Keys to the city

For better or worse, the buzz is building about Dubai Healthcare City (DHCC). Regionally at least, the project hasn’t suffered from a lack of media coverage since its inception.

Now, its marketing tactics have gone global. If the littering of articles in the international press is to be believed, the United Arab Emirates is poised to welcome 11.2 million health tourists by 2010, with a majority pouring through DHCC.

Dubai is known for its brazen ambition, but this is a lofty aim for a project still lacking a fully functional hospital (bar the American Academy of Cosmetic Surgery’s somewhat niche facility).

DHCC has attracted the world’s attention. The pressing question now is whether it can deliver. In its haste to create “the internationally recognised location of choice for quality healthcare,” has DHCC also built a rod for its own back?

Empty space: the final frontier

With its prime location overlooking Dubai, Moorfields Eye Hospital Dubai (MEHD) is very much an anchor tenant for DHCC. The facility’s CEO, Dr Chris Canning, believes that the project has hit a precarious point. “I think DHCC is moving to a critical phase,” he muses.

It is like handing over any real estate project – you have to get the tenants in and you have to get the whole place feeling like a lived-in environment.”

The project arguably has, to date, been a victim of its own bold plans. Its extended construction period – which, impressively, is largely on track – has meant while a number of clinics are open for business, the city still looks like a building site.

It’s not, critics agree, a picture that inspires thoughts of pristinely modern healthcare. A more pressing building issue, however, may be DHCC’s occupancy rate. For industry analyst Ziad Fares, large swathes of the site “still look like a ghost-town.”

Market talk suggests DHCC’s central location has made it a victim of the “Dubai real-estate curse”, according to Fares. “Real-estate speculators were able to step into DHCC early on and that is what has caused the disruption that we see today. I imagine many of the empty buildings are being locked down by speculators who have no idea about healthcare but are holding onto this property because it is in the centre of Dubai.”

DHCC has rebuffed this claim, arguing that it boasts an 86% occupancy rate in its completed buildings with companies “either in fit-out stage or processing their licences”. Investors, it claims, are told who they may lease to, to ensure the mix of specialties remains varied.

There is, of course, an alternative scenario – that certain buildings are unoccupied because they are not economically viable. Despite the well-publicised benefits of setting up in a free zone (full ownership and full repatriation of profits among them), DHCC rents are prohibitively high for small clinics.

Added to that is the cost of meeting the project’s heavy regulatory demands. Occupational health services provider, Prime Health Group, opened its doors in DHCC at the start of 2008. Although generally pleased with the way business has gone so far, clinical director Dr Sarah Peeters admits that life as a smaller tenant can be tough in DHCC.

They take care of you, but they also ask a lot as well,” she says. “It is not easy for a small clinic to follow all of their rules and guidelines because they expect a lot from their clinics in terms of quality.”

DHCC is yet to prove a cash cow for some non-clinical facilities, either. Welcomed by the Center for Healthcare Planning and Quality (CPQ) as a high-end design company, Design Young had hoped to target DHCC’s vibrant fit-out market.

Although it is enjoying success in projects outside of healthcare, Mark Young admits that DHCC has yet to furnish his company with many actual clients. “We help people design high-end facilities,” he states. “To be honest, most of the practices setting up here just want a straightforward design and build.”

Closer to home

Market forces will inevitably answer the question of unoccupied units. If there is enough demand from patients, suppliers will be queuing up to take out a lease in DHCC. Accurately gauging that demand, argues Dr Chris Canning, is imperative for organisations hoping to succeed in the project. “You can’t just say that Dubai is the land of milk and honey – you need to look at the projected growth and assess how much care in your particular specialty is needed.” For Dubai’s healthiest micro-city, any success must begin at home. The fixation with medical tourism makes it easy to forget that DHCC’s core business will be local patients.

Any global success will need to be built on the back of a locally established brand. “It is almost counter-intuitive to push the DHCC brand globally at the moment,” reasons Fares. “It’s too early and there is a threshold of success that needs to be achieved locally before it can be considered as a brand itself.”

But tenants would be naïve to think that their competition will only come from within the free zone. Compulsory health insurance is just one government initiative aimed at fast-tracking healthcare across the whole of Dubai.

