Callan Emery: The recent economic recession has negatively impacted the global economy and many countries are still feeling the pinch – the Middle East, even with its vast oil wealth, is no exception. However, the healthcare industry in this region has seemingly weathered the storm and continues to grow. How has the economic recession affected your company with regards development, operations and management? What procedures and processes have been put in place to counter the recession’s negative affects?
Dr Kassem Alom: Leaders have to use these challenging times as opportunities to grow. They must take the initiative to build the organisation’s infrastructure and a stronger management team to make it through the recession.
David Printy: Oasis is the only charity hospital in the emirate of Abu Dhabi so the recession has brought more patients without the means to pay for services. This has caused the hospital to be even more efficient.
The recession has also slowed down the race to build more facilities. The advantage is a decrease in the pressure of recruiting staff. However, it has also made it more difficult to finance medical equipment and this has a large impact on operations.
Aziz Koleilat: There has been a reset of the whole healthcare landscape. Organisations with organic growth have survived. From a management point of view, a recession causes organisations to “cut the fat”. They also review their products and services, and look into long-term partnerships.
We continued to grow during the recession, but in different areas. For example, the private sector has definitely slowed down, but there is a big push within the public sector to improve healthcare services in the region.
Simon Higgins: The dynamics of the banking sector have also become restrictive. More due diligence is being required for lending and, consequently, clients are more educated and informed.
Callan Emery: What financial restraints have you seen in your customer/client base – and how has this affected your company? As Horace (Quintus Horatius Flaccus), the Roman poet, said in his Satires: “Adversity has the effect of eliciting talents which, in prosperous circumstances, would have lain dormant.” Have these challenges created new opportunities for you?
David Printy: As government plans have slowed down, the private sector finds itself at full capacity. The increased demand and volume is putting pressure on private hospitals.
Gary Wolff: There has been an interesting change in dynamics in the healthcare industry in this region. There is reemphasis on going back to a much more integrated, comprehensive, and collaborative planning process. From an architect’s perspective, consultants are designing better solutions to enable operators to manage more efficiently.
Michael Arnold: A recent article in the New York Times highlighted that when we come out of this recession, leaders of organisations will look at the future differently. Rather than expanding, or focusing on new things, they will be cautious and focus on efficiency. This different perspective will have an impact on healthcare in terms of operations and design. Operators will have to get more “lean” and continue to do more with less.
Dr Kassem Alom: When you have a recession, you also have an opportunity. If you want to lead the market, you have to focus on quality. We have continued to grow through the recession; however, the consistent challenge for healthcare providers is the process for licensing staff. It can sometimes take six months and this affects the operations of the different clinical services within the hospital. Hospitals must become more efficient and seek alternatives.
David Printy: I think there is new opportunity in Abu Dhabi. Our current challenge is ensuring we have the ability to meet the demand. Construction costs have decreased so this is the right time for those who planned properly to expand. In addition, prior to the recession, contractors did not have time to even bid on a project. There are many bidding now and the costs are more reasonable.
Dr Kassem Alom: The insurance market
has been growing in the UAE. This has
impacted reimbursement of services.
Currently, some services are reimbursed at
a higher rate at public hospitals. We have
seen a migration of insured patients to the
private sector for these services.
Healthcare planning needs to be
improved. An overall five-year plan for
healthcare services in the UAE would help
enhance the planning process. The plan
for the public hospitals in Abu Dhabi also
needs to be made clear, as they are direct
Dr Sanjiv Malik: To understand and address the impact of the recession, it is important to segment the market. For example, we have clinics, hospitals, pharmacies, and labs across the UAE. These entities were impacted differently depending on the services provided and the location. The decrease in rents in Dubai and the movement of residents from Sharjah has created neighbourhoods in Dubai which are thickly populated and in need of medical centres. The reduction in cost of living in Dubai has also allowed for a decrease in the cost of manpower.
Aziz Koleilat: The recession has had a global impact but we are lucky to be in this region. The healthcare market continues to grow and, as the regulations continue to develop, the dynamics of the market will shift to those of a more mature market. GE has a global and local initiative which they are focusing on. On a global level, the chairman has launched the Health Innovation Initiative focusing on how GE products are designed. There are 3 axes which GE looks at: 1- increasing access to healthcare, 2- improving quality, and 3decreasing cost.
