The expansion of medical coverage has seen an uptick in the provision of health care services

The health sector in Abu Dhabi has expanded rapidly on the back of a mandatory medical insurance scheme and a number of new hospital projects aimed at improving specialty and emergency care in the emirate, which could reduce medical revenue outflows that have had a negative impact on domestic growth. Private developers have had a great deal of success under the government’s health investment plan, which has seen steady growth in the number of beds and doctors, as well as basic health indicators.

Nonetheless, a rise in lifestyle diseases, particularly diabetes and cardiovascular disease, shortages of some specialty services and an ongoing shortage of qualified staff have created serious challenges for the industry, providing future opportunities for private sector expansion.

Market Structure

The federal Ministry of Health (MoH) has established a plan to adopt health strategies and policies that will provide comprehensive health services and improve the development of the country as a whole. It plays a pivotal role in developing the national health care system in coordination with emirate-level bodies, under the UAE Vision 2021 development plan. Two core initiatives of the MoH have been to increase private sector participation in patient care and service delivery, and to establish a mandatory health insurance scheme for all residents. Abu Dhabi was the first emirate in the UAE to implement a mandatory health insurance scheme in 2006, followed by Dubai in 2013.

The Health Authority - Abu Dhabi (HAAD), the health sector’s policy-maker and regulator, is responsible for licensing and monitoring health providers and insurance companies, including regulating premiums and reimbursement rates. HAAD also works with public and private investors to establish new facilities, as well as promote public health campaigns.

As with many government entities, HAAD has aligned its long-term strategy with the Abu Dhabi Economic Vision 2030 economic development plan, which identifies the establishment of high-quality education, health care and infrastructure as one of its main pillars. Investment in technology and human resources plays an important role, with the Economic Vision 2030 document stating, “The growth of the medical sector is dependent on large investments in technology, which Abu Dhabi is in a position to make. The emirate will have to attract qualified doctors and medical scientists, as well as train local medical staff in order to develop this sector sufficiently.”

Guided by the Economic Vision 2030, HAAD has developed a new health sector strategy. Built on seven key priorities, the strategy aims to improve the overall outcomes of the health care sector, reduce capacity gaps and collaborate with the private health care sector to attract new investors to the market.

Growth & Indicators

Abu Dhabi’s health care industry has expanded its size and scope considerably over the past decade, driven by population growth, rising health awareness and an increasing incidence of lifestyle-related diseases, as well as rising per capita health care expenditure.

According to a 2014 report published by Alpen Capital Group, government spending comprised 74% of total health care expenditure in the UAE in 2011, while Colliers International reported that government health care expenditure nearly doubled between 2007 and 2012 to reach over $12bn that year, with government spending comprising 3.3% of total GDP, the highest ratio in the GCC.

Growth in Abu Dhabi’s health sector is expected to continue at around 10-11% per year until 2020, according to HAAD, driven by 5% annual population growth in the emirate. “There is a rapidly growing population that is increasingly demanding with respect to the quality of health care services that it receives. Now there is a need to have a marriage of clinical excellence and patient experience. Patients want better care and they want it closer to home,” Suhail Mahmood Al Ansari, the executive director of Mubadala Healthcare, told OBG.

Spending on capacity has allowed the emirate to significantly improve basic health indicators: for example, in its “Health Statistics 2013” report, published in December 2014, HAAD noted a 29% reduction in infant mortality rates, from 8.7 per 1000 live births in 2007 to 6.3 in 2013, and the World Bank reported that life expectancy rose from 75.4 years in 2004 to 77 years in 2012.

However, the rising incidence of non-communicable diseases will have a profound impact on spending and outcomes. Demand for services related to cancer screening and treatment, cardiovascular diseases, diabetes, respiratory conditions, mental illness, neuropsychiatric conditions and emergency medicine is forecast to be particularly strong in the coming years, with the government now moving in partnership with the private sector to expand service offerings and coverage. “Once the infrastructure setup has been completed, the next phase in health care that should be considered is playing a greater role in personalised medicine, as well as research and development – if the correct mechanisms governing this are in place,” Dr Ihsan Husein Almarzouqi, a board member of Healthpoint, Mubadala’s primary care and multi-specialty hospital, told OBG. “The UAE is making significant progress in establishing the infrastructure to provide high-quality care. There now needs to be a greater emphasis on biotechnology, genome research, intellectual property and other fields that feed the health care sector.”

