A cutting edge diagnostic facility in Al Ain is the UAE's latest weapon in the battle against cancer.
Cancer centre to boost UAE health care
A cutting edge diagnostic facility in Al Ain is the UAE's latest weapon in the battle against cancer and shows what can be done when the public sector uses its resources in conjunction with business to improve health care just as demand is forecast to grow. The fight against cancer, which is the third-leading cause of death in the UAE, will get a boost when a state-of-the-art diagnostic medical facility opens its doors next February in Al Ain.
Until then, patients requiring specialised diagnostic analysis would likely have to take a long-haul flight to Europe or Asia to see a specialist, a trip that could often prove stressful for patients and their families, as the UAE lacks the technology to carry out these scans. Featuring advanced diagnostic imaging systems essential to the early detection and tracking of cancer, cardiovascular and neurological diseases, the Tawam Molecular Imaging Centre (TMIC), which is be managed by Johns Hopkins Medicine International, will enable thousands of scans to be carried out each year.
The clinic is a prime example of the increasing involvement of the private sector in meeting the burgeoning need for health services in the UAE. Decades of under-investment means the country's health facilities are undeveloped, with many patients forced to travel abroad for major medical treatment. But a combination of a rising population and the growing incidence of costly diseases is leading the Government to harness the support of the private sector to update its healthcare infrastructure.
And regulatory reform is opening the way for nationals and expatriates to use health services in the private as well as the public sector. "Development of a world class healthcare sector is integral to the transformation of Abu Dhabi and the UAE's economy," says Mark Erhart, executive director of Mubadala Healthcare, which is responsible for delivering TMIC, which will be on the campus of Tawam Hospital.
The Ministry of Finance last week announced 6.4 per cent of its total Dh43.6 billion (US$11.87bn) budget for the next year will go to health. Further funds are likely to be allocated within the forthcoming budgets of the individual emirates. However, at current expenditure growth rates there may not be enough funds to match healthcare demand from a rising population in 25 years, according to some forecasts.
Mubadala Health care, a division of Mubadala Development, Abu Dhabi's strategic investment arm, has a number of projects it is initiating through partnerships with international medical organisations. In these arrangements, Mubadala will provide the capital and the partner will supply the medical technology, expertise and staff. "Mubadala is a catalyst for economic development in the region," says Mr Erhart. "We look for opportunities offering not only commercial returns but socioeconomic benefits."
Mubadala is focusing on providing services and facilities for the medical conditions that are spreading across the region. These include lifestyle conditions such as diabetes, hypertension and cardiovascular disease. Twenty per cent of UAE residents have diabetes, a condition linked to obesity. Obesity rates of 25 per cent for men and almost 40 per cent for women, puts a further strain on current medical facilities. In addition, the country ranks among the high-income countries where cardiovascular illness is a leading killer and high sodium a significant factor in high blood pressure, according to the World Health Organisation.
Mubadala opened the Imperial College London Diabetes Centre in 2006. In the same year it established the Abu Dhabi Knee and Sports Medicine Centre as knee injuries are one of the most common musculoskeletal problems in the region. Now private equity firms are eyeing investment opportunities as health care becomes more accessible to public-private partnerships. At a time when investors are making a tentative return to regional markets in the wake of the financial crisis, health care is attractive as it is viewed as counter-cyclical. Investors also see the sector as low risk because the bulk of spending comes from Government coffers.
"Health care is quite attractive for investment due to strong underlying fundamentals," says Jonas Voelker, the senior associate at Gulf Capital. which is based in Abu Dhabi. The firm plans to channel about 10 to 20 per cent of its $500 million general fund into health care. Ithmar Capital, the private equity firm based in Dubai, last week revealed health care was one of the areas it was focusing on under plans to invest Dh500m over the next two to three years.
"It's a market for potential," says its managing director Faisal Juma Khalfan Belhoul . " With changes to the regulatory environment towards more of an active insurance market and less reliance on the Government, the private sector will have considerable growth opportunities to cater for the demands of the locals and expatriates." Medical staff training is an area a number of fund managers see as a lucrative field of investment, partly because of the relatively low threshold of capital needed.
More than 140,000 extra doctors and 227,000 extra nurses will be required in the Gulf by 2050 in order to maintain current levels of service, according to a report published in June by Ithmar Capital. "The area we believe has received less attention and capital is the development of serious support infrastructure," says Yahya Jalil, the senior executive officer of private equity for investment bank The National Investor (TNI).
"Currently, when there's a new procedure, doctors or other staff have to be sent to the UK or France for training. We are looking at creating new regulation centres to manage the cost of healthcare expenditure for UAE governments in a more cost-effective way." TNI plans to launch a fund of up to $70m in the first quarter of next year to invest in a number of projects over the next three years, including establishing a simulation-training business for hospital staff and disease management centres.
Gulf Capital is also examining investments within education and training of nurses and doctors. Mr Jalil says TNI is awaiting further reform of the health insurance system which would involve them paying for patients to seek treatment in the private sector. A mandatory health funding system for expatriates and nationals is expected to be introduced by the Dubai Health Authority next year. Abu Dhabi already has mandatory health insurance laws requiring firms to offer health cover for Emiratis as well as expatriates and their families.
Further opportunities are likely to emerge for private investors as spending in the sector soars over the coming years. Health authorities in Abu Dhabi and Dubai are in the process of introducing a set of quality standards for both private and public hospitals and clinics, a move likely to lead to greater investment in facilities and services. McKinsey and Co, the US management consultancy, has said it expects healthcare expenditure in the Gulf to increase four-fold to $60bn in 2025 from last year's of $15bn.
A sizeable chunk of that expenditure is likely to be in Abu Dhabi. The Abu Dhabi Health Authority plans to add between 5,000 and 7,000 hospital beds in the next 15 to 20 years, partly through the multibillion redevelopment of two major hospitals in the emirate. "The health sector is under huge development and improvement in the coming future and the health authority is putting a lot of energy on increasing the capacity and the quality," says Falah Mohammed al Ahabi, general manager of Abu Dhabi Urban Planning Council.
Dubai is targeting health care as it looks to reduce reliance on property. @Email:email@example.com