Kuwait: A healthy prognosis

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Development of the health care sector remains a priority for Kuwait, with the government recently signing two agreements with foreign educational institutions that aim to improve training for the country’s medical professionals. While the goal of this type of international collaboration is to enhance the skills of local physicians who work at state-run facilities, the government is also taking steps to create private investment opportunities in the country’s health care sector.

In late December, Kuwait’s Ministry of Health signed a five-year agreement with Johns Hopkins Medicine International (JHI) that calls for JHI to help Kuwait improve health care delivery at four of the country’s five secondary care public hospitals. JHI is the international division of US-based medical school Johns Hopkins Medicine.

Beginning in early 2012, JHI experts in clinical care, hospital administration and hospital management will work with health care professionals at the Ministry of Health and four local hospitals that, combined, account for more than 40% of public sector hospital beds in Kuwait. The collaboration will focus on medical issues in the fields of trauma, orthopedics, rehabilitation, diabetes, obstetrics, pediatrics and telemedicine.

The Ministry of Health is taking other steps to ensure that its physicians are well trained, including signing an agreement in December with the Faculty of Medicine at the King Abdulaziz University in Saudi Arabia to provide emergency medical training to doctors in Kuwait. According to Dr Khalid Al Sahlawi, the assistant undersecretary for technical affairs at the Ministry of Health, the purpose of this collaboration is to qualify a number of Kuwaiti staff who can train other local medical professionals.

While these two recently signed agreements pertain to the training of staff in the public health care system, Kuwait is also planning to expand the role of the private sector in the provision of medical services, according to Waleed Al Falah, the assistant undersecretary for planning and quality at the Ministry of Health.

“The Ministry encourages the participation of the private health sector as a partner and not a competitor, urging it to expand its services and to implement high-quality standards,” he told OBG. At present, the private sector accounts for about 10% of the health care market in Kuwait.

The government’s efforts to this end have thus far been focused on the establishment of the Kuwait Health Assurance Company (KHAC), a public-private partnership (PPP) that will be responsible for managing the health care needs of the majority of expatriates living in Kuwait. At present, all expatriates who reside in Kuwait are required to purchase health insurance from the government, and then can seek medical attention at one of the state-owned medical facilities.

According to a presentation prepared by The Advisory Group, a consulting firm currently engaged in several health care projects in Kuwait, the target population for KHAC’s services amounted to about 1.5m individuals in 2010. As envisioned by the government, KHAC will sell health insurance to expatriates, and then will provide medical services for plan enrollees at facilities owned and run by KHAC. In the parlance of health care economics, this type of system is usually referred to as a health maintenance organisation.

Facilities to be built include a network of 15 primary care centres, as well as three secondary-care hospitals, to be located in Ahmadi, Farwaniya and Jahra. In total, the three hospitals will have more than 1200 beds.

As is the case for other PPPs in Kuwait, the government is seeking a strategic investor for the project, who will hold 26% of KHAC. The Kuwait Investment Authority (KIA) will own a 24% stake, while the remaining 50% of the company will be sold to Kuwaiti nationals in a public offering. The 26% share is being sold by an auction, which closed on November 29, according to KIA’s website. The investment authority is responsible for conducting and supervising the auction.

Bidders for the 26% stake included two local players in the finance sector (Kuwait Finance House and KIPCO Asset Management Company), US-based GE Health care and, most recently, Agility, the Kuwaiti logistics firm. On December 4, Agility announced that it had bid about KD25.6m ($91.45m) to acquire the 26% strategic stake in KHAC.

The government expects that KHAC will launch by 2015. Once operational, this new entrant to the Kuwaiti heath care system will significantly expand the quantity of medical services available in the country and could well reduce the state’s cost of providing health care to its residents.

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