We have witnessed firsthand the tremendous growth and incredible change in the healthcare industry over the years in UAE. In the late 1990s, the only option for quality healthcare was to travel abroad, either east or west. As the country matured, so did the mindset of the people living here, who increasingly started utilizing the facilities provided here. This resulted in the expansion of the healthcare economy of UAE, resulting in the increasing number of hospitals, clinics, pharmacies and other ancillary companies. Although, even with the recent advancements, UAE still has a long way to go to be competitive or comparative to the standards of healthcare in the developed countries.
Historically, when the country was in its infant stages, healthcare services were provided by Government hospitals and institutions, and licenses were rarely provided to the private sector. Gradually, as the economy expanded and diversified, the Government encouraged investment in the healthcare sector and initiated directives towards the development and sophistication of this sector. It established ministries, enacted laws and hired professionals to regulate the quality of services provided. Further, it improved stability and transparency in the economy as a whole. Consequently, consumer and investor confidence grew leading to an exponential increase in the number of healthcare providers and the creation of the healthcare economy. The UAE Governments strategically exploited the boom in the healthcare industry through initiatives such as promoting health insurance, medical tourism and establishing healthcare cities. The rapid population growth and economic expansion has further fueled the growth in the healthcare sector.
We have observed through interactions and experience with the members of the healthcare sector that there is a common weakness identified by all, which is the lack of funding towards research and development. Further, large multi-nationals have also been skeptical in establishing manufacturing facilities in UAE which might be due to a lack of expertise or experience. We believe this has already been identified as an opportunity by the Governments of UAE, as they have recently launched initiatives promoting innovation and research in all sectors. The establishment of Healthcare cities as free zone areas, has spurred the rise of consultants and research firms.
Another key issue we have noted from our recent experiences of auditing healthcare providers is that all of them have two main concerns related to the current state of the sector – increased competition and rising staff costs. These are depressing the margins, making the sector less attractive to future investors. To overcome these challenges, the following measures can be adopted by the public and private sectors:
*Planning sustained growth in the sector by geographically spreading the investments.
*Attracting medical practitioners from other countries and easing the process of certifications.
*Developing the quality of service provided with advanced diagnostic capabilities.
*Strategically encouraging investments in new sectors, treatments and research.
*Implementation of Electronic Health Records systems and enabling the exchange of these records among healthcare providers would help reduce overall cost of healthcare.
*Improving operational efficiencies, promoting automation and advancements in innovative technologies, mobile applications of health etc.
*Focus on developing more integrated multidisciplinary teams to deliver care efficiently.
The percentage of health spending relative to the overall GDP is still low for UAE and the sector would still be considered as developing compared to the developed economies. Advancements in technologies and fostering innovation and research can further lead to development of the sector. Similar initiatives have been launched by other developing economies such as China and India because they all realize that fostering knowledge and learning is the next step towards becoming a truly developed economic superpower.
by: Sachin Singhal, Principal, Audit, and Manish Gourisaria, Senior Manager, Audit, Deloitte, Middle East
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