ABU DHABI // Daman, the nation's largest health insurer, is voluntarily ending its monopoly on direct billing at public hospitals and clinics in Abu Dhabi, its chief executive said yesterday, in a move expected to boost competition in the market.
Currently, public hospitals and clinics allow Daman customers to simply present their insurance cards when they require treatment. The institutions then bill Daman directly. Other patients, however, must inconveniently pay out of their own pockets, sometimes thousands of dirhams, for treatment, and seek reimbursement from their own insurer. Prices are also typically much higher at public hospitals than private ones. Due in part to their exclusive deal with Daman, public hospitals have faced little competition and have not had the same incentives to provide affordable health care.
Dr Michael Bitzer, the chief executive of Daman, said the company had decided to give up the exclusive direct-billing rights to ensure the long-term growth of the insurance industry. "Currently, if a member goes to a public provider, only Daman is a direct-bill facility and anyone else has to pay cash and the insurer has to reimburse; it is not ideal," he said at the Middle East Insurance Forum yesterday on the sidelines of the Arab Health Congress 2010 in Dubai.
"It is in favour of the market as it creates more competition and allows for overall development of the market. And also for the patients: they will get more access in the emirate." Daman, which has 1.8 million customers across the country, insures about 80 per cent of Abu Dhabi's population. The rest are covered by one of 32 other licensed insurers in the emirate. The Health Authority-Abu Dhabi (HAAD) introduced mandatory health insurance in 2006. It decided that anyone living and working in the emirate must be provided with insurance by an employer or sponsor, although an unknown number who work for unscrupulous employers remain uncovered.
Dr Finn Goldner, the head of health-system financing at HAAD, said Daman's move had several positives and described it as "great" for patients. "If a patient [who is not insured by Daman] wants to visit Sheikh Khalifa Medical City, they must take cash with them. "Now patients will have more choice about where to seek treatment and the competition between the insurers will be increased, boosting quality," he said at the forum.
He said it was also good for public hospitals since more patients might now be walking through their doors, generating more revenue. The first move for many private insurance companies now will be to sign up with Seha, the company responsible for all government hospitals in Abu Dhabi, and negotiate how much they are reimbursed for various treatments. Observers also believe the move will offer more incentives for insurers from other emirates to venture into the Abu Dhabi market, as Daman no longer has such an advantage.
Abdulrahman Abdulla, the editor of Insure magazine, said smaller insurance companies might want to take their time entering the market. "They need to ensure they have all the right structures in place so that they can handle more services," he said. He said it was essential they negotiate prices to make sure they could afford to offer services at a greater number of hospitals and clinics. "It is important to negotiate; insurance companies are businesses so they should not pay for claims that the business cannot afford. The prices need to be right before they enter the market."
It was also important to establish the level of care offered by public healthcare providers before entering the market, Mr Abdulla added, since patient outcomes at some hospitals are better than others. Mustafa Vazayil, the managing director of Gargash Insurance Services, which is licensed to operate in Abu Dhabi, welcomed the move and said he was looking forward to working in a more open market. "This is a very positive step," he said. "It also shows Daman's confidence that they can compete on a level playing ground."
He said increasing competition among insurers would help raise standards in the healthcare industry as it would increase competition between the public and private sectors, as well as between insurance companies. Public healthcare providers are popular and handle the majority of Abu Dhabi's medical cases. According to figures from HAAD for 2008, the latest figures available, public hospitals and clinics treated 62 per cent of all inpatient cases and 28 per cent of outpatient cases. They also provided 94 per cent of all critical-care bed days.
The authority also says public hospitals care for more than 90 per cent of critical patients, often patients who require intensive, long-term care for which public hospitals are better equipped. Seha also employs 65 per cent of the emirate's physicians, 33 per cent of nurses and 41 per cent of other medical professionals, including pharmacists. Some public institutions also offer nearly exclusive services.
The Corniche Hospital in the capital, for example, is the largest and only dedicated maternity hospital in the emirate. Sheikh Khalifa Medical City has the largest emergency unit in the capital and Tawam Hospital in Al Ain offers some of the most comprehensive cancer treatments in the emirate. Many public hospitals are operated by well-known international healthcare management firms. The Corniche Hospital, for example, is managed by Johns Hopkins International, a US-based firm, as are Tawam Hospital and Al Rahba Hospital.