Reviewing Healthcare system in Abu Dhabi - Research Paper Example

Reviewing Healthcare system in Abu Dhabi INTRODUCTION Background Healthcare is one of the most important sectors that have been identified by the government of UAE and due to additional effort, the healthcare industry in UAE showed significant progress and extraordinary growth in the last decade. The government of the country has been aiming to diversify from its oil intensive business environment, which is why providing adequate resources for the healthcare sector is an initiative. Healthcare segment is regulated and controlled in UAE, both at Emirate and Federal level. Since the establishment of UAE as an independent state in 1971, the president and founder of the state, Sheikh Zayed bin Sultan Al Nahyan, had put forward his vision to establish quality healthcare services and centres for the community. UAE, as a resource rich nation, has never faced financial issues in maintaining high standards of healthcare services. The public healthcare services are managed and administered by various authorities and regularity bodies in UAE. However, among them, The Ministry of Health Authority-Abu Dhabi (HAAD), Emirates Health Authority (EHA) and Dubai Health Authority (DHA), are the primary authorities (Koornneefa, Robbena, Seiari d, e & Siksekf, 2012). The healthcare standard is extremely high in the country and therefore, the government spending in the sector has also been high. The total expenditure by the government in this sector from 1993 to 2003 was around $436 million. The World Health Organisation (WHO) stated that in the year 2004, the healthcare segment of the country constituted of 2.9 percent of the gross domestic product. It was identified that cardiovascular diseases were the major reason of death in the country and accounted for 28 percent of deaths. Other major causes of diseases and deaths are congenital abnormalities, injuries, accidents and malignancies. According to World Bank, Abu Dhabi and Dubai are considered to be the 3rd and 2nd most admired medical destinations in this region, apart from Jordon (Koornneefa, Robbena, Seiari d, e & Siksekf, 2012). High-quality medical facilities and doctors are available in UAE. Due to the high percentage of expats, foreign medical staffs and doctors are available in the country. This also prevents difficulties for the tourists from the western countries in any treatment proceedings. The most contemporary hospital in UAE is the Rashid Hospital, which is in Dubai. The country also has excellent maternal hospitals where all the deliveries are done by highly trained doctors and medical professionals. Polio has been eliminated completely from the country (Koornneefa, Robbena, Seiari d, e & Siksekf, 2012). There are more than 40 public hospitals in UAE and in Abu Dhabi; there are 57 health centres, 3 maternal hospitals, 3 specialised dental centrals, 5 rehab centres and 13 private hospitals, managed by the government body called SEHA. However, there are more private healthcare centres and hospitals compared to the government sponsored ones (Westway, Rheeder, Van Zyl & Seager, 2003). Research Aim and Objectives The aim of this research study is to discuss about the healthcare system of UAE, with prime focus on Abu Dhabi. Healthcare sector in the country is quite significant and has been strongly established, managed and administered by the government and other regulatory bodies. With this aim, certain objectives for the study have been developed: To analyse the position and condition of the healthcare sector in UAE as a whole. To analyse the different regulatory bodies and their role in the healthcare segment in UAE. To discuss the healthcare business of Abu Dhabi with regards to its financial contribution to the national income. To evaluate the health insurance issues in Abu Dhabi. THEORITICAL BACKGROUND Healthcare System in Abu Dhabi Abu Dhabi is the capital of UAE and also, one of the most successful cities due to its immense contribution in the national income. It is one of the top exporters of oil and gas globally. The city is presently enjoying extensive investments, which reveals that its financial status and standard of living is quite high. However, with the increasing population, the diseases are also rising. Diseases such as, cardiovascular, respiratory diseases and diabetes, are mostly found among the citizens. According to HAAD, the population of Abu Dhabi will double and a requirement of around 20 new hospitals and 23 new clinics would be necessary. The optimal occupancy in the critical care wards in Abu Dhabi is around 73 percent and reports of 100 percent occupancy have been there (Smith & Swinehart, 2001). The provision of sustainable, high quality and affordable healthcare, that the people in the city can freely access, is indeed a dream for every policy makers. However, there are countries, where the gap between reality and dream has motivated the stakeholders to advocate lasting and