Investing in Tunisia’s health care sector has been a major priority for the government. Considerable efforts have resulted in the country having one of the highest life expectancies in Africa behind only Morocco and Algeria. In recent times, Tunisia has witnessed strong improvements in key health outcomes, thanks in part to the provision of health care coverage to the bulk of the population. However, system resources have started to come under strain recently, prompting the authorities to develop reform plans. The private health care industry is growing rapidly, bolstered to some extent by a well-established medical tourism sector. Industry figures point to ample room for investment and expansion, providing the country continues to make progress in areas such as gaining international accreditation for local institutions and improving transport links with promising source markets.
Structure
The Ministry of Health (MoH) monitors and implements public health policy in the areas of prevention, medicines, narcotics and care. The ministry is responsible for inspecting and controlling the opening and closing of pharmaceutical industries, drug depositories and wholesalers, and pharmacies. It also supervises the bodies in charge of handling imports, pricing, inspection and the quality of medication. The latter half of 2017 marked a volatile time for leadership of the MoH, as four different ministers took office. Samira Merai, the former minister of public health, was replaced by Slim Chaker in September during a cabinet reshuffle. Minister Chaker then served for around three weeks before passing away due to a sudden heart attack, which left Mohamed Trabelsi to serve as interim minister until November 18, when the position was filled by Imed Hammami from the Ennahda Party.
Key Indicators
Recent years have been characterised by strong improvement in key indicators. Infant mortality has been on a steady decline since the start of the millennium, falling from 23.3 deaths per 1000 babies under the age of one in 2002 to 12.1 in 2015, according to latest available information from the World Health Organisation (WHO). Life expectancy at birth stood at 75.49 in 2015, up from 73.25 in 2000, according to World Bank figures. This is broadly in line with Maghreb peers Morocco and Algeria with respective life expectancies of 75.52 and 75.85.
The country is home to 167 local hospitals, 33 regional hospitals, 23 university hospitals and 81 clinics, according to figures reported by Minister Hammami in March 2018, as well as 2058 health centres and a total of 31,936 available beds, according to the MoH. Of the 13,988 doctors working in the country in 2016, 6832 were employed by the public sector and 7727 worked privately, according to the National Statistics Institute (Institut National de la Statistique, INS).
Spending on health care, including drugs, hospital infrastructure and medical personnel amounted to 7% of GDP in 2014, according to latest available data from the World Bank, surpassing the WHO recommendation of 5%. Although this was down slightly on 7.3% the previous year, it represents a strong increase from 5.7% in 2008. Public expenditure accounted for the bulk of this, at 4% of GDP, with private health care spending constituting the remaining 3%. Out-of-pocket expenditure on health care rose by two percentage points over the five years to 2017, with sector trends indicating that demand for lifestyle-related products, such as baby formula, vitamins and nutrition products, is on the rise. While spending related to asthma, allergies, ophthalmology and diabetes is among the strongest growth driver for health expenditure.
Coverage
The 2014 constitution declared health a human right under Article 38, making the state responsible for ensuring curative and preventive health services. The government is also now legally required to guarantee social protection and free health care for lower-income populations. According to industry analysts, 86% of the population is covered by public health care insurance, which represents a high proportion for an emerging market country. State coverage is provided via two programmes. The first of these is the government-funded Free Medical Assistance scheme, which covers approximately 20% of the population, providing treatment for vulnerable populations without other forms of health care at no out-of-pocket cost.
The second scheme is the National Sickness Insurance Fund (Caisse Nationale d’ Assurance Maladie, CNAM), which is wholly funded by contributions from membership dues and covers roughly two-thirds of the population. The fund offers three levels of coverage: basic coverage, which provides members access to public facilities; intermediate coverage which reimburses members for some forms of private health care providing they are first referred by a general practitioner; and top-tier coverage, which allows patients to freely choose their provider from both private and public services. Of CNAM’s total expenditure in 2013, 45% went to private sector providers, 28% went to public sector facilities and 20% was spent on medication.
Systemic Reforms
CNAM’s ability to fund treatment has come under pressure in recent years as a consequence of factors such as weak economic growth and rising treatment costs have contributed to financial pressures. According to Mohamed Trabelsi, the minister of social affairs, from 2010 to 2016 the number of beneficiaries with chronic diseases rose from 482,000 to 935,000, while the number of operations increased from 44,000 to 69,500. In 2008 CNAM’s expenditure on public health care hit TD683m (€262.3m), but by 2015 that number more than doubled to TD1.8bn (€691.1m).
