same problems would occur again. As the law is written, the boards and managers are appointed by the MoPH, so they are not free of political interference. I believe now around 15 to 20 percent of the overall healthcare budget goes to public hospitals whereas it was around 10 percent back then.

Within healthcare in Lebanon, are there sufficient quality control measures?

Before the major effort to restructure the healthcare sector back in 1998, there wasn’t anything called quality control by the government in the hospitals. We wanted  something like the joint commission in the United States, but we ended up doing what is called the accreditation of hospitals, whereby a committee from the MoPH comes and checks the hospital including everything from the infrastructure to the nursing to the management.

How rigorous is the process?

It is working, but not very well. This is because of how it is being implemented. The problem is that the hospitals are audited by one of four companies selected by the ministry. [It is a situation] where the companies may give wrong results.

How?

[Laughs.] Well, if you know or have relations with the people who own the [ratings] company, then they can give better grades. With these contacts, they can help the hospital get an accreditation when maybe they shouldn’t. The way the system is built is not foolproof to prevent abuse.

How would you assess the balance of primary to secondary and tertiary healthcare spending?

There is too little [spending] on primary healthcare and preventative medicine. There has been an effort by the MoPH and [its] director general to improve the primary healthcare centers and put more effort into improving preventative medicine, because the dollar you put there can save you 10 further down the line. Private institutions can’t do this because it is not profitable.

How coherent and comprehensive is the data available for the sector?

There was lot of money put into a 1998 study for restructuring the sector. Part of this was to collect data in what is called the national health account, and it gave some alarming findings. For example, it found that total healthcare expenditure was 12.3 percent of gross domestic product, which was second only to the US. [Between] 2004 and 2005, it found it went down to around 9 percent. But we really have to take these figures with a large pinch of salt. There is [a possibility] for errors or even gross errors in the collection of this data.

How efficient is the pooling of resources and data within the sector?

Healthcare information is very important for the steward of the system, and this should be the MoPH. Now the ministry is a lot of things. It is the steward, it drafts the laws, implements the laws, treats patients and pays for the patients. All these should be split and divided. There should be checks and balances.

These proposals have been put forward many times but have not been implemented. Why not?

The ministry should be the steward for the system, put down the regulations and have a center for the collection of data. The one that owns the hospitals should be another entity, and the one that collects and pays the money should be the national healthcare fund. The government has not been able to implement these policies even though they were approved by the Council of Ministers [Lebanon’s Cabinet] way back in 1999.

Why not?

There is no political will. If you want to take from the National Social Security Fund (NSSF) the power of paying for the hospitals, then they will not be happy, and the same for the MoPH. If you want to create a national health fund, this will take from the MoPH and the NSSF. Neither of them will allow it.

How would you assess the efficacy and equity of the mix of payments from the public health ministry, insurers, NSSF and professional associations?

It is both inefficient and inequitable. The most inefficient way to pay for healthcare is out of pocket, and yet it amounts to around 60 percent of all healthcare spend here.  This also leads to inequality. If you are poor and don’t have insurance, you can’t afford to pay out of pocket so you go without. We need more prepaid systems.

The NSSF is in a bad state of affairs. What could be done to make it more sustainable?

The sickness fund portion of the NSSF used to have more money in the bank, but year after year you see the money available going down because the losses are more and more. It has passed zero and it is now losing billions of lira every year. Another set fund was created a few years ago for those people that are not insured. Who chose to join? The elderly who have no social security ­— and they are very sick, so within a couple of years the fund ran out of money. The government pays into the regular fund, but they have not been paying their share because they say there is a lot of theft and abuse of the system. The NSSF is going to remain in deficit unless there is a major change made, which I don’t see happening in the coming years.

What is the state of care for the elderly and palliative care in Lebanon?

I think one of the worst aspects of our healthcare system is that there is no proper adequate care for our elderly, either in terms of healthcare or nursing homes. Nothing. There are hospitals that have long-term contracts with the government for the elderly, but they are really paid minimal amounts per day. Not enough to pay the electricity. This is [a failure] of the system. Once you stop working at 65, your insurance stops and your health coverage stops and you get paid your social security, which [runs out] in one year. After that you have no medical coverage, so many of the elderly are left uncovered.

Twenty-one-year-old Peter Dagher has a rare type of leukemia, a form of blood cancer, and he needs a donor of hematopoietic stem cells (often referred to as bone marrow) for the treatment of his life-threatening disease.

Members of his family don’t match and nor do his friends, and Lebanon does not have a national registry where he could look for a potential donor.

Peter is not alone. The American University of Beirut’s Medical Center (AUBMC) comes across five to six patients a year in need of a such a procedure. Beirut’s Makassed Hospital currently has three patients anxiously awaiting a life-saving donor. 

With the absence of a registry where Peter and others like him can search for registered donors, they are left with two options: continue to ask people around them to undertake tests to see if they are a match — with each test costing between $300 to $470 — or reach out to international registries where chances of finding a match are even slimmer.

“We turned to registries in Europe, the United States and around the world, but finding a compatible donor from outside of Lebanon is difficult. Doctors told us that if the matches found abroad [which were not 100 percent compatible] were from the same country or region, they would have done the transplant. We need a national registry,” says Randa Dagher, Peter’s mother.  By not having a national registry, the opportunity to connect potential donors and future patients is lost.

