Wazni said he was “ready” to pay private hospitals part of their state-owed arrears of more than LL2 trillion, which is equivalent to $1.35 billion (at the official rate).
At the meeting where the Private Hospitals Syndicate was represented by its head, Sleiman Haroun, the minister assured that his ministry is “ready to find a solution to the problems faced by private hospitals by paying part of the arrears.”
On his part, Haroun underscored the importance of such payments, calling for monthly payments so that hospitals can pay their employees’ salaries and meet their financial obligations. “Non-payment could lead to the closure of many hospitals in Lebanon,” he warned.
Haroun also met with members of the health parliamentary committee. “We have invested in expensive equipment to deal with the (COVID-19) pandemic, in addition to our financial difficulties and problems with the acquisition of medical equipment,” he said at the end of the meeting.
Assem Araji, head of the health parliamentary committee, called on the “state to pay the dues it owes to hospitals as soon as possible”.
In the event of an agreement, the draft would be endorsed on April 16 during a scheduled meeting of the Council of Ministers. In recent days, Kanaan warned of a “disaster” in the hospital sector. One of the first signs of the gloomy prospects was the decision of "Our Lady of Lebanon Hospital" in Jounieh to close its doors at the end of the month.
The government’s debt to this sector has reached enormous proportions. According to Haroun, the state owes the private hospitalization sector more than LL2 trillion, which is equivalent to $1.35 billion (at the official rate). Price inflation, combined with currency devaluation (the dollar sold on April 14 for more than LL3,000 in the black exchange market), caused a 35% increase in the operating cost of the hospitals.
“At the actual Lebanese pound rate, that debt has lost half of its value, while all of our suppliers demand to be paid in foreign currencies,” Haroun said. “As a result, the gap between our revenues and expenditures has widened disproportionately. Some hospitals cannot take it any longer,” said Haroun, who himself owns a hospital. He recommend the payment of two amounts of LL300 billion each, in April and May, and a LL90 billion monthly installment starting next year to settle the arrears.
The state has been dragging its feet in paying its arrears since 2012. But since summer, the crisis in this sector has become more acute with liquidity becoming limited in the market. This has paralyzed imports of medical equipment, already slowed by hospital cash flow difficulties,” Haroun said. "Moreover, since the end of February and the detection of the first coronavirus case in Lebanon, private hospitals have had to assume the additional costs of equipment needed to confront the epidemic, starting with the most basic, such as masks, protective suits and disinfectants. A box of 50 masks, which sold at LL10,000 pounds in pharmacies, now sells at LL80,000, and so on.”
The decision by "Our Lady of Lebanon Hospital" in Jounieh, which has 300 beds and 400 employees, to close its doors by the end of April was the first sign of the impending disaster. “Notices have been sent to staff, and the Ministry of Labor has been informed,” said hospital owner Christian Adaïmi, who promised, however, that the hospital’s dialysis center will remain open. “No one believes us. They think we are maneuvering while this is the sad reality,” he said. “We are the first to decide to close our doors, but we will not be the last."
He noted that his institution does not receive any aid from the state, a party or a religious group and that small reserves he had put aside were dried up during the last six months. “I no longer have the means to continue,” he said.“Since October, the banks are no longer funding us. As long as I was able to stand by my commitments and pay the salaries, I sustained operations, but I do not intend to use suspicious means or false promises to ensure the continuity of my healthcare services .”
While he remained tightlipped about whether he would revoke his closure decision if the state settled its LL10-billion-plus debt to his hospital, Adaïmi expected “large hospitals to hold on: They are all making losses, but their losses will be covered by funds from other sources.”
This cash-flow problem was confirmed by Sami Rizk, director of the LAU Medical Center-Rizk Hospital. “We all suffer from a cash flow problem, and it is the payments we get from the National Social Security Fund that help us. However, for a few months now, insurance companies have been delaying their payments to us for up to six months. They claim that since October 2019, some of the premiums have been settled in Lebanese pounds and their payments to hospitals are being made accordingly.” Rizk, nevertheless, said “we are privileged compared to private or family-run hospitals: We benefit from the moral, ethical and financial coverage of large universities, which allows us to provide our healthcare services over time. Moreover, we also have an obligation to maintain continuity for our students and residents.”
When asked if the closure of a hospital like Hôtel-Dieu de France (HDF), which has 405 beds and 1,300 employees, is unimaginable, HDF Director Martine Orio said: “Nothing is unimaginable! The situation is complicated. What I can tell you is that people have been getting less healthcare for the past few months, probably because of the economic situation and now Covid-19. We have less revenues, while our expenses are fixed. The private hospital sector certainly needs the help of the public authorities to continue operating.”
The health sector crisis is being compounded by that of the nursing staff. The Order of Nurses, led by Myrna Doumit, has already filed complaints against 25 hospitals for abusive salary reductions, changes in schedules or the pace of work, forced leaves and all sorts of measures to justify a reduction in wages.
“In some hospitals, nurses have not received salaries for almost five months,” said Doumit, reporting that about 30 nurses have contracted Covid-19 while at work. It is a difficult situation for those whom, she says, are “the cornerstone of the hospital system.”
(This article was originally published in French in L'Orient-Le Jour on the 15th of April)
Weakened to the extreme by the economic and financial crisis, Lebanon’s private hospital sector which provides 85% of total health care with about 10,000 beds, is in the emergency room. To get it out of the mess, a plan to settle in installments payments owed to it by the state was examined on April 15 by the Syndicate of Private Hospitals and Finance Minister Ghazi Wazni, in the presence of...