Leveraging its tremendous economic growth and high per capita income, Dubai has developed a robust health care system that provides a high level of medical services to its citizens and others. Health care-related spending per capita across the UAE places the country among the top 20 in the world, with an average of $1544 per capita in 2010, down from $1704 in 2009, according to the World Health Organisation (WHO). The Dubai Health Authority (DHA), responsible for the regulatory and strategic oversight of health services in Dubai outside the health care free zone, is further strengthening the sector through strategic partnerships to develop health care-related education facilities. The government’s strategy seeks to encourage the broader participation of the private sector, particularly through free zones like the Dubai Healthcare City (DHCC) and Dubai Biotechnology and Research Park (DuBiotech).

MAJOR TRENDS: Health care standards in Dubai and the UAE more generally have continued to improve due to a combination of targeted investment, a business-friendly environment and improved regulatory oversight. The UN Human Development Index ranks the UAE 30th out of 187 countries, placing the country above all its GCC peers. The UN data shows that the under-five mortality rate in the UAE has dropped from 30 per 1000 live births in 1980 to just seven per 1000 live births in 2009, placing it above countries such as the US. Similarly, life expectancy at birth has also improved from 68 years in 1980 to 77 years in 2009.

The affluence and growth that has driven improvements in these key health indicators has also brought additional problems that are in turn driving up the cost of quality health care in Dubai. As in the rest of the GCC, the UAE displays a distinctive array of risks that have emerged due to changing lifestyles. The prevalence of diabetes, obesity and cardiovascular disease is striking. The WHO estimates that 38% of deaths in 2002 were due to cardiovascular disease. Today, near 20% of the UAE’s population has diabetes compared to the global average of over 6%, according to the International Diabetes Federation. Over 70% of the population is considered to be overweight, a figure which is expected to rise to an estimated 80% for women in 2015.

PREVENTATIVE MEASURES: Thomas Murray, the CEO of the American Hospital, told OBG, “The increasing rate of those suffering from non-communicable diseases is alarming. Any efforts to encourage individuals to adopt preventative measures, whether they are to simply heighten awareness or to actually increase the frequency of regular check-ups, should be supported.” The WHO found that the prevalence of non-communicable diseases has a severe economic impact, estimating that heart disease, stroke and diabetes alone can reduce GDP by 1-5% in developing economies. Dubai’s health strategy therefore places a strong emphasis on preventative health care measures to tackle these diseases. Besides programmes to encourage physical activity, the emirate recently adopted policies to improve the quality of food available at schools.

Dubai’s population dynamics also play an important role in the structure of its health care services. The population of Dubai has mushroomed since the emirate embarked upon its tremendous economic transformation over 30 years ago. According to the Dubai Statistics Centre, the population now stands at over 2m, up from 270,000 in 1980. Approximately 75% of this population is male due to the large number of low-wage foreign employees who work in Dubai’s construction and services sectors. Estimates suggest these demographic trends will continue as Dubai attracts ever more workers to its shores and the local population also grows. These figures have a significant impact on Dubai’s health care strategy, which must accommodate a wide range of needs based on demand and ability to pay.

REGULATING SERVICE DELIVERY: The health care sector in Dubai is uniquely divided between the DHA, the public regulatory authority, and DHCC, which functions independently and has its own regulatory and licensing systems. The DHA was created by the government in 2007 to drive and oversee a critical shift towards a holistic approach to the delivery of health services. Originally the Department of Health and Medical Services, the DHA’s mandate was expanded beyond the delivery of services to overseeing the whole sector, preparing and implementing sector strategies, and driving private sector participation. The DHA’s vision and four strategic goals are derived from the Dubai Strategic Plan 2015 and seek to ensure: 1) better health for citizens and visitors; 2) access for all; 3) a high quality of service; and 4) efficient and sustainable services.

