Governments across the Middle East are investing heavily to expand and upgrade their healthcare systems.
In Saudi Arabia, and as part of the Kingdom’s 2020 budget, the government allocated 16.4 per cent of its spending on the sector. In the UAE, Dh5 billion was allocated for healthcare; a 26 per cent increase from 2016. This comes as governments continue to actively work towards improving the standard of living and quality of life for all.
The need for this spending is now furthered by the breakout of COVID-19, adding pressure on healthcare systems and forcing their rapid evolution. This also comes on the back of increased private investment in the sector, as investors shift to defensive assets in light of market volatility and the uncertainty ahead.
As such, three key pillars need to be considered: Private sector participation, advanced infrastructure, and technology.
Build on established alliances
Governments are actively encouraging private sector participation in healthcare. This comes as no surprise given the fragmented model of health delivery, and the added value the private sector can contribute through eliminating inefficiencies and improving operating structures. The healthcare sector has already seen a move towards public-private partnerships (PPP), and this trend is likely to be enhanced by the shortage of hospital beds and skilled workforce.
To successfully promote this model, it is imperative to put in place proper policies, supported by revised regulations that clearly set out the roles, responsibilities and returns of different participants in the process. This will create a framework and achieve a more sustainable business model long-term.
With government hospitals at full capacity, private sector hospitals have been effectively requisitioned to provide additional beds for COVID-19 patients. The financial arrangements by which these patients are being treated is placing an unstainable burden on private sector hospitals, which have also been starved of income from the cancellation of routine and elective surgeries and the closure of many clinics.
Unless a new model is found, the financial viability of private operators will quickly be called into question.
Another focus area
Healthcare research and the development of innovative drugs and vaccines is another area in which the private sector will have a key role to play. Once again, this will require better regulation to ensure that the private sector is willing to allocate the required level of effort and investment.
While much of the discussion to date has focused on the delivery of healthcare through clinics and hospitals, it must be remembered that there are two other important sub-sectors, namely medical equipment and pharmaceuticals.
On the delivery side, there is a clear need for additional facilities that will require funding, design development and construction, as well as operations and facilities management. While many of these services are undertaken in-house (within government agencies and private hospital chains), we would expect a shift to outsource.
Second, the availability of sufficient hospital beds has proved to be a major challenge, particularly in light of COVID-19. The solution here is two-fold, involving an increase in total bed capacity and the ability to use these in a more flexible manner.
The UAE has moved quickly to create additional bed capacity through the temporary conversion of existing premises for healthcare purposes. An additional 8,300 bed spaces have been created, with the largest being the conversion of the exhibition area at Dubai World Trade Centre into a 3,000-bed field hospital. The other 5,300 additional beds are spread across five separate locations in the northern emirates.
There are also plans for a further 3,400 temporary hospital beds. The total of 11,700 additional beds represents a 75 per cent increase in the total stock of hospital beds across the UAE from the beginning of 2020.
Beds matter as much
With the need for isolation becoming a more permanent short-term measure, it is not just the total number of hospital beds that matters, but also the type of beds. Many hospitals have now moved towards the use of flexible rooms that allow various levels of care to happen in the same room with little modifications. This means the number of isolation beds can be increased almost overnight with little or no additional expense.
Outside of the hospital sector, there will likely be additional demand for support in the medical equipment and pharmaceutical sectors. One of the clear implications of the current crises is that many countries in the global north (Europe and the Americas) have run down their local manufacturing capabilities, thus increasing their dependency on imported products.
The strong connectivity links (air and sea transport) in MENA enhance the region’s natural geographic advantage, creating an opportunity for manufacturers of both medical equipment and pharmaceuticals to establish facilities to serve not just the local markets but also to export goods.
Get technology interested
Undeniably, tech advancements are impacting all areas of our daily lives, with a constant stream of announcements in the “proptech” space. There is also an important role for technology in the healthcare sector, although the term “healthtech” is yet to enter our common vocabulary.
One interesting development is the release of apps by public health authorities, which provide real-time information to patients with respect to the incidences of COVID-19 within their neighborhood. These apps color-code zones based on the number of infections, with red-zones indicating high numbers of infected persons within a one- or two kilometre radius.
Other tech-advances include the app launched by the UAE government, which uses Bluetooth signals to track interactions between people. The app does not alert you, or anyone else, to a person who may have the virus, but allows the government to track you down, test you if necessary, and prevent you from passing it on.
There is also an opportunity for the development of real-time dashboards to monitor infectious diseases using Geographic Information System Mapping (GIS) capabilities. This will provide timely data to public health agencies and those involved in tracing those with exposure to patients with confirmed cases of COVID-19.
The growing interest in the healthcare sector, both from a public and private sector perspective, is paving the way for the industry to develop and adapt to nww necessities, which include learning to operate efficiently through private sector participation, incorporating technologies to effectively manage and report on latest data, and becoming agile and flexible in their offering to adapt to various possible scenarios.
- Sandeep Sinha and Saranya Balijepalli are with JLL MENA.