With its high-income population and regional integration, Dubai offers a wealth of opportunities, and the emirate acknowledges that the current dependence on public financing for health care expenditures is unsustainable and inefficient. According to the World Health Organisation, health care-related expenditures in the UAE totalled over Dh40bn ($10.89bn) in 2010, representing around 3.7% of GDP. This is only a fraction of total expenditures as a percent of GDP in Organisation for Economic Cooperation and Development countries, indicating that the UAE will need to increase spending and the market will continue growing. Dr Ayesha Abdullah, the managing director of Dubai Healthcare City (DHCC), told OBG, “Demand for health care in the region will grow due to a rapidly growing population, rising income levels, higher insurance penetration and an increased prevalence of lifestyle-related diseases.”
Bridging these gaps will place a tremendous amount of pressure on government resources and Dubai is therefore turning to the private sector to provide medical services. The Dubai Health Authority (DHA) replaced the Department of Health and Medical Services in 2007 to oversee this strategic shift.
INSURANCE: Government finances accounted for almost 75% of total health expenditures in 2010, up from 59% in 2005. Households covered most of the remaining through out-of-pocket payments. Private health insurance, yet to be universally mandated, has played a very small role so far. However, Thomas Murray, the CEO of the American Hospital, told OBG, “There seems to be an influx of foreign insurance companies exploring the option of entering the UAE market. While the population is only 6m-7m people, those insurance providers are looking at the UAE as a base of operation, not only to capitalise on domestic growth, but in order to penetrate the greater GCC and Middle East and North Africa region.”
Local firms are turning to innovative products to maintain a competitive edge. Islamic insurance, or takaful, is a growing business segment. Dubai has postponed plans to require universal coverage, but there are indications that the government will review its policies in the next few years.
PRIMARY CARE & SPECIALTY CLINICS: While Dubai boasts high-quality services, it lags behind in many performance indicators such as the ratio of doctors, hospital beds and nurses per thousand people. DHCC already has several projects in the pipeline to expand infrastructure, including the Al Qubaisi Urology Hospital, a 25-bed facility currently under construction, Al Jord Orthopaedic Hospital (40 beds) and Minimal Invasive Surgery Hospital (50 beds), which are due to begin construction soon. An analysis of services that Emiratis access overseas provides some indication of potential areas of investment. According to DHA’s 2011 annual report, 1428 Emiratis travelled abroad for treatment in 2011. Oncology Treatments were sought by one in five of the total overseas patients (20%), followed by orthopaedic surgeries (13.2%), neuro-surgeries (9.1%) and cardio-surgeries (8.5%). Total expenditures on overseas treatments added up to Dh303m ($82.4m).
HEALTH EDUCATION & TRAINING: One major challenge that has arisen due to rapid expansion in the sector is a shortage of skilled professionals and it will unlikely be filled through public sector initiatives alone. The “UAE Health care Sector Forecast to 2014” study by RNCOS, a market research firm, estimates the UAE will close to 13,000 doctors by 2014. In addition, there is a serious need to train existing staff to maintain capacity and standards. The DHA and DHCC currently manage several training initiatives, but the market for these facilities will continue growing as the sector expands. DHCC is an attractive destination for private entities to establish training centres, but Dubai’s other free zones, such as the Dubai International Academic City and the Knowledge Village, also offer numerous advantages. Dubai’s broader education strategy seeks to transform the emirate into a centre of global academic excellence, and positions the emirate to tap into a wider regional market for health care education.
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