Private sector healthcare provision is increasingly prevalent in the GCC, easing the cost burden on the state. But governments cannot rely on private companies to provide for all their healthcare needs.
On 6 June 2016, a 59-year-old man from Tabuk in the north west of Saudi Arabia was admitted to hospital. Two days later he was diagnosed with Middle East Respiratory Syndrome and four days after that he passed away. Unfortunately, he will not be the last to die of MERS, as the disease is more commonly known.
The disease, which is caused by a coronavirus, was first identified in Saudi Arabia in 2012 and has since spread to 26 other countries. The World Health Organisation (WHO) says it has been notified of 1,769 confirmed cases to date and at least 630 deaths. The vast majority of these have been in Saudi Arabia, although there was a significant outbreak in South Korea in mid-2015 and there have been cases reported from the US to France to Malaysia.
There has been some criticism of the way in which the Saudi authorities handled the issue at first and how quickly it shared information with the rest of the world. This is not in itself unusual, as Dr. Keiji Fukuda, assistant director general for health security and environment at WHO, noted when talking in June 2015 about the slow response of the South Korean authorities to the outbreak there.
“In my experience in dealing with outbreaks for the last few decades, what’s true is that whenever they occur, particularly when we have new viruses and new diseases, they invariably take everybody by surprise,” he said. “They take the country by surprise, the responders and the government and there is always a period of time in which you have to get organised to deal with the outbreak… There is always a learning curve in the beginning of these outbreaks.”
It may not have helped that the Ministry of Health has been led by seven different people in the four years since the MERS outbreak began. At least some ministers or acting ministers have been dismissed due to their handling of the response to MERS, including Abdullah Al-Rabiah who lost the job in April 2014. Hospital managers have also been in the firing line. In May 2014, the then acting Minister of Health Adel Faqih replaced the director and deputy director of King Fahd Hospital. The official Saudi Press Agency said the changes were made “to better fight the corona virus,” as the disease is often known in the country.
In one sense at least, things have been getting better. In the early days of the disease, the fatality rate was running at around 60%, but it is now close to 36%. Even so, the problem is far from solved and new patients are diagnosed with the disease most weeks. Between mid-May and mid-June, five other people in Saudi Arabia were diagnosed with the condition, in addition to the 59-year-old from Tabuk, and one of them is in a critical condition. Between 16 and 20 June the numbers shot up, with 28 more cases in the country, the majority of them occurring in a hospital in Riyadh.
Most cases have been attributed to human-to-human infections, particularly in hospitals and other healthcare settings where poor hygiene standards and other problems are to blame. One recent case highlights the risks: a 49 year-old woman was admitted to a hospital in Riyadh on 10 June with symptoms unrelated to MERS and kept in a multi-bed ward. During that time, at least 50 healthcare workers and patients were exposed and at least 20 of them have since tested positive for MERS.
It is widely suspected, although not proven, that infected camels are the original source of the disease and many others who have been diagnosed with the disease have had a history of close contact with camels. As a result, WHO says people should avoid drinking raw camel milk or eating camel meat that has not been properly cooked.
MERS is a tricky condition to diagnose at first. As with other respiratory infections, the early symptoms are non-specific, including fever, coughing and shortness of breath, but some carriers of the disease are asymptomatic. Patients can go on to suffer pneumonia and organ failure, especially of the kidneys. Older people, those with chronic diseases such as diabetes, cancer and chronic lung disease, and those with weakened immune systems, are all at higher risk.
No vaccine has yet been discovered for the disease. However, moves are afoot to develop one. In the U.S., the National Institute of Allergy and Infectious Diseases reported some promising results in tests of a vaccine on mice, rhesus macaques and camels in 2015.
In December that year, a team of Dutch, Spanish and German scientists revealed, in a paper published in the journal Science, that they had developed a vaccine that makes infected camels excrete less virus, something which could help to prevent transmission to humans. “It is possible that the risk of outbreaks among humans can be minimized by vaccinating camels,” said Bart Haagmans, leader of the study and a virologist at the Erasmus Medical Center, based in Rotterdam in the Netherlands. At the time, the Erasmus Medical Center said the new vaccine could also be used to vaccinate humans, and that a fresh study was being undertaken to determine this. As yet, no results have been announced from that study.
