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Sun 20 Jan 2008 04:00 AM

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Under construction

In the push for a first-world healthcare system, the UAE is pinning its hopes on a flourishing private sector. Joanne Bladd asks whether the nation's new health service is set to come of age - courtesy of outside help.

In western healthcare systems, the phrase ‘public-private' sets pulses racing for all the wrong reasons. But however maligned the concept, it's one now being groomed as the saviour of the UAE's crumbling government healthcare sector.

In the last year alone, the Health Authority of Abu Dhabi (HA-AD) has rented out its three flagship hospitals to outside management. In November, Dubai Health Authority (DHA) announced a deal with Joslin Diabetes Center as a partial answer to the Emirate's pressing problem of diabetes, alongside a tie-up with Harvard Medical International. Ras Al Khaimah has just unveiled its first public and private funded hospital, run by a Swiss consultancy firm. As policy shifts go, its less privatisation by stealth, and more a well-planned hijack.

The spend is getting close to western standards. The only difference is that we’re getting nowhere fast - in terms of patient care, we’re failing. The number one priority is to offload that burden

The overall goal is to map the government's path away from hands-on healthcare, says Curt Schroeder, group CEO of global healthcare organisation Bumrungrad International. Bumrungrad, which sees 50,000 Emiratis annually in its flagship Thailan hospital, has been selected by HA-AD to run Al Mashraq hospital.

"The UAE's governments are moving in the direction that many other governments are - from an operative role to a regulatory and policy-making role," Schroder says. "They are not aligned to run consumer operations such as healthcare, so they are essentially outsourcing the task.

Qadhi Saeed Al Murooshid, director general of the DHA, has been one of the first to sign up wholeheartedly to the hands-off approach, confirming the Authority will regulate but not provide healthcare. He has been open on the shortcomings of the current system, admitting that "it was devised when the city and the population were much smaller". The Authority, he says, is eager for outside help and funding; "We need to work as a partnership relationship between the public and the private sector.

The changing landscape means Schroeder is under no illusions about his remit with HA-AD. "What the Authority is trying to do is find out what management services we can bring to a hospital that was built in the 1970s, to get the best from proprietary hospital management and apply it to government settings. It's a transition between a purely public to a private approach," he says matter-of-factly.

Strictly business

For a country that has run - and subsidised - its national health system for several decades, opening hospitals doors for business could also open them to controversy. Saudi Arabia's attempt to outsource its public sector in the 1980s was widely deemed a failure. Consultancy firms were accused of cashing in, while delivering little real progresses in policy. Two decades on, however, the UAE no longer has a choice about relinquishing its provider status. The government's bottom line, explains industry analyst Ziad Fares, has become the bottom line. "They are spending way too much money on healthcare," he insists. "It's getting close to western standards. The only difference is that we're getting nowhere fast - in terms of patient care, we're failing. The number one priority is to offload that burden."

Certainly Saudi's annual healthcare spend is a stark warning to other GCC countries to find alternative funding, fast. Its healthcare expenditure hit US$13.2 billion in 2005, and is expected to soar to $20bn by 2016. The UAE's healthcare authorities are hoping that melding public hospitals into privately run facilities will help dodge a similar bill.

"Study after study about how to overhaul healthcare, without fail, says ‘engage the private sector more'," Fares notes. "It's the quickest way to modernise the national healthcare system."

And the current model is not working. Public hospitals here, until recently, were run entirely on government subsidies with no incentive to lower costs or maintain accountability. The country's demographic spread has also changed dramatically since the system was designed, meaning services no longer reflect local needs.

Large hospitals serve small patient populations, costing much but delivering little. So despite the Ministry of Health (MoH) pouring money into the public sector, residents are starving in the midst of plenty, with some unable to access basic primary healthcare. Worse, Fares warns, the UAE government risks shackling its economy if it continues to invest so much in one sector. "Their role is to move as far away from operation as they can, as far from touching the patient as they can. Their role should be one of gatekeeper - and that's a healthy trend."

Call to account

Filling the gaps in the system means simultaneously tackling the problems of poor access, poor care and high costs, while stemming the tide of outgoing medical tourism.

Professor Stan Capp is technical director of VHA, an Australian management consultancy firm, and current CEO of Sharjah Teaching Hospital, courtesy of a tie-up between the company and HA-AD. His firm also runs Al Quasimi Hospital, once the white elephant of the MoH's portfolio, best known for its staggering staff turnover and badly managed funding. The government's best decision, Capp notes dryly, was realising that "running healthcare organisations and in particular hospitals, isn't necessarily what governments do best". By enlisting global consultancy firms, the ministry can drive a speedy modernisation of the healthcare structure, weaving in the best features of tried and tested overseas systems.

"We're not trying harder, we're changing the system," Capp says. "In terms of developing policies and protocols, we've got thousands of them now that we've put into place, that have been regionalised from the Australian system."

A key reason why this overhaul could work is the recent decision by the health authorities to free up the purse strings and let hospitals budget - and run - themselves. In the northern emirates and Abu Dhabi, the authorities have installed boards of directors into each facility. They are charged with hauling the hospital into the black, and answer directly to the governing body.

