A cornerstone of the renewal of the Lebanese healthcare industry is a series of investments in hospitals, paradigmatic among which is the project to expand and improve the medical center at the American University of Beirut (AUBMC). First announced two years ago in April 2011, ground was broken on the project last autumn. Construction is currently in the excavation phase for the new, nine-story academic and clinical center on a corner lot once occupied by a low-rise building. Other structures will be razed in the coming years to allow for new units in the massive project.

While the excavation activities and an extensive display project the scope of the project, the plan goes significantly beyond developing several physical structures. 

“The idea is to make this institution really deliver the best care and maintain an edge in education and research,” says Dr. Mohammed Sayegh, AUB’s vice president of medical affairs and dean of the Faculty of Medicine. “When we are talking about best care, we are talking about North American standard-type care because this is, after all, the American University of Beirut,” he adds. 

In pursuit of this aspiration, AUBMC came up with a 10-year, six-point concept that was dubbed Vision 2020 when it became clear that its schedule would run until 2020. When viewed against other “2020 visions” that have been produced for cities, statelets, and whole countries in the Middle East and elsewhere, the AUBMC project has a rather concise feel to it. 

The six components of the plan are: building new physical structures, recruiting medical faculty, improving patient care and service, establishing new clinical and research centers, redesigning the curriculum for the Faculty of Medicine, and creating a collaborative network through strategic partnerships. 

Aiming for the top

The driving force behind the plan is Sayegh, a 1984 graduate from AUB medical school and recipient of numerous awards in his field. He spent most of his career at Harvard before allowing himself to be recruited back to AUB in July 2009. 

An initial assessment of AUBMC at the time showed that it “provided good care but I wouldn’t classify it as the best care we can provide,” Sayegh tells Executive. This insight led to the determination “to elevate standards on all levels”, with the six components of the plan all feeding into the provision of excellent care while fulfilling the medical center’s mandate as an academic institution. 

In an approach typical for such a venture in the United States, the institution is relying on fundraising to develop new physical structures.

“We value this project at around $400 [million] to $500 million for the physical structures,” Sayegh says. In addition to the hefty construction price tag, he estimates that another $100 million or so will flow into hiring, investments in new research capabilities, network building and
so forth. 

Cost factors related to the concept are vast and varied, as AUBMC has a host of 500 residents and fellows in the practical extension of the medical school. This training program alone, according to Sayegh, represents an annual budget of $4 million to $7 million in costs to AUBMC. On the patient side, the facility has to wrestle with the inequities of the Lebanese healthcare compensation, just as many other providers of healthcare services do.  

Unlike the US, where the government allocates funding to support residency training, the Lebanese government provides no subsidies for the training of young physicians. On top of that, AUBMC feels the relentless pinch of the “dismal” reimbursements for treatment of patients that are admitted on Ministry of Public Health and National Social Security Fund (NSSF) accounts, Sayegh says. “We have an obligation and accept these patients but they cost us money. The nice thing is that we have a nice mix of patients, where we have some insurance patients, some self-payees and some who are [covered by] government and NSSF.”

The importance of networking

AUBMC’s mix of lucrative and money-losing patients makes balancing the bottom line easier than it is for other Lebanese hospitals. 

The institution additionally changed its stance from academic isolationism of sorts to increased interaction with Lebanese hospitals. According to Sayegh, this was realized by entering into affiliations with several institutions to which AUBMC can dispatch physicians to treat patients who under existing contracts with municipalities and public sector entities are not eligible for admission to AUBMC itself.

Medical provider networking is one of the lessons taken from the AUBMC dean’s US experience at Harvard. Creating such partnerships, which represents the sixth component in AUBMC’s Vision 2020, is also on the agenda of regional interaction with Arab countries. 

Although the six strategic items of the vision are equally important, implementation of some points does presuppose progress on other agenda items. The most pivotal point is reversing the brain drain by attracting highly qualified faculty members to Beirut. Expanding the hospital care capacity to about 360 beds in the immediate term and 600 beds later on is another facilitator required for entering into more strategic partnerships.       

While a sound business model in today’s world is a must also for an academic medical center, the idea for AUBMC’s overall path forward is not commercial or profit-oriented but to financially sustain operations. “Sustainability is critical, otherwise you are losing money every year and cannot in fact have the best academic medical center,” says Sayegh. 

This future will mean, however, a continued dependency on donors who support needy patients through several funds such as the Brave Heart Fund and the Neonate Fund, established in 2012. “The availability of citizens who believe in these missions is very important. You cannot sustain our operation with just pure business models, and none of the academic medical centers can do it unless [they] compromise either on training or on care,” says Sayegh. 