Along with the human cost of the disease, there is also an economic cost to be borne, although to date it has not been as bad in Saudi Arabia as some may have feared. The government has placed some restrictions on travel during the Haj in recent years, which reduces the number of the most vulnerable coming to the country. The Command and Control Centre of the Ministry of Health advises that people over 65, pregnant women, children under 12, and those suffering immunodeficiency or chronic ailments should postpone their trip this year.
Even so, the amount of international visitors to the kingdom has continued to climb most years, from 16 million in 2012 and 2013 to 18 million in 2014 and 19 million in 2015, according to data from the country’s central bank, the Saudi Arabian Monetary Agency (Sama).
The Saudi economy has taken a hit in recent years, but mainly because of the fall in oil prices since 2014, and it is hard to separate out any impact that MERS might have had on the economy overall. However, while Saudi Arabia appears to have escaped any major economic impact so far, the same could not be said of South Korea, which saw its growth rate sharply dip in 2015 when it suffered a large outbreak of the disease. The problem was traced back to a businessman who had been infected on a visit to Saudi Arabia and then returned home.
The way Saudi Arabia and South Korea struggled to deal with the initial incidences points to a wider issue about the preparedness of the world for such outbreaks. MERS was not the first big disease to hit the headlines in recent years, nor the last. Others have included the severe acute respiratory syndrome (SARS) in Asia in 2003, Ebola in West Africa in 2014 and, most recently, the Zika virus in Brazil in 2015. On each occasion, medical authorities have struggled to cope and there has been a global scramble to deal with the problem.
That has prompted some to advocate a new approach. Speaking about the outbreak of the Zika virus, Marion Koopmans, head of the department of virology at the Erasmus Medical Center, told Dutch current affairs programme NOS Nieuwsuur in May that “We are surprised every time. There are again no vaccines or diagnostic tests and we are again one step behind.”
Koopmans suggested that a global fund should be set up to ensure there are sufficient financial resources to fund vaccines and diagnostic tests for viruses in the future, whether they are completely new or simply new strains of existing viruses. While the world waits for that to happen and for a vaccine to be discovered, visitors to Saudi Arabia would do well to follow the suggested precautions.
How to securely handle sensitive personal health information is becoming a critical issue for the region’s health services as they go digital.
Over the summer months in 2016, Emirates Integrated Telecommunications Company (Du) will be taking a step into a whole new area, with a project to provide secure access to patients’ electronic healthcare records (EHRs) in local hospitals and clinics. It may seem a strange move for a telecoms firm, but such initiatives are going to become increasingly common in the future.
The amount of data being collected in every area of our lives is proliferating, and finding a way to handle it safely and smartly is as critical an issue for the healthcare sector as for any industry. Patients need to know their health records are both accurate and secure. The Du project, which will test a system for sharing EHRs using block chain technology, might go some way to ensuring that is the case.
“Electronic health records are fantastic to have, but they generate a problem in terms of security because the information in the system can be accessed by people in hospitals or externally. They can be malicious, they can be mistaken” says Jose Valles, vice-president of enterprise commerce, new business and innovation at Du. “It is important to provide another layer of security. Block chain provides that. We are able to track changes in the EHR. We are going to be able to have alerts in case something is changed. You are going to know who is doing what when.”
If you’ve heard of block chain before, it is almost certainly in relation to the virtual currency Bitcoin, which uses it as the basis for its entire system. Block chains are essentially public databases, which allow users to share and verify information without the presence of a central authority. While virtual currencies have already harnessed its potential, advocates of the technology say it has far wider potential and can help in any situation where critical information is exchanged, from contract exchanges to voting.
The Dubai authorities have latched onto the idea with enthusiasm, setting up the Global Block chain Council in February which will launch a series of projects to test the technology. The Du project is merely one of the first. The project isn’t a complete leap into the unknown though. Du is working with Amsterdam-headquartered Guard time, which has already rolled out the technology in the Estonian health service.
“Today in Estonia every single healthcare record is backed by block chain,” says Mike Gault, chief executive officer of Guard time. “If there is any access or any change to a healthcare record, that digital activity is registered in the block chain. That does several things. It allows citizens to verify what happened to their healthcare record and it prevents hackers manipulating those records. It becomes impossible for insiders in the hospital or outsiders to get in there and cover up their tracks. You have this transparency, this accountability that has never been possible before.”
