The role of contractual arrangements in improving health sector ...

INTRODUCTION
Lebanon
Contractual arrangements play an important role in the health sector in Lebanon. This owes
to two main historical developments in post-independence Lebanon: the organization of
Lebanon’s economy and social structure along a liberal model; and the profound consequences
of the civil war (1975–1991). Since its independence in 1943, Lebanese society has been
organized along a liberal model, emphasizing relatively open markets and encouragement of
private initiative, leading to gradual growth of the nongovernmental health sector.
Concomitantly, during the relatively prosperous years prior to the civil war, i.e. the 1950s–1960s,
the state took steps towards ensuring and protecting citizens’ interests in the health area, such as
the establishment of the National Social Security Fund (NSSF) in 1961 and developing
legislation to provide free health care for the indigent.
The outbreak of civil war in 1975 put an end to ambitious plans for public health
protection, for example through expanding the coverage of the NSSF to include the entire
Lebanese population as well as establishment of a strong public health system. During the civil
war years, the role of the government was severely limited. This affected both the provision of
health services, with profound deterioration of governmental health facilities, as well as
regulation of the health sector, including the stewardship role of the Ministry of Public Health.
The nongovernmental sector grew tremendously to fill the gap. For example, nongovernmental
oragnizations played an important role in providing essential services in different areas in
Lebanon, across the lines of divide. With the dismantling of the economy and worsening of
social conditions, the government played an increasingly important role as a financer of health
services for uninsured Lebanese.
In the post-civil war years since 1991, the growth of the private sector continued while the
re-construction efforts of the successive governments took precedence over rebuilding the health
care sector. The nongovernmental health sector (e.g. private practitioners, hospitals,
nongovernmental organizations) became the dominant providers of increasingly complex, more
expensive and high-tech specialist-based health care services, while governmental and public
agencies (e.g. NSSF) became increasingly the financers of these services. Health care costs skyrocketed
(Lebanon spends 12%–13% of its GDP on health, second only to the US), but this was
not associated with commensurate improvements in health outcomes. This led in the mid 1990s
to increasing calls for health sector reforms and culminated with the formation of an interministerial
reform committee to design large-scale reforms, aided by a US$ 37 million loan from
the World Bank. Due to multiple factors, large-scale reform efforts have not proved successful.
While discussions on the scope of reform continue today, there is increasing recognition of
the importance of smaller scale reforms. For example, the Ministry of Public Heatlh has tried to
assume a more visible and more effective regulatory role, which corresponds to its important
roles as a financer of health care services for a large segment of the Lebanese population and as a
steward of the health system. Other financing agencies also increasingly see the need to use tools
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