The Healthcare Sector
in the United Arab Emirates
[Innovation Brief No. 4]
Global Healthcare Sector is Growing Rapidly
Healthcare is one of the most rapidly growing sectors of the global economy, with global
1
expenditure totalling $7,682 million in 2015. According to estimates by the EIU, health
spending will accelerate in most countries, rising to an average of 5.2% a year in 2014-
2
EIU (2016) Industries in 2016; A Special 18, equal to $9.3 trillion. This increase will be driven by the needs of aging and growing
1
Report from the Economist Intelligence
populations, the prevalence of chronic diseases, emerging market expansion,
Unit.
3
infrastructure improvements, and advances in treatment and technology. Yet there will
also be increased pressure to reduce costs and maximise savings.
World industry outlook: Healthcare and
2
pharmaceuticals, The Economist
Intelligence Unit, May 2014.
Deloitte, 2015 Global health care
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outlook: Common goals, competing
priorities.
The Economist Intelligence Unit, WHO.
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Figure 1: Health spending across the world4
IIPI Team: AlixPartners Team:
Dr. Sami Mahroum (Academic & Executive Director) Mr. Eugenio Berenga (Managing Director)
Dr. Elif Bascavusoglu-Moreau (Senior Research Fellow) Dr. Tobias Plate (Managing Director)
Dr. Yasser Al-Saleh (Senior Research Fellow) Mr. Benoit Pastorelli (Vice President)
Healthcare on the Home Front
Healthcare in the GCC region
Healthcare has proven to be
one of the most resilient
The most rapid growth in healthcare
spending is expected to be in the Middle sectors in the UAE despite the
East and Africa (Figure 1). The region could current economic downturn.
see an annual average increase of around
9% over 2014-18, due in part to population
growth and efforts to expand access to The UAEs 2021 Vision states that the
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care. UAE [will] invest continually to build
world-class healthcare infrastructure,
Currently, despite efforts by the private and expertise and services in order to fulfil
public sectors, indicators such as the density citizens growing needs and
of provision of beds, doctors and nurses in expectations.
the region lag those in developed
economies. The average number of beds per The healthcare structure in the UAE is
1,000 people in the Gulf Cooperation Council different to that of its neighbours in
(GCC) countries was 1.9 in 2012, compared that Abu Dhabi and Dubai have their
to three beds in Singapore, the UK and the own healthcare regulators. There are
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US, and more than eight in Germany. four regulators in the UAE:
Average healthcare expenditure as a
World industry outlook:
5 percentage of gross domestic product (GDP) - The Ministry of Health
Healthcare and pharmaceuticals,
The Economist Intelligence Unit, in the GCC is estimated to be 2.3%, - Health Authority Abu Dhabi (HAAD)
May 2014. compared to 7.6% in the UK and 8.1% in the - Dubai Health Authority (DHA)
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US in 2013. - Dubai Healthcare City Free Zone
Meed Insight (2014) Healthcare Each entity has responsibility for
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Strategies in the Gulf. facilities, licensing of doctors and
Healthcare in the UAE
nurses and market regulation within its
In the United Arab Emirates, the healthcare jurisdiction. The Ministry of Health
sector has witnessed an extended period of continues to play a pivotal role in
World Bank Development
7 high growth, which is forecast to continue, providing healthcare, but it is not the
Indicators.
driven by the gap between supply and only actor in the UAE healthcare
demand. system.
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Global Trends in Healthcare 2) The genetic revolution
Innovation
Thanks to data science and the human
genome project, we now know the genetic
Healthcare communities generate scientific,
traits of a population, and can identify genetic
medical, and care delivery breakthroughs that
differences. The healthcare sector is moving
can improve health worldwide. Innovation in
towards precision medicine, an emerging
healthcare has long been associated with new
approach to treatment and prevention that
medicines, enhanced technology for
takes into account variations in genes,
healthcare devices and advances in surgical
environment and lifestyle. Although it is not
procedures. There is, however, more to
yet used in diagnosing most diseases, the
healthcare innovation than new drugs and
trend is clearly shifting away from one size fits
instruments.
all medicines.