"It's a different mentality," insists Schroeder. "You have to justify your actions and you have to stretch your budget."

Dr Ken Ouriel, Cleveland Clinic's CEO at Sheikh Khalifa Medical City agrees. "It makes these institutions accountable; they're not just getting a blank cheque from the government any more."

Previous attempts at reform have run headlong into a gridlock of red tape, as issues of staffing and funding passed painfully slowly through the Ministry of Health's centralised structure.

This shift to more local purchasing will speed up the process and ensure decision-making in each facility reflects local service needs. And by forcing hospitals to survive on what they can bill, with minimal subsidies, the state budget earns some much-needed breathing room, which can be poured back into the underfunded primary sector.

Despite the better health outcomes associated with a solid primary care system, the sector has always taken a back seat to acute care in funding and prestige. Better use of money here, argues Fares would have a direct impact on the national burden of care. "Prevention is where you get the biggest bang for your buck and to the biggest extent in primary care. The government should restrict itself to this."

For the government, an added attraction is the commercial promise of having global brands installed in public sector hospitals. Aside from providing a draw to clinicians - an area where the UAE, lacking in home-grown staff, needs all the help it can get - it's a lure for patients. For a country that spends an estimated $2 billion annually on ferrying nationals abroad for procedures, boasting names such as the Cleveland Clinic and Bumrungrad International buys the health service instant legitimacy.

They can see how we can bring up the service level to a point that the Emiratis want to stay at home for their healthcare," Schroeder says candidly. With, as yet unfounded, market talk of the UAE becoming a target for regional medical tourists, these tie-ups could potentially prove a new source of government income.

Slow change

Experience has shown that the path to a privatised health system is rocky, and the UAE won't be the exception to the rule. Revamping institutionalised attitudes is tough, and not helped by a creaking legacy system. "It's quite a trauma to move from a bureaucratic approach to a more nimble organisation that will essentially be self-reliant on its own budgets and eventually self-producing," Schroeder admits. "That's quite a big swing for a hospital with a 30-year history of living on a year to year budgeting cycle.

Walking the line between a developing government that is slow to change, while lobbying for better legislation is a diplomatic challenge for all consultants. Unhooking the Ministry's grip on the hospitals, says Capp, is an exercise in tact. "Establishing, for the first time, an operating budget for the hospital, autonomy to undertake procurement and staff appointment, things which have previously been centralized within the Ministry ...it challenges the way things have operated for some time. It's almost a complete reformation that is needed.

For Fares, the greatest potential pitfall is the lack of national clinical standards. Now is the prime time, he argues, to install transparency into the health system - like any company outsourcing a service, the government must have the means to benchmark its ROI. "The biggest missing factor here in this region is accountability. Go wrong, and pretty much it goes unnoticed here. This is an opportunity to remedy that.

"We are inviting all these players, but we still don't have the measuring sticks. We can't lose sight of the fact that they are paid substantial amounts for their services. How well they are performing and how well they are spending money - that all needs to be documented and reported and bettered."

Private agenda

It's no secret that the UAE's medical market has caught the attention of the private sector for financial rather than philanthropic reasons. And it's something the government is keen to capitalise on. Policies are reflecting this preoccupation, by smoothing the way for private investors, while the promise of nationwide mandatory health insurance adds a steady revenue source. "There is a lot of investment coming to healthcare," DHA director general Al Muroshid has said. "We need to be driven by [the private sector's] demands and needs."

It is, Schroeder believes, a smart approach that can translate a contract into an investment opportunity. Both Cleveland Clinic and Bumrungrad International have independent projects slated for completion in the next two years, in Abu Dhabi and Dubai respectively. "It is very forward thinking to make an honest attempt to involve the private sector," he explains. "You can't just give them a contract and pay them a fee - unless there is an engagement by the private operator and a buy-in to the long term goals then you basically get a manager. If you want to take the facility forward there has to be this level of opportunity to participate in some way."

It's also a boon for private providers who, realistically, can see the stream of medical tourists from the UAE drying up in the next five years. As one of the major players in this field, Bumrungrad is reluctant to lose its share of the pie. "We have no illusions in this at all - we fully expect healthcare provision to return to the Middle East, whether we are there or not," says Schroeder. "We can either decide to sit in Thailand and watch as people return home or participate. We have chosen to
participate both by owning a proprietary hospital and in the transition from public to private healthcare."

All to play for

The UAE is poised to break new ground by waving goodbye to its provider status. Whether the private sector will be the solution the government hopes for remains to be seen; but what is certain is that the state cannot afford to fund it alone. Having bought in the best advice, Fared stresses, the government is perfectly placed to learn from the mistakes of developed health systems, and profit from a fresh approach.

"It's too early in the game to say that this is going to be a success," he admits. "The only certainty is that no matter which area of healthcare you look at, there will be a player out there who is making money and [the UAE] is virtually untapped. It's a great time to be in healthcare - there is a lot of work to be done.

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