Vital signs: As the sector continues to expand, partnerships with the private sector are being encouraged

The introduction of compulsory medical coverage and a significant population increase have fuelled the growth of Abu Dhabi’s health care sector in recent years, with a number of new facilities opening. This expansion is expected to continue, with both the government and the private sector planning new hospitals for the near future. This additional capacity should help stem the flow of Emirati patients from Abu Dhabi to international medical facilities, which in turn could reduce the financial burden on the government of paying for such services. Other savings could also come from changes to the health insurance system that will encourage more efficient behaviour on the part of providers, as well as public health programmes designed to reduce the prevalence of non-communicable diseases like diabetes and cancer.

MARKET STRUCTURE: Over the last decade, the health care system in Abu Dhabi has undergone several major reforms, including the 2007 split of the General Authority for Healthcare Service into two entities: the Abu Dhabi Health Services Company (SEHA) and Health Authority – Abu Dhabi (HAAD). SEHA took over the role of state provider and owns all public health care assets, in addition to developing new medical facilities when necessary. Meanwhile, HAAD acts as the market regulator, developing policies and standards for the health care sector, and licensing all health care providers and payers (i.e., insurers), both from the public and private sectors, as well as enforcing rules and regulations. The authority also sets the larger strategy for the health system, monitors the population’s health and works to create awareness of healthy living standards.

Abu Dhabi is aiming to increase private sector participation in the health care sector, but for now, government-subsidised SEHA facilities still provide the majority of inpatient services – 74% of inpatient encounters and 66% of the emirate’s 3659 hospital beds in 2011, according to the most recent data from HAAD. Its largest facilities are Tawam Hospital (Al Ain), Al Mafraq (Abu Dhabi), Sheikh Khalifa Medical City (SKMC, Abu Dhabi), Al Ain Hospital (Al Ain) and Corniche Hospital (Abu Dhabi), all of which see more inpatients than the largest private hospital, Al Noor’s main facility in Abu Dhabi City. Other major players in the private sector include NMC Healthcare (which, like Al Noor, has hospitals in both Abu Dhabi and Al Ain) and Al Ahalia.

MANAGEMENT: While SEHA owns and operates the majority of its hospitals, the organisation has entered into management contracts with international medical institutions for several of its largest facilities. The Cleveland Clinic manages SKMC, while Johns Hopkins oversees the Tawam, Corniche and Al Rahba hospitals. Finally, Vienna Medical University manages Al Ain Hospital. The details of these agreements are not public, but Cleveland Clinic’s management contract with SKMC includes a set of SEHA targets related to revenue, productivity, quality and customer service goals, all of which affect an undisclosed percentage of Cleveland Clinic’s fee. Since 2011, SEHA has been pursuing the re-centralisation of management for its hospitals. As of November 2012 the contracts held with Bumrungrad (Al Mafraq Hospital) and Vienna Medical University (Al Ain Hospital) expired.

Meanwhile, on the outpatient side – which accounts for about 93% of health care system encounters – SEHA plays a smaller role, treating around 38% of all outpatients in 2011 at its hospitals and primary health centres, according to HAAD data. In 2011 the largest non-hospital providers in this market were Advance Cure Diagnostic Centre, Island Falcon Medical Supplies, New National Medical Centre, Prince Specialist Medical Centre, Al Noor Hospital Clinics and the Specialist Diabetes Treatment and Research Centre.

Finally, it is important to note citizens of Abu Dhabi also have the option of travelling abroad for treatment when local options are not available, through a system that is managed by the international patient care department of HAAD. Requests for treatment at a foreign institution can come from individual patients or from doctors in government-owned hospitals. A medical committee then determines whether or not treatment is available either at one of the UAE government or private hospitals, recommending sending the patient abroad when it is not.

KEEP IT LOCAL: According to the Abu Dhabi Chamber of Commerce, UAE residents spent approximately $2bn on treatment at foreign facilities in 2009, the most recent year for which full data is available. However, the government has been actively seeking to slow this outsourcing of care outflow.

In part this is being done through the development and expansion of SEHA’s facilities, but also through Mubadala Healthcare, a division of Mubadala Development Company, an investment vehicle mandated to develop the emirate’s economy alongside its primary commercial remit to generate financial returns via its domestic and international portfolio. Mubadala Healthcare, one of the newer divisions within the development company, has played an important part in increasing the role of the private sector in the emirate’s health care system. It has also reduced the need for patients to travel abroad to seek treatment.