Even so, the health authorities in the U.A.E. are not rushing in and the Du project is very much a proof of concept rather than a full roll-out. The precise details of it haven’t been revealed, but only a small number of clinics and hospitals will be involved at first.
“The authorities are exactly the same here as they are in the U.K. or Spain or anywhere,” says Valles. “They are interested but they are cautious, because at the end of the day they are handling something that is very important. But there is a willingness to adopt technologies in the U.A.E. that I don’t see in other places. So hopefully after the results of the pilot they’re going to embrace it. Right now, they’re observing, which is wise.”
The whole project is an interesting case of how technology is becoming an integral part of healthcare systems. In part, the expansion of technology is being led by patients, using smart watches, mobile phones or other wearable devices like Fitbit to monitor their health. Data from these devices isn’t typically shared with doctors yet, but it could be in the future. But the healthcare system is itself also generating ever large quantities of data.
“Astoundingly large amounts of data are generated in healthcare in structured, semi-structured and unstructured formats,” says Lina Shadid, healthcare leader for IBM Middle East and Africa. “The ability to use insights from this big data will be the key to improving patient care and the sustainability of health systems in the coming years. We believe that getting the right insights from that healthcare data into the hands of health practitioners will dramatically improve outcomes for patients. Big data can also help manage population health, identifying at-risk population segments for early proactive intervention and care.”
At the moment, the region and the industry are in the early stages of figuring out how best to achieve these aims, and it is not just in the Gulf where initiatives are being tested. US technology firm Cisco has been working with the Jordanian government on a ‘telehealth’ project, which links specialists at the Prince Hamzah Hospital in Amman with patients in two rural locations, at Al-Mafraq and Queen Rania Governmental hospitals.
“Licensed healthcare professionals staff the remote location and assist with patient examinations while critical data on patient information can be instantly accessed by the specialists through the network-connected medical devices,” explains Mike Weston, vice-president of Cisco Middle East. “Given the choice between an appointment in Amman or a scheduled specialist consultation at the telehealth clinic, patients are increasingly choosing the local option. To date, over 110,000 patients have benefited.”
But making the most of the possibilities requires heavy investment. Research firm IDC estimates that, globally, the quickest rise in IT spending in the next few years will be in the healthcare sector. In a report issued in February it said healthcare IT spending would grow by 5.5% a year between 2015 and 2019.
The growth rate will be even faster in the Middle East, at 7.1%. Qatar, Saudi Arabia and the U.A.E. will see the fastest growth of over 8.5% annually. This year alone, total IT spending by the healthcare sector in the Middle East will reach $1.24bn, of which half is being spent in the GCC. They have a lot of catching up to do though. According to Nino Giguashvili, lead healthcare analyst for the Middle East at IDC, less than 20% of hospitals in the Middle East currently use some type of ‘big data’ technology.
Perhaps more than anything else all this data also needs to be secure. If not, patients will start to lose confidence in the entire system. Given that risk, the use of blockchain and other technologies is likely to be a critical feature of the healthcare systems in the years ahead.
“The balance between access to and portability of health information and the need for confidentiality are obvious. As with credit card and bank account data, the risk of losing the privacy of your health data is critical,” says Shadid. “The risks include security, data breach and data hacking. These risks are amplified with the increase of mobile devices and apps which collect personal health information.”
The use of data to manage healthcare issues has a long history and it has at times been controversial. In 1902, insurance companies in the U.S. got together to form the Medical Information Bureau to share data on their customers’ health conditions. It has garnered plenty of criticism over the years, often because of the secrecy surrounding it, but the companies involved insist that it means health insurance is cheaper for U.S. consumers.
But technology and big data don’t work miracles every time. A much-hyped project by Google to try and predict where flu and dengue fever outbreaks were likely to happen next, based on people searching for related terms on their computers, was set up in 2008. But it was dropped in 2015 when it proved to be of no use. More information is not in itself a useful thing unless it can be analysed properly, much like a doctor looking at an EHR.
