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Sun 27 Feb 2011 12:00 AM

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Healthy progress

UEMedical CEO Mohammed Ali Al Shorafa takes the pulse of the healthcare sector

Healthy progress

with opportunities as the demand for hospital beds and specialised medical services
increases, the healthcare industry is quickly becoming an interesting prospect for
contractors seeking work and developers hunting profits. Free from the effects of
recession, the sector is also emerging as one of the few stable industries that
firms can turn to during a prolonged period of market uncertainty.

Capitalising on the opportunities provided by the healthcare
industry is Abu Dhabi-based developer United Eastern Medical Services, otherwise
known as UEMedical. The 100% local firm, owned by the United Eastern Group and led
by Mohammed Ali Al Shorafa, was set up as a result of changes to the healthcare
system in Abu Dhabi
and, subsequently, the other emirates.

“We were incorporated three years ago in mid-2007,” explains
Al Shorafa, “with the objective of investing in healthcare projects in Abu Dhabi and the UAE. The
holding company is a big family concern involved in various different sectors from
real estate and construction to oil and gas. For this subsidiary, they decided to
focus on healthcare because of the deregulation of the healthcare sector in Abu Dhabi.”

Before 2006, healthcare in Abu Dhabi was free to expats and nationals, with
private facilities available for those prepared to pay.

“As part of Abu Dhabi Health Authority’s initiatives to create
a sustainable healthcare sector, they decided to introduce the compulsory private
healthcare insurance in Abu Dhabi.
By doing this, the Abu Dhabi
government brought a lot of the major, worldwide health operators to this region
and increased the standard of healthcare.”

Of course, this also created business opportunities for anyone
considering developing projects in the healthcare sector, rendering hospital building
and outpatient facilities profitable developments for private investors. According
to Al Shorafa, however, building a healthcare facility is not quite as simple as
it seems, and requires careful observation of the market before embarking on a project.
As part of its own approach, UEMedical uses data provided by Abu Dhabi Health Authority,
as well as information from its own feasibility studies, to pinpoint high-demand
areas and plan its developments accordingly.

“You have to use some sort of primary data in terms of research
and some secondary data from authorities here in the market,” says Al Shorafa. “We
have done a complete feasibility study along with one of the biggest consulting
firms in the UAE and our partner, a hospital operator from Singapore. Based
on this and statistics from Abu Dhabi Healthcare Authority, which look at the next
10 to 20 years, we have identified the gaps in the market.”

Currently, he says, there is high demand in Adu Dhabi, but also
in Dubai and the
rest of the UAE. There is need for speciality services, such as women’s facilities
and oncology services, as well as paediatric programmes – the latter not just in
the UAE, but in the wider region. He adds that speciality facilities are indeed
becoming more popular the world over.

“Everywhere in the world the trend is moving from general hospitals
to speciality hospitals. So it is important to us to have speciality facilities,
to retain talent and get good doctors as well. In fact, all our facilities will
be speciality facilities.

“The truth is that having a speciality hospital also helps increase
expertise and clinical outcomes, and at the end of the day, public or private, the
aim of the government here is to increase the value of care for the patients. It
is also important if you want to stand out.”

Evidently, the firm is also taking into consideration Abu Dhabi
Health Authority’s own plans for development, which influence whether or not UEMedical,
or any other private developer, will be allowed to build in the first place.

“The complete programme that was developed two years ago for
the Danat Al Emarat hospital, for example, was completely in line with the requirement
that Abu Dhabi Healthcare Authority developed in line with its own gap analysis,”
says Al Shorafa.

“The government does not fund private initiatives, but they try
to support you as best they can. At the moment, they are trying to encourage private
investment, but they do not want to encourage ten different companies to all bid
for the same project. So one of the most important things they have developed is
a so-called certificate of need. In other words, if they think there is a gap of
400 beds among facilities offering gynaecological services, then if someone comes
to them with a bid to build a hospital with 200 beds, they will accept it. But then
if someone else came to them with plans for another hospital for 400 beds, I do
not think they would approve it because then they would have 600 beds. So they do
it strategically,” notes Al Shorafa.