THE MUBADALA MODEL: Mubadala Healthcare’s business model is to establish long-term partnerships with international medical institutions for developing greenfield projects to deliver high-quality health services. While the foreign partners provide medical expertise, Mubadala brings local know-how. In the early stages of a project, this involves working with local officials to secure the necessary licences and oversee construction of the facility. Mubadala also remains active on the administrative side of the business once the facility is operational. Moreover, financial agreements between Mubadala and its foreign partners are structured such that their interests and goals are aligned, with both parties sharing equally in the implementation and success of projects.

Mubadala works closely with HAAD to identify areas where there is a need to build domestic capacity, according to Suhail Mahmood Al Ansari, the executive director of Mubadala Healthcare. However, he added that the firm evaluates whether or not it is possible to provide these services in a financially viable way – as is the case with its parent company, the health care unit has a commercial mandate to be profitable. Another factor entering the calculation is the likelihood of finding a foreign partner committed to transferring knowledge to the local community and willing to enter into a long-term partnership. As Al Ansari told OBG, Mubadala looks for “good chemistry” and a willingness to stay in the region for the long run. At times Mubadala has reached out to potential foreign partners, but Al Ansari told OBG international medical institutions looking to enter the region have also approached it.

To date, Mubadala has been involved in the creation of several specialist outpatient and ancillary service facilities. These include the Imperial College London Diabetes Centre, which initially opened in 2006 in Abu Dhabi City and expanded into a second facility in Al Ain City in 2011. The Abu Dhabi Knee and Sports Medicine Centre also launched in 2006 and has performed thousands of procedures since opening. In 2010 the National Reference Laboratory, a partnership with Laboratory Corporation of America, was set up in Dubai, followed by a second lab in Abu Dhabi in 2011.

The Tawam Molecular Imaging Centre, which opened in 2010, is a specialist imaging facility located on the campus of Tawam Hospital in Al Ain City and operated by Johns Hopkins. The centre offers PET.CT diagnostic imaging systems for the detection and management of cancer, as well as cardiovascular, neurological and other diseases. The Wooridul Spine Centre, a partnership between Mubadala and the South Korean spine care specialists Wooridul, launched an outpatient facility in 2008 in Dubai. The development of a larger inpatient facility is currently under way in Abu Dhabi and will be part of Healthpoint, a new speciality hospital, scheduled to open in 2013.

CLEVELAND CLINIC ABU DHABI: Mubadala Healthcare’s biggest project yet – Cleveland Clinic Abu Dhabi – is being constructed on Al Maryah Island, the capital city’s new central business district, and will have 360 beds (expandable to 490), with five clinic floors, three diagnostic and treatment levels, and 13 floors of critical and acute inpatient units.

The hospital will be divided into five institutes (heart and vascular, digestive disease, neurology, ophthalmology, and respiratory and critical care) and seven departments (surgical subspecialties, pathology and laboratory medicine, medical subspecialties, radiology, anaesthesiology, quality and patient safety, and emergency medicine). Within each of these units, there will be a variety of specialists. For example, staff at the heart and vascular institute will include heart surgeons, cardiologists, vascular surgeons and vascular medicine physicians.

This system, different from the structure at most hospitals, where internal medicine and surgical services are separate, will allow the hospital to better serve patients, Dr Tomislav Mihaljevic, the chairman of the Heart and Vascular Institute and chief of staff at the clinic, told OBG. Dr Mihaljevic noted this hospital follows a group practice model, as the Cleveland Clinic does in the US. This means that all physicians are salaried and compensated for the quality of care they provide, not by the number of procedures that they carry out. This model of patient-centred care can reduce unnecessary services, improving efficiency.

The primary purpose of Cleveland Clinic Abu Dhabi will be to serve the people of Abu Dhabi, followed by the other emirates and in the longer term the larger GCC region. But for now the focus will be on serving local residents, thus reducing the outflow of patients seeking treatment in the US, Europe and elsewhere, according to Dr Marc Harrison, the CEO. In part this will be accomplished by bringing high-quality medical staff to the emirate, all of who will be North American-board certified (or equivalent) and many of whom are currently physicians at the Cleveland Clinic in the US. In total, Cleveland Clinic Abu Dhabi is recruiting 170 consulting physicians, as well as about 2000 nurses and allied health professionals. Some 80% of the physician chairs will come from the Cleveland Clinic and approximately 50% of physicians are expected to be brought from North America, with the balance coming from Europe and other areas.