The organisational aspect of healthcare is a
source of some of the most radical 3) Enhanced communication
http://www.wsj.com/articles/ innovations, particularly with the technologies, digital & video images
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drone-delivers-medicine-to- development of digital technologies which
rural-virginia-clinic-1437155114 represent a huge opportunity to transform Delivery of healthcare services is changing;
the healthcare sector in way that increases they can now be directly delivered by experts
efficiency as well as quality. Industry experts from a distance. It is now technically possible
point to three core domains driving to prescribe a drug remotely, although the
innovation in the healthcare sector: practice is still in its early days. The
possibilities with this type of technologies are
1) Data science innovation endless; prescribed medicines can be
delivered to remote areas via drones, as
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Big data offers vast potential for the happened in July 2015 in rural Virginia, USA.
healthcare sector. Previous innovations have Cases of chronic disease can be monitored via
relied on limited datasets, largely from data transfer without any effort from the
clinical research or research projects. Today, patient.
for the first time, the healthcare sector can
collect life-long datasets. Sources including
medical and insurance records, wearable
sensors, genetic data and social media use
can be used to personalize care, contain
epidemics, and prevent chronic illnesses
through predictive modelling techniques.
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Successful Healthcare
Innovation in the UAE
The UAE has launched a number of Innovations make their way to UAE healthcare
initiatives to promote innovation in the sector through various routes. Besides direct
health sector. Telemedicine the use of government support and partnerships with
digital technologies to provide healthcare leading global players such as Cleveland Clinic,
services from a remote location offers an there have been a number of successful
illustration of what digital technology can initiatives to forge partnerships between
do for healthcare in the UAE (see Figure 2). industry and academia. For example, the UAEs
first biotechnology incubation initiative was
Abu Dhabi Telemedicine Centre is a joint established in 2012 on the Abu Dhabi
venture between Mubadala and Universitys campus in collaboration with
Switzerlands leading telemedicine AccuVis the medical research and product
provider, Medgate. By expanding the reach development company financed by Khalifa Fund.
of UAE physicians, telemedicine helps In Ras Al-Khaimah, Julphar has emerged as one
relieve the shortage of high-quality of the largest pharmaceutical manufacturers in
healthcare practitioners, as well as the MENA region. Showcased during the UAEs
reducing costs and giving greater access to Innovation Week (22-28 November 2015),
general and specialist care for patients Julphar presented a giant leap in the fight
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through various digital media. against diabetes at its state-of-the-art
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recombinant diabetes plant.
Big data analysis offers another
http://www.tamimi.com/en/magazin opportunity for innovation in the In addition to its efforts to develop the
9 healthcare industry. The majority of pharmaceutical and biotechnology industries,
e/law-update/section-11/may-
8/telemedicine-has-the-potential-to- healthcare providers across the UAE have the UAE promotes innovation in the delivery of
revolutionise-the-uaes-healthcare- adopted advanced technologies and tools health therapeutic services using advanced
sector.html#sthash.SAauKqnV.dpuf to manage patient data in an efficient technologies such as robotic surgery. Dr.
manner. Compiling, accessing, sharing and Mohammad Al-Olama, Undersecretary at the
http://gulftimes.ae/uae- applying big data analytics will drive more UAE Ministry of Health, says government
10 healthcare-sector-moving- efficient, robust and effective business and ambitions are high. The introduction of
towards-technology/ clinical decision-making. advanced technologies at our hospitals will
contribute to greater efficiency in patient care
For example, SKMC has incorporated iCare and also contribute to the better health of the
http://www.healthmagazine.ae/pr an Electronic Medical Records (EMR) people. By assuring excellent service standards
11 ess_release/julphar-presents- 10
system in all of its facilities. The system through deploying the latest technologies, we
giant-leap-against-diabetes-at- already holds almost half a million are bringing transformational change to our
uae-innovation-week/ electronic medical records. It allows healthcare system.