Investors from Europe and Asia are eyeing opportunities in the countrys under-resourced medical system
With most sanctions on Iran now lifted, the countrys healthcare system has been drawing a lot of international interest, and it certainly could do with the boost that foreign capital and expertise could bring.
Irans Minister of Health & Medical Education Hassan Hashemi estimates the republic needs to add 100,000 in-patient beds and modernise 60 per cent of its existing healthcare facilities to meet international standards. Those two tasks, along with the need for more medical equipment, ambulances and specialised care facilities, mean investment of at least $25bn is needed in the coming years.
The Islamic Republics healthcare system is a hybrid of public and private sector provision. The Ministry of Health & Medical Education (MOHME) provides primary healthcare to everyone. More complex care is provided by a mixture of the MOHME, private operators and charities, and is mostly funded through insurance schemes such as the Iran Social Security Organisation (ISSO) and the Medical Service Insurance Organisation.
More than 90 per cent of Iranians have health insurance, which covers 70 per cent of the price of medicines and 90 per cent of the cost of hospital visits. However, there are allegations that some doctors demand fees beyond the set rates and, if the patient refuses, they withhold care. In any case, Iranians have long been used to paying for healthcare directly and out-of-pocket expenses account for almost half of medical spending.
All this leaves the country with a system that is better than some in the region, but far behind the best. While primary provision is generally seen as good, more advanced care is often only available from private clinics and even then does not always reach a high standard. The Switzerland-based World Economic Forum ranks Irans healthcare system at 69 out of 140 countries, above North African countries, but below its GCC neighbours.
Part of the problem has been sanctions. While medicines and medical equipment were exempted from trade embargoes, the system was still hobbled by the difficulty in paying for imports due to the lack of banking links. Many projects to renovate and upgrade facilities were put on hold, the cost of imported equipment rose by a third and there were shortages of some medicines. Opportunities to develop the medical tourism market, and thus take advantage of Iranian expertise in areas like cosmetic surgery, were also restricted.
Money is still an issue. The government spends 17.5 per cent of its budget on healthcare, with total spending equivalent to 6.9 per cent of GDP. That is higher than the 5.3 per cent average across the Middle East and North Africa (Mena) region, but below the global average of 9.9 per cent. On a per capita basis, Iran spends $351 a year, compared with $433 per person for the Mena region.
The sector is under-resourced in terms of personnel. According to the Washington-based World Bank, there are 0.9 doctors for every 1,000 people in Iran, compared with 1.6 doctors across the Mena region. There is an even larger gap when it comes to nurses and midwives, with 1.4 for every 1,000 people in Iran, compared with 2.5 in the wider region. Figures for hospital beds are far more worrying. There are just 0.1 beds for every 1,000 people in Iran, compared with 1 for the Mena region.
Iran needs a huge improvement in the quality and quantity of healthcare, says Ali Nassersaeid, co-founder of the American Iranian Business Council. It has no shortage of doctors and expertise, but it is short of just about everything else. Medical facilities that can provide high-quality service are rare. The situation is particularly bad in the smaller cities and rural areas.
As the government has acknowledged, a lot of investment is needed and much of it is likely to come from overseas. With the shackles of sanctions now removed, several deals have already been signed with European and Asian companies. Among them, Italys Pessina Costruzioni signed a memorandum of understanding (MoU) in January to build and operate five hospitals, including a 1,000-bed facility in Tehran and 500-bed hospitals in Rasht and Nishapur.
Another Italian firm, the San Donato Hospital Group, is to build a 1,500-bed hospital in Isfahan, in a deal signed with Isfahan University of Medical Sciences in mid-May. A spokeswoman for the Italian group said it was premature to provide further details at this stage, given it is only an MoU. Austrias Vamed is also partnering with Iran Housing Investment Company, an affiliate of ISSO, to build two 320-bed hospitals in Shiraz and Tabriz, in a deal worth 200m ($224m).
Among Asian companies, South Korean firms have been leading the way. The official Yonhap news agency reported on 18 May that seven firms have signed MoUs to build seven hospitals with a total capacity of 6,000 beds. Seouls Ministry of Health & Welfare reported that the deals were worth $2bn in total. Among those involved are major South Korean contractors such as Samsung C&T and Hyundai Engineering & Construction.
