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

Lebanon
quality of care in the contracted hospitals. The main features of the current contract areas as
follows.
Contracts are generally awarded to hospitals that meet accreditation standards.
Allocations are assigned based on Ministry of Public Health calculations that take into account
number of beds, expected MOPH patient volume, location, hospital services, etc.
The supervising physician has a greater role in ensuring appropriateness of care and transparency
of billing.
More detailed specification of the responsibilities of the contracted hospitals
Penalties are stipulated if contracted hospitals do not adhere to the terms of the contract.
Payment to the contracted hospital is distributed over the whole month.
A certain percentage of the payment is secured for emergency room visits.
The Ministry of Public Health perceives that implementing of contracts has already had an
impact. In previous years, expenditures of contracted hospitals exceeded assigned allocations by
around 50%. This has come down to 5% recently. Furthermore, data collected as part of the
contract have allowed the supervising physicians to put together a monthly report about services
and expenditures for Ministry of Public Health patients. This has empowered the Ministry of
Public Health by providing a stronger evidence base for its policies.
Among the 103 hospitals are 10 public hospitals (which have become autonomous after
Lebanese Law 544/96). Another 10 hospitals provide hospitalization services to Ministry of
Public Health patients but are not formally covered by contract for political and other reasons.
For example, Tyre Governmental Hospital, which is located in al-Rashidiyya refugee camp,
cannot afford to impose co-payments on its users as this may lead to social and political
instability.
In terms of payments, the Ministry of Public Health reimburses private and public hospitals
85% and 95% of the bill, respectively. The remaining balance represents co-payments by
beneficiaries. Payment is based on cash transfer upon approval of the bill. The Ministry of Public
Health commonly reduces submitted bills by up to 25% because of the known inflation of actual
costs.
Using the contract as a tool, the Ministry of Public Health introduced the concept of the flat
rate for a variety of surgical procedures in 2001. This has further reduced costs, although there
are no data currently on the financial impact of this change. There are plans to introduce flat rates
in 2004 for medical treatments and procedures. Revenues from the Ministry of Public Health are
important for many hospitals, especially the smaller ones and those in certain urban and rural
areas where the uninsured dominate.
While there are indications that the Ministry of Public Health is gradually and more
effectively using the contract as a regulatory tool, many problems remain with the current
arrangements. The Ministry of Public Health still has little leverage over hospitals; it has limited
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