When Maria Carballo recently returned to her job with an airline in the United Arab Emirates, she felt fortunate. Her tests after completing treatment for breast cancer had shown that she was free of the disease. She also felt that she had made the right decision to choose not Dubai for her therapy but a specialized oncology center in her home city, Madrid, where she said counselling was excellent, she felt safe, and all care was provided under one roof.
Maria, an expat living with her family in Dubai, had been diagnosed with breast cancer at a check-up she took in the emirate, but the ordeal of having a cancer diagnosis was made more challenging by a disjointed experience with doctors. “I was sent all over the place in Dubai to take tests and some of the tests were sent abroad. Then there was no continuous care by one doctor but several were involved, giving me different opinions on my results and leaving me confused,” she explains.
While factors ranging from language and cultural affinity to costs make it logical that expats tend to seek specialized treatment in their countries of origin, recent polling has shown that preferences for treatment abroad are also strong among nationals of Gulf Cooperation Council countries. Survey results released last month by Gallup said that 39 percent of nationals in the UAE and 35 percent in Saudi Arabia prefer to take medical treatment abroad. In each of Qatar, Oman, and Bahrain, more than 40 percent say they prefer medical treatment in another country and in Kuwait, the rate is 65 percent.
Even as surveys published in spring 2012 revealed that residents of the six GCC countries were, at satisfaction rates of on average over 70 percent, much happier with their domestic healthcare systems than people living in other parts of the Middle East and North Africa, Gallup said much work needed to be done to convince GCC residents that treatment for serious illnesses can be accessed without having to “first travel to the airport”. It cited poor quality of care and unavailability of certain specialized treatments such as oncology among the main reasons why nationals prefer treatment abroad.
The costs of medical care have risen worldwide and led to increased portions of countries’ gross domestic product having to be allocated to healthcare. However, since the cost increases were far from uniform and since medical progress also greatly favored specializations of medical practitioners and diversification of entire healthcare sectors, medical tourism is a growth industry which more and more countries are trying to benefit from.
Thus, although the UAE incurs costs of $2 billion annually, according to Gallup, from sending nationals abroad for treatment, the emirates are also developing their inbound medical tourism with vigor.
An emirate of opportunity
According to consultants Frost & Sullivan, a total of 4.3 million medical tourists visited the Middle East in 2011. Of these, most chose the UAE. Dubai could generate health tourism revenues of $1.66 billion by the end of 2012, a prospect which adds significantly to the emirate’s attractiveness for regional healthcare groups such as Riyadh-based Saudi German Hospital Group (SGHG).
“Dubai, and indeed the UAE, is definitely far cheaper than the United States and United Kingdom, for example, in terms of medical services. However, it is more expensive than Thailand or India, for example, but the quality of the treatment here is far higher,” says Makarem Batterjee, president-elect of Bait Al Batterjee Holding, which owns SGHG and earlier this year opened the Saudi-German Hospital Dubai (SGH Dubai).
SGHG and other groups aim to develop speciality centers for treatment of cancers and other diseases where local treatment options have not met rising needs. SGH Dubai is the first investment in a facility in the UAE by SGHG, which has been around since 1988 as provider of healthcare to the Saudi population. SGHG’s portfolio includes five hospitals on its home turf and one in Yemen.
According to Batterjee, the group envisages growing 16 percent per year, opening 30 further hospitals in places such as Saudi Arabia, Cairo, Abu Dhabi, Al Ain, Ajman and Sharjah over the next couple of years. The group chose Dubai for its first project in the UAE, despite higher costs to establish a facility here, because, as Batterjee explains, the emirate is “a recruitment center within the GCC and attracting talent is a very important aspect.”
Fishing in a new pond
Of more than $200 million invested in the multi-speciality SGH Dubai, about $109 million went to the site development and construction that was carried out by a sister company of SGHG. Rather than being located in the Dubai Health Care City (DHCC) further north, the hospital sits in the Al Barsha area of Dubai, with a large catchment area in the vibrant economic zones and upscale residential quarters nearby — and no competing provider in the direct vicinity.
“It was my father’s vision not to set up in DHCC; there are too many fishermen in a small pond, the customer gets confused,” says Batterjee. “In addition, housing is an issue in Dubai and we have the advantage to offer our staff nice apartments close to their workplace.” Plans for expansion of SGHG facilities in Dubai are already in place as six specialized treatment centers, including facilities focused on diabetes and oncology, are scheduled to be built near to the main hospital in the next couple of years.
Another key reason why SGHG invested so heavily in the location is medical tourism and Dubai’s proven success in attracting these tourists on international and regional levels. “Even our nationals want to get away, especially for private things like cosmetic surgery,” says Batterjee.
Whilst it can take years to obtain licenses and operating hospitals requires constant reinvestment to keep up to date with the advancement in medicine and equipment, it is a business that has been rewarding for the family-owned group. Treating more than one million patients across its network, SGHG aims to treat 100,000 patients in Dubai by end of next year, including UAE and GCC residents as well as patients from Africa, Russia, Northern Europe.
Mid-market economics
In financial terms, Dubai is actually a mid-market location when it comes to direct treatment costs. According to a 2012 DHCC edition of a medical tourism guide publication called Patients Beyond Borders, a procedure in a DHCC treatment facility can cost from 18 to 75 percent less than in the US, but some countries, such as Israel or India, have more developed capacities in tourism for medically assisted conception, and India and other Asian countries generally beat the emirate on prices.
Reputation is key
Cost elements are, however, only one and not necessarily the decisive factor why patients chose a destination. Quality of care and reputation building play key roles for developing inbound medical tourism — this counts among the reasons why operators and the government in the UAE emphasize the value of certification by the Joint Commission International.
Social and cultural factors as well as smart marketing are also not to be underestimated in their importance. In the Middle East, Lebanon and Jordan were other countries where operators in the healthcare sector have made efforts to attract medical tourists, and while Jordan is a lower-cost alternative to Dubai, Lebanon has had niche success in drawing in seekers of cosmetic surgery.
The UAE, however, with its mixture of governmental support for healthcare projects, investments by private operators and international appeal as general destination for visitors, appears set to claim the position as the largest medical tourism destination in the Middle East and North Africa for years to come.
It is a challenging sector but therein lies its profit potential. “Nothing is easy in healthcare,” says Batterjee. “It’s not like repairing a car, you are dealing with people’s lives [which means] you need lots of controls and [to] recruit doctors with diligence, but that’s why it’s a good business.”
