Increased focus on private sector investment and preventive care

Nearly 40 years after the government launched a series of long-term health reforms, Oman’s health care sector has made major strides in terms of providing primary health care services and improving basic health indicators. As the sultanate nears the end of its eighth five-year health development plan (2011-15), the sector has witnessed substantial improvements in outcomes, spending, and the number of hospital beds and facilities available to its residents.

At the same time, a rise in non-communicable diseases and a high incidence of genetic disorders, as well as ongoing human resources (HR) shortages that pose challenges to domestic provision of specialty care, have led the government to focus its efforts on attracting private sector investment to this fast-growing industry, with billions of dollars in new projects in the pipeline.

Sector Reform

The Omani government began its long-term health care reforms in 1976 with the launch of a series of five-year health development plans, focusing first on improving service delivery, and later on long-term strategies, preventive care and devolution of services. Five-year plans are guided by Oman’s Health Vision 2050, which sets out a strategic framework for health development over the next 35 years. Vision 2050 aims to improve tertiary care facilities, upgrade and integrate health training facilities, improve rural and regional service delivery, develop a strong HR base and provide a greater role for private sector involvement, with 10,000 new health clinics and nationwide medical cities in the works.

Oman’s health care system is divided into three levels of service provision: primary care, in which basic clinical health services are provided, and secondary and tertiary care, which include specialised treatments such as surgery and radiology. Other health care providers include the Armed Forces Medical Services, Royal Oman Police Medical Services, Sultan Qaboos University Hospital (SQUH), Diwan Medical Services, Petroleum Development Oman Medical Services and private hospitals. The sector is overseen by the Ministry of Health (MoH), which supervises service provision across the sultanate’s 11 regions or governorates, each of which offers at least one regional hospital.

Spending

Health care is free for all Omanis, and government spending accounts for about 78.7% of total health expenditure, according to the MoH. Out-of-pocket spending for direct purchase and cost sharing accounts for 61.3% of private health expenditure, or 13.1% of total health expenditure, while insurance companies cover the remaining 8.2%.

The Omani government has significantly increased its health budget in recent years. Health spending stood at OR261.2m ($676.35m) or 3.8% of government spending in 2008, according to the National Centre for Statistics and Information (NCSI), but increased to OR341.5m ($884.28m) or 5% of total spending by 2010. Spending jumped 55.4% between 2010 and 2013 to reach OR530.6m ($1.37bn), although this represented a dip in health spending as a percentage of total expenditure, at 4.3%. In its 2014 budget Oman allocated OR1.29bn ($3.34bn) to health care, nearly double the 2013 budget, in part to further focus on preventing and fighting non-communicable diseases.

Hospitals

Health care is directly provided in facilities mainly owned and operated by the government. The Muscat Governorate is home to four public hospitals: the Royal Hospital, Al Nanhda Hospital, Khoula Hospital and Al Masrah Hospital, all of which act as referral centres for critical cases from regional hospitals. In the southern Dhofar Governorate, Sultan Qaboos Hospital Salalah provides secondary and tertiary care, while the Sohar and Nizwa Hospitals also offer larger facilities and specialised care.

Hospital bed numbers have increased over the past decade, with the sultanate offering 6000 beds in total in 2013, up from 5000 in 2004. With 6000 beds in a country of around 4m people, Oman’s bed-to-patient ratio stands at 15 per 10,000 people. While the government offers free health care to all Omani citizens, rapid population growth and ongoing bed shortages have necessitated an increase in public and private investment in the health care sector.

Of the nine new hospitals built in Oman between 2004 and 2013, seven were developed by the private sector, according to the NCSI. “The Ministry of Health is well geared up to meet the the increasing health and specialised care needs of the sultanate, and the private sector is also geared up to compliment this need.” P.S. Ramesh Prakesh, general manager of Ibn Sina Pharmacy, told OBG. Construction of new public hospitals is high on the agenda, and in June 2014 the MoH announced plans to build five new hospitals in Oman.

