Successful health care reforms, potential privatisation and growing patient demand make Abu Dhabi’s health sector an attractive investment opportunity.
Zaid Al Siksek, the chief executive of the Health Authority – Abu Dhabi (HAAD), told OBG, “The story of privatisation is evolving in the sense that we are planning to privatise some assets in the future. Before you can do that, however, you need to show investors they will get the right return on investment in a transparent fashion.”
HAAD is doing this, it says, by creating a clear financing system with fixed prices, linked to key performance indicators for health providers. It is also releasing regular statistical data regarding population, demographics and growth in patient demand.
“The amount of data available about the health sector for investors has improved greatly. In the past there was no reliable data, now it is in-depth and very helpful,” Mohammed Al Shorafa, the managing director of United Eastern Medical Services (UEMS), told OBG.
Investors use this information to analyse potential opportunities, of which there are many, according to HAAD.
“There’s room for more medical suppliers or even the opportunity to get into manufacturing in the health care industry, which is not very big in the UAE today,” Al Siksek explains.
He also believes that there is a role for the private sector to bring in education providers – creating continuous education centres for medical professionals.
The opportunities for entrepreneurs do not stop there; he also sees a raft of other areas that could catch the eye of the private sector.
“Education is just one area but we are also automating our medical records and health processes, so there is a great need for IT innovation and expertise. On the health care provision side of things, there is room for physicians to open clinics, dental clinics, hospitals, even diagnostic centres,” he said.
Of course, the seeds of these opportunities were sown when policymakers first decided to reform the health sector in the capital several years ago.
“The government had a vision for health care and they wanted the private sector to be a part of it,” Al Shorafa told OBG. “In the past, private health care was niche but since the government separated the role of regulator and operator, it has made investors look at the market very differently,” he went on to say.
This division of management and regulation now means public health care centres and hospitals are overseen by the Abu Dhabi Health Services Company (SEHA), while both the public and private sectors are regulated by HAAD. The General Authority for Health Services (GAHS) used to be responsible for both roles. “Splitting into two organisations has been an excellent step and the reforms aimed at increasing private health care providers are beginning to produce good results,” Dr Kassem Alom, the managing director at Al Noor Hospital, told OBG.
Traditionally, public institutions provided the majority of medical needs in Abu Dhabi. Increasingly, however, policymakers are placing beds under the control of the private sector and partnering with health companies to upgrade existing public facilities.
Institutions operating in Abu Dhabi include medical names such as Imperial College London Diabetes Centre and the Cleveland Clinic, a top US health provider, which has assumed management of Sheikh Khalifa Medical City (SKMC). Furthermore, Cleveland Clinic Abu Dhabi, a 360-bed hospital, is due to open in early 2011.
Another key milestone in the reform process was the introduction of mandatory health insurance, which finances the medical system in Abu Dhabi. Residents now have 2.3m insurance contracts and most nationals are also insured, according to HAAD.
“The introduction of compulsory health care insurance was the main reason for the big boom in the industry,” BR Shetty, the managing director of NMC, an Abu Dhabi-based health care conglomerate, told OBG.
Providers saw the introduction of universal insurance cover as a sign of the sector maturing, as well as the government’s willingness to reduce public sector involvement.
“International investors would be wise to put their capital into health care in Abu Dhabi. Compulsory insurance has enhanced the growth in the sector, there is a growing population, finance is not a problem and demand is increasing all the time,” Shetty said.