Interview: Ahmad Nasrallah, CEO, Dar Al Shifa Hospital

To what extent is Afya contributing to the growth and resilience of private health care?

AHMAD NASRALLAH: The Afya insurance policy for retirees has been pivotal to the growth and resilience of private health care in Kuwait. The Ministry of Health (MoH) initiated this innovative programme to contract private care services to an insurance company intermediary with an aim to address public sector shortfall and serve the retired segment adequately. This programme has been expanding, in turn driving private health care growth. At the same time, the public sector has added about 7000 in-patient beds in the past decade, most of which are now operational. This expansion has influenced health care supply and demand dynamics, affecting both public and private players. The outlook for private health care hinges on how demand can be sustained and how increased public capacity can be utilised.

Additionally, Afya has significantly improved the range and quality of services available to retirees. Its personalised approach and emphasis on hospitality ensures a fulfilling experience for retirees and their families. Additionally, the redirection of a substantial portion of the health care budget from the public to the private sector has stimulated growth in the latter. Hospitals experienced an increase in demand following the implementation of Afya, which compelled the expansion of private services.

Ultimately, this shift has spurred increased investment in medical centres and hospitals in the private sector, further catalysing growth. Afya has allowed public hospitals to manage their patient load more effectively by transferring approximately 140,000 retirees to private sector care. This reallocation has improved public capacity to serve other community segments more efficiently. With the expanded capacity of the public sector, it is vital to avoid competition between the public and private sectors and limit the unnecessary duplication of services.

What role does technology play in advancing the scope of health care services in Kuwait?

NASRALLAH: There have been significant developments in the expansion of the role of technology in advancing health care services in Kuwait, although there is a need for further growth and integration in this space. A key example is the utilisation of electronic medical records. While there has been progress, Kuwait lacks a comprehensive electronic medical record system. Private hospitals have taken some steps; however, this progress is not part of a national digitalisation policy, which is still anticipated. The MoH is working towards digitalisation but a comprehensive policy has yet to be established. Creating a governing strategy for digitalised health care would incentivise hospitals and private care providers to invest in solutions that can improve the efficiency and quality of care.

How do you assess the attractiveness of Kuwait’s private health care segment to investors?

NASRALLAH: It is essential to consider the segment’s evolution to assess the investment proposition for private health care. The private sector historically represented about 10% of the overall bed capacity in Kuwait, with 700-800 beds compared to the public sector’s approximately 7000 beds. Recently, there has been a significant expansion in the private sector, growing from 700-800 beds to 1300, with an additional 600-700 beds expected.

While this growth indicates positive momentum, it raises questions about the balance of supply and demand. In the short term, we may see a slight dip in hospital occupancy rates. The profit margins for shareholders may decrease but will remain profitable. Additionally, supply may exceed demand in the coming years, with a 30-40% increase in bed capacity projected for 2023-27 despite the Afya scheme extending coverage to new customer segments.