The health of nations

The health gap mirrors the wealth gap - except where the Saudi German Hospital Group (SGHG) is concerned. Sobhi Batterjee, president and CEO, tells MT of surgery in Sana'a, and why budget is no object when it comes to getting medics to the masses.

Unusually, SGHG appears to split its interests between private hospitals and not-for-profit (NFP) facilities. Can you tell us about your business model?

There are four billion people at the bottom of the pyramid that cannot afford to pay [for healthcare] and no one is addressing them.

As large corporations, we should use our economies of scale and our research capabilities to come up with services that can address the requirements of these people.

Most people can buy things but you need to create a product or a service with a price that they can afford. For example, as a large construction company...[you] buy hundreds of thousands of tonnes of steel.

They could use their buying capacity to ask their supplier to give them 10,000 tonnes of steel at cost price in order to build housing for the poor. These sized companies can ask for tax breaks, compensation of power or water - in other words bring the cost down.

How do you maintain these hospitals while offering care at a price the patients can afford?

Because it will be on a fee-basis, but at cost prices. We will use our economies of scale, our knowledge and our contacts and we expect that the initial costs will be helped by donations.

We will in some cases use our own equity - and I think medical staff will be prepared to work for less because these organisations are not for profit.

After 20 years of managing hospitals we are able to produce 50-bed hospitals at US$5 million each, which is actually very cheap.

Are you able to include tertiary care with that budget?

We started with that in Yemen, with a tertiary care hospital. We created a US$100 million tertiary hospital to serve the African horn out of Sana'a and we are bringing patients from Sudan, from Eritrea, from Chad, from Somalia.

The World Bank told me to only go for primary care and secondary care in Yemen and I said no - these are humans that are entitled to have open-heart surgery, to have radiotherapy.

Has it been difficult to secure funding for specialist care in these developing markets?

Of course you will have difficulties with start-ups - we had difficulty in bringing the nuclear isotopes into Yemen because they have no system to treat radioactive materials.

We had to create a system and make sure that government authorities were involved.

We had difficulty in getting visas for people. But this is what it takes to be a pioneer - they pave the road.

Is it difficult to offer NFP hospitals in areas you have targeted for commercial expansion?

They are completely different markets. There is no conflict of interest between the two because it is a different market. Even if it is in the same town.

SGHG is currently building a hospital in Dubai. What market will that facility target?

All market segments, from the rich to the poor. But now there will not be poor and rich in Dubai in my opinion - many people are well off here and the poor segment is very negligible.

But the majority of the expat population from the subcontinent, is below the breadline?

With mandatory insurance at our doorstop then everyone will be covered and the ability to pay will disappear.

Insurance is already here for most of the companies, and 75% of the population is covered. Policies in Saudi are very extensive.

Excluding insurance, what other potential boom areas do you see in healthcare?

I proposed the Dubai government establish a panel for health tourism. Dubai is coming into a very important era in healthcare and it will take time to restructure this to make healthcare tourism successful. The panel would decide policies and procedures and discuss incentives and finance even.

How would you propose to bring in health tourists?

You attract business by giving business incentives. Just as car dealers approach banks and arrange finance for their customers, I am saying to the [UAE] government, approach the Nigerian government and say; 'Bring me 10,000 patients and I will arrange finance for you.'

The bank pays the patient's costs and Nigeria pays the bank later on. Many governments are sending their patients abroad to Europe and the USA. Persuade them to come here by offering healthcare services and arranging financing for them. It is called export service finance.

But these are developing countries. Are you proposing this as a NFP service?

It is not charity - I am not talking about this as a cheap service. What I mean is that the Nigerian government, instead of sending their patients to Paris, send them to Dubai. Instead of paying €100,000 in France they could pay €50,000 here and that would be financed.

A health tourism panel would address ideas like this and would function to increase the supply of patients to Dubai.

Is the UAE market sophisticated enough for that level of coordination between hospitals?

I would like to see more integration between the private sector and the government sector here in Dubai. Healthcare now is going into a period of major restructuring in the region. Compulsory medical insurance will be like a cyclone - it will really increase volume.

It has the potential to create bottlenecks [in care], so there must be restructuring of the whole network. The billing process will have to change.

How could these changes best be achieved?

I would love to see a strategic thinktank, not only for the UAE but also for the region. We need to make a network so that all of our [hospital] highways are connected, if you follow the traffic analogy.

So an insurance company will be able to cover a patient in Saudi Arabia, a patient in Bahrain, or a patient in Egypt. If everybody builds their own network then [hospitals] will not be able to talk to each other.

Now is the time - if we don't do it now it will be extremely difficult in the future. It takes leadership to do something like that and it takes people with vision.

Local governments are addressing currency, they are addressing customs unification, and they are addressing the unification of power - healthcare should be the same.