Improving the quality of healthcare delivery in existing hospitals and clinics is as important as building new facilities for the Gulf states. Patients’ perceptions of the quality of the healthcare available are so low that most patients who are financially and physically able to travel overseas for treatment do so, rather than be treated in their home state.

In an August 2009 survey by international research organisation YouGov, 57 per cent of UAE nationals said they would seek medical treatment abroad if they fell seriously ill.

The fact that so many would avoid being hospitalised in their own country at any cost is a serious cause for concern. The GCC states are keen to win acceptance as developed nations, but a key measure of this is their ability to care for their citizens through world-class health systems. For this reason, a growing number of health authorities in the region are choosing to outsource the management of their hospitals in a bid to raise the standard of care they offer, and to encourage GCC citizens to trust their local healthcare systems. 

Historical precedent

Bringing in international expertise to operate hospitals in the Gulf is not a new strategy. “Outsourcing goes back to the 1970s when, after oil prices shot up, Saudi Arabia and the UAE found themselves with large amounts of money and wanted to develop their social infrastructure with particular emphasis on healthcare, but they didn’t have the capability,” says Howard Lyons partner at UK consultant PA Consulting.

The first contracts were awarded through gov-ernment introductions. US defence firm Whittaker Corporation was the pioneer, winning a $100m healthcare management contract from Saudi Arabia in 1976, which included the construction and equipping of several hospitals. Later in the 1970s, the firm was awarded a $10m contract to build and operate the Tawam hospital in Abu Dhabi. Other US and UK firms followed.

Initially the contracts awarded were highly profitable, with governments willing to pay whatever it cost to build, equip and manage the healthcare facilities. In the 1980s, as the trend for protecting national interests began to take hold in the Gulf, companies wishing to do business in the region were obliged to work in joint-venture partnerships, which reduced the profitability of operating hospitals. Fixed-price hospital operating contracts later became the norm, and in time local companies began to be favoured over international firms.

“The 1990s was a time when there wasn’t a lot of contracting out to international companies, the one exception probably being Interhealth Canada, which was brought in to build and manage the Sheikh Khalifa Hospital in Abu Dhabi,” says Lyons. “By the end of the 1990s, there was little active involvement of international companies in managing hospitals in the Middle East. But then came the recognition that once local companies had taken over, standards declined.”

Once again governments are looking to bring in international management teams to improve the operations of public hospitals. In Dubai, Interhealth Canada is managing the Rashid Hospital, while the Al-Qassimi Hospital in Sharjah has recently been handed back after a spell under the management of Australia’s VHA Global.

Western countries have traditionally outsourced hospital management to bring cost savings and efficiency gains. But the motivation in the Gulf is different. Restoring faith in the healthcare system and improving the quality of care delivered are the main drivers behind outsourcing hospital management.

Abu Dhabi has adopted a strategy of its own, partnering with big brand names to build confidence in its health system. Over the past four years, six public hospitals in the UAE capital have been handed over to well-known inter-national operators.

Three of these are being managed by Johns Hopkins International of the US, whose research and teaching hospital in Baltimore has been voted the best US hospital by magazine US News & World Report for 19 consecutive years.

In February 2006, Johns Hopkins signed an agreement with Abu Dhabi’s General Authority for Health Services to oversee the management of the Tawam hospital in Al-Ain. In February 2008, Johns Hopkins was appointed to manage the Al-Rahba Hospital on the outskirts of Abu Dhabi city, and in November, it was hired to manage the specialist maternity Corniche Hospital in downtown Abu Dhabi.

The mission given to the operators is to provide high-quality healthcare that will meet the needs and exceed the expectations of the residents. Full use is made of the companies’ logos.

“Bringing in a branded organisation is meant to raise public confidence,” says Chris Austin, principal consultant at PA Consulting. “Branding is very important in the culture here. Whether it is a Luis Vuitton handbag or a Cartier watch, they like brands and I think much of this approach is based on being associated with something that stands for quality, cutting-edge research and up-to-date, evidenced-based practice.”

Of course, adopting a logo does not bring changes overnight, and there is a danger with Abu Dhabi’s approach that patients’ expectations are raised and then dashed before the quality of care has improved.

“You can’t just put a brand name on a hospital,” says Lyons. “If you are doing kidney transplants, for example, it is not just the surgeon but the whole team that needs to have done hundreds of these to get the expertise.”

Industry observers say attempts in the past to assess the success of outsourcing endeavours in the region have been frustrated by the lack of data generally held by hospitals.

The successful management of any hospital, whether by an outsourcing firm or not, requires measurable targets and regular assessments. These targets need to be rigorously enforced and incur financial penalties if they are not met, to bring about a wholesale change in the operational culture of hospitals. But such accountability systems have yet to be implemented in the region.

“You are limited in the extent that you can improve management practices,” says Peter Dumble, managing director of VHA Global. “If you don’t have the data about what you are doing, you have no basis upon which to improve. One of the means to improving
quality of management is better management of information.”

If a health authority has a complete picture of how a hospital is performing, it will be in a better position to negotiate an outsourcing contract and set concrete targets for improving performance. 

But saving money is not a priority in the Gulf’s race to modernise its health sector. Abu Dhabi in particular has shown it will spare no expense in its drive to build a world-class health system.

Yet the region needs to be realistic in what it can achieve even with the help of international experts. Recruitment is a major challenge for the region’s health providers due to a severe shortage of indigenous healthcare professionals, and this will put limits on the range of services the Gulf can provide.

Imported expertise

The Gulf’s healthcare sector is heavily reliant on imported manpower. Saudi Arabia and the UAE have the highest proportion of expatriate physicians, at 80 per cent, according to Saudi investment bank NCB Capital. More than 90 per cent of nurses in Kuwait and the UAE are estimated to be foreign nationals, while in Qatar, 30 per cent of the medical workforce are Qatari, yet only 7 per cent of nurses are locals.

This over-reliance on foreign workers results in a high turnover of staff, with expertise constantly being lost. This inevitably affects the quality of care offered in the region.

Abu Dhabi hopes its associations with branded hospitals will not only raise patients’ confidence but also make it easier to attract and retain skilled medical staff.

The problem for the Gulf is that with so many patients preferring to go overseas for treatment, recruiting skilled professionals will continue to be a challenge regardless of what branding is adopted.

“People will go for an outpatient appointment or even for diagnostics, but when they are really ill and want treatment they will go to the UK or the US, and that will continue to be the case in the Middle East,” says Lyons. “It then becomes a cycle as the clinicians won’t want to come since, if they don’t have enough patients, they won’t have enough clinical material to work on and their skills and reputation will decline.”

For certain treatments, it will always be necessary to send patient overseas. The region’s relatively low population of just under 40 million means the volume of patients necessary to justify building specialist hospitals is not there. For some tertiary and quaternary specialities – for example, cancer care and neuro-surgery – it will never be feasible to offer them in the region.

While outsourcing hospital management may win back the trust of some of the Gulf’s citizens, it will never be able to remove the need for sending patients overseas entirely.