Despite the uncertainties of the Lebanese health care system and despite anticipated dependency on the goodwill of the donor community, the leader of AUBMC and driver of Vision 2020 exhibits no shred of doubt in his return-on-investment projections. When asked how much value he expects each dollar invested in the institution’s universal upgrade project will generate, Sayegh’s answer is categorical: “hundreds, of course.” 

The maxim in approaching the Lebanese healthcare “system” today appears to be simple: do not upset the patient. Keeping calm with strict bed rest can be a good short-term rule in caring for an acute heart condition or explosive backache. But for solving the Lebanese healthcare condition of ‘chronic dysfunctional systemitis’ (that disease newly discovered by Executive), not upsetting the status quo is nothing but a contraindication. 

Besides overdue reforms to advance the social side of healthcare and make access equitable, the economic muscles of the healthcare industry in Lebanon need coordinated exercise. Unless these muscles are toned today, the health industry here will soon be outshone by other Arab countries and may even atrophy. 

The Lebanese well know of the fragmentation of public health services and the weak supervision  of commercialized private healthcare providers. Indeed, more than 90 percent of healthcare is conducted within the private sector, as Dr. Roger Sfeir, former adviser to the Ministry of Public Health (MoPH) and to several international bodies, told Executive. Meanwhile, public hospitals are underfunded, the National Social Security Fund (NSSF) is inefficient and bleeding money, and the political will for reforming the mess is lost in corruption. 

Hospital operators across the quality spectrum suffer under the long delays in payment transfers from the NSSF and MoPH, and the more their patient mix is skewed against self-paying or privately insured patients, the more they are stressed, said Dr. Mohammed Sayegh, dean of the faculty of medicine and vice president of medical affairs at the AUB Medical Center. But even AUBMC, with a comparatively high share of well-compensated treatments, is impacted by the low payments coming from NSSF and MoPH. “The reimbursement is dismal and it costs the institution money, which impacts the efficiency,” he said.      

From academic hospitals and diagnostic centers to plastic surgeons and specialists in stem cell medicine, stakeholders in the healthcare industry confirmed that their area of activity lacks legal frameworks and efficient collaboration with the public sector entities. 

The World Health Organization (WHO) likewise said in a 2010 six-year country cooperation strategy (CCS) paper for Lebanon that “equity and fairness of the healthcare system are still far from being reached.” It also advocated a strong need to streamline and focus cooperation among key programs aiming for anything from accident prevention to tuberculosis control. 

Notably, the WHO took the further view that “meaningful changes to health system expenditure will not occur without better management of the private sector.”

The CCS paper criticized competition among hospitals in acquiring costly medical machines and linked what the WHO called “the excessive use of resources and new technologies” to “perverse incentives that arise out of the way hospitals and health care providers are paid.”

Alarming medical outcomes

While the Lebanese health sector has seen massive investments in private and non-profit hospitalization facilities in recent years, including investments in high-end diagnostic machinery, the monitoring of hospitals for unintended negative patient experiences has neither a comprehensive scope nor an independent structure to report and evaluate all incidents and their causes, whether physicians’ errors, inadvertent infection, false medication, or others. 

A glimpse into the issue and incident rates was offered in a recent study undertaken by GlobeMed, a healthcare payment services company affiliated with the insurance industry. Some of the findings in the study, published last November, were not pretty.   

According to the study, one in every 143 people admitted to a hospital is going to die in what is called a “medical outcome” or negative change in the health status of a patient due to clinical intervention. Under the definition used in the study, medical outcomes also include infections, complications, readmissions and deaths. 

The total rate of medical outcomes in Lebanon was 5 percent during the years 2005 to 2010, and the study only looked at patients whose accounts were managed by GlobeMed, which means large patient groups such as those on NSSF and MoPH accounts were not included. GlobeMed said the outcomes rate in Lebanon was higher than in the United States (3 to 4 percent) but lower than in Canada (7.5 percent). 

Averages may be very deceiving

However, the average rate of medical outcomes at 5 percent was computed from 152,000 admissions, of which 137,000 represented a stay in hospital of one day or less. When counting the rate for the 15,000 admissions that exceed one day length-of-stay, the outcome rate more than doubles to 12 percent. Even more concerning is the timeline of incident rates: the number of outcomes advanced from less than 800 in 2005 to nearly 1,400 in 2010, and the percentage of outcomes recorded each year moved from 4 percent in 2005 to beyond 6 percent in 2010. 

Shaking the picture further was that it only captured data on adverse events that occurred in the hospital, not recognizing any outcome that occurred after the patient was released. 