FURTHER EXPANSION: Cleveland Clinic Abu Dhabi is just one example of growth in the number of health care facilities, with several hospitals either recently opened or in the works. These include Lifeline Hospital Group’s Burjeel Hospital, which was inaugurated in April 2012. The facility, which covers an area of more than 70,000 sq metres and has a capacity of over 200 beds, provides a range of specialised health care services. Looking ahead, Ahalia Medical Group, which currently has a hospital in Abu Dhabi City and 10 medical centres across the emirate, plans to open a 110-bed hospital in Mussafah. Meanwhile, United Eastern Medical Services has started work on Danat Al Emarat, a 250-bed women and children’s hospital in Abu Dhabi City, with completion expected in 2013. Finally, Oasis Hospital will replace its 50-bed facility in Al Ain with a new 120-bed hospital that will offer expanded maternal, neonatal and surgical care services.

Brad Kellogg, the senior vice-president of facility management and safety, told local newspaper The National that this expansion is necessary. “It is definitely needed, most of our outpatient services are almost always filled to 100% occupancy,” he said.

While the private sector is stepping in to add capacity and fill some gaps in specialist areas, the government is still actively building new health care facilities, while at the same time investing in the expansion and upgrade of existing ones. In January 2012 the Executive Council announced that it had approved plans for six hospitals, as well as a medical rehabilitation centre, a dialysis centre, four walk-in clinics, a disease prevention/screening centre, and a special-needs centre.

One of the biggest changes will occur at SKMC, where two new hospitals (general and paediatric) are under discussion to replace existing facilities at the medical centre. At the same time, it is currently envisaged that a new women’s health hospital will open at SKMC, replacing the Corniche Hospital, which will be closed. In total, bed capacity at the SKMC would rise from 568 to 838. New facilities are also planned to replace the Ghayathi and Al Sila hospitals in Al Gharbia, which could raise the number of beds at each of these facilities from 30 to as many as 80. Meanwhile, at Al Ain Hospital, a major expansion plan is under planning, which will progressively increase bed capacity from 371 to 688, with 150 of these beds for acute rehabilitation. Construction is expected to begin in late 2012 and be completed within three years.

PAYMENT SYSTEM: There are a few explanations for the recent growth in health care facilities, both in the private and public sector. One is simple: demographics. Between 2005 and mid-2011, the number of nationals and expatriates living in the emirate grew from 1.4m to 2.12m, according to the Statistics Centre – Abu Dhabi. Moreover, this growth is expected to continue. According to the Urban Planning Council, Abu Dhabi’s population may reach over 4.6m by 2030.

The emirate’s decision to implement a system of mandatory health insurance has also affected demand. Since 2006, all expatriates have been obligated to enrol in a health insurance plan. HAAD then introduced the Thiqa programme in 2008, which provides universal medical coverage to UAE nationals, who are required to become members. These legal changes have pushed up demand across the board, but particularly for expatriates, many of whom previously did not have insurance and had to pay cash when seeking medical services. It has also created more robust competition in the medical service and insurance markets, which has the potential to improve quality and lower prices for consumers. “There has been a renewed interest in private sector health care since the introduction of the mandatory insurance system,” Zaid Al Siksek, the CEO of HAAD, told OBG. “Previously only a small segment of the industry was addressed by the private sector, but companies are now investing in more complex services and other areas of health care delivery which were previously only addressed by the government.”

HAAD has continued to adjust the emirate’s universal health care system, perhaps most notably in 2010 with its decision to require all agreements signed between providers and insurers to be based on a standard HAAD contract (see analysis).

This document specifies that all reimbursement for inpatient services will be categorised into diagnosis-related groups, effectively making it impossible for hospitals to bill on a fee-for-service basis when covering insured patients. This change will encourage hospitals to be more efficient and will give the government a better sense of its projected expenditures when it comes to the Thiqa programme and the government-subsidised basic insurance plan.

PUBLIC HEALTH: Changes to the insurance regime could well reduce costs in the care system by encouraging efficiency and increasing competition among providers. However, the government has also taken steps to lower its financial burden by investing in public health initiatives, which can reduce costs by facilitating earlier detection of medical problems and also by helping to avoid them entirely.

