Dubai’s hospitals face battle to survive amidst ‘abuse of system’

Vast oversupply of beds and abuse of system threaten to burst ‘healthcare bubble’ unless wide changes are made, experts say.

DUBAI // Hospitals face a struggle to survive, with a vast oversupply of beds and abuse of the system threatening healthcare providers’ existence, experts warn.

The supply of hospital beds will outstrip demand by 600,000 a year by 2021, figures from Anglo Arabian Healthcare show.

Mark Adams, chief executive of the company, yesterday said that a “tsunami of change” was necessary in Dubai health care to stop the “bubble bursting”.

Mr Adams said fraud, waste and abuse of the system would leave many providers unable to offer cost-effective care without sweeping changes.

He said they would have to include a clampdown on greedy doctors receiving commissions for patients having unnecessary tests, and for prescribing branded drugs.

“If the bubble bursts, it takes away a lot of the excitement that has been generated by health care in the UAE and it suddenly becomes a battle for survival,” Mr Adams said.

“We have to change, there is no other option.

“Providers and payers suffer from an oversupply, with health care likely to continue to go up in price. Change brings the opportunity to embrace new ideas, innovations and technologies. To resist change will leave operators like the dinosaurs, as footnotes in history.”

By 2021 there is expected to be demand for 800,000 beds a year but a supply of 1.4 million when all projects being developed are complete.

At the same time, Anglo Arabian figures show a focus on high-end health centres will mean a shortfall of 700 beds for mid to lower-income earners, assuming the Dubai population grows to 4 million.

The statistics also show that between Dh350 million and Dh400m is paid each year to doctors as incentives for laboratory tests and radiology.

Mr Adams said that could only be the result of greed, as doctors in the UAE are among the best paid in the world.

A junior doctor in the UK can expect to earn between Dh87,750 and Dh97,500 a year, but in the UAE their earnings are between Dh240,000 and Dh300,000. And consultants can earn three times the Dh247,000 to Dh333,000 their UK peers are paid.

“Doctors from Europe and America who come here, and who would not usually take referral fees, fall into the system and it becomes an incremental income,” Mr Adams said.

“From our calculations, the level of annual kickbacks to doctors in the UAE for diagnostics is between Dh350million and Dh400m.

“That money would be better spent elsewhere, rather than on doctors who already do very well compared with elsewhere in the world.”

Mr Adams presented a report on the healthcare crisis at the Mena Health Insurance Congress in Dubai this week.

The annual bed supply and demand figures are based on: the 2,547 beds available now increasing to 4,822 by 2021; outpatient services used five times a year by each person; hospital capacity rates of 85 per cent throughout the year; and each patient staying two nights.

There are 15 new hospitals in the pipeline for Dubai, bringing the number to 45 by 2021.

But Mr Adams said there was likely to be a shortfall at the lower end of the market, as healthcare providers focus on top-end centres for the rich and medical tourists.

Stephen MacLaren, of insurance broker Al Futtaim Willis, agreed there were serious challenges facing health care in Dubai but said medical tourism could mitigate some of the effects felt by new centres.

“There is an oversupply of hospitals compared to what is required,” Mr MacLaren said.

“Hospitals are being built where the profit is expected to be, not where they are required, at the lower end. That creates a price-driven market.”