The DHA has several ongoing initiatives to develop an improved regulatory environment and enable better service delivery. The agency is preparing a Clinical Service Capacity Plan 2020 that will survey all public and private health care facilities in Dubai to develop a comprehensive picture of the supply of health care services in the emirate. The DHA is also aiming to tackle major gaps in data collection and analysis by embarking on an e-health initiative to standardise health data collected. The agency carried out the EMRAM survey in 2011 across 19 private and four public hospitals in Dubai to determine their electronic efficiency. The survey found that 70% of participating hospitals relied almost entirely on paper records. These findings will help drive the longer-term strategy of adopting digital records. Future plans include developing a Health Data Dictionary and a Drug Code List.

FINANCING THE SECTOR: Health care expenditures in the UAE are significant, but lag behind global averages for Organisation for Economic Cooperation and Development (OECD) countries. According to the WHO, per capita expenditures in the UAE have almost doubled from $885 per capita in 2000 to approximately $1450 in 2010. This dwarfs the average of $252 per capita in Arab countries, with only Qatar investing more per capita in the GCC region, but is less than half of what is spent in the UK and is only one-fifth of the expenditures in the US. Saudi Arabia has the largest total investment in the GCC region, but, with only 12% of the population in the GCC countries, the UAE accounted for 20% of the total GCC health care expenditures in 2009, according to Alpen Capital. However, this still represented only around 3% of GDP compared with 9.3% in the UK, 11.3% in Germany and 16.2% in the US.

Although the government operates most hospitals, the private sector is also playing an increasingly important role. According to WHO’s estimates, the private sector finances almost 26% of total health care expenditures in the UAE, with the bulk of it coming from individual households. Dr Ayesha Abdullah, the managing director of DHCC, told OBG, “Health care spending has depended greatly on government finances. This has become a major challenge with soaring health costs, and there is a need for increasing private sector participation.” A full assessment of total capital expenditures is not available, but the private sector is also making sizeable investments in DHCC, DuBiotech and other facilities in Dubai.

MARKET-BASED APPROACH: Dubai has adapted its market-based approach to development to the health sector. Drawing on the success of its free zone model, Dubai set up DHCC in 2002 to attract investments from global health care players. DHCC is the world’s first free zone for health care and was launched to meet demand for high-quality, patient-centred health care. Among other benefits, DHCC allows full ownership for a foreign operator. DHCC reports show that: “In less than a decade, the Free Zone has grown to include two Joint Commission International (JCI) accredited hospitals, over 100 outpatient medical centres and diagnostic laboratories with over 3000 licensed professionals occupying 4.1m sq feet in the heart of Dubai.” According to their data, DHCC physicians treated more than 500,000 patients in 2011. These figures are set to climb as more facilities come on-line and DHCC consolidates its strategy.

While independent of the DHA, DHCC is also investing in efforts to improve health care standards in Dubai. DHCC established the Centre for Healthcare Planning and Quality (CPQ) in collaboration with Partners Harvard Medical International, a premier organisation that seeks to transform health care delivery, education and research, originally founded as a non-profit subsidiary of Harvard University. CPQ licenses all doctors that practise within the DHCC, enforces standards, assesses facilities, collects statistical data and implements patient initiatives to improve quality. Attesting to the rigorous standards used, the DHA accepts CPQ’s licences for doctors seeking to practise outside the health care free zone. Similar to DHCC, the DuBiotech Free Zone provides a platform for life science firms to operate in the GCC region. The companies currently established there reach beyond the health sector, but global players such as Pfizer, Genzyme, Merck and Amgen are all contributing to Dubai’s health industry, driving innovation and investing resources into the local economy.

Marwan Abdulaziz Janahi, executive director at TECOM Investments’ Sciences Cluster, told OBG that companies are eyeing Dubai as a base for operations in the broader Middle East and North African (MENA) region, which currently represents only 2% of global pharmaceuticals sales. He believes this figure vastly underestimates the market’s potential. The success of both free zones points to the growing value of the health care market in Dubai, the GCC and MENA region. A recent health market report by Canada’s Ministry of Economic Development reported: “Despite the economic downturn, the GCC countries are expected to face an unparalleled and unprecedented rise in demand for health care over the next two decades. No other region faces such health care demand with the simultaneous need to realign its health care systems to be able to respond to a growing population and health conditions resulting from more affluent lifestyles.” The report estimated that total health care spending in the region will increase from $14bn in 2009 to $60bn in 2025.