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doctors to instantly access critical patient
http://www3.gehealthcare.ae/~/m information, including their medical
12 edia/documents/uae/press%20kit history, blood type and use of prescription
/latest%20medical%20technology drugs, regardless of which hospital or clinic
%20to%20transform%20uae%20h holds their details.
ealthcare%20pr%20english.pdf?Pa
rent=%7B30430C4C-4133-46E2- Another example is eclaim, an electronic
A5CF-6A10E792567C%7D health insurance claim system introduced
by HAAD aimed at cutting down time-
consuming paperwork. The Dubai Health
http://www.thenational.ae/arts
13 Authority has launched a number of smart
-lifestyle/well-being/abu-
apps to provide people with free and easy
dhabi-telemedicine-centre-in-
access to both general and personalised
numbers
healthcare information.
Figure 2: Abu Dhabi Telemedicine
4 Centre in numbers13
S.W.O.T. Analysis of the Healthcare
Innovation System in the UAE
Strengths The human capital required for healthcare
The main strength of the UAE resides in its innovation is also relatively limited. The vast
culture that is ready to adopt new ideas, majority of healthcare workers are sourced
and offers fertile ground for them to grow from East Asia. There is not enough time nor
into tangible outcomes. As a country, it incentives for research among healthcare
welcomes innovations and implements professionals. A shortage of locally trained
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them rapidly. human capital is cause for concern.
There are not enough trained healthcare
With regard to harnessing the potential of
professionals, and some recruits view working
healthcare innovation, the population is
in the GCC simply as a stepping stone in the
small enough to manage easily, but big
process of emigrating to Canada, the UK or
enough to see results. This makes it
other Western nations.
possible to build very rich databases. As
one industry expert put it, This is a place
Attracting and retaining qualified medical staff
where it is possible to close the loop to
increases the burden on healthcare
capture detailed personal information 18
operators. The associated costs are not only
from birth.
financial, but also social, as it takes time for
foreign medical professionals to understand
Furthermore, individuals trust the
IMD, World Competitiveness Yearbook and adapt to the local culture. The diversity of
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government with their data. As the
2016. the population makes it challenging to address
government sponsors the lifetime cost of
their various healthcare requirements. With
healthcare, there is no fear of exclusion.
more than 200 nationalities, effective
This willingness to share data is a key
communications is challenging. Additionally, it
advantage when implementing innovative
is estimated that the population keeps
http://gulfnews.com/news/uae/educati health projects.
15 changing every 6-7 years, making it difficult to
on/uae-urged-to-invest-more-in-
scientific-research-1.1155562
follow up on outcomes.
Entrepreneurial activity around research is
Weaknesses also low in the UAE. One industry expert has
The main weakness of the Arab region as a
https://www.vision2021.ae/en/national- pointed out that whereas the amount spent
16 whole is its resources, both in terms of
priority-areas/competitive-knowledge- on clinical research activities by
economy tangible and intangible capital. However, pharmaceuticals is equal to 7% of sales in USA,
it is worth noting that in 2014 the UAE in the MENA region its less than 1%. The
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spent 0.7% of GDP on R&D. This rate is public sector dominates the healthcare
considerably more than the 0.2% average provision industry in the UAE; 60% of patient
White, Nicholas (2016) Arab Health
17 that Arab countries spend on scientific
Magazine, 2016- Issue 1. 15
care in UAE is delivered by SEHA. Some private
research and discovery. Looking ahead, companies have made major investments and
the UAE National Agenda has a goal to improved their market share, but the market
increase R&D spending to 1.5% of GDP by remains fragmented and small businesses
US-UAE Business Council (2014) The UAE 2021.
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18 struggle to break into it. Start-up activities in
Healthcare Sector.
healthcare and related innovations are limited
because commercial enterprises such as real
estate are perceived to be more lucrative.