Of course, an MoU does not guarantee a formal contract will be signed and it is likely to take time before all these schemes move ahead. Ali Mirmohammad, senior consultant at US-based research firm Frost & Sullivan, says the banking problems first need to be fixed and predicts little will change before mid-2017.
It is not just a matter of building wards and operating theatres, however. There is also a need to modernise hospital equipment and develop medicine supply chains.
The medical devices market was worth almost $800m last year and is expected to surpass $1bn by 2021, according to India-based research firm Mordor Intelligence. Iranian officials have been seeking out new source markets for such goods. A trade delegation to Poland in May resulted in an MoU on the supply of hospital equipment among other things.
Pharmaceutical production is also developing. This is already a significant domestic industry, with more than 85 per cent of the 6,200 generic medicines used in the country produced locally, according to the Organisation for Investment, Economic & Technical Assistance of Iran, the countrys inward investment agency.
The value of the pharmaceuticals market was $4.2bn in 2015 and is expected to grow to $4.8bn by 2021, according to Mordor Intelligence. However, there are some concerns about the medicines produced locally, in terms of both quality and range. During the years of sanctions, Iranian producers came to rely on imports of cheap, low-quality active pharmaceutical ingredients (APIs) from China and India, which, according to Mirmohammad led to many problems in the country and also led to some deaths among patients.
It should now be easier to import higher-quality APIs, which should allow Iran to start targeting export markets. The government plans to encourage foreign brands to transfer technology and [bring] new formulations to produce high-quality generic products, not only for the local market but also for export, says Mirmohammad. He says the government plans to increase the export of medicines to more than $2bn over the next 10 years, from $180m at the moment.
The most significant recent deal in this area came in September, when Denmarks Novo Nordisk, a specialist in diabetes, announced plans to build a 70m ($77.6m) facility to make insulin pens, in a deal signed with Irans Food & Drug Administration, part of the MOHME. This makes it the first Western pharmaceutical company to build a manufacturing plant in the country and could provide a model for others to follow.
Diabetes is a big problem for Iran. Ole Moelskov Bech, corporate vice-president of Novo Nordisk for the Near East, says close to 5 million people have diabetes in the country. According to the Switzerland-based World Health Organisation (WHO), diabetes and cardiovascular diseases are the principal causes of death in Iran, followed by cancer.
But Iranians are in better shape than many of their neighbours. According to WHO, life expectancy at birth in Iran is 74, compared with 68 years for the wider region. If the Islamic Republic can successfully tap into the investor interest in its healthcare system, that could yet improve even more.
Healthcare tourism is a $60bn industry and presents an enticing opportunity for hospitals and medical authorities in Dubai and Abu Dhabi
Every year, the UAE healthcare authorities send several thousand locals abroad to hospitals in Germany, the UK, the US and elsewhere.
For patients it means they receive the treatment they need in areas such as oncology, neurosurgery and cardiology that are unavailable locally. But this comes at a price. Dubai Health Authority (DHA) says it spent an average of AED162,000 ($44,000) on treatment for every patient it sent overseas in 2013.
But for each Emirati going abroad, many more are coming to the UAE to receive care, particularly to Dubai Healthcare City (DHCC). Since it was set up in 2002, DHCC has become the biggest medical tourism destination in the region.
The two hospitals and 120 outpatient centres in the city looked after 260,000 international patients in the first half of 2015. The greatest number come from across the GCC, but patients also come from other parts of the Middle East, Europe and Asia.
Infertility treatment is the most common procedure for visitors, followed by cosmetic, dental, cardiac, and orthopaedic treatments. The care they receive can often be life-changing.
In 2014, DHCC treated a 51-year old Qatari man with complex spinal treatment, which allowed him to walk again.
Other patients find they need to make multiple visits. In June 2007, Suha Bashayreh, a Jordanian teenager, was involved in a traffic accident that meant both her legs had to be amputated. She first visited DHCC in May 2009 for prosthetic rehabilitation, and has returned several times since then for follow-on treatment.
As well as improving peoples lives, the sector is also providing a welcome boost to the economy. The local Alpen Capital estimates medical tourism was worth $1.7bn to the UAE in 2013. But in many ways the country is just scratching the surface.
