By Ahmed Faiyaz, Health Industry Leader and Strategy Consultant based in UAE

The past decade in the Gulf Cooperation Council (GCC) has witnessed significant investment by both government and private sector investors to build new hospitals and clinics, and to improve the health infrastructure. However, apart from Dubai and Abu Dhabi in the UAE, much of the investment in the last 10 years, and particularly to improve and expand secondary and tertiary care, has come from the public sector as over 70% of the spending on healthcare in most of the GCC countries is met by the government.
But with the current global economic climate and austerity measures undertaken by most GCC governments, there exists a burning platform to deliver good quality clinical services, with improved efficiency and affordable cost. The public health system is also constrained in most parts of GCC, as expansion projects and new projects have slowed down or have been altered, to allow for greater private sector participation.
While in some cases, there is a growing opportunity to form Private Public Partnerships; in others, there is a willingness to step back and let the private sector make investments to deliver health services to meet the needs of the population. The stable and growing population across GCC countries, and the rising health utilisation for both outpatient and inpatient services driven by the ageing of the national population and the growing burden of disease are a strong catalyst to support future investments in the health sector.
Private sector facilities in GCC could consider the following reform initiatives to strengthen and stabilise their growth platform, and deliver high quality, efficient patient services with improved patient experience:

• Reassess the service portfolio – A number of private sector facilities in the region have been modelled as ‘general hospitals’ or ‘general polyclinics/ medical centres’, attempting to offer a broader suite of patient services across specialties.

When constrained by size of the facility (less than 100 beds in most cases) and lower level of investment, such a model is faced with challenges, and many end up being “me-too clinics/ hospitals” with little differentiation in perception among the patient community, as they are unable to attract and retain the highly specialised clinical talent, and are burdened with offering services that generate low patient volumes leading to loss of money on a day to day basis.

Given the increase in capacity and improvement in access to primary and secondary care in the private sector, many would do well to carefully assess the top four to six specialties and services that are driving patient volumes and focus entirely on these services. While part of this could be driven by having star doctors or having a long-standing reputation in delivering these services, on the other hand, this could also be driven by the demand for health services within the catchment area. For e.g., high demand for pediatric services, obstetrics and gynecology, and family medicine in clusters with a high percentage of young families.

Private sector facilities can carry out internal assessments, as well as gather and analyse information from health statistics and assessment studies to identify high demand services and gaps in delivery of medical services, and could re-shape their service mix, making investments to deliver highly specialised and efficient services to their identified patient segments.

• Improve referral platform and support a multi-disciplinary care model – Stemming from the need to be more specialised and focused on a limited set of specialties and services, unless there is scale and proven capability to replicate successful models regionally or internationally, private sector facilities, particularly smaller clusters of clinics or standalone general hospitals, could partner with community clinics, specialised clinics and rehabilitation centres, and tertiary care hospitals, to refer patients for specialised services, or receive patients to offer specialised services or continuity of care. Such a model is beneficial for patients, particularly with electronic medical records being implemented, which would enable them to access the best in class and most efficient services across the health system.

Globally, coordination of care is improving with the formation and rise of integrated health networks which help improve patient access, improve efficiencies and reduce costs. This could also enable the formation of structured clinical partnerships, with a cross flow of physicians coming in as visiting doctors to address the needs of patient groups that require multi-disciplinary, coordinated care. For e.g., a specialised eye clinic working closely with a diabetes centre or a children’s hospital. This could help limit the spending on infrastructure to duplicate clinical services that do not justify the patient volumes, and instead focus on quality excellence in specialised services.

• Overhaul patient experience – While much of patient revenue flows in through out-of-pocket payments by patients and insurance reimbursements, the future is expected to see a bigger shift towards the latter, and most health facilities operating in cities with mandatory health insurance, are dependent on insurance reimbursement for 80-90% of their revenue. Payers are continuing to put pressure on limiting over-utilisation of services particularly on the ordering of lab and diagnostic tests and on prescriptions for medications, and there is a strong push to move away from delivering “sick care” to “evidence-based care” with focus on prevention and wellness.

Private facilities that anticipate growth from increase in utilisation of clinical support services are less likely to succeed considering the pressure to contain costs. On the other hand, private hospitals and clinics that offer a more holistic, patient centric services with a greater emphasis on patient awareness, prevention and chronic conditions management, will be better poised to sustain and grow in the coming years, as such facilities are better perceived by patients and payers, and are known to practice conservative medicine.

• Reassess the cost structure – With growing competition among the private sector considering new capacity being created and curbs on rise in prices/health spending, there is growing pressure to carefully manage costs and reassess business plans and projections that are ambitious or outdated, especially if these were based on plans that are three to five years old. With hospitals and clinics spending 35-50% of their cost on third parties – drugs, medical consumables, medical devices, outsourced and in-house support services (e.g. catering, sterilization, etc.), more efforts can be made to benchmark against best practices and streamline and standardise the purchasing function with the aim to improve category management and generate value through more agile outsourcing functions.

Many successful healthcare groups that are implementing these reforms among others, are on a strong growth platform, and are more resistant to cyclical slowdowns or small shifts in demand for services, making them less reactive and more structured in their growth journey to delivering exceptional patient care.