Dubai: The UAE’s health care sector could still do with a few more hospital beds.
“Currently, the UAE [still] has the lowest hospital bed density (number of hospital beds per 1,000 residents) available in the GCC,” said Prasanth Manghat, CEO and Executive Director at NMC Health plc. “UAE’s vision to rank among the world’s Top 20 health care markets presents a renewed focus on health care, while mandatory health insurance would bring in more capacities and create the bedrock for an emerging medical tourism market.”
As of now, Abu Dhabi and Dubai have in place compulsory medical cover for all residents, while the Northern Emirates could be headed in the same direction. Some insurance industry sources say the first steps could be taken even as early as later this year.
“The utility of insurance has been realised — in Abu Dhabi it has matured to a larger extent as against elsewhere in the UAE,” said Manghat. “It has gone through evolutionary phases of free-for-all to allegations of over-diagnosis to co-payment.
“Excluding Abu Dhabi and Dubai, it still has to kick off. With the vivid dynamics of the migrant population, the concept of medical insurance and its contribution to the sector would always remain thematic.”
Whatever be the status for compulsory medical insurance for all in the Northern Emirates, the UAE overall could see the number of hospital beds rise to 14,000 by end 2020. That would come about from a 3 per cent annual growth over the next two years. For comparison’s sake, the number of hospital beds in 2010 was estimated at just under 8,000.
“UAE is among the top 20 countries for health spending per capita and the country accounts for 26 per cent of the total health care spending by GCC governments,” said Manghat. “All the money would translate into creating [new] capacities and capabilities.”
Some in the industry reckon that much of the required capacities are already in place to serve the needs of the resident base for the next three to five years. That after putting in significant investments in the first seven years of this decade, health care operators should pause for breath. That instead of focusing on just adding new beds, the emphasis of upcoming investments should be on specialised care rather than create more capacity in the primary health care space.
Manghat, however, argues that such broad assumptions cannot be made, and that it could vary with the emirate, “The growth would come from ‘specialised’ capability creation in Abu Dhabi [and] capacity creation in Dubai and especially the Northern Emirates,” the CEO added. “Other factors would be the ageing population and an increase in chronic diseases coupled with lifestyle diseases.”
For leading health care operators in the UAE, it means keeping one eye on growth chances and the other on an ever increasing cost of investment and operations. Industry feedback suggests that raising debt finance has also tightened up considerably in recent quarters.
According to Manghat, “The cost could be broken down in two parts — first is attributed to the money while the other is attributed to time. Not taking into account the real estate costs — as it could be vary based on location, etc — the cost of creating new capacities depends upon the type of facility is being created as in secondary-, tertiary- or quaternary care.
“A mid- to high-level tertiary care facility could cost anything between Dh1.5 million to Dh3 million per bed. The costs would always go up as medical technology is improving and the manpower is coming as more and more specialised and trained. These costs are almost similar all across the region.
“On the cost in terms of time, the regulatory approvals have always been forthcoming as the fastest in the UAE as compared to elsewhere in the region.”