Locally, GE is working with government institutions and organisations to develop solutions. For example, GE is known for their lean processes (i.e. six sigma) so one of the things they are focusing on is operational efficiency and patient flow. It is important to remember that the healthcare systems in this region are very young. Most have 30 – 50 years of experience as compared to other systems, which have been developed over centuries. The positive part is that governments in this region are engaged and committed to improvement. They are receptive, but we have to be realistic as change will take time.
Simon Higgins: Projects are much more realistic now. Growth continues, but a slower rate. For example, we had one hospital project in Abu Dhabi in 2008, we now have 10. The market dynamics during a recession will wipe out those who aren’t performing well. Those who deliver on quality will survive.
Dr Sarper Tanli: One of the challenges we faced when the recession started was trying to recruit for a large medical centre in Dubai which MI was setting up. That was quite challenging because, at the time, there was a large amount of people leaving Dubai and it was difficult to convince candidates to come to work here, regardless of the packages offered. There was a lot of uncertainty.
From a Consultant/Operator’s perspective, we also saw growth during the past year . Many of the projects are in the planning phase, not execution. This indicates that organisations are still delaying decisions to implement [the projects].
David Printy: Developing critical thinking skills in staff is essential. We can buy state of the art MRIs and other medical equipment, but there is need for qualified staff to operate the equipment and interpret the results. It requires more than high salaries to attract the required staff members. Our staff comes from more than 36 countries, they are committed to the overall mission [of charitable healthcare] and work in different hospitals in Congo, Bangladesh and Kenya, but they use the hospital in Al Ain as a base.
Aziz Koleilat: Many organisations in the region acknowledge the need to attract high calibre staff. They are looking to affiliate with international partners to transfer knowledge. There is also a need to develop an economically viable model for such partnerships as it’s not cost effective to bring international staff to the region.
David Printy: The cost of equipment is higher in this region due to the supply chain management.
Aziz Koleilat: Many healthcare providers buy large machines, such as 64-slice CT scanners, which they don’t need. It’s a high investment, but is often unnecessary as in many cases a smaller 16 slice CT scanner would be sufficient for their clinical services. It’s a race for the “fastest and best” technology. Another challenge is training the right people to use the equipment.
Simon Higgins: We see a sense of realism coming back. CSI has several projects where they have been asked to review the costs and decrease them.
Dr Aman El-Duweini: Several examples of challenges turned to opportunities come to mind. Despite the recession, the introduction of insurance in Abu Dhabi has tripled the number of outpatients at Al Noor Hospital. In addition, the government is focusing more on decreasing the cost of sending patients abroad for treatment. Al Noor Hospital invested in high level consultants with the expertise necessary to treat these patients in their own country.
David Printy: I think the recession slowed down the speed of migration. From an administrator’s perspective, this is a positive thing as the staff is more stable. They stay longer and are more familiar with the processes and cultural issues that are specific to this region. Since many of the healthcare professionals are expatriates, it is important to invest in them through training and education, giving them an incentive to stay for the long term.
Dr Sarper Tanli: Another opportunity we saw during the recession is the ability to cross-train our staff. It was a chance for them to learn new skills and grow while allowing the organisation to maintain costs. It is also important to be proactive, not reactive, to the market – to understand the needs of the region and develop products which are relevant to it.
Dr Sanjiv Malik: We need to analyse why in this part of the world, we were building luxurious hospitals. Is that what the clients wanted? Customers want value for their money and are becoming more educated. There is a move now to build “hospitals” not “hotels.”
Many patients are still going to India for surgeries and treatment. They are looking for lower cost and high quality. This is linked to the cost of supply chain as the cost of acquiring medical equipment is 50% less in India enabling them to keep the cost of services lower.
Simon Higgins: Prior to the recession, investors were focusing on luxurious healthcare facilities. However, now, there is a clear shift to efficiency and cost-effective designs.
Regarding the supply chain issues, this is a good example of where government regulation enforcing capacity planning can help.
Dr Sarper Tanli: It is surprising that even though funds are available, the government is not yet planning any nursing or allied health schools.
Gary Wolff: We are working on a project with the Health Authority of Abu Dhabi (HAAD.) There is a need for a long-term vision for the development of the healthcare industry, not just hospitals. This should include schools, training and research institutes, but there must be an understanding of existing services and facilities first.