Facilities

New facilities will be located in the province of Suwaiq in the North Batinah Governorate, Khasab in Musandam, Al Najat in North Batinah, Samail in Dakhiliyah and Al Falah in the South Sharqiah Governorate. The Suwaiq facility will offer 300 beds and 53 outpatient departments, while hospitals in Khasab, Samail and Al Najat will each provide 150 beds and 35 outpatient departments. At the announcement, the minister of health, Dr Ahmed bin Obaid Al Saeedi, told local newspaper The Muscat Daily that the MoH also plans to award contracts for construction of the planned Saham Hospital in North Batinah, the Al Namaa Hospital in North Sharqiah and the Muscat Public Hospital, while a tender for construction of the new Sultan Qaboos Hospital in Salalah is expected to be floated soon. The government’s efforts to increase service options outside of major urban centres also offer new opportunities to private developers. In September 2014, the MoH signed a contract with Zawya Engineering Consultancy to design and supervise the construction of 17 new health centres across Oman.

“The ministry wants to decentralise and offer treatment to people in their own regions. This reduces financial, physical and social burdens, and will also allow for improvements to follow-up care,” Dr Mazin Al Khabouri, advisor for clinical affairs at the MoH, told OBG. In the private health care market, the sultanate is set to benefit from two planned health cities, which will add a considerable supply of hospital beds and specialised care options. The first of these, the $1bn Sultan Qaboos International Medical City, is already under construction, while a second facility, planned to begin operating in Muscat in 2020, will offer five new private hospitals (see analysis).

Improvements & Challenges

Oman has witnessed substantial improvements to basic health indicators in recent years; life expectancy rose from 71.6 years in 2008 to 76.6 years in 2013, while maternal mortality rates fell from 26.4 per 100,000 live births in 2010 to 12.3 per 100,000 live births in 2013. The World Health Organisation (WHO) notes that diet-related illnesses are one of the biggest challenges facing health providers in Oman. The organisation reports that Omanis are experiencing nutrition transition, which is problematic because it has resulted in a double burden of under-nutrition and micronutrient deficiencies, as well as high incidence of obesity. “Low intake of iron, zinc, vitamin A and dietary fibre, along with high intake of saturated fat, sodium chloride and possibly transfat, are concerns,” stated WHO’s profile of Oman.

A 2013 report by the UN Food and Agriculture Organisation found that Oman is the least obese nation in the GCC, with 22.1% of residents reportedly obese, compared to 42.8% in Kuwait, 35.2% in Saudi Arabia, 33.7% in the UAE, 33.1% in Qatar and 32.6% in Bahrain.

Oman’s obesity rate is nonetheless in line with developed Western countries, and diabetes has become one of the most common illnesses in the country. The Oman Diabetes Association reported in 2012 that Oman is ranked ninth among countries with the highest prevalence of diabetes in the world, with an estimated 15% of residents suffering from the disease.

Cancer & Tobacco

Cancer rates have also been on the rise; the Programme of Action for Cancer Therapy reported in 2013 that Oman is forecast to see an almost two-fold increase in cancer incidence between 2008 and 2020, due in large part to lifestyle changes, an ageing population and a lack of preventive care. Indeed, the SQUH reported in September 2014 that the incidence of breast cancer has more than doubled since 1999, which it attributed to a lack of screening procedures and reluctance among women to get tested.

While Oman ratified the Framework Convention on Tobacco Control in 2005, implementing tobacco control regulations including a ban on smoking in the workplace and public spaces, the MoH reported in May 2014 that nearly 70% of Oman’s residents suffer from a tobacco-related illness, with the government now considering laws extending the smoking ban from enclosed public spaces to beaches, parks and bus stations. In 2012 the WHO reported that anti-tobacco legislation is spread between a number of sub-national laws, recommending that the government implement a comprehensive national tobacco law.

Genetic Disorders

As in other GCC nations, incidence of consanguinity and related genetic disorders are high in Oman. The eighth five-year health development plan reported that while morbidity and mortality statistics for newborns and children have shown a reduction in communicable diseases, preventive measures for genetic disorders are still in the preparatory phase, leaving room for potential private sector involvement in care and prevention.

Consanguinity is the primary factor behind an increase in genetic disorders in the sultanate, and marriages in Oman carry a higher rate of consanguinity than other countries in the GCC, due in large part to prevailing cultural norms around marriage. A 2012 study published by the Department of Mathematics and Statistics at Sultan Qaboos University found that 52% of marriages in the sultanate are consanguineous. This is one of the highest consanguinity rates in the Arab world, although it is lower than the rates recorded in Saudi Arabia (56%), Kuwait (54.3%) and Qatar (54%). In November 2013 the sultanate opened the National Genetic Centre, which is fitted with diagnostic equipment and mandated to support hospitals in treating genetic disorders, providing follow-up for cases, and supporting investigative molecular research to determine the most effective treatment and handling of paediatric cases of genetic disorders.

