Health care is one of the fastest growing industries in the region. As a global leader in health care equipment and technology, GE Healthcare — a $17 billion segment of the General Electric Company and the first GE business headquartered outside the US — is playing a major role in shaping the next generation of patient care. At this year’s Arab Health exhibition in Dubai, Executive had the chance to sit with John Dineen, president and chief executive officer of GE Healthcare and Aziz Koleilat, the general manager for GE Healthcare for the Middle East.
E At present, how would you describe the condition of health care in the Gulf?
John Dineen (JD): From a business standpoint, it’s very good. Like most parts of the world, [the region] had a challenging start to 2009, but we saw very good recovery in the second half of the year. It’s one of the better regions in the world for the [health care] business. We think governments in the region understand the importance of the social investment of health care and we don’t think that is going to change.
Aziz Koleilat (AK): From a delivery standpoint of the healthcare systems themselves, there is a need for development. So the potential is there. On top of that, there are a lot of projects coming up, whether in the private or public sector. The whole Gulf Cooperation Council is investing because they need to catch up with delivery ratios. There’s a lot of potential.
JD: There’s a big gap but it’s moving in the right direction. It’s got the right type of leadership with the right commitment. The progress has been good.
E In your opinion, what markets in the GCC will see the biggest growth in health care this year?
AK: The sheer size of Saudi Arabia in any industry in the Gulf makes it the biggest.
JD: It’s moving forward. They’re investing in health care and they’re large; that’s probably the distinguishing factor. There are plenty of countries in the region that are moving forward, in fact most if not all of them are — all in the right direction. When you couple that with size, mathematically Saudi Arabia is the largest and has the most potential.
E There are many private equity (PE) funds investing in health care in the region. How do you work with PE investors?
AK: A lot of private equity has moved into health care. They’re investing in the infrastructure because they know there’s space for the private sector to play a role.
We partner with them in many cases, i.e. we can work on solutions with them, we sometimes even pair them up with international operators to put the pieces of the puzzle together — it’s more of a coordination role. We have the contacts in United States and Europe for different hospitals that want to come to the region and we have very good contacts with the investors who want to put money into them. We also have our own construction company and give our own advisory services. So we bring the whole thing together for them.
E What role does the public sector play in the Gulf in terms of health care? Does it understand the need for health care?
JD: In terms of the basics, there’s a tremendous commitment to health care. In the region most of the governments understand its importance. It’s one of the most basic investments you can make in a society. It has almost unanimously received tremendous support in that area.
I think on the public sector side there is a strong commitment to investing in infrastructure. We’re probably seeing more public interest in health care here than in many places in the world.
Health care is a regulated industry. You’ve got controls in place, with both strengths and some challenges wherever you go. It’s no more challenging in the Gulf than the rest of the world.
E What is the situation and potential for health care in Iraq or Yemen? These countries are not only facing security issues but are also lagging in health care. Is GE looking into such locations?
JD: We have real interest. When you take a long-term view of a market like that, it’s got the resources, it has the need, the infrastructure will be built: the only question in your mind is, ‘When?’ and ‘How fast?’
You don’t have a question as to where it’s going and what it’s going to need. It really has all the makings of a great health care market. We’re hopeful that we’re going to see some investments and building in the future there, and maybe we can play a big role in that.
E So you have plans in those countries already?
AK: We already have contacts, we have deals and we’ve worked on projects. This already happened, whether in Yemen, Iraq, Afghanistan, Pakistan, all these markets. We have a presence, so we work with them. The key challenge is how can we help accelerate in helping them build the necessary infrastructure. Because of the insecurities [there is a risk of] putting investments in and then having to pull out, so we’re trying to find the best way to do it in order to bring in our expertise and work with them to find solutions.
E What is the best way?
JD: We’ve got to find the right relationships; we have to understand who the first movers are going to be, with regard to infrastructure development.
AK: On top of that, we’re talking directly to the Ministry of Health in Iraq and the same thing with the Ministry of Health in Yemen, to see what their needs are and who they think would be the right partners in that sense. So we’re looking for the best way to get deeper into those countries.
JD: It’s really the next big challenge. We’re spending a lot of time talking about it. We don’t have a simple answer to your question, but it’s really an area that we’re trying to work through as we speak.
E Do you think your competitors are also looking into the same areas for potential long-term projects?
JD: Yes, the opportunity is obvious. The ‘how’ is going to be the real challenge as people crack the code on how to do it. I think it’s going to be a great opportunity.
AK: The demographics and dynamics are there, it’s not hidden. We all know it.
E Let’s talk numbers. How much was the region’s health care industry affected by the global financial crisis?
JD: I can speak relatively. It wasn’t as bad as what we saw in the US and Europe; those were the most challenged markets. This market was slow to start during 2009. People were cautious. But at the end of the day it didn’t stop the investments. I still think there were long-term commitments made. It’s a pretty strong market — maybe not as strong as China or India, but still much better than most of the developed markets.
AK: In the first half of 2009, the oil price dropped and the private sector got very worried. There was a shift, it’s not like things completely stopped but it was a shift. We see more projects and more interest going forward; confidence is back in.
E What are your targets and expectations for 2010?
JD: Our view is that we’re going to continue to grow; we’re bringing more technologies and products to the market, we’re investing in our people in a very big way, developing service needs to support our base, and we continue to create new partnerships — especially with private equity funds. We’re continuing to build more and more capabilities.
E What are the greatest issues and concerns for the GCC health care industry going forward? How do they differ from 2008/9?
JD: To some extent, the health care industry in the region and around the world is focused on the next generation of technology.
We wait for that technology to trickle down to the more affordable segments. Health care now is about solving problems, it’s not just about building the next great CT [scanner].
It’s about understanding the classic challenges in health care systems, which in many countries is improving access, improving the quality of the health care, improving costs, etc.
So we are really looking to utilise technology to solve those problems and change the way health care is delivered.