Crisis economy: Prognosis growth
Humanitarian aid inflows spur growth in Lebanon’s healthcare sector
Perhaps the first thing refugees fleeing a war zone need is medical attention. It is no surprise, then, that Lebanese hospitals have been busier than usual since war engulfed Syria in 2012. According to a recent UNDP study, in fact, in 2014, humanitarian aid inflows focused on Syrian refugees have spurred 1.76 percent in additional growth for the healthcare sector, according to a UNDP study. That year, UN agencies and affiliates supported 180 primary healthcare centers and 65 hospitals throughout Lebanon. With a swell of new patients, particularly in 2013, hospitals have experienced positive growth and have consequently invested in their infrastructure and service provision. “When these hospitals have more business, they are going to buy more medical supplies and more medications from pharmaceutical companies,” says Walid Hallassou, general manager of GlobeMed Lebanon. GlobeMed is the third party administrator that UNHCR has contracted to help it manage its healthcare response. “They are going to employ more doctors, more nurses and so on,” he adds.
At times, healthcare facilities also received direct, in-kind aid from UN agencies. Over $1 million were used to purchase roughly 6,200 items of medical equipment for primary healthcare centers in 2014 alone. Hospitals, primary healthcare centers and even the Ministry of Public Health also received training for staff and support to hire new professionals — at least 81 new professionals were hired with direct UN support in 2014, according to the UN.
Healthcare aid to refugees and affected Lebanese communities has also included direct provision of medication, which has sparked growth in Lebanon’s pharmaceutical sector. According to a 2015 Business Monitor International report on Lebanon’s healthcare expenditures, pharmaceutical sales in Lebanon jumped from $1.3 billion in 2012 to $1.46 billion in 2013 — and then again to $1.59 billion in 2014. Pharmaceuticals are also playing a bigger role in Lebanon’s economy: drug sales as a percentage of GDP increased from 3.05 percent in 2012 to 3.37 percent in 2014, the report found. As part of the support to affected Lebanese communities, $6 million worth of pharmaceutical products were purchased by UN agencies and distributed to primary healthcare centers and hospitals. Unfortunately, numerous pharmaceutical companies contacted by Executive — including Omnipharma, BroadMed, Omnilab and Medex — either did not respond to requests to comment or declined to provide any information about particular growth within their companies.
There are also a number of intermediaries who have experienced growth as a result of aid — not least of which is GlobeMed. Contracted by UNHCR at the end of 2013, GlobeMed manages the secondary and tertiary levels of healthcare provision for Syrian refugees and is the refugees’ point of contact for healthcare issues. Partnering with UNHCR has brought multiple dimensions of growth to GlobeMed.
“For an organization that used to serve about 500,000 lives in Lebanon to take on another 700,000 overnight was not an easy task,” Hallassou tells Executive. “We recruited a lot, we opened offices, we bought equipment, we had system developments to do.”
However, these investments are made warily. Describing UNHCR as a “high risk client,” Hallassou says GlobeMed — and other firms in the healthcare sector — are painfully aware that their contracts are valid only so long as UN agencies continue to have steady funding. This precarious situation means that GlobeMed manages its growth carefully, apprehensively, and on a short term basis.
“Usually our employees are on unlimited contract[s] — now we need to recruit employees on a limited basis. They are brought in as consultants or employees with limited contracts so that we protect them and we protect ourselves,” Hallassou admits. Purchasing new equipment to manage the refugee workload works the same way — GlobeMed’s management has to continuously consider whether new systems or pieces of equipment can be used for other projects if its UNHCR contract abruptly ends. Still, Hallassou says, the contract has been worthwhile from a business point of view.
That view might not extend to the long term. Hallassou is skeptical that the quality of the healthcare system as a whole in Lebanon has been buoyed by international aid. While there may well be improvements in some institutions, this is not represented across the industry. As long as hospitals and primary healthcare centers have “weak foundations” in infrastructure and service provision, he says, new equipment and new staff won’t boost quality. The conclusion is worrisome: although humanitarian aid money may be providing the sector a profitability boost today, the long term implications of this capital injection may prove to be minimal.