Stem cell donation

Hematopoietic stem cell therapy is commonly known as a bone marrow transplant. These stem cells, the parents of all our cells, are found in their greatest abundance within bone marrow — the soft and fatty tissue that fills bone cavities. In the past, hematopoietic stem cells could only be collected from bone marrow via painful hip punctures. Now, medical advances mean the cells can be taken from the blood in a procedure called peripheral blood stem cell donation. (The centers that conduct the procedures are still named after the original procedure: “bone marrow transplant centers.”)

Whether harvested from bone marrow, umbilical cord blood (another rich source of stem cells) or peripheral blood, the transplant does not involve surgery, a persistent misconception. The procedure is similar to a
blood transfusion.

Although it is more complicated than going down to the Red Cross to give a pint of blood — it involves more testing, a few days of preparatory injections and a more intrusive machine — the simplified procedure has increased the popularity of stem cell donations in the past couple of years, increasing with it the likelihood of saving lives.

The two basic forms of transplants are autologous and allogeneic: the former makes use of a patient’s own stem cells and the latter uses cells from a donor of a matching type. The first hematopoietic stem cell transplant in Lebanon was autologous. It was performed at Makassed Hospital in 1997, 29 years after the world’s first truly successful attempt. 

In Lebanon, three hospitals — AUBMC, Makassed Hospital and Mount Lebanon Hospital (MLH) — conduct hematopoietic stem cell transplants. AUBMC and Makassed both have their own dedicated units where they conduct both autologous and allogeneic transplants. MLH only performs autologous transplants.

The majority of Lebanon’s transplants take place at AUBMC, where a total of 84 were performed in 2012, up from 45 in 2011.

Dr. Ahmad Ibrahim, head of the bone marrow transplant unit at Makassed Hospital, estimates that around 120 transplants were undertaken in the country last year.

Prohibitive costs

When a patient and their family are not losing sleep over the life-threatening disease, they are fretting about the hefty cost of the transplant. For an autologous transplant, prices vary from around $35,000 at MLH and Makassed to between $40,000 and $45,000 at AUBMC. When a donor is needed, the cost increases to $55,000 at Makassed and $75,000 at AUBMC. Currently Lebanon’s Ministry of Health only covers a small percentage of the costs of hematopoietic stem cell transfers.

When the donor is unrelated to the patient, additional medical needs push the cost even higher, to some $120,000 at AUBMC, the only hospital conducting such a procedure.

AUBMC performed Lebanon’s first transfer from a donor who was not related to the recipient in September 2011. The donor was found on the registry of the United States’ National Marrow Donor Program (NMDP), the world’s largest registry, and the stem cells were sent to Lebanon.

A match made in Lebanon

A donor’s compatibility is determined by testing for the human leukocyte antigen (HLA), a test of genetic markers on white blood cells. The chances of finding a perfect match is highest among siblings.

“The [head] of the laboratory sits with the family, draws the family tree and starts proceeding with tests within the family,” says Samar Okaily, nurse manager of the bone marrow transplant unit at AUBMC. When siblings and members of the family don’t match, then the probability of finding a match is higher among fellow Lebanese and Arabs. Still, finding one in Lebanon or even the Middle East is a Herculean task.

Besides Israel, there are only three countries in the region that have a bone marrow registry: Iran, the United Arab Emirates and Saudi Arabia. According to the Bone Marrow Donors Worldwide (BMDW), an aggregator of data from worldwide registries, Iran has around 5,000 registered donors, the UAE has just 45 and Saudi Arabia’s registry, established in 2011, is not even listed on the BMDW.

Donors from the Middle East account for a negligible 0.02 percent of the total 21 million registered potential donors on the BMDW, an alarmingly low figure. The US, with a population size close to the Middle East’s, accounts for over 35 percent of the registered donors.

More procedures, but still no registry

Dr. Ibrahim of Makassed Hospital, which has conducted over 400 transplants since 1997, says there are several reasons for the lack of a registry. First, the transplants have been around for just 15 years in Lebanon as opposed to half a century in some developed countries. Second, “in our population, families were big so you had a higher chance of finding a compatible donor among your siblings than in developed countries. As families have become smaller, there is a bigger need for a registry.”

Finally, and most importantly, Ibrahim believes economic and legal challenges have hindered the development of a national registry. “It needs money so the [stem cell] tests can be done for free, and it needs the [adequate] legal system to protect the donors’ [anonymity],” says Ibrahim, who estimates that it would cost a minimum of $3 million to establish such a registry in order to conduct the tests for free and raise awareness about stem cell donations. 

Dr. Fadi Nasr, who heads bone marrow transplants at MLH, blames the lack of a national registry on egos. “We disagree on [which doctor] will put his name on it; it’s politics,” he says, explaining that different hospitals are reluctant to share data with one another in order to establish a national registry. And with no law imposing such collaboration, he does not foresee the establishment of a registry in the near future.

Globally, more than 1 million blood stem cell transplants were performed as of the end of 2012, a medical procedure used in the treatment of over 70 diseases

Lebanon’s medical system is gearing up for an increasing number of transplants, with two of its leading hospitals planning to start performing more complex procedures in the near future.

When the European Group for Blood and Marrow Transplantation, a non-profit scientific forum, held its 2013 annual meeting last month, Dr. Ali Bazerbachi, who heads the bone marrow transplants unit at AUBMC, and Makassed’s Dr. Ibrahim were both speakers on high impact panels.

As Lebanon commits to saving lives with more complex hematopoietic stem cell procedures, it is critical that it provides a registry for patients in need of an unrelated donor, such as Peter. Without one, his life is at risk. “I want a donor now,” his mother told Executive. “I don’t know what to do”.