Globally, 12-15 million people travel every year for medical procedures, spending about $40bn-$60bn in the process, according to US-based medical tourism organisation Patients Beyond Borders. Most people prefer to stay fairly close to home, with 85 per cent travelling by flights that last a maximum of six hours, says the organisation.
That presents the UAE with a large potential market, including India, East Africa, Southeast Europe and more besides.
Because of cost, convenience and cultural preferences, most patients wish to keep medical travel regional, says Josef Woodman, CEO of Patients Beyond Borders.
This is good news for the UAE, which carries opportunities to draw from a wide array of countries in the region. Also, the healthcare lag in other GCC countries gives the UAE at least a decade of opportunity to establish itself as the regional destination of choice for short-haul medical travellers.
More investments are being made to tap into that potential. DHCC is expanding, with a second phase taking shape on a large plot adjoining Dubai Creek. Projects on the site include the WorldCare Wellness Village, which will focus on diseases such as obesity, hypertension and diabetes, and which is being developed by the US WorldCare International.
Such schemes should help Dubai close in on its target of attracting more than 500,000 medical tourists a year by 2020, as well as with its Dubai Health Strategy 2021, launched in January with the aim of bolstering the emirates position as a regional medical hub.
The activity is not restricted to the DHCC free zone. In November, the UKs Kings College Hospital (KCH) announced it will build a hospital with 80-100 beds in the planned Dubai Hills area in Mohammed Bin Rashid City, supported by a small network of clinics.
The clinics will open over the course of 2016 and 2017, with the hospital following in 2018. It will specialise in paediatrics, endocrinology, orthopaedics, obstetrics and gynaecology, as well as other acute and general medical services.
KCH already runs a clinic in Abu Dhabi, which mostly caters to locals and expatriate residents. The new clinics in Dubai are likely to have a similar mix of patients, but Simon Taylor, director of commercial development at KCH, says the firm is interested in attracting patients from other countries to the new hospital.
There is the possibility of attracting inward medical tourists from other places in the Gulf, says Taylor. Thats something well be interested to see if we can develop.
On the whole, Abu Dhabi is less developed than Dubai. There are 39 hospitals and other healthcare facilities in the emirate accredited by Joint Commission International (JCI), a US-based standards body. In Dubai, by contrast, there are 73. Dubai also benefits from having more extensive air connections and a deeper pool of high-quality accommodation.
What Dubai has got going for it is the fact that its a central transport hub, says Taylor. Its very easy to get into Dubai, so thats a big advantage. Its also got extensive, good-quality hotels. Its got the infrastructure.
There are challenges, however. Overall, there are some $90bn-worth of healthcare construction projects planned or under way across the Middle East and North Africa (Mena) region, with $72bn of them in the GCC, according to regional projects tracker MEED Projects. Some of these will be competing for medical tourists, for example the International Medical City project in Oman, which is being developed by Saudi-based Apex Medical Group at a cost of about $650m.
The relatively high cost of care in the UAE is another issue the country needs to grapple with, as it is bound to put off some less affluent travelers. However, price is just one factor that people consider when they travel for medical care, and not always the most important one.
The UAE is definitely more expensive than India or Thailand, but its still [cheaper] than a lot of other places in Europe and the US, says Jonathan Edelheit, CEO of the US-based Medical Tourism Association.
For some people its not about the pricing, its about making sure theyre getting quality. When you deal with insurance companies or governments that send patients abroad, pricing isnt the key factor. Their main factor is quality and good outcomes.
One reason why the UAEs pricing is higher than in some destinations is that all its healthcare, all the doctors and nurses, have to be imported. That is a disadvantage the country has to overcome and the way its going to overcome this is by focusing on quality.
If the UAE manages to do this, there are some important potential economic benefits. Medical tourists often spend more than regular tourists, as they tend to stay for longer and travel with family members or other companions, who help to fill hotel rooms.
Investment in hospital-building programmes and the employment created in those facilities also contribute to economic activity. Healthcare authorities should also find that once more facilities are in place locally, they no longer have to send so many of their own citizens abroad for treatment.
Its going to help really boost economies in the GCC, says Edelheit. A lot of GCC countries are spending billions sending patients abroad and if they can increase the quality [of their own healthcare facilities] they can start keeping these patients at home and save [that money].