Liberalization of dollar exchange rate at hospitals leaves people dying in their homes in Lebanon

Published on: 1/10/2020

The American University of Beirut Medical Center (AUBMC) has adopted the banks’ approved dollar exchange rate, which is 3,900 Lebanese pounds, in a number of its departments instead of the official exchange rate, which is fixed at 1,507 Lebanese pounds.

This decision has sparked a state panic among people, who fear that the entire private hospital sector would follow suit.

Based on the decision of the AUBMC’s administration, the entrance fee to its emergency department is now 600 thousand Lebanese pounds. This fee did not exceed previously 190,000 Lebanese pounds. Moreover, a visit to a doctor in the hospital’s outpatient clinics jumped to 225,000 Lebanese pounds after it was a maximum of 120,000 Lebanese pounds.

The value of the Lebanese pound against the dollar collapsed during the financial crisis that Lebanon has been facing since the end of 2019. There are now three exchange rates for the dollar. The official exchange rate remains at 1,507 Lebanese pounds, and it applies only to imports of fuel, medicine, and wheat as well as hospitalization costs and insurance agencies. Banks apply an exchange rate of 3,900 Lebanese pounds for dollar deposits. The dollar exchange rate on the black market is 8,300 Lebanese pounds.

Lebanon is suffering from a shortage of dollar reserves at the Banque du Liban, and this has been reflected in the gradual removal of subsidies on basic materials, especially medicine.

The president of the Syndicate of Private Hospitals, Suleiman Haroun, said: “There is pressure on private hospitals, but we hope that part of the dues for private hospitals will be paid so that they can carry out their duties.”

Haroun warned that “if the subsidy on medical supplies and medicines is removed, people will die in their homes and not at the doors of hospitals.”

He said that he had been informed by an importer that the central bank had removed subsidies on sterilization materials.

Haroun pointed out that the decision of one of the major hospitals to adopt the dollar exchange rate of 3,950 Lebanese pounds does not apply to the official tariffs with the guarantors.

The most prominent of these guarantors are the National Social Security Fund (NSSF), the Cooperative of Government Employees, and tens of health insurance companies.

The director-general of the Cooperative of Government Employees, Dr. Yahya Khamis, warned that the hospitals’ adoption of a dollar exchange rate of 3,950 Lebanese pounds means that “disaster will inevitably happen.”

Bechara Asmar, head of the General Labor Union, expects other private hospitals to follow the example of the AUBMC early next week. He warned against “the policy of infiltrating the rights of the working class and people with limited incomes.”

He said: “This means an increase in the cost of the hospital bill to more than three times and the collapse of the purchasing power of citizens and guarantors. This will result from the inability of the NSSF, the Cooperative of Government Employees, military sectors, and insurance companies to fulfill their obligations. The citizens will have to bear the difference, which is equivalent to double what the guarantor companies pay.”

Asmar highlighted that “this will lead to the collapse of the health system as a whole.”

The decision’s advocates believe that adopting the banks’ dollar exchange rate for the pricing of hospital services is similar to what happens with the subsidized food basket – this subsidization adopts the dollar exchange rate of 3,900 Lebanese pounds, not the fixed official exchange rate of 1,507 Lebanese pounds.

An official in an insurance company said: “If the matter applies to all medical services in hospitals, the difference that will result from the hospitals and insurance agencies’ adoption of the fixed exchange rate will be borne by either the citizen or the insurance companies, which still charge the citizens insurance premiums at the official exchange rate.”

The head of the General Labor Union refused to adopt “any hidden tariff, as is currently happening, because this would be met with immediate action, taking to the streets, and staging sit-ins outside these hospitals.”

Health Minister Hamad Hasan stressed on Thursday that “subsidies for the health and hospital sectors and the medicine sector will not be affected at the present time, and this is out of the question.”

Hasan announced that a solution has been reached “between the Syndicate of Private Hospitals and the Ministry of Health requiring that dues are paid to private hospitals within a month for coronavirus patients through a loan of $39 million from the World Bank.”

He said: “The Ministry of Health follows the Lebanese law, and everyone must participate in the solution, not the other way around. Enough bidding on people’s pain. Any individual action taken by a hospital exposes it to accountability.”

Former Health Minister Mohamed Jawad Khalife, however, said: “The decision of the AUBMC is very transparent because all the hospitals charge patients based on the dollar exchange rate of 3,000 Lebanese pounds without officially announcing it. Let the minister of health kindly take from me an admission document into any hospital to realize that the 15-percent difference between the pricing of the Ministry of Health and that of the hospitals is received by the hospitals, which charge citizens 8,000 Lebanese pounds.”

It does not seem that the problem of hospitalization in Lebanon is limited to the financial issue. Hospitals are facing the resignation of many of their doctors, who are emigrating to other countries after accepting offers after the collapse of the purchasing power of the national currency.

One of the nurses at a well-known hospital in Beirut said: “The hospital is in a very bad condition as if it is deserted. Patients who used to come from abroad for hospitalization in Lebanon can no longer come because of coronavirus. Lebanese patients postpone non-urgent operations until after the pandemic. Some of the doctors whose incomes have declined due to the financial crisis and the coronavirus crisis began to emigrate abroad. Among these are well-known doctors.”

Former Health Minister Dr. Karam Karam said: “In the 1980s, doctors emigrated from Lebanon because of the war, but there remained hope in the country. Now, we have many qualified doctors leaving Lebanon either to the United States or to the Arabian Gulf countries, and the reason is financial. Many of these doctors’ children are continuing their education abroad, and the doctors are no longer able to pay their tuitions due to the freezing of their deposits.”

He added: “As a doctor, what I earn is not sufficient to pay my clinic's rent or my assistant’s salary. More seriously, there are a number of highly qualified histologists who will leave Lebanon as well. The situation is tragic. They stole our money, our lives, and our dignity. They even stole the idea of the homeland. They are a group of thieves and mafia controlling this homeland. They made us hate Lebanon and even Palestine because of what they do in their names.”