Dr Sarper Tanli: There is also a need to revisit the planning assumptions which were used during the boom. For example, the growth rate at that time was projected at 6-7%, however, this is no longer accurate. The actual growth rate could be at 12%, but this is also not clear yet.
Gary Wolff: This becomes even more relevant as consultants have to work more regionally. They need data to understand the dynamics of each of the countries they are working in. For example, the growth and economic situation in Saudi Arabia is very different than that in the UAE.
Michael Arnold: There are no local databases available so consultants are using benchmarks from the USA, Canada, UK, Australia and other countries from which they work and extract data. This is challenging as the data is not necessarily relevant for this region. What is encouraging is that, coming out of the recession, people are asking more questions. They are not making decisions, but are asking the right questions for better planning.
Callan Emery: Although healthcare regulation in the country is still being developed, lawmakers are nonetheless making strides in an effort to provide and enable the best quality of care. Are there any regulations that are currently a hindrance to the management of your organisation? What regulations are beneficial? And what new regulations could be implemented to enhance healthcare management?
Dr Kassem Alom: The MoH laws are dated as they were first drafted in 1973. The new regulatory authorities, Dubai Health Authority (DHA), Dubai Healthcare City (DHCC), and the Health Authority of Abu Dhabi (HAAD) have attempted to update these laws, but this has also created many different regulations. In an attempt to have more consistent regulations, the UAE’s Prime Minister, HH Sheikh Mohammed bin Zayed Al Nahyan, has created a Health Council. The members are from the different regulatory authorities and the Committee is chaired by HE Dr Hanif Hassan Ali, the Minister of Health. Among the issues the members are working on is the possibility of setting up a UAE-wide licensing board for healthcare professionals, which would allow them to practice in the different emirates under one license.
Dr Sarper Tanli: Another challenge is that the regulatory system seems to be a work in progress. This leads to inconsistency in implementing the regulations. For example, in the last year, MI opened three outpatient centres in Dubai, but had to follow a different process each time.
Dr Kassem Alom: In Abu Dhabi, some of the professional licensing standards are very high, which leads to difficulties in recruiting staff as well as with maintaining cost-effective services. It is the new Health Council’s role to review these regulations and improve them.
Dr Aman El-Duweini: In addition, the implementation of new regulations is sometimes abrupt. For example, about two years ago, a new law was introduced linking CME to relicensing. A transition period would have made the transition much smoother.
Gary Wolff: From the facility planning side, HAAD does have a long list of standards, but enforcing them is a challenge. TAHPI has been working on a project with them to select the most appropriate design standards for the Abu Dhabi emirate.
David Printy: As the country matures, there is a desire for the healthcare system to also mature. One of the things that would be beneficial is a peer review system where physicians can review each other’s work. Another important aspect of the healthcare regulatory system is the medical complaints management. Currently in the UAE, patients must file a police report if they have a medical complaint. There needs to be a complaint management system which is in line with international standards.
Dr Sarper Tanli: Continuity and consistency is critical. Different organisations are choosing various accreditation programmes (i.e. JCI, Canadian, Australian, etc.) Is it time to think about a nation-wide accreditation body?
Dr Sanjiv Malik: Dubai is implementing a new regulation which mandates that all hospitals have to have international accreditation by 2012. While accreditation is a good goal, we must ask if it really measures quality? Also, it is important to take into consideration the budgetary constraints of different hospitals. Going through the accreditation process can be costly for hospitals, which are targeting the lower income segment of the market so, if it is not measuring quality, we must assess if it is cost-effective.
Callan Emery: To what extent do you think technology can enhance healthcare services in the region?
Dr Sarper Tanli: What we heard earlier is that there is a general lack of healthcare data in the GCC. Recently, Abu Dhabi started an e-claim process, which has facilitated the data collection process. This is a good start, but it is important to also have a system to validate the numbers.
Dr Kassem Alom: There is a good validation system in place. HAAD uses specialised software to track any abuse or fraud. Hospitals are also starting to develop internal checks which audit the claims prior to submitting them to insurance companies.
David Printy: SEHA also monitors the
claims. I think Abu Dhabi is moving in the
right direction, but it is very fast.
Technology is critical to enhancing the
healthcare services in the UAE and the
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