Obesity

Rising disposable incomes and urbanisation have created significant health challenges across the GCC. Residents have adopted an increasingly sedentary lifestyle and consume growing levels of high-calorie, high-sugar, processed goods, which has led to a corresponding rise of diabetes, heart disease and hypertension. In recent years the rate of diabetes-related illnesses across the region has witnessed an unprecedented increase that is expected to continue going forward, with cases projected to grow from 1.5m in 2000 to 4.5m in 2030.

The UAE is no exception: according to data released by Middle Eastern Initiatives at America’s Institute for Health Metrics and Evaluation in 2014, over 66% of men and 60% of women in the UAE are classified as obese, while the UN Food and Agriculture Organisation reported in 2005 that UAE residents consume nearly 3000 calories per person per day, almost one-third more than the recommended intake.

Diabetes

The knock-on effects of high obesity levels are significant. Diabetics in the UAE – estimated at nearly 19% of the population, according to the International Diabetes Federation – have the highest prevalence of cardiovascular disease among GCC countries and are three times more likely to suffer a heart attack and four times more likely to have a stroke. An estimated 50% will eventually die from heart disease. Imperial College London Diabetes Centre (ICLDC), which was established by Mubadala in collaboration with the UK’s Imperial College London, has been working to treat diabetes in a significant number of patients. The centre aims to provide a complete disease management programme to ensure that those diagnosed with diabetes can live with the disease as normally as possible. ICLDC has achieved a 0.368/1000 hospitalisation rate for diabetes-related episodes, which is much lower than in many developed countries. Its success has translated into high demand, with the original Abu Dhabi branch treating over 200,000 patients since its opening in 2006. To accommodate this level of demand, the centre launched a second facility in Al Ain in 2012. It now treats between 500 and 650 patients per day at its Abu Dhabi clinic, and between 350 and 400 patients per day at its Al Ain clinic.

Dr Saf Naqvi, consultant diabetologist and endocrinologist, and deputy chairman of ICLDC’s medical board, told OBG, “New facilities for diabetic treatment are being opened, which will allow the sector to adequately meet the growing demand over the next three to four years. However, according to the World Health Organisation (WHO), as the average age of the national population begins to increase, the rate of diabetes could in fact double in 10 years, requiring further investment.”

Cancer

Abu Dhabi’s health care system is also facing a heavy burden related to the increasing incidence of cancer. The disease had become the number two cause of death by 2012, after cardiovascular disease, with HAAD’s “Health Statistics 2012” indicating that 1729 new cases were reported that year. According to WHO’s International Agency for Research on Cancer, if the UAE does not adopt preventive screening and early detection measures, the number of cancer deaths in the country will quadruple from 832 in 2008 to 3356 in 2030, while the number of new cases will reach 5914.

As such, screening and diagnostic activities offer a high-potential growth channel for public and private providers in the emirate. Government-mandated screening activities have already witnessed tremendous success; in 2008, HAAD invested in a pioneering, mandatory national screening initiative called Weqaya, which identifies cardiovascular risk factors for UAE nationals, who are screened every three years. The first round of screening covered 94% of nationals in the emirate, uncovering 9000 cases of diabetes and 27,000 cases of hypertension, marking a significant step forward for preventive care in the emirate. Weqaya’s mammography drive also picked up many undiagnosed cases of cancer.

