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Economic analysis -Towards a Qualitative Leap for Lebanese Social Security
Published in AL HAYAT on 11 - 02 - 2010

The Lebanese Ministry of Labour will begin today its workshop on ‘Social Security: a Priority of Social Policy'. In truth, the Lebanese Labour Minister Boutros Harb insists on introducing a radical change to this public institution, which is considered by many to be the first building block in the structure of social welfare offerings for every citizen, beginning with the citizens' right to medical care and healthcare, and not ending with senior citizen pension benefits and unemployment benefits, based on two premises: The first premise is that 10.2 percent of the Lebanese will become above the age of sixty five by 2025, and will hence require social security benefits at that age; the second premise is that economic crises, such as the one affecting the world today, might throw part of the labour force outside the scope of being economically active, which will subsequently increase poverty, reduce spending power, and damage the interests of economic institutions (thus equally damaging employers and employees). It is noteworthy to mention here that statistics conducted in several U.S states indicate that 46.2 percent of personal bankruptcies were caused by medical debts.
Meanwhile, the participation by both the public and private sectors in the workshop reflects the seriousness of their bid to arrive at results that are feasible and acceptable to everyone. This is because implementing social welfare programs is an act of economic solidarity with the aim of building a society that is better, healthier, and fitter for production, and consequently, a society that becomes an engine for consumption, without which there would be no returns and profits for employers.
But in Lebanon, this issue becomes a question of how to optimally achieve the interests of all the social partners involved, i.e. the employers, workers and the state. Despite the fact that Lebanon was one of the pioneers in adopting the principles of social solidarity and healthcare, it has been the slowest in terms of developing this system, and has one of the costliest health care programs as well. In fact, all three parties are equally responsible for this massive spending.
For instance, government spending on healthcare rose from 365 million dollars in 1998 to 638 million in 2008, with an annual average increase of 6.4 percent, and from 2.15 percent of the GDP to 3.2 percent during the same period, at a time when population growth did not surpass 2 percent annually. Is it then that the health conditions are deteriorating year after year in Lebanon, or is it that the cost of healthcare has increased to this level, or that there is waste and mismanagement at certain levels? Some studies produced such accusations, aimed in particular at healthcare groups and hospitals; but it seems that the causes mentioned above are actually intersecting.
Moreover, available statistics indicate that there is a large disparity in the average governmental healthcare spending per individual among the different institutions concerned; in recent years, this spending averaged 877 dollars (364 million dollars for 415 thousand patients), broken down into 1542 dollars for the military institutions, 938 dollars for the Ministry of Health, 677 dollars for the Social Security Service, and 892 dollars for the Cooperative of Government Employees.
In parallel, Lebanon's imports of general pharmaceutical products rose from 429 million dollars in 2004, to 753 million dollars in 2009, with an annual increase of 15.1 percent. This figure included 396 million dollars in medicines in 2004, and 677 million dollars in 2009, with an average annual increase of 14.4 percent.
This data raises the following question: are the health conditions of the Lebanese getting worse, or is it the healthcare bill that is increasing at such rates annually? These rates are completely illogical in a country where half of the population is under the age of forty, and which cannot justified by the fluctuation in exchange rates affecting imports and the cost of medicine either.
One of the studies published indicated that the potential for waste in healthcare spending were at some stage massive, while this doesn't seem to have been completely eradicated at present. Spending on healthcare in fact is among the highest per individual across the highest-spending countries, in particular among the countries of the Middle East and North Africa when measured as a percentage of their GDP. This percentage in Lebanon is 12 percent, while the yield achieved is probably the lowest.
Furthermore, this waste in spending is being equally seen in both the public and private sectors, where the cost of medical care is raised to compensate for the shortfall in hospital bed occupancy and the cost of medical equipment in laboratories and elsewhere.
For these reasons, the workshop on the National Social Security Fund is taking place in preparation for Lebanon's entry into the ‘era of health safety', given the latter's economic benefits. The computerization of the fund is thus a crucial step to revive the latter and to guarantee the contributions of the members, not to mention the need to universalize retirement and unemployment benefits, in tandem with launching the comprehensive health card.
In this vein, it seems that the determination of the Minister of Labour promises to achieve a quality leap that can be a pioneering step in the Arab World.


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