Dr. Fadi Al-Jardali, head of the Center for Policy Guidance at the American University, echoes Haroun’s sentiment, considering mergers a “healthy” option but emphasizing the need to adhere to the principle behind them: “The principle is to be taken literally, and not just an option to maintain these institutions.” He highlights a major crisis within the hospital health system, particularly related to two key aspects: the authorities’ misguided investments in the health sector and the fragility of the system tied to support funds, which collapses alongside their collapse. He explains that “the wrong investment in health over many years during the war and following was at the expense of sound investment in the government hospital sector and primary health care centers.” Over several decades, a substantial portion of the Ministry of Health’s budget was allocated to private sector hospitalization, reaching 67% of the budget over the past twenty years, according to a study by the Center for Policy Guidance. This resulted in the proliferation of similar hospital institutions and medical centers “in the same areas and doing the same work,” creating a fragmented hospital health sector. This reality led to overcrowding in some areas and severe shortages in others, alongside the absence of a specialized approach aligned with the needs of each region and its patients. This situation arose from “huge accumulations and wrong decisions to invest in the private sector at the expense of the public sector, in addition to the absence of a health map governed primarily by needs rather than profit and loss balances.” This deviates from the policy adopted in many countries worldwide, which emphasizes a more flexible health map centered on patient needs. “Therefore, we see in these countries a central general hospital and specialized hospitals in regions and cities, whether for eyes, burns, or cancer…”
Mergers are healthy if their sole purpose is not to increase profitability and keep struggling companies afloat.
Due to these circumstances, the hospital sector experienced significant difficulties and almost collapsed, leading to the proposal of merging hospitals. This approach involves a large hospital assuming management of smaller and medium-sized centers and hospitals while maintaining their independence as individual units. Haroun highlights two positive aspects of this approach: “The financial problem in the struggling institution is solved and the quality of medical services improves,” making it “an excellent opportunity.” Al-Jardali corroborates this, emphasizing that “large institutions transfer their expertise in management and medical staff to the other institution, which is reflected in expansion and quality of services.” He recognizes the benefits for the merging institution as well, including “reducing costs and improving income,” echoing the practices in developed countries. “Instead of having a board of directors for each hospital, there is one management for several centers, which creates networks of integrated medical clusters.” While acknowledging this, Al-Jardali refrains from premature evaluation, preferring to assess the outcomes following two or three years. However, based on the Lebanese hospital reality, he expresses concern that “the majority of decisions in Lebanon are taken based on private interests, meaning that the profit goal overrides any other goal for all institutions, not just hospital institutions.” He points out that any merger process or even hospital institution involves “management impact,” implying that “for example, I cannot close a unit or open a unit or close a department without giving priority to the needs of the region and the population, and unfortunately this is not what happens in Lebanon.” Another concern regarding the move stems from its lack of vision or strategy, as a fundamental aspect of any merger process “is supposed to be based on a state vision, not as is currently the case between one institution and another.” Al-Jardali identifies further key pillars for successful mergers: “The merger process be reflected in the general trends so that the provision of services is linked to the needs of the region and patients, and that the continuity of treatment is taken into account by arranging the identities of the institutions from general to specialized based on building a network based on information integration and without duplication of services, and that we subsequently ensure that the quality of services is not affected by the cost incurred by the merging institution, especially in the regions, since each region has its own patient clients.” Therefore, this step should be an “opportunity,” according to Al-Jardali, for “each hospital to assume its responsibility by aligning its goals with what is required from the merger process.”
The Hospital Sector Crisis in Lebanon: Merging for Survival or Profits?
The Looming Crisis in the Lebanese Hospital Sector
The Lebanese hospital sector is facing a severe crisis, characterized by financial instability, a shortage of medical staff, and a lack of government support. This crisis has been exacerbated by the economic and financial turmoil that has plagued Lebanon since 2019, coupled with the COVID-19 pandemic, which has strained the healthcare system. This article aims to analyze the factors contributing to the crisis and evaluate the implications of the recent merger phenomenon in the hospital sector.
The Impact of Insurance Funds and Financial Instability
The Lebanese healthcare system is deeply intertwined with private insurance funds. The collapse of these funds, due to the economic crisis and the decline in national currency value, has significantly hampered the capacity of hospitals to operate effectively. With insurance payments dwindling and patients struggling to afford medical expenses, hospitals have faced a critical shortage of cash flow. This situation has pushed several hospitals to the brink of closure.
The Rise of Private Hospitals and the Absence of a Comprehensive Health Map
Over the past decades, the Lebanese government has prioritized funding private hospitals over public ones, leading to an oversaturation of private hospitals and a lack of investment in public hospitals and primary healthcare centers. This strategy has resulted in a fragmented healthcare system, with private hospitals often clustered in certain areas, while others are severely underserved. The absence of a comprehensive health map that prioritizes public health needs over profitability, has created an imbalanced system susceptible to economic shocks.
The Merger Phenomenon: A Potential Solution or a Corporate Takeover?
Facing the prospect of closure, some hospitals have opted for a merger solution, where larger institutions absorb smaller ones. While this approach promises to streamline operations and potentially improve the quality of services, concerns have been raised regarding the motivations behind these mergers. Some argue that larger institutions are using the crisis as an opportunity to consolidate their power and expand their market share, potentially prioritizing profit over patient needs.
Table 1: Mergers in the Lebanese Hospital Sector
| Merging Institution | Acquired Institutions |
|---|---|
| Hotel Dieu de France | Saint Charles, Al-Qortbawi, Tal Shiha, Al-Salam – Qobayat, and Al-Aila in Zgharta |
| American University of Beirut Hospital | Keserwan Medical Center |
| Greek Hospital | Al-Burji Hospital |
The Need for a Strategic Vision and Effective Management
While some argue that mergers can be a positive development, ensuring the success of this approach hinges on a clear vision and ethical management practices. The mergers should prioritize the needs of the community, ensure the continuity of service, and avoid duplication. Each institution should be held accountable for its role in promoting patient well-being, rather than simply maximizing profits.
The Future of the Lebanese Hospital Sector
The crisis in the Lebanese hospital sector is a complex issue with no easy solutions. The merger phenomenon, while potentially helpful, needs to be carefully monitored. A comprehensive national healthcare strategy is crucial, one that prioritizes public health, invests in primary healthcare, and establishes a balanced healthcare system. Only then can the Lebanese healthcare sector achieve a sustainable path towards better care for all.