Private providers have also moved to offer high-demand screening services. In August 2014 private provider VPS Healthcare, previously LLH Healthcare Group, opened a new cancer screening centre in Abu Dhabi’s Marina Mall. The 2500-sq-metre VPS Health Promotion Centre offers a range of medical imaging services, including MRI and CT scans, electrocardiography, ultrasound and digital mammograms, in addition to a stress treadmill, endoscopy services and a pulmonary function test. The facility has a total daily capacity of up to 50 patients.

To improve the rates of early detection, Mubadala’s Tawam Molecular Imaging Centre is using advanced equipment – such as PET.CT diagnostic imaging systems – to screen for not just cancer, but cardiovascular and neurological diseases as well.

Hospitals

According to a December 2013 report by Colliers International, the MoH owns and operates 36.4% of hospitals in the UAE, although public hospitals represent 73.1% of total hospital beds. According to HAAD, as of 2013 Abu Dhabi had 41 hospitals and 3864 beds, including 12 Abu Dhabi Health Services Company (SEHA) hospitals, one Mubadala, one military and 27 private facilities. Average bed availability for SEHA hospitals was 2402, according to HAAD “Health Statistics 2013”, compared to 1462 private-sector beds. Colliers reports that private hospitals are largely dedicated to general medicine, with a limited number of specialty care facilities, while the public sector provides the majority of super-specialty treatment, which remains in short supply. HAAD reported in 2013 that the emirate may require an 2200 more beds by 2020. The actual number will depend on several factors, including operator efficiency in using the beds and whether existing providers can absorb additional capacity.

While current projects in the pipeline indicate that Abu Dhabi is well on its way towards meeting expected demand for new beds, HAAD has stressed that severe capacity gaps remain, particularly in intensive and critical care medicine, emergency care, neonatology, paediatrics, paediatric surgery, oncology, orthopaedics, neurosurgery, plastics, surgical oncology, rehabilitation and psychiatry.

Sheikh Khalifa Medical City (SKMC) is one of several developments that have helped meet new demand in recent years. Established in 2005 and managed by the US-based Cleveland Clinic since 2007, SKMC consists of a 586-bed acute care hospital, 14 outpatient specialty clinics and a blood bank, all of which are accredited by the Joint Commission International (JCI.) SKMC also manages a 125-bed behavioural sciences pavilion and urgent care centre, both located in Abu Dhabi. With SKMC’s emergency centres reporting 80,000 visits during the first six months of 2014, compared to a total of 104,000 visits in all of 2013, capacity constraints at public facilities, particularly in specialty care, have become a major concern for stakeholders.

“We are experiencing a lot of capacity constraints right now. We are seeing 85,00 deliveries annually and running 25-30% over capacity,” Linda Anne Clark, CEO of the Corniche Hospital, which has a partnership with SKMC for neonatal medicine, told OBG.

The Abu Dhabi Executive Council approved the construction of 14 new health care facilities in January 2012, including six hospitals, and the government has moved forward on a host of new hospital builds since. The proposed new SKMC, which will be built by 2018, will include a kidney dialysis centre, general hospital, trauma centre, and a women’s and paediatric hospital, offering a total of 826 beds, while Al Mafraq’s 732-bed hospital was approaching completion, according to a May 2014 update by project management firm Allen & Shariff.

Also in the pipeline is an expansive new hospital in Al Ain, with Musanada, the government’s service arm, awarding a Dh4.3bn ($1.17bn) construction contract for the 719-bed facility in December 2013. Other notable hospital developments include the flagship Cleveland Clinic Abu Dhabi, the newest in Mubadala Healthcare’s network (see analysis).

Other Specialty Services

Cleveland Clinic Abu Dhabi is not Mubadala Healthcare’s first partnership with private players, and the company has a solid track record in bringing a host of high-demand specialty treatment options to the emirate. The ICLDC, for example, was established by Mubadala and the UK’s Imperial College London. The centre’s Abu Dhabi clinic has treated more than 200,000 patients since it first opened its doors in 2006.

