Private healthcare operators and insurers are set to receive a boost from the introduction of mandatory health insurance in Dubai.
The announcement of compulsory insurance in the emirate sent the stock of NMC Health soaring more than 10 per cent on Wednesday to close at an all-time high.
The UAE-based and London-listed operator is one of a number of private groups that stand to benefit from a change that will add tens of thousands of new patients and customers to the books of insurers and hospitals. The new law will lead to “a substantial rise in … insurance claims and premiums written,” said Mohammad Kamal, the director of equity research at Arqaam Capital, and “greater utilisation of … capacity in the Dubai healthcare system”. New revenues should lead to greater investment in hospitals. “More money flowing in from insurance will mean increased access to medical services,” said Neil Crossley, a partner and employment law specialist at DLA Piper. “A bigger pool of investment will result as more people seek medical attention. It’ll be practicable to invest in facilities to augment what’s already there.”
Simon Ball, a principal at the HR consultancy Aon Hewitt, said new customers would “increase throughput for hospitals, increase competition between providers, and lead to a greater use of [local] services”. Lower-cost hospitals would benefit most, he said.
“For local insurance companies, it’s fantastic, [They] will have a greater opportunity to write insurance [for locals].” Insurance companies are likely to introduce new products as lower-income workers in Dubai are covered for the first time. Rajeshwari Suresh, a deputy manager at Gargash Insurance, a Dubai-based brokerage, said: “There should be [new products].Abu Dhabi currently offers a basic product for around Dh600 that covers almost everything.” She predicted that a similar product would be launched in Dubai.
Mr Ball said: “The lower-paid will benefit the most.” Ms Suresh said: “It’s a support for the family, as medical costs are increasing on a daily basis. It’ll [have] a big impact on blue-collar workers who aren’t covered.” Currently, employers of domestic workers do not have to provide health care for their employees – although many do so voluntarily.
Mr Crossley said many employers help with the one-off costs should something happen to their domestic workers. “It makes [paying for health care] more predictable for both sides – employers and employees,” he said. The Dubai scheme is modelled on a similar policy implemented by the Government of Abu Dhabi, where 98 per cent of the population has health insurance.
“There is a public health dimension to this as well,” said Mr Crossley. “Rather than ignoring illnesses where, for example, people have an upset stomach, but [may have] amoebic dysentery … it’s much better if … they have the facility to get treatment.”
Mr Ball agreed. “With a healthier workforce, there is less of a necessity to lay people off due to sickness,” he said. “The turnover of the workforce will reduce – but the impact will take a few years to be seen.
“Most MNCs already provide socialised health care without delineating requirements by job title, so for them, the cost impact is likely to be small.
“The biggest impact will be in hospitality and construction.
“Firms will have to provide a broader range of benefits, [and] a number will have to broaden access to health care.”
Mohamad Bitar, the founder of the fast-food chain Just Falafel, welcomed the measure. “It’s amazing,” he said. “All those rules and regulations help make Dubai an international hub.
It will cost us money – but … one hand can’t clap. It improves the quality of living for our employees.”
Ms Suresh said cost increases would vary on a case by case basis. For basic products, there would not be a huge expense, she said.
Mr Crossley said the cost increase “will still be a low percentage” of overall costs.
Rana Jawad, a lecturer in social policy at the University of Bath in England, said: “There’s still a risk as people … have to be in employment to … access health services.
“If [someone loses] their job and [hasn’t] contributed, they are probably most in need of access to health care.
“[But] any kind of move to universal coverage is always welcome.”.
Mr Ball said: “It’s a very good first step forwards. It’s a good way to bring about uniformity of health care in the region.
“There’s an interesting comparison to the US with the ACA [Affordable Care Act] – the Dubai programme is much more generous.”
abouyamourn@thenational.ae