Currently, the firm’s projects include three hospitals, six speciality
centres and 14 family clinics, each designed to meet the needs of the market and
in line with the government programme. Among these is a scheme called HealthPlus,
a growing network of premium outpatient centres in Abu Dhabi, aimed at introducing medical services
for the high end of the market. Upon completion, it will include 20 facilities,
each adopting international standards and best practices for healthcare provision.

“At the moment we have two facilities. One is a fully dedicated
women’s healthcare centre that caters for obstetrics and gynaecology, and the other
is a genetics centre for people having difficulties conceiving. We are also developing
family centres, the first of which is located on Al Bandar island and, once operational,
will cater for communities outside the city.”

The womens’ centre, which opened last year, was the first private
medical centre in Abu Dhabi
to be accredited by the US-based Joint Commission International (JCI). The fertility
and genetics centre will open in April this year, with the family clinic scheduled
for completion within the next six months. Meanwhile, the Danat Al Emarat hospital,
a flagship project for the company, with hi-tech equipment and a luxury atmosphere,
has only recently begun construction and is scheduled to open finally in 2013.

But demand is not the only thing to consider when building a
hospital. According to Al Shorafa, one of the key considerations during healthcare
facility construction is that a project meets the guidelines of local government
authorities which, in turn, include green standards and international healthcare
standards. “We have committed to providing private healthcare initiatives in Abu Dhabi, and have therefore also committed to meeting all
the guidelines of Abu Dhabi
government.  So this includes Abu Dhabi Municipality, the Urban Planning Council,
and even ADWEA, but mainly Abu Dhabi Health Authority.”

Asked how the firm meets the demands, Al Shorafa said that one
of the most important things is to take on experienced contractors.

“For the Danat Al Emarat hospital, it was very important for
us to choose contractors that had healthcare expertise. This is linked to the multi-specialities
that are part of the hospital build; you have a lot of different systems, and a
lot of different items that need to be integrated and coordinated, and it is not
easy. It is not like a building normal commercial building or residential development.”

He adds that the design is also a key consideration, and that
as part of UEMedical’s business strategy, it has tried to ensure that all hospitals
have a consistent design. However, the most crucial factor, he says, is the hospital

“The most important thing if you are a hospital developer is
to differentiate yourself from the market by getting the right operational team
on board from day one, before you even decide to design a facility. Our operator
who is managing the Danat Al Emarat facility is from Singapore and is listed on the stockmarket
there; they have 25 hospitals that they manage, and they were involved from day
one in the design of the facility. Every operator is different, but having the right
operator from day one will make it much easier for the operator to manage the facility
later after it is constructed and ensure it runs more efficiently.”

Minimum green standards, it seems, are among the government requirements
for a hospital build, although Al Shorafa says his firm tries to go above and beyond
wherever it can.

“The government does give minimum requirements that you have
to meet, but we thought it was important to have some green initiatives from our
side, also to demonstrate our corporate social responsibility.

“Of course, how much we do varies from project to project. Being
a private, profit-making organisation, you have to say that if increasing the standards
more than the minimum would cost us a lot more money and take us a lot longer to
earn back, then we cannot always do it.” As for the commercial challenges associated
with a hospital build, Al Shorafa again comes back to the subject of financing the
projects. “One of the biggest challenges is finance,” he says. “A lot of the financial
institutions in the UAE do not understand healthcare projects because they look
at it as a real-estate project rather than a public health facility. This was a
particular problem after the financial crisis. The rest of the issues are pretty

“Obviously when you look at investing in healthcare, you have
to bear in mind that it does take longer to get a return on investment, and that
these are probably not as high as returns on a real-estate project. But healthcare
is sustainable, it is anti-recession. During the financial crisis, the only thing
that did not go down was the healthcare services, so you have most security in terms
of investment. This is what the institutions need to look at.”

Regionally, the company is focusing on Abu
Dhabi at the moment but it is also looking at Dubai and Sharjah. “We will also be keeping our
eye on Qatar and Saudi Arabia. I
think the close proximity of Qatar
and Saudi makes it a lot easier for us, but saying that, if there is any opportunity
where we feel we can add value, we will always go for it.”

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