structural reforms, for addressing the financial concerns and quality problems in the healthcare segment. WHO and Organisation for Economic Cooperation (OECD) have carried out several researches and identified that the cost of healthcare has been increasing aggressively in the recent times. According to Reuters, the pharmaceutical sector has been showing a growth of 11.3 percent and by 2014, the drug expenditure is expected to reach around $2.2 billion, which signifies a compound annual growth rate of 9.86 percent. The study published by Dubai Chamber of Commerce had stated the local pharmaceutical segment to be small and so, the country has to rely on Europe for 64 percent of drug imports. Regulation for Pharmaceuticals and Medical Devices The pharmaceutical market in Abu Dhabi and entire UAE is subjugated by the foreign multinationals and has very few domestic manufacturers in the country. However, even then, there are well-established legal framework to govern the manufacture, import and distribution of medicine and medical equipments that has been set under the Federal Law 4 of 1983. The pharmaceutical industry of the Gulf countries is around $7.6 billion, which is expected to grow to $9.6 billion by the year 2019. The UAE has made 34 percent contribution in this, which is around $2.6 billion. Most of the growth percent in the industry can be linked to the import of legitimate drug due to the increasing population of the country and also, due to over-prescribed medicines by the doctors. This has been a core reason for the increase in healthcare cost and also, a significant market tool for the companies, producing medicines and medical devices. The Intercontinental Marketing Services (IMS) have revealed that expensive medicines are being prescribed in Abu Dhabi and this increasing trend has been noticed in recent years. In order to control and manage the pharmaceutical industry, the government of the country has set laws for the manufacturers, distributors and sellers (Rahmqvist, 2001). The Law no. 4 in the pharmaceutical segment UAE states that any pharmaceutical factory, distribution centre or shop cannot be opened without a licence and the applicant, applying for the licence, should be a citizen of UAE. The medical products to be offered for sales have to be legally imported. The sales, distribution and import of the medical devices are controlled and managed by the Ministry of the country. There are set guidelines of the ministry for medical devices and those with the intention of exporting the medical devices can only do so with the help of a local medical shop owner with valid licence. Medical device application form needs to be submitted to the Ministry of Drug Control Department. UAE is slowly venturing towards biotechnology. Dubai Biotechnology and Research Park has been setup in the free zone of Dubai in the year 2005 for research and development. Proper establishment and recognition would be able to offer benefits to patients in the healthcare segment of Abu Dhabi. This can also be a catalyst to boost the turnover of the healthcare sector of Abu Dhabi and entire UAE (OECD Investment Research, 2010). Competition One of the most significant characteristics of Abu Dhabi’s healthcare system is its prevailing aggressive competition. This has been due to rising privatization of the healthcare services, which are even receiving international recognition from institutions such as, John Hopkins Hospital and Cleveland Clinic. With the development of SEHA in 2007, a system was created which led to delivery of critical care service to the employees of the external companies for creation of a quasi market. SEHA controls the performance of these contract providers which are monitored under a set of key performance indicators. This system also includes financial penalties when the performance of the service provider falls below the expectations (Ygge & Arnetz, 2001). The private sector in the healthcare segment has expanded considerably in 2009-2010 as the number of facilities in the healthcare segment has increased by 12.4 percent and among these, 90 percent is run by private companies. It has been noticed that these private service providers have improved the quality of healthcare services. The augmenting facilities however, do not imply an improved access to healthcare. The utilisation rate is still low and differs starkly in comparison to the total population (Zineldin, 2006). Financial Aspect in Healthcare Segment of Abu Dhabi, UAE In this segment of the study, the discussion would be focused towards the financial aspect of the healthcare segment of UAE and Abu Dhabi. In 2011, it has been noted that UAE was able to achieve a GDP growth of around 3.3 percent due to the improving economic status of the country. The major reasons behind this are the confidence of the customers, increasing level of trade, tourism in the country and definitely, the rising oil prices. It is regarded as one of the wealthiest