However, though things are improving, Oman does not yet require couples to test for genetic risk factors prior to marriage or conception. This has had a negative impact on the health landscape. According to a 2008 report titled “Genetic Disorders in Oman: A CTGA Perspective” published by the Centre for Arab Genomic Studies, the incidence of children born with congenital or genetic disorders in Oman is as high as 7%, while about 21.6% of cases of infant mortality in the country are attributed to congenital malformations.

Oman’s Down Syndrome Parent Support Group has reported that a lack of specialised treatment facilities for affected children poses a serious obstacle for affected families. Provision of specialised services for sufferers of genetic disorders could therefore represent a significant growth channel for private service delivery in Oman. Furthermore, as Vision 2050 emphasises preventive care, genetic screening could also provide substantial new opportunities for private providers.

“Prenatal and premarital genetic screening is not mandatory yet, but it is a process that we expect eventually. There has been talk of legislation, but it will take time due to cultural sensitivities. It is a big challenge, especially considering the fact that Oman covers a large geographic area and has such a variety of different groups of people,” Rajesh Maniyanghat, operations manager at Muscat Private Hospital, told OBG.

HR Shortage

Oman’s high incidence of genetic disorders and non-communicable diseases have made pre-existing HR challenges more difficult to tackle. “One of the biggest challenges we face specifically is bringing in quality physicians. There is high demand in this region for the best and brightest surgeons, and facilities in Oman have struggled to compete with surrounding countries,” Maniyanghat told OBG.

One of the foremost reasons for persistent staffing challenges lies in the comparatively lower pay structure for medical personnel in Oman, resulting in limited options for specialty care in paediatrics, maternal medicine, oncology, cardiology and orthopaedics. “There is definitely a big challenge in Oman, purely because of the issues related to salaries and salary schemes. Salaries offered in the Omani market are far lower than what is available in larger health care markets like Saudi Arabia, the UAE or by entities that have the financial might to afford services, even though the need may be non-existent,” Maniyanghat continued.

On top of lower pay grades, the sultanate’s lengthy recruitment and licensing process has also been cited as a challenge for professional recruitment. Doctors who plan to practise in the sultanate must first pass a two-phase exam, followed by a verification process, before applying to the MoH for a work visa. Obtaining a practising licence can take up to a month, with the entire process lasting up to nine months. Furthermore, an MoH official confirmed local media reports that recruiters from surrounding GCC countries had poached some of Oman’s shortlisted candidates by offering expedited visas and higher salaries.

Nonetheless, some stakeholders argue that the affordability and quality of life in Oman offers the sultanate a strategic advantage in terms of HR sourcing. “It reduces financial, physical and social burdens on the patients and their families. Staff retention has always been a challenge for the industry, but Oman has its own charms. People like to make Oman their home, and that is our selling point,” Dr Al Khabouri told OBG.

Pharmaceuticals

While Oman had traditionally offered some of the highest pharmaceutical prices in the GCC, new regional reforms will see drug prices drop substantially in the coming months. On October 1, 2014 a GCC-wide unified price policy came into effect in Oman, which will see drug prices drop anywhere from 5% to 60%. Pharmaceuticals treating endocrine, cardiovascular, gastrointestinal, musculo-skeletal and skin ailments will be the first affected by the new policy, with 1404 of an estimated 4000 imported drugs seeing reduced prices during the first phase of the policy. The implementation of the policy is being undertaken by standardising cost, insurance and freight (CIF), using the US dollar as the uniform currency. The move is expected to cut profit margins to 45% or less of total CIF, and MoH inspection teams have been established to enforce the new policy.

Outlook

The sultanate will soon release its ninth five-year health development plan, a critical mid-term policy in the run-up to 2020. Decades of sector reforms have led to significant improvements in basic indicators and strong expansion of service delivery, although the sultanate now finds itself grappling with diseases common to the developed world that have exacerbated the growing pains of a fast-expanding segment.

Although a lack of specialised and critical care, as well as qualified medical professionals, continues to hinder the industry, the government’s increased focus on private sector investment and preventive care should help to maintain the sector on a steady growth path.