As a result, the fund has accrued substantial debts, worth TD2.99bn (€1.1bn) as of January 2018 according to Minister Trabelsi. Adding to mounting financial pressures, the National Social Security Fund (Caisse Nationale de la Securité Sociale, CNSS) owed CNAM an estimated TD2.33bn (€894.7m) as of mid-2017, causing additional financial issues. Partly in response to this shortfall, in March 2018 authorities were in the process of drafting new reforms for health insurance and pensions systems. The government is also currently working on a new national health strategy covering the period to 2030, which will inform its 2020-25 and 2025-30 five-year plans for the sector. The scheme is expected to include a shift in emphasis from a focus on curing diseases to more of a preventative model, with a particular focus on curbing recent rises in lifestyle-related, non-communicable diseases such as cardiovascular disease and diabetes, which account for around two-thirds of health spending in the country.
Central Pharmacy
The Central Pharmacy of Tunisia (Pharmacie Centrale de Tunisie, PCT) is the sole entity in charge of distributing medicine in the public sector. Private sector distribution is done through private wholesalers that distribute imported and locally manufactured products. The PCT has a monopoly on importing medicine for both the public and private markets. Drugs in the private market are sold at stable prices established by the Ministry of Industry and Trade. The current financial woes at the CNSS and CNAM has affected the PCT, with CNAM owing it around TD366m (€140.5m), causing cash flow restrictions at the provider. Limited revenue generation at the PCT and additional costs have contributed to growing debt, with local media reporting that it owes around TD370m (€142.1m) to foreign importers. “The PCT has liquidity issues and therefore doesn’t always pay its suppliers on time,” Sara Masmoudi, president of the National Chamber of the Pharmaceutical Industry, told OBG, “Although payment is supposed to take 180 days, there is a 90-day delay, making reform of the PCT crucial to ensuring access to medicine in the Tunisian market, mainly, but not only, by solving the negative impact of the self-subsidy system within the PCT.”
Private
The strain on the state-run health care system, means private practices are becoming much more prevalent. Private clinics are often viewed as having higher-quality services than public hospitals, with better equipment and more qualified medical staff, and the sector has seen strong growth over recent years. There were 93 private sector clinics operating in the country as of October 2017, according to INS data. This was up from 91 the previous year and 81 in 2013. According to Imed Hassine, deputy director of the Tunis Clinique Pasteur, such growth is expected to continue in the coming years. “There will be around 150 private clinics in the country by 2022,” he told OBG, forecasting the number of beds to rise from around 6500 currently to around 10,000. Despite the increase in capacity, high levels of demand have ensured that the sector will remain competitive. “If a clinic does good work, it can currently attract patients without difficulty,” he added.
Contributing to the segment’s success is the fact that private care is available via public health insurance for some CNAM beneficiaries and that some treatments and diagnostic procedures are only available in the private sector. Public facilities have also been the target of criticism with regard to efficiency and cleanliness in recent years, with labour stoppages due to worker strikes also helping to bolster private sector demand.
However, as is the case for much of the country’s infrastructure, private facilities are disproportionately located in coastal regions of the country, leading to a concentration of private clinics in certain areas offering similar services. To address this issue further, collaboration between public and private sector clinics may be beneficial. “There are too many private clinics in Tunisia offering the exact same services. Having over 80 clinics in a small market is excessive. Public-private collaborations between hospitals and clinics is something that needs to be encouraged,” according to Mourad Kharouf, CEO of Polyclinique les Jasmins Tunis.
Pharmaceuticals
Since its privatisation in the early 1990s, the Tunisian pharmaceutical industry has been driven by the increased needs of the domestic market combined with growing opportunities to export. The sector is made up 50 production units, of which 31 produce pharmaceuticals for human use, covering 70% of the country’s medicinal needs by volume, according to Hammami. “Around 50% of Tunisian medicine consumption by value is produced locally,” Alya Elhadda, CEO of pharmaceutical company Opalia Recordati Pharma, told OBG.
However, the segment has not been without its challenges. The pharmaceutical industry saw growth rates of 7-8% before the 2011 revolution, but over the 2012-16 period grew by only 3%. The growth was over 6% for the private market in 2017, and should be the same for 2018. This slowdown has been partly attributed to the inefficient registration processes and ongoing issues at the CNSS and the CNAM. To overcome these challenges a number of Tunisian pharmaceutical companies are increasing exports, in particular to markets in sub-Saharan Africa, where Tunisian drugs have a good reputation. “Although France continues to dominate the pharmaceutical sector in francophone sub-Saharan Africa, Tunisia should leverage its geographical proximity and language commonality to export more to the region,” Masmoudi told OBG.
Authorities are embracing new approaches to increase the Tunisian pharmaceutical industry’s competitiveness in international markets. To this end the focus has shifted to exporting more and better medicines, gaining a foothold in foreign markets by targeting strategic markets where quality trumps price, and developing a range of biotechnology-derived products, which have become the new focus of the sector.