countries based on it’s per capital income. The high government spending on the healthcare segment is due to the availability of high disposable income (Deloitte, 2011). Market trends suggest that the spending in the healthcare segment will continue to remain high because of outpatient services, overconsumption patterns and high level of awareness. It has been found that the government of the country has spend around $8 billion in the year 2010 in the healthcare segment and had also planned to increase their spending by 24 percent in 2011. By 2014, the government of the country will try to double the spending on the healthcare segment as a growth of 3.4 is expected in GDP from 2.8 percent. This growth is, however, assumed to be increasing due to drivers like, low inflation, aging population and increasing purchasing power (Deloitte, 2011). Another significant reason is the obligatory insurance policies in Abu Dhabi, due to which the people are somewhat bound to avail healthcare services from the country, leading to an increase in national income. However, as discussed in various places in this study, the healthcare expenditure is still not up to the mark, compared to the policies availed by the customers, because the expats are going back to their homelands and the people remaining in UAE or Abu Dhabi are not utilising their basic policies. However, the CAGR is expected to rise to 5 percent, thereby revealing that the country has extremely high growth prospects in healthcare sector, with regards to the financial perspective (Deloitte, 2011). If the expense front of the healthcare services is analysed, then it can be found that the medical expenses have increased by 35 to 40 percent in the past decade. The reasons behind the increasing medical cost may be the consumer habits in the country, inflation rates or the tendency of fewer patients to over-consume the offered medical services that leads to a scarcity of offerings at various places. The increasing competition among the medical professionals is also one of the significant reasons for increasing medical cost. It has been also estimated that the increasing medical costs is also due to the tendency of the doctors to over-prescribe medicines or treatments, so that the hospitals and physicians can derive maximum treatment cost from the insurance companies. The increasing rate of spiralling or chronic diseases also results in increasing medical premiums, leading to an increase in the healthcare cost by at least 20 percent (Deloitte, 2011). Health Insurance The reform programs, established by the government of Abu Dhabi, mandates that all the workers need to avail the health insurance. The employees working in companies in the city must register themselves in the health insurance system and fund their insurance, which also includes the expatriate employees. According to the regulatory authorities, around 95 percent of the population should have access to the healthcare system through insurance plans. This can be done by enrolling in one of the three insurance plans in the healthcare segment. However, even though people were compelled to avail healthcare insurance, but this did not confirm the percentage of policy utilisation (Koornneefa, Robbena, Seiari d, e & Siksekf, 2012). The members, availing the basic insurance in the healthcare segment, seldom access the policy. This is an indication that the healthcare policies, though availed, are underutilized. Furthermore, the expats go to their own countries when they are seriously ill. This leads to lower utilisation of policies. So, this signifies that focus needs to be on utilisation of basic policy needs (Koornneefa, Robbena, Seiari d, e & Siksekf, 2012). In the year 2010, around 3000 patients were approved by the medical board to utilise their insurance policies for treatment, which led to an increase in policy utilisation by 13 percent compared to 2009. Apart from this, there is limited information available in relation to the affordability of the services related to healthcare, even when more than 2.7 percent of GDP is spent on healthcare sector. The two most significant offerings in healthcare insurance are Thiqa Scheme and Basic plan, which are supported by the government of Abu Dhabi (Brady & Robertson, 2001). The current research on the healthcare insurance segment of Abu Dhabi has indicated that health insurance decreases the per capita spending on the healthcare of the household. This signifies that it is certainly complex to identify the impact of the initiation of mandatory insurance schemes in the healthcare segment (Koornneefa, Robbena, Seiari d, e & Siksekf, 2012). Comparative Analysis between Abu Dhabi and Singapore Healthcare Segment In this segment of the study, the focus of discussion would be towards conducting a comparative analysis between the healthcare segment of UAE, which includes Abu Dhabi and Singapore. As already been studied, generous financial spending from the government is helping the