Another hitch in a region where convenience is king is that Healthcare City is tied to its location. “There are some major, major expansion plans for Dubai and I am not sure where all these patients [for DHCC] are supposed to come from,” questions Canning.

“The other argument is that what people want is a hospital on their doorstep – they don’t want to go somewhere where they might have to sit on Sheikh Zayed Road for an hour.”

The marketing challenge for DHCC lies between stoking international interest in the project and getting local people through its doors and into its clinics. The company line reflects this.

The initial feasibility was built around servicing Dubai and the surrounding region,” states a spokesperson. “The patients treated today at DHCC reflect this actual need gap… [however] medical tourism is a growing industry [and] DHCC is developing strategies to address this trend.”

At issue, however, is whether Dubai is adequately positioned to attract medical tourism. The city is well connected to Europe, Asia and Africa, but its high healthcare costs are unappealing to medical tourists.

What we see in the Middle East are top-end developments being targeted to the Middle East’s wealthy population,” explains Guy Ellena, director of the health and education department at the International Finance Corporation (IFC), a member of the World Bank Group. “There is not enough of a comparative advantage in this region to attract a large number of people from other parts of the world because the main constraint is cost.”

Standard practice

When DHCC was first envisaged, its trump card was its superior regulatory framework. Harvard-designed standards aimed to weed out any back-alley clinics and attract international talent, setting the free zone apart from Dubai’s patchy healthcare laws.

The theory behind this move – that like attracts like – was a key selling point for the project, and one that held true, with Mayo Clinic, Boston University and Great Ormond Street all among the early tenants. Still, while DHCC has the first-mover advantage, the industry overall is catching up. The Dubai Health Authority is emerging as a legislative force, with tighter regulations forcing hospitals and clinics to snap into shape.

The Authority has sharply curtailed DHCCs ability to regulate independently – the chief perk of a free zone. “They have to abide by the DHA regulations as a minimum – whether they want to go any further with regulations is entirely up to DHCC,” states Dr Haidar Al Yousuf, transition director at the DHA.

Ironically, the Authority’s new-look regulation has taken much of its inspiration from DHCC. The chummy relationship between the government and free zone saw the Department of Health and Medical Services set up shop there last year.

At the time, Dr Ayesha Abdullah, CEO of DHCC’s CPQ, implied both the DHA and the Ministry of Health were likely to take its lead on legislation. “CPQ is really an experiment to develop new clinical regulations for DHCC, but this is just a starting point,” she said nonchalantly. “It was always the intention to integrate the regulations to greater Dubai and the rest of the UAE.”

This expansive attitude won’t help DHCC in the long run. It is difficult to pitch yourself as a front-runner, when the healthcare industry is managing to keep pace. If Dubai’s regulation and reputation is on a par with DHCC’s, what is to keep the free zone from losing its edge? To say the least, the issue is causing confusion in the market – and no little consternation.

“The direction we are travelling in Dubai is to have a single government regulatory framework, whether it is in the free zone or not,” says Canning. “That could have pretty major ramifications if DHCC wants the site to remain to be seen as exclusive.”

Graduation day

Regardless of what framework DHCC finally settles on, it seems clear to all involved that it desperately needs a figurehead. While few concrete details have been released about University Hospital, its success or failure will ultimately have a defining role in the development of DHCC.

A spokesperson for DHCC acknowledged its importance, but still considers it as just one component to the success of the project – along with regulating bodies and existing service providers. Canning notes that Dubai authorities have become a little obsessed with “legislating their way to clinical excellence”. A simpler formula, he argues, is to find ways to attract the best doctors, rather than keeping the worst ones out.

“What will make this place good is the University Hospital establishing an international standard in healthcare research and teaching,” he says. “If you can do that then naturally you will get good doctors accreting around this area – and that will achieve a lot more than just trying to put more regulations in.”

Needless to say, the pressing problem for DHCC and University Hospital is that international standards in healthcare are not achieved overnight – and they certainly won’t be by the end of 2010.

A good marketing campaign is about momentum, but excellence in healthcare is about achieving and sustaining top-level standards of research and teaching with top-rate physicians. DHCC has to be careful it doesn’t settle for one without the other.