Dubai curbs cost of health care

As compulsory insurance begins, private hospitals and clinics must apply to health authority for permission to raise prices.

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DUBAI // Dubai moved on Monday to regulate the cost of private health care as authorities try to rein in the rising cost of living.

From next year, hospitals, clinics and polyclinics that want to raise their prices must apply to the Dubai Health Authority, which will evaluate the request based on the rate of inflation, the cost of doing business in the emirate, the quality of the services provided and the performance of the applicant.

“The DHA is trying to strike a balance between regulating price and ensuring that the cost of health care does not inflate, while keeping the free spirit of the market in Dubai,” said Haidar Al Yousuf, the authority’s director of health funding.

The authority will control price increases rather than set prices, he said. “We have reached an equilibrium over the years and will not upset that immediately.”

If the DHA accepts a proposed price structure, providers would still need to negotiate it with health insurers. Dubai’s 44 health insurance providers have been asking for the regulation of rising healthcare costs, which have fuelled the world’s fastest growing premiums.

“Access to health care gets expensive, and can we keep increasing premiums?” said Sherif Mahmoud, the regional head of medical operations at Axa Insurance Gulf.

Mr Mahmoud said health insurance premiums in the UAE increased by between 10 and 16 per cent a year, and the new system in Dubai woud probably limit that to about 10 per cent.

Dubai is introducing compulsory health insurance in stages, beginning this year, which is expected to provide about two million residents and their families with coverage for the first time. The new system could be challenging for the Government because of a lack of clarity about how those new customers will behave, said Mr Mahmoud.

There is a risk for consumers that the regulation of price increases may reduce the number of healthcare options available to them, he said. “It is promising but let’s wait and see the reaction of providers.”

Mr Mahmoud said healthcare providers could reduce costs but also increase the frequency of applications for price rises.

Providers are concerned that any cap on price increases could have an impact on their services.

“It’s a major challenge because of the continuous inflation in the market in the UAE and once prices are fixed it takes a lot of time to revise them,” said Ravi Dhir, chief executive of Healthcare Mena. The company operates 21 facilities in the UAE and Kuwait, including Abu Dhabi’s National Hospital, and has plans to open more than a dozen more medical and dental centres at a cost of more than Dh100 million.

“There should be quality parameters to define pricing for each medical entity, such as international accreditation, qualification of the staff, and location of the centre.”

For instance, doctors with degrees from the United States and Europe command double the salary of those from other countries, increasing operating costs, he said.

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