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Opportunities Overall, the UAE has
Leadership is a main source of massive resources, modern
opportunity in the healthcare sector in infrastructure, and a small
the UAE. It has a visionary and
and young population
supportive government, whose
objectives and concerns are aligned. living in peace. As on
Innovation is clearly defined as an expert pointed out, there is
objective, and the government is striving
to set common objectives across
no better atmosphere for
different departments. This creates public health!
further opportunities for alignment and
for capitalising on existing efforts
between different entities. The entire
strategy for healthcare in Abu Dhabi, for
example, has been approved by the
Threats
government, which opens up the
opportunity to make changes and make The UAE is situated in a region known for
them fast. instability as well as its economic
dependence on oil and gas resources.
A core initiative by the government is to While it compares favourably with
boost private sector involvement in neighbouring economies, these issues
healthcare provision. The New Medical make finance one of the main challenges
Centre and Al Noor Hospital, both non- for the regional healthcare system.
government run, provide specialty and Funding is crucial as costs are rising every
full-spectrum care that are crucial to the year. If funding is reduced or withdrawn,
UAEs overall and long-term healthcare drive for innovation will be abandoned.
development.
With regard to human capital, in Access for the entire population to the
INSEADs Global Talent Competitiveness right level of care at the right time is one
Index 2016 the UAE tops the Middle East of the main challenges for the UAE.
in attracting and retaining talent (23rd), Currently, there is over-utilisation of
ahead of Qatar (24th) and Saudi Arabia certain types of services, and quality gaps
(42nd). The study, which measures a across specialities, which increases costs
nations competitiveness based on the and reduces efficiency. There are a
quality of talent it produces, attracts and number of reasons for this. Individuals do
retains, ranks UAE particularly high on not always trust the doctors; they make
the Attract pillar which aims to measure 13 outpatient claims a year (in developed
both external and internal openness. world the figure is 5-6 claims, despite an
older population). This corresponds to
As part of the drive towards a more than one doctor per month per
knowledge economy, the government Emirati on aggregate. As there are no
has taken steps to attract foreign talent questions asked about insurance, no gate
and expertise, and it certainly has done keeper mechanism in the form of family
so in the medical sector. The next step is doctors, people shop around for the
to attract more young Emiratis to right doctor, which is costly and time-
embark on medical careers. consuming.
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The Way Forward for the UAE
Healthcare Sector
Tapping the Potential of Medical
Tourism in the UAE
Six million people travel for medical treatment from one country
to another, and if you add in those who travel some distance
http://www.imtj.com/resources/medical- 19
19 within a country it exceeds 10 million a year. Indeed,
tourism-research-facts-and-figures-2015/
globalisation and the development of logistic and communication
services has radically changed the dynamics of healthcare. In
todays world, a trend is apparent among patients in the
http://gulfnews.com/business/sectors/touri developed world who travel to emerging countries in search of
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sm/500-000-medical-tourists-to-dubai-in- economical medical treatment.
2015-1.1597133
Medical tourism is a key domain for developing the healthcare
sector in the UAE, as well as an important source of revenue for
the country. The benefits of medical tourism to the overall health
sector are numerous. Among others, they include:
- Development of healthcare services in the private sector.
- Higher quality of healthcare service provision due to the
need for international competitiveness.
- Improving the customer experience and the overall
perception of healthcare.
- Attracting highly-skilled healthcare professionals.
- Strengthening the healthcare investment climate.
- Generating more revenue.
The countrys improved healthcare infrastructure, alongside its
existing profile as a tourism hub, has led to the development of
medical tourism within the GCC. Dubai, in particular, is becoming
a popular medical tourism destination as patients look to combine
leisure time with affordable yet high-quality medical services.
Dubai attracted 260,000 medical tourists in the first half of 2015,
up 12% from the same period a year ago, generating Dh1 billion in
revenues. The Dubai Health Authority aims to grow the number of
medical tourists by around 12% annually and to generate Dh2.6
billion in revenue by 2020, according to Linda Abdullah Ali, Head
of the Medical Tourism Office at the Health Regulation
7 20
Department of the DHA.