Healthpoint, a primary care and multi-specialty facility, is another Mubadala facility that specialises in offering a one-stop shop for a range of services: family medicine, dentistry, gynaecology, paediatrics, urology, nephrology, podiatry, dermatology, radiology, and plastic and reconstructive surgery, among others. It has extensive orthopaedic and spinal care offerings, provided by sister centres Abu Dhabi Knee & Sports Medicine Centre and Wooridul Spine Centre, as well as a 1000-sq-metre centre for physiotherapy, one of the largest in the UAE. The facility employs 50 physicians and 500 nurses and health staff.

Mubadala Healthcare has also partnered with USbased LabCorp in their National Reference Laboratory, which offers one of the largest test menus in the country, with over 4000 tests. More recently, Mubadala opened Abu Dhabi Telemedicine Centre, a joint venture with Switzerland’s leading telemed-icine provider, Medgate. The centre provides high-quality medical consultations over the phone – the first of its kind in the emirate.

Private Hospitals

The private sector has been critical in delivering new hospital beds over the previous decade and today Abu Dhabi boasts a diverse and sophisticated portfolio of private health care providers. Major players include Al Noor Medical Group, NMC Healthcare and VPS Healthcare, with the government’s targeted investment strategy facilitating the development of a host of specialty care facilities in recent years.

“We have all the right conditions for public-private partnerships in the health care sector to form and these can act as an example for other sectors of the economy: government policy is conducive, private capital is increasingly available and demand for high-quality services is growing in every area, from acute conditions and long-term care to a host of hospital ancillary services. As a consequence, we are seeing the beginnings of a dramatic transition in health care,” Salem Al Noaimi, the CEO and managing director of investment company Waha Capital, told OBG.

Al Noor Hospitals Group offers three JCI-accredited hospitals on Khalifa Street, Airport Road and in Al Ain, housing specialty clinical and surgical facilities for cardiology, oncology, nuclear medicine, orthopaedic, neurology, cosmetology, bariatric-advanced laparoscopic surgeries, paediatric care, a neonatal intensive-care unit, obstetrics and gynaecology. In October 2014 the company announced plans to spend $200m on acquisitions in 2015, following three purchases in 2014, including a $21.8m deal for the Gulf International Cancer Centre.

London-listed NMC Group, meanwhile, offers 277 beds across the UAE and reported that occupancy at its hospitals reached 70% during the first half of 2014, with the company adding 16 new beds and hiring 39 doctors during the same period. The number of inpatients treated at NMC facilities rose by 12% during the first half of 2014, while outpatient visits increased by 13.7% to reach 1.13m, driven by demand at facilities in Al Ain, Dubai and Sharjah.

NMC Group nearly doubled its total capital expenditure to $60.8m during the first half of 2014, as work continued on hospitals in Abu Dhabi and Al Ain. In July 2014, the group opened BrightPoint Women’s Hospital, the first private women’s hospital on the island of Abu Dhabi, offering 60 beds.

NMC has plans to open the $7m Al Ain Medical Centre by 2015, while its $200m Khalifa City Hospital, offering 250 beds and 23 specialties, is the largest facility in NMC’s portfolio and will open its doors during the first half of 2015.

VPS is the emirate’s third major private provider, with four hospitals located in Abu Dhabi. In July 2014 the group’s Burjeel Hospital announced that it is embarking on a $1.5bn expansion plan, which will add four hospitals, five specialty clinics and 15 medical centres to the emirate and create the Burjeel Medical City. It will be located in Abu Dhabi’s Mohammed Bin Zayed City, at a cost of Dh1.4bn ($381.14m). The facility will offer 400 beds and oncology treatment, nearly doubling Burjeel Hospital’s present capacity.

Another private provider, the Anglo Arabian Healthcare group, was acquired by Waha Capital in mid-2013. Anglo Arabian owns and operates 25 assets, employs more than 650 people and serves over 400,000 registered outpatients, with average daily visits of about 1500 patients. In addition to an 85-bed hospital in Ajman and a day surgery hospital in Sharjah, the group’s network includes 10 clinics, five pharmacies, and a network of accredited and award-winning laboratories across the UAE.