For example, HAAD has worked with public and private sector partners through campaigns, screening and other health promotion activities. These include a partnership with the Susan G Komen Foundation to help raise awareness about the importance of breast cancer screening. The health authority has worked with the Abu Dhabi Education Council, Abu Dhabi Food Control Authority, Zayed Higher Organisation for Humanitarian Services and the School Health Department to help ensure that students develop healthy habits and receive quality care.

The local medical community has welcomed programmes like these. “Society and government are paying very close attention to encouraging activity, smoking cessation and healthy diets. Schools have curricula now and my sense is that they are taking a proactive approach to public health, which is impressive,” Harrison told OBG. He also noted Cleveland Clinic Abu Dhabi would like to become involved in government wellness campaigns, either in conjunction with existing efforts or by designing complementary programmes.

Investments in public health are important in the emirate, where rates of chronic diseases related to lifestyle such as obesity, diabetes and cardiovascular diseases are high. Indeed, in 2011 diseases of the circulatory system accounted for almost 38% of deaths, according to HAAD. However, the government is working to reduce these rates, Dr Jeffrey Staples, the CEO of SKMC, told OBG. “Preventive medicine is very important; proper eating habits, regular fitness and an overall healthy lifestyle will drastically reduce the frequency of lifestyle-related diseases within the country. The government is taking steps to increase public awareness in these issues,” he said.

Since 2008, the HAAD has led a population-wide prevention programme targeting cardiovascular disease risk factors, including diabetes. The programme is called Weqaya (Arabic for “prevention”). More than 94% of UAE national adults have been enrolled, and early data suggests the programme has led to a significant improvement in clinical outcomes.

In late 2012, HAAD will launch a novel market-based approach by licensing three disease management programme (DMP) providers under Weqaya. DMP providers will be able to monitor their health status through HAAD’s secure data systems, and will be directly reimbursed for measurable improvements in their health (a model called “pay-for-health”). This programme is expected to enable innovation in mobile devices and wellness interventions, and is under close scrutiny by other markets with high burdens of chronic disease.

HUMAN CAPITAL: Another area in which Abu Dhabi is working to improve the health care system is in the Emiratisation of the labour force. According to data from HAAD, 12.7% of the emirate’s 4900 physicians were UAE nationals as of 2011, while this figure stands at 12% for dentists and 1% for nurses.

The challenge presented by these low rates of domestic labour participation is that it increases the rate of staff turnover, with most foreign health care professional staying in the country for just three to five years. According to some health providers, Emirati patients prefer to see the same doctor over time. As a result, high turnover among facility staff can erode patients’ confidence in the health system overall.

The high rate of staff turnover and low participation by Emiratis has not gone unnoticed by HAAD, which is taking steps to train more local staff to work in the medical field. The authority has put in place a number of initiatives to encourage Emiratis to choose a career in medicine, including a residency matching process so that recent medical graduates can receive practical training at hospitals and other facilities.

It will take time for these changes to have a significant impact on the availability of local staff, but they are starting to take effect, with a number of educational institutions working towards a goal of placing more locals in the medical field.

In the meantime, HAAD is also making it easier to license physicians coming from abroad, a helpful development given continued expansion in the number of medical facilities in the emirate. HAAD now offers a total of 17 international test centres for medical professionals, which makes it easier and faster to recruit and license physicians. It is also less expensive for hospitals that are doing the recruiting, as they no longer have to shoulder the expense of bringing candidates all the way to Abu Dhabi just for testing. Another move that may make it easier to attract physicians is dual licensing with Dubai – since April 2012, any doctor licensed to practise in one of the two emirates will be allowed to practise in the other.

OUTLOOK: In a relatively short span of time – certainly less than a decade – the health care system in Abu Dhabi has undergone a profound shift, with the introduction of mandatory health insurance, a new structure for the government’s role in the sector, and a number of additional public and private health care facilities. Nonetheless, while the private sector has shown considerable growth in the last few years, it is likely that there remains room for investment in new facilities, particularly in certain areas that HAAD has identified as underserved.

These areas include intensive and critical care medicine, emergency medicine, neonatology, cardiology, psychiatry, obstetrics and gynaecology, paediatrics and oncology. Moreover, with HAAD having already taken steps to reduce challenges, such as recruiting and retaining professional staff, investment in this sector is poised as an even more attractive opportunity.

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The Report: Abu Dhabi 2013

Health chapter from The Report: Abu Dhabi 2013

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