healthcare sector of UAE and Abu Dhabi to flourish and world class healthcare services are being offered to the patients. The government and regulatory bodies have ensured that 90 percent citizens of the country have their own health insurance policy. Now, the healthcare segment of Singapore would also be studied in order draw a comparison between these two countries and their ways of managing healthcare segments (Bodur, 2002). It is said that Singapore possesses strong excellence in the healthcare sector too. It is known to have the fourth best healthcare infrastructure in the world, but even less than 4 percent of the GDP is spent on the healthcare segment. The healthcare segment and services offered are multilayered and the practices in these services fall among the best treatments worldwide. However, despite this reputation in the global healthcare business, the Ministry of Healthcare in Singapore has been putting efforts to restructure the healthcare system and incorporate care model, which is integrated in the business model for providing patients with an integrated and holistic care. The framework of healthcare in Singapore has been segregated into six divisions based on the regions (Chua & Poh, 2008). Despite the uncertainties arising due to global economy, the healthcare segment has been doing quite well. Based on the data provided by the Healthcare Index of Singapore Stock Exchange, the industry has gained 40.7 percent, even during the financial downturn around 2010. This signifies that the healthcare segment of Singapore is equal or higher in status, compared to UAE or Abu Dhabi, because this segment in Singapore has been successful in establishing global records in terms of quality of services provided to the patients around the world (Singapore Economic Development Board, 2013). It has been a common destination for medical travellers over years and this trend is increasing day by day. The healthcare services offered to the patients are mainly based on the sophisticated techniques, technology and procedures. The services offered are niche and due to the country’s political stability, low crime percentage and excellent transportation services, travellers find it convenient to visit Singapore for medical purposes. The culture and cosmopolitan environment of the country also attract patients’ attention from all over. Though UAE and Abu Dhabi, in this case, possess all these qualities, yet at some point the culture and ethnic pattern followed in the country is specific, which is why the western tourists sometimes prefer to avoid the Middle-Eastern countries (OECD Investment Research, 2010). CONCLUSION In countries, different stakeholders have different points of view regarding the effective mechanism for bringing about reforms. However, the aim is similar in every case, which is high quality treatment in the healthcare segment, affordability and free access to every citizen in the country. The goal set by the government of Abu Dhabi reflects its pledge to offer sustainable, affordable and quality healthcare services to its community. However, it can be said that there has been slight research on the role of healthcare system, its quality and administration in Abu Dhabi. Regardless of little evidence, various conclusions can be drawn. The first goal is to improve the access of the people to healthcare. Strides towards increasing accessibility have been made and over 95 percent of the population avails the health insurance scheme now. However, the rate of utilisation differs among the policy holders. Many challenges, with regards to access, quality and affordability, need to be addressed. However, the first step towards success has already been taken by the government of Abu Dhabi under the guidance of HAAD. Ambitious research initiatives have been taken by the government in order to offer excellent healthcare services to the people. The Abu Dhabi government has established research initiatives for various compliances and regulatory requirements. A comparison has also been drawn with the healthcare segment of Singapore. It was found that though the healthcare sector of Abu Dhabi is progressing and has high standards, yet Singapore has better opportunities to offer to the medical tourists around the world, due to the better facilities and favourable external environment. References Bodur, S. (2002). Outpatient satisfaction with health centers in urban areas. Turkish Journal of Medicine, 32, 409-14. Brady, K. & Robertson, J. (2001). Searching for a consensus on the antecedent role of service quality and satisfaction: an exploratory cross-sectional study. Journal of Business Research, 51, 53-60. Chua, S. T. & Poh, C. Y. (2008). Singapore healthcare sector. Retrieved from http://www.rafflesmedicalgroup.com/ImgCont/249/suisse_Stronggrowth%20diagnosis.pdf Deloitte. (2011). Survey of the UAE healthcare sector opportunities and challenges for private providers. 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