Residents run for cover as health insurance policies shrink in the Gulf

Insurance providers, including Daman, have downgraded their coverage. Sammy Dallal / The National

The clinics stretch for miles along Dubai’s Jumeirah Beach Road. A back scan could set you back Dh3,000 or a dental crown Dh4,500.

But for many the cost of such procedures is often of little interest because health insurance policies foot all or most of the bill – one of the long-standing perks of working in the region.

Now such policy benefits are being trimmed across the Arabian Gulf, for expatriates and nationals alike, as governments are forced to seek savings while oil revenues slide and budgets come under pressure.

The changes are already being felt by patients and providers alike. A 28-year-old semi-professional footballer who suffered knee pain while running wanted the “correct diagnosis”, and although his updated health insurance policy no longer covered treatment at Dubai’s Upandrunning Integrated Sports Medical Centre, he went there anyway and paid out of his own pocket.

Medstar, a day-surgery centre in Dubai that offers procedures such as cosmetic surgery, hair transplants and hernia repairs, must also adapt to the new economic reality.

“Major hospital players will be affected if they don’t reduce their costs, and this is true across the region,” said Dr Sajid Burud, the managing director of Medstar.

At stake are billions of dollars in private healthcare revenues riding on the insurance coverage offered by national and private sector providers.

In the UAE, the Health Authority Abu Dhabi cut benefits for expats employed by government and semi-government agencies covered by insurer Daman, and Emiratis under its Thiqa programme from April. Haad was not available for comment.

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The governments of Oman and Qatar have also trimmed their health insurance benefits.

At the end of last year, Qatar suspended the government’s ­national health insurance services that covered Qatari nationals. Private insurance players are ­expected to fill the gap.

While the roll-out of mandatory health insurance programmes was considered a boon for private hospitals in recent years, cuts to insurance policies are ­expected to hit the sector hard.

“Hospitals may be significantly affected by these cuts,” said Clancey Po, chief executive of Burjeel Hospital in Abu Dhabi.

But one healthcare provider said that the reforms had been sorely needed for some time.

“The health-benefits cuts will affect the hospitals in general but it will not slow down the sector because the market needed some reorganisation,” said Ala Atari, chief executive of Medcare Hospital.

“Haad, DHA [Dubai Health Authority], MoH [Ministry of Health] all have new regulations now to top the standards for the long-term benefits of ­patients and operators. This is the way to go forward because it will bring stability to the market.”

Following mandatory health insurance legislation in Dubai and Abu Dhabi, there was an increase in health benefits offered to many employees.

But some companies who have been offering health benefits in excess of the regulatory requirement are reviewing their cover, and shifting to lower-cost providers or packages, according to a spokesman for Dubai-based recruiter Gulf Talent.

“The net effect of these two trends may be to increase the attractiveness of working in the Gulf for more junior employees, and possibly reduce it for more senior and higher-income professionals,” he said.

It would also make it tougher to attract expat executives to the region, according to some recruiters.

Healthcare costs have ballooned across the region with data from Haad illustrating how health departments have come under rapid pressure.

Thiqa had 773,627 Emiratis registered last year, up from 202,870 in 2008.

Daman’s basic programme had 1.3 million members last year, up from 1 million in 2010.

Last year, Haad paid Dh942 million in subsidies, up from Dh30.5m in 2010.

The changes to the Thiqa cover were widely anticipated by many healthcare professionals and ­analysts.

“The health insurance market has been susceptible to abuse over recent years by means of tactics such as up-coding, unbundling of claims for reimbursement and the payment of referral commissions, none of which benefits patients in any way,” said James MacCallum, a partner at Al Tamimi law firm in Abu Dhabi.

“Accordingly, measures to rationalise the plan and make it more efficient should benefit all stakeholders in the longer term.”

The Thiqa policy changes would encourage patients to seek treatment in the UAE, which has invested millions of dollars in recent years on its healthcare infrastructure, he said.

These include Mubadala’s Cleveland Clinic Abu Dhabi, Healthpoint hospital, Capital Health Screening Centre and Abu Dhabi Telemedicine Centre as well as international partnerships such as between Abu Dhabi Health Services (Seha) and John Hopkins Medicine International.

In 2009 Haad replaced full dental cover for Emiratis at private dental clinics with 50 per cent co-pay.

“Having a greater buy-in from patients, through co-pays and increased co-insurance, has been shown to decrease the amount of fraud, waste and abuse in the healthcare system,” Mr MacCallum said.

The reshaping of the region’s healthcare insurance coverage is also expected to affect the proliferation of private sector laboratories that have sprung up to meet demand for MRI scans, ­ultrasound and blood testing.

In the UAE, the basic cardholders with Daman will be referred to central laboratories for lab investigations, effective April 6.

Several hospitals in the UAE, such as Burjeel, have developed their own laboratories to cut down the time for results to be reported. “The move may affect the hospitals’ revenue from laboratory services,” Mr Po said. “It may eventually limit investments in laboratories and may also lead to a reduction in the number of staff.”

With potentially fewer hospital visits, laboratory tests and second opinions to sustain them, the region’s gleaming new hospitals could soon start to feel the heat.

“Over time, this will factor into projections by healthcare groups and likely reduce investment in the sector,” according to Asjad Yahya, an analyst with Shuaa Capital.

Back in Jumeirah, healthcare providers are unfazed by the potential impact on their businesses of a rollback of insurance benefits.

Physiotherapy is among the benefits that have been axed under some insurance plans but at Upandrunning, founder Anna Zickerman said patients would keep coming back because of the quality of care they received.

At the two Upandrunning clinics on Al Wasl Road, physio­therapy sessions cost about Dh450 for a 45-minute slot.

More than 90 per cent of the patients – who are from Saudi Arabia, Oman, Egypt, India, Turkey and Lebanon, as well as the UAE – have health insurance, Ms Zickerman said.

“Good clinics will continue to be busy no matter what because people seek to get there because they know they will get good results even if they have to pay themselves,” she said.