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

Lebanon
forefront of discussions of health sector reform. At present, hospitalization accounts for over
80% of the budget of the Ministry of Public Health.
While 50% of the Lebanese population is eligible for Ministry of Public Health coverage
for hospitalization, it is not known what portion takes advantage of this coverage. This is
reflected in the number of covered hospitalizations: the Ministry of Public Health currently
covers around 135 000–140 000 per year, while the expected number would be 240 000–
250 000. This may reflect social stigma associated with use of Ministry of Public Health
coverage and the perceived difficulties in the application process for eligibility.
Because of the inadequacy and short supply of public hospitals, hospitalization for citizens
covered by the Ministry of Public Health has been provided mostly by private hospitals. The
Ministry has historically encountered many difficulties in dealing with private hospitals. Some of
these difficulties include inappropriate or false admissions, un-indicated procedures,
overutilization of services, spending over allocations, spending allocations early in the month
and lack of protection of assigned allocations for emergency room visits throughout the month.
All of these problems reflect the opportunity for the contract to be used as a tool for regulating
the Ministry of Public Health–hospital relationship, while at the same time improving
performance and containing costs.
In the 1990s, the Ministry of Public Health contracted with most of the licensed private
hospitals that had applied for a contract. In 2000, the Ministry of Public Health began an
accreditation programme for hospitals with the purpose of ensuring quality of services provided
to patients covered by the Ministry. In 2001, 46 were accredited, but an additional 30 were added
due to political pressure or lack of accredited hospitals in certain areas, so the total number
reached 76. In 2003, the total number increased to 103, as more hospitals sought to meet
accreditation standards. These 103 hospitals provide around 2000 beds in total.
In contracting with hospitals and health care facilities, the Ministry of Public Health
currently uses two types of contracts. Group 1 contracts are intended for acute care. The 103
accredited hospitals are currently included. More details about these contracts are provided
below. Group 2 contracts are intended for long-term care facilities (such as those that provide
rehabilitation and care for the aged and for patients with long-term debilitating conditions such
as Alzheimer’s). There are around 50 hospitals and facilities (with a total of 4500 beds) in this
group. The total expenditures/MOPH allocations for these facilities amount to 30 billion
Lebanese pounds (BLP) per year. Payment to these Group 2 facilities is based on flat rates set
according to condition. Dealing with these hospitals is generally much simpler than the acute
care hospitals and, therefore, transfer of payment (which is usually smaller than that made to
acute care hospitals) is usually done more speedily.
For Group 1 contracts, the Ministry of Public Health uses a standard contract that has
replaced the contracts used prior to 1997 (improvements have been introduced yearly). The
contract has been a powerful tool for the Ministry of Public Health to regulate spending and
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