Struggle to survive: Can smaller UAE healthcare providers come out on top?

Independent healthcare providers in the UAE are facing an increasingly competitive market.

Competition for patients and staff, coupled with an increasingly harsh stance from healthcare insurers and industry regulators, is threatening to drive small, private hospitals and clinics into the wilderness.

So what can these providers do to stay in the game? Is it possible to push back against the major players?

Let’s examine the key challenges to healthcare provision in the UAE and how small independents can help one another by applying the principles of ‘stronger together’.

1. Oversupply is leaving empty beds

As the UAE seeks to establish itself as a medical tourism destination, the number of new clinics and hospitals being built has far exceeded demand.

With Dubai’s tourist influx expected to hit 20 million next year when Expo 2020 becomes the region’s big draw, demand for hospital beds will no doubt spike. But right now, the excess supply means there are 50 per cent more private beds than are actually needed. In addition, many clinics are being run inefficiently.

Once the Expo is over and the crowds have subsided, that is the picture we are likely to be left with throughout the UAE. The result will be a price war, which will be hardest on the small practices, who will find themselves outmuscled by the bigger providers.

How you can strengthen your bargaining position

The UAE’s small, private clinics and hospitals can’t be expected to just grow overnight, in order to put up resistance to their bigger competitors. But they can grow collectively.

By joining forces within a larger network, independent healthcare providers can increase their efficiency and their purchasing power, thus presenting a more formidable bargaining position.

2. Having good relationships with insurers is crucial

Healthcare providers that are not listed on the insurance companies’ approved networks find that new patients are reluctant to come to them.

Because of the way healthcare insurance is structured in the UAE, patients who use a clinic that is not listed on their insurer’s network have to pay the full cost and then claim it back. This can take months to recoup and there is also the risk that the claim may be rejected, sometimes by as much as 20 per cent.

Understandably, this is a major deterrent, driving patients to those clinics and hospitals that are on their insurer’s list. For independent providers that are not on all the lists, this can mean being left out when it comes to securing new customers.

How to make sure you’re on the insurance list

Insurance companies in the UAE have been imposing more stringent selection criteria in order to protect their combined operating ratios. The first places to go are those with the lowest bed occupancy rates, since low occupancy equates to a higher price per head.

By joining forces within an efficient network of high-quality providers, you will present a more attractive proposition to insurance companies who want to provide the best possible service for their budget.

3. Competition for talent is fierce

There is a lack of skilled healthcare professionals in the UAE, especially nurses.

This is not a local problem, it is a reflection of a global shortage of healthcare talent. The UAE is hugely reliant on overseas doctors and nurses to staff its hospitals and clinics – in fact, across the GCC as a whole we find that as much as 80 per cent of the healthcare workforce is from outside the region.

With the US, UK and other highly developed health services fishing in the same talent pool, this means the UAE’s independent healthcare providers have to come up with a very attractive employment package in order to land the skilled personnel they need.

How you can attract high-quality healthcare talent

Talent acquisition from overseas is a labour-intensive process that requires considerable resources of time, experience and money. For small, independent healthcare providers, such a concerted recruitment programme can put a real strain on budgets.

By joining a network, you can share the costs of talent acquisition with other practices. This way, you all have access to a well-established recruitment service that can help you to source the skillsets you need on a much more cost-effective basis.

4. Increased regulation is slowing down delivery

The rising incidence of health insurance fraud has prompted a regulatory clampdown in the UAE.

Over-prescription, unnecessary visits and tests, and even false coding are all ways that corrupt providers have tried to defraud healthcare insurers. Such malpractices have all been uncovered in as many as 5 per cent of all healthcare insurance claims, according to the authorities.

As a consequence, the regulatory framework has been tightened up, meaning more monitoring and more unannounced inspections. This inevitably puts speed bumps in the way of healthcare provision and the smaller your business is, the greater the disruption is likely to be.

How to minimise the impact of inspections

The more efficient you can be with your own self-regulation, the more you will help the inspectors and thus reduce the amount of time they take scrutinising your practice. Make sure your data capture systems are comprehensive and efficient, feeding into robust record-keeping and reporting.

This will not only leave you well prepared should the regulators decide to call unannounced, it will improve your own operational efficiency and help to eradicate the opportunity for corruption within your establishment.

Stronger together

There are many challenges facing independent healthcare providers in the UAE. High investment in anticipation of a booming market has left us with a surfeit of facilities and a shortage of talent.

While the demand for healthcare provision is still forecast to grow, the focus of specialist care is not necessarily where it is needed most. For example, the drive for medical tourism has seen a sharp rise in the number of clinics offering reconstructive and cosmetic surgery, while the most pressing health concerns in the region are obesity, diabetes, and cancer.

Small, private hospitals and clinics in the UAE have every reason to be concerned about the challenges they face. But by organising themselves and working together, they can be the ones to come through in the best of health.

Mark Adams is the chairman at The Healthcare Network