MEDICAL EQUIPMENT & SUPPLIES: Linked to its substantial investments in transport and logistics, Dubai is increasingly becoming a centre for medical equipment and other supplies. The Swiss Arab Consulting group estimated that sales for medical devices alone totalled over $1.7bn across the GCC in 2009. Saudi Arabia was the largest market with $804m in sales with the UAE following with $600m in the same period; together they account for over 80% of the total GCC medical devices market. While manufacturing in the UAE is limited, DuBiotech and other business-friendly initiatives will help expand this market further.

PHARMACEUTICALS: Pharmaceuticals are another key area for growth. According to the Dubai Chamber of Commerce, imports of pharmaceuticals products rose from $218m in 2003 to $816m in 2010. Europe was the biggest supplier with nearly 64% of pharmaceuticals imports, followed by 8% from North America, 8% from MENA and 5% from India. Dubai’s ports also serve as a major gateway for re-exports into the rest of the UAE, the GCC and entire MENA region. This rapid expansion is leading to more challenges in regulating the sector. A study by the European Commission found that: “Almost one in seven counterfeit items – including 73% of fake medicines – seized at European borders in 2011 was routed through the UAE.”

The sheer quantity of pharmaceuticals goods moving through Dubai’s free zones is a challenge, but the state is actively seeking solutions and stepping up inspections. Despite the challenges, Dubai’s growing population and continued economic performance will continue driving demand within the pharmaceuticals sector. Global pharmaceuticals and biotech companies such as GlaxoSmithKline, Wyeth, Novartis, Abbott Laboratories and Johnson & Johnson already have a presence in the UAE, and sales of specialised drugs are expected to continue growing as Dubai carries on investing in and expand health care services.

MEDICAL TOURISM: One indicator of success is a growth in medical tourism. DHA reports that Dubai has facilities and is a destination for a variety of procedures, including open-heart surgery and catheterisation, LASIK surgery, complex surgeries in paediatrics, knee replacements, reconstructive surgeries for burns and accidents, dental surgeries and cosmetic dental treatments, and cosmetics and aesthetics procedures. Confirming its regional popularity, Abdullah said, “In 2011 Dubai treated over 500,000 patients, proving itself as an established regional centre for health care and its potential as a destination for medical tourism.”

DHCC is at the forefront of this and recently launched “Patients Beyond Borders: Dubai Healthcare City Edition”, an initiative that seeks to promote medical tourism in the city. According to market researcher Business Monitor International, medical tourism in Dubai is growing at 15% annually, with over 502,000 patients travelling to Dubai in 2011 compared with 412,000 in 2010. The report estimates that this business will be worth over $1.6bn by the end of 2012. While Dubai cannot yet compete on costs with existing medical tourism destinations such as India and Thailand, it offers a favourable alternative to European and North American facilities. Investments in related infrastructure and services such as the Dubai International Airport, which served over 50m passengers in 2011, and the hotels and tourism sector all support the medical tourism industry.

FRAMEWORK: Not all operators are convinced of the viability of medical tourism in a nascent market such as Dubai’s that has not yet laid down a framework within which medical practices function. However, the government is working on improving the regulatory environment for the sector with goals of better aligning services provided by the DHA and DHCC and improving monitoring and evaluation of medical practices. Further work is required to assess the legislative system surrounding medical practices such as legal recourse for patients or practitioners.

INFRASTRUCTURE: In a recent media release, Laila Al Jassmi, CEO of Health Policy and Strategy Sector for the DHA, noted that: “Dubai already has the infrastructure it needs to develop medical tourism – airports, a wide network that connects over 120 countries, roads, ports and hotels. We also have the right climate for investment, and talented health professionals are always looking for opportunities to live and work in Dubai.” She concluded that: “We do not intend to compete with ‘low cost’ destinations for medical tourism. Most visitors who take advantage of medical services in Dubai are here because they can benefit from a pleasant environment in which to recuperate before returning home. This shows the close relationship between the ‘tourism’ and ‘medical’ aspects.”