Health Insurance

Abu Dhabi has moved towards a universal health care model over the past decade, following the introduction of mandatory medical insurance legislation in 2005. This paved the way for the establishment in 2006 of the National Health Insurance Company – Daman, the country’s first specialised health insurance company. “There is an abundance of new medical facilities and hospitals set to be introduced to the market in the coming years,” Dr Michael Bitzer, the CEO of Daman, told OBG. “With all this new capacity it allows for patients to easily seek out medical attention, and hospitals are aggressively marketing products and services to prospective patients. This results in more patients receiving care, which drives up insurance utilisation and, consequently, health insurance premiums.”

Daman provides comprehensive health insurance packages to more than 2.5m members, covering individuals and organisations, and it acts as the exclusive manager of Abu Dhabi government’s health care programme for UAE nationals, Thiqa, as well as the Abu Dhabi Basic Plan for low-income expatriates.

In 2013 HAAD reported that 60% of the competitive, enhanced health insurance market was held by three players: Daman, with 40%; Oman Insurance, with 10.7%; and Abu Dhabi National Insurance Company, with 9.6%. Further reforms came in 2010, when all hospitals and insurers in the emirate were required to bill on a diagnosis rate group system. Although this measure is expected to curb growing medical prices, inflation has been at around 3% in recent years, according to HAAD estimates.

The preponderance of easily accessible facilities in Abu Dhabi has resulted in increased patronage by patients, which is costing insurers and compelling them to raise premiums. According to HAAD, claims per policyholder rose from 4.6 in 2009 to 6.5 in 2013. Following the November 2013 announcement that mandatory medical insurance will be introduced in phases across Dubai, to reach 100% coverage by 2016, the federal government is now in the process of rolling out mandatory insurance legislation across the UAE, and Sharjah is expected to implement a similar policy in the near future, according to the USUAE Business Council (see Insurance chapter).

HR Shortage

Human resources shortages have become one of the biggest challenges facing the health care sector. With 2.7 doctors and 4.3 nurses per 1000 people, HAAD estimates the emirate will require an additional 1600-4800 doctors by 2022. The actual number needed will depend on many factors, including future population growth.

A report released by McKinsey & Company in January 2014 found that the demand for health care across the wider GCC is expected to expand by 240% over the next 20 years, driven by the increasing need for cardiovascular care, which is forecast to grow by 419%, and diabetes care, at 323%.

Physician recruitment challenges, such as the need to recruit and validate the credentials of health care professionals from more than 100 countries, contribute to the overall problem. Burjeel’s expansion, for example, will require an additional 400 doctors and 1000 new nurses. HAAD is streamlining and improving its processes with the aim of ensuring that almost all licensing and credentialing of health care professionals is completed within 30 days of submission of complete applications.

The introduction of a UAE-wide unified licensing system is expected to further improve the recruitment process for health care professionals. In October 2014 the MoH, Dubai Health Authority and HAAD moved to introduce a unified licensing system for medical practitioners in the UAE, which will allow doctors in one emirate to work across the country. This is expected to have the biggest impact on super-specialty practitioners, who are rare in the UAE, allowing them to travel the country for consultation work, although they will still be required to receive approval from the emirate in which they wish to practise.

Meanwhile, the emirate’s Khalifa University of Science and Technology is planning to establish a new medical school, the first of its kind in Abu Dhabi, which has the potential to substantially expand the home-grown talent pool (see Education chapter). UAE University established the College of Medicine and Health Sciences in 1984, making it the oldest medical school in the country.

Outlook

While Abu Dhabi’s health care sector is facing certain constraints that will prove challenging to growth – including a shortage of qualified personnel, as well as significant rates of obesity, diabetes, cardiovascular disease and cancer – these difficulties, though serious, have nonetheless provided health care providers in the emirate with considerable opportunities for expansion in the future. In addition, the establishment of leading specialty care facilities, such as Cleveland Clinic Abu Dhabi, could help to bring about a dramatic turnaround in medical tourism outflows and recruitment challenges.