The researchers additionally admonished the lack of legal obligations for hospitals to publish medical outcome rates and the reluctance of many doctors to completely fill in patient files. These insecurity factors on data quality notwithstanding, the reasons for the increase in adverse patient experiences in recent years need to be researched and understood. The GlobeMed study suggests that the expansion of hospitals might play a role in the rise of medical outcomes, due to hospital staff learning curves. Other possible reasons alluded to, but not further elaborated on, by the study are the increase in the average age of GlobeMed clients from 34.8 in 2005 to 36.5 years in 2010 and deficiencies in the ways adverse incidents are reported. 

The study said that due to under-reporting of incidents, not enough measures will be taken to correct the underlying problems and avert repeat incidents. According to Dr. Sami Faddoul, a noted radiologist and diagnostic specialist, another factor driving the rise in incidents could be the freezing of treatment compensation that hospitals receive from public agencies and commercial insurance companies, as inflation and cost increases at hospitals have outpaced reimbursement rates that have been stuck at low levels for many years.  

It was clear from the GlobeMed study that longer stays in hospital increase the probability of negative outcomes, such as contracting a dangerous hospital bug (nosocomial infection). Another clear conclusion was that the cost of a nosocomial infection is stellar. At an average cost ratio of 842 percent (!) when comparing an outcome-free hospital treatment with one involving a nosocomial infection, this type of infection is a supernova, blowing national medical expenses out of proportion.            

Constructive needs

In the WHO’s view, Lebanon scores relatively well on overall health indicators, and life expectancy is above the regional and global averages for women and men. 

Some of the organization’s documents on the Lebanon website cause wonderment — the CCS put its population estimate for the country at 3.4 million whereas another factsheet said 4.3 million people, for example, and the information value of regional comparisons is impeded by the fact that the WHO saw it fit to define the “Eastern Mediterranean” as a region comprising over 580 million inhabitants from Afghanistan to Somalia and from Morocco to Kuwait. Nevertheless, the WHO factsheet attests that the country has around 3.5 times the number of physicians, 35.4 per 10,000 residents, of the regional average.

The high ratio of medical doctors and the above-regional ratio of nurses point to the strengths of the Lebanese healthcare industry and its potential. The country’s healthcare sector has immense potential to be a lead supporting actor in the country’s wellbeing and economic growth. 

It may not steal banking’s Oscar for gross domestic product contribution or claim the real estate sector’s function as a treasure chest, but besides education, and given that it creates a great deal of tourism, Lebanese healthcare has what it takes to be a national profit center. 

As evidenced in Executive’s discussions with sector stakeholders and its research on healthcare, the industry provides jobs and services that can earn massive revenues on three levels: income from treatment seekers who come as “medical tourists” for anything ranging from oncology to a elective plastic surgery; as a source of remittances and financial giving by Lebanese who work as doctors abroad and support their preferred causes with generous amounts; and a source of revenue for companies that provide healthcare-related services from Lebanon across the Middle East.

All these economic potentials deserve to be fostered by a sound national strategy that begins with proper laws, regulation and oversight of the sector. It should provide efficient and equitable access to healthcare to all residents, and proceeds to extend support for the quality and regional growth of the Lebanese healthcare industry. 

The potential of the Lebanese healthcare industry to generate revenues needs to be understood and quantified. The industry is seen today as a drag on GDP thanks to ballooning medical costs, but an alternative perspective can be realized through research and reform.

Executive’s special features on plastic surgery, radiology and stem cell banking show that physicians in each of these disciplines have taken the individual initiative to export Lebanon’s health services to the region.

Meanwhile, incentives for investment in the industry have only recently been extended by the Investment Development Authority of Lebanon, Lebanon’s national investment promotion agency, through investment assistance for pharmaceutical manufacturers and medical centers. Results of and potential for this investment support are still too early to gauge thoroughly, as the trade balance of pharmaceuticals in the past few years was ambiguous.  

One difficulty in assessing the role of the healthcare industry is that the expenditure on GDP in a country’s balance sheet is perceived less as an economic activity than it is a social expense. 

This perspective may be worthy of realignment in the context of the increasing globalization of healthcare, whereby medical capacity building, accumulation of specializations and preventive care and wellness environments can be seen as assets for an economy.

In the liabilities column of the healthcare balance sheet, challenges will continue to mount as a result of the increase in lifestyle diseases and of medical needs that go hand in hand  with an aging Lebanese population. But both these health risks entail expanding economic opportunities in healthcare and thus need to be managed. Here is where the public sector’s limitations on devising a long-term health and healthcare industry strategy can be decisive.  

The most disconcerting insight from our examination of health care provision in Lebanon is that so much is known about what is wrong and so much is agreed about what needs to happen to fix it, yet so little is done.