The Dubai government is taking a proactive Taken together, these strategies suggest that
approach towards developing this as a the UAE will soon be one of the top
regional industry and it has developed a destinations in medical tourism. But one hurdle
number of strategic initiatives. The that remains is the high percentage of UAE
introduction of a three-month medical tourist nationals that seek medical care overseas.
visa, for example, has been a major incentive
for foreign patients to seek treatment in Regional dynamics play a crucial role in the
Dubai and other Emirates. Another important trends of medical tourism, as a large volume of
step has been achieved with the introduction travellers prefer regional locations over long
of short-stay visas for specialist doctors, distance travel. In Dubai, for example, Asian
making it easier for hospitals to bring in tourists accounted for 33% of the total,
experts for consultations and special followed by 27% from Europe, and 23% from
procedures. A specialised free-zone named GCC and other Arab countries in the first half of
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Dubai Health Care City, including over 120 2015.
medical healthcare centres and around 4,000
medical professionals, is another important There is stiff competition among countries to
development. attract medical travellers (see Figure 3). Various
regional centres of excellence have emerged in
Dubai is not the only Emirate to attract the recent past such as Jordan in MENA; India,
medical tourists. The opening of Cleveland Singapore and Thailand in Asia; Brazil, Cuba and
Clinic in Abu Dhabi has come as a boon for Mexico in Latin America; and Turkey, Poland
medical tourists resulting in a 15% to 20% and the Scandinavian countries in Europe.
increase in inbound medical tourists to Abu
Dhabi since the world-renowned brand Facilities in these countries are of a high
21
launched in 2015. Managed by Mubadala standard, and often feature collaborations with
Healthcare, the multi-specialty hospital is one international brands and accreditation from
of the biggest healthcare facilities in the city. international regulatory organisations. They
cater for medical tourists by providing English-
Alongside these considerable infrastructure speaking staff, multiple specialisations and
investments, the UAE Ministry of Health workers to help with post-operative recovery.
ensures that stringent safety regulations are Most importantly, they offer cost-saving
http://gulfnews.com/xpress/ab in place and an increased number of benefits to medical tourists.
21 u-dhabi/news/abu-dhabi-new- measures are being taken to ensure clinics,
destination-for-medical- hospitals and medical professionals provide
tourists-1.1649372 the highest standards of care.
http://gulfnews.com/business/
22
sectors/tourism/500-000-
medical-tourists-to-dubai-in-
2015-1.1597133
Figure 3: Perceptual mapping of leading destinations in medical tourism
Source: Health Beyond Borders an advisory firm based in Dubai
Possible Policy Directions
The world is at a crossroads when it comes to healthcare. As more and more
innovations in healthcare are put into practice, we are witnessing the transformation
of healthcare systems. This ongoing transformation requires a balanced regulatory
framework, one that does not impede the take up of innovation and yet does not
compromise the safety and quality of healthcare services. Too much and too rigid
regulation can be a major hurdle to the uptake of innovation in the healthcare
system. And yet there need to be laws and regulations that provide protection
against risky and unethical practices. In UAE, for example, it is not possible to use the
cloud to transfer data as the privacy of the patient is vital.
With the development of new technologies, an increasing number of ethical
questions will be raised which the government will need to tackle. Some of these will
be addressed globally in a multilateral level through the World Health Organisation;
others will have to be addressed locally. At the local level, governments can
spearhead ethical-industrial committees to forge roadmaps for the development and
adoption of the next generation of healthcare innovations. As seen with the Bush
administration regarding stem cell research in the US, one countrys ban on a
particular research area can have long-term implications for the development of that
area.
More specific to the UAE; we offer the following recommendations:
- Increase both government and private investment in medical research.
- Develop a national medical innovation strategy that sets a roadmap with
milestones and targets that aim to put the UAE among the top 10 countries
in healthcare innovation.
- Create a UAE healthcare innovation exchange network where best practices
and innovations in healthcare delivery and administration are shared openly.
- Create a UAE Healthcare Innovator Award that recognises and celebrates
the countrys top medical innovator.
- Develop a balanced regulatory framework that reconciles the provision of
the right set of incentives for innovation and the most adequate level of
patient and practitioner protection.
- Consolidate, coordinate and communicate healthcare policy targets at all
levels of government.