Ongoing efforts at the biotechnology research and development centre BiotechPole Sidi Thabet demonstrate the government’s efforts to achieve these goals. In September 2017 new projects were announced between the centre and French research partners IMT group and NovAlix aimed at establishing a technology resource centre and business incubator. Projects will continue to develop training and clustering dedicated to biotechnology, pharmaceuticals, life sciences and applied engineering related to health care. “At present the sector’s potential is far from fully exploited. Less than 10% of the total production of human medicines is exported, representing less than 0.2% of total exports,” the MoH’s Hammami told local media.
Health Services Exports
The fifth Tunisia Health Expo was held in Tunis in March 2018 looking to reinforce international partnerships and strengthen bilateral cooperation with key global players, most notably the guest of honour Sudan. The expo saw the governments of Sudan and Tunisia sign a memorandum of understanding to develop and upgrade health and medical systems between the two countries. To further these goals, a new Tunisair flight from Tunis to the Sudanese capital Khartoum is expected in September 2018. Additionally, for the first time at the expo there was a specific focus on promoting medical tourism.
International development institutions are contributing to the promotion of exports and sector-wide expansion. A comprehensive study is under way with funding from the African Development Bank to explore the possibility of creating an agency at the MoH in charge of marketing health services and attracting investment. To this end, the ministry is also focusing on developing a communication strategy that would, for instance, make all the information on health products and prices available online at the MoH website.
Medical Tourism
Private companies are also contributing to the national effort to boost Tunisia’s medical tourism. The sector is well-developed, thanks to factors including the country’s close proximity to and shared language with major European and Arab source markets, and its reputation for having well-trained medical staff. According to Hammami, Tunisia is the second-most sought after medical tourism destination on the continent after South Africa.
As for the potential in regional markets, both the Libyan and Algerian health systems provide funding for patients to be treated abroad, something that is particularly key in Libya given the damage years of conflict have done to its health infrastructure. Although statistics on the breakdown of medical tourists by country of origin are not available, Hassine told OBG that in 2017 Libyans represented 15% of the total patients at medical clinic Clinique Pasteur, Algerians between 8% and 9%, and French patients 5%. Tunisia is already well-established in European markets as a destination for cosmetic procedures, with other promising medical tourism specialities including gastric bypass surgery for weight loss. “Lots of French patients are already coming to Tunisia for bariatric surgery, as it is much more accessible here than in France,” Hassine told OBG, citing French regulations that require patients to work with medical professionals on other weight-loss strategies before they are eligible for surgery. Hydrotherapy is also popular among health tourists, with Tunisia being one of the few countries to benefit from a dedicated legislative framework that upholds certain standards.
In terms of facilitating travel, Hassine told OBG that sub-Saharan Africa and the broader continent showed particular promise, calling on the country’s national flag carrier Tunisair to establish more routes to such countries in place in order to facilitate travel. “Africa is the most promising region in terms of promoting the development of medical tourism in Tunisia, with cardiac surgery showing strong potential,” he said. “Tunisair has been opening some new routes, such as to Benin, but the process is progressing slowly. Meanwhile, increasing levels of international accreditation at Tunisian health facilities would also help to boost European arrivals in coming years, with orthopaedic medicine showing particular promise in this regard,” he added.
Debt
In 2013 the number of tourists coming to Tunisia for medical and aesthetic reasons peaked at 370,000, of which 40% were from Libya. Conflict in the neighbouring country has had negative spillover effects in the local market, with the country now owing Tunisian clinics and hospitals a large amount of money. It is estimated that between 2011 and 2016, Libyans had accumulated a total of TD300m (€115.2m) in debt at 55 clinics.
“Tunisia needs to encourage health tourism from regional countries in order for the sector to grow. However, the payment neglect from a major source country is an issue,” Mohamed Bourguiba, CEO at medical equipment importer Prochidia, told OBG. The Libyan government promised to start payment instalments to Tunisian clinics in March 2017, but the Tunisian National Union for Private Clinics announced that as of November 2017 only a few firms had received some form of payment. Mohamed Zaguia, CEO of Clinique International Hannibal, told OBG that Libyans represented 30% of their overall revenues in 2017, and this situation has had a sizeable impact, leading Tunisian clinics to look at strengthening relations with new African markets to attract additional medical tourists. OUTLOOK: The private health care sector is set to continue to expand in coming years. Growth will be driven to a substantial extent by medical tourism, although progress will depend on factors such as the speed at which local institutions can achieve international accreditation and – following terrorist attacks in 2015 that led to a sharp fall in tourism, as well as socio-economic unrest – the stability of national security and the political environment. Furthermore, public health infrastructure reforms will be necessary to ensure the sector’s sustainability as costs continue to increase.
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