The quality of health care infrastructure in Dubai exceeds international standards, but still lags behind in terms of meeting demand. Despite investments over the last decade, the density of hospital beds is far lower than most OECD countries. However, the government is proactively attracting investment to the sector to fill these gaps, offering significant and increased economic opportunities for private businesses.

As of 2010 there were a total of 25 hospitals, 1337 clinics and health centres and 342 dental centres operating in Dubai, according to the Dubai Statistics Centre. These facilities provide a total of 3623 beds and employ 4766 physicians, 9154 nurses, 1220 dentists and 3744 technicians. These figures do not include several new developments, such as the privately run Saudi German Hospital, which opened in early 2012.

PUBLIC FACILITIES: Rashid Hospital is Dubai’s biggest hospital, with 599 beds and over 370 physicians. The facility hosts a trauma centre, established in 2006, and is advertised as one of the largest worldwide, housing 57 beds, 10 ambulance bays, two helipads and four resuscitation units. Latifa Hospital, formerly known as Al Wasl Hospital, is a maternity and children’s hospital and is one of the largest of its kind in the UAE. The 444-bed facility employs a total of 133 physicians and treated over 25,000 inpatients in 2010, according to the Dubai Statistics Centre. Latifa Hospital was accredited by the JCI in 2007 and re-accredited in 2010. It has been recognised by UNICEF for its effective practices and was awarded “baby-friendly” hospital status in 2011.

Dubai Hospital is the DHA’s second-biggest facility with 429 beds and 242 physicians, according to the Dubai Statistics Centre. The hospital offers several specialised departments that focus on fields such as oncology and urology, and includes a cardiology centre.

PRIVATE FACILITIES: The vast majority of Dubai’s hospitals and clinics are private, with 20 hospitals, 1314 clinics and 314 dental centres managed by private operators. The most recent development that has significantly altered the landscape is the Saudi German Hospital Dubai, which opened in 2012 and provides the latest technologies. The 300-bed facility spread over 90,000 sq metres is poised to expand further with plans to develop a medical tower that accommodates 215 leased clinics, six specialised medical centres and an educational centre that all form a medical city.

The American Hospital Dubai was the first hospital in the Middle East to earn JCI accreditation, which was renewed for the fifth time in 2012. The hospital’s medical laboratory was also the first private laboratory in the Middle East to be accredited by the College of American Pathologists and has been reaccredited five times subsequently. The hospital opened a Heart Centre in 2005 and continues to expand its services with plans for new facilities that will create an additional 240 beds in private rooms and suites, transforming the hospital into a 384-bed campus.

HUMAN RESOURCES: The DHA is leading efforts to ensure health professionals in Dubai have access to a training, education and research opportunities. DHA manages a variety of initiatives to help medical professionals such as the Dubai Residency Training Programme, scholarships for education in the UAE and abroad, and partnerships with universities and colleges. In a midyear review, DHA revealed that over 7367 professionals from the public and private sector completed 270 programmes covering medical, support, technical and administrative fields related to the health sector.

DHA also recently signed a memorandum of understanding with the University of Bradford, a top British university in health studies, to promote nursing and midwifery education, providing opportunities for nurses at the DHA to obtain a bachelor’s degree without having to leave their jobs. DHCC is also seen as an attractive base for firms to set up training facilities. It offers continuous education services that are linked with the renewal of licences to practice within DHCC.

OUTLOOK: Dubai has made significant progress in developing its health care sector, with vital improvements in indicators such as life expectancy and infant mortality. Shifts in lifestyle coupled with tremendous economic growth have come with negative health impacts, but the government is investing considerable resources in educating the general public and improving health care facilities. Drawing on its experience working with the private sector in other fields, the emirate’s health strategy embraces private delivery of services. Free zones are attracting investments and have seen tremendous growth of private clinics and specialised service centres. This strategy has also opened up a strong potential for medical tourism.

The health care sector has grown rapidly, with some fragmentation in terms of oversight and strategy. The DHA and DHCC’s CPQ are working towards unifying procedures under one concrete plan for the entire sector. These factors all point to a very positive outlook and highlight significant opportunities for the local, regional and international private sector as well.