What is the nature of the relationship between Abu Dhabi Health Services Company (SEHA) and Johns Hopkins?
LAVATER: What SEHA did, as a semi-private entity, is they went out and hired managers from around the world to manage their hospitals. So Johns Hopkins Medicine International manages not only Corniche Hospital but also Tawam Hospital in Al Ain and Al Rahba Hospital. SEHA has also hired Cleveland Clinic to manage SKMC for example.
To what extent was healthcare neglected during the boom in the UAE and how has that lag created opportunity for investors today?
LAVATER: I think the government here has recognized that if they want to be a world-class city, a city of destination not only for tourism, but also for business, that healthcare needs to be one of those components. When you look at how people evaluate cities, you look at education, you look at healthcare, you look at safety, economic opportunity, etc. So that healthcare component is raised to a high level within Abu Dhabi because world-class healthcare is something they want to have in being a world-class city. I think they are investing a lot of resources as of late to drive that agenda of having world-class healthcare. I think there are certainly opportunities that they need to grab with facility design, facility builds, bringing in the right clinical talent, etc. I think they have recognized all of that and it is part of their development plan. I have actually been impressed as an American hospital executive coming over to the UAE and seeing how healthcare ranks quite high on the agenda.
Over the next 20 years, treatment demand in the GCC will rise by 240 per cent and the total number of hospital beds will need to more than double to 162,000 to meet the needs of an ailing populace, according to consulting firm McKinsey and Company. Is the UAE currently on track to meet these growing demands?
LAVATER: When you look at supply and demand for healthcare services, and I am going to speak more specifically to what I know, which is Abu Dhabi, Abu Dhabi is positioning itself to be able to meet the demand. Something about these long-term surveys is that they are based on the wrong criteria about how healthcare is going to be delivered into the future. I think you can have a tendency to require too many hospital beds versus looking at the whole delivery of healthcare into the future. For example, more outpatient surgery centers, home healthcare, and delivering healthcare to the population in the vehicle that is necessary into the future versus just looking at number of hospital beds compared to population. I think Abu Dhabi and the Abu Dhabi government recognizes that and is trying to have that balance between over building hospital beds versus really providing the healthcare that is going to be needed for the population.
The Gulf is battling the highest incidence per capita of lifestyle diseases in the world. One in four people in the UAE have diabetes. What emphasis is placed on preventative medicine in the UAE today?
LAVATER: We are primarily a maternity hospital offering neonatal services. So we are dealing with younger women in their child bearing years and we see a very high rate of diabetes in this population and that is mirrored in the whole population. We have put together programs and activities to help address that community need. We have a multidisciplinary team of physicians that handle diabetes care specifically. We are trying to go out into the community and talk about diabetes and prevention of diabetes so that, when the women of Abu Dhabi get pregnant and they come to us for services, we hopefully get in front of some of their healthcare concerns early in the process. I think the government, as an entity, needs to continue to drive public health type activities. I think some of the cultural aspects that I have seen in the Middle East are hurting the population by not really promoting some of the health and wellness activities that some of the Western countries have developed more fully. I think that will come over time as the awareness in the community is out there. Health Authority-Abu Dhabi (HAAD) is doing a lot, the government is doing a lot to try to educate the community about proper diet, about exercise, and I think that will pay dividends in the future.
Generally about 70% of the healthcare in Abu Dhabi is provided by government or the government-private institution SEHA and their hospitals and doctors. That leaves about 30% of the healthcare market in the private sector. If I were a healthcare investor looking at opportunities in Abu Dhabi, I would take a look at where the gaps are and where the government hospitals are not providing some services and use that as a vehicle to come into the marketplace.
Where would you identify gaps in provision in healthcare in the UAE and how can these be seen as investment opportunities?
LAVATER: Generally about 70% of the healthcare in Abu Dhabi is provided by government or the government-private institution SEHA and their hospitals and doctors. That leaves about 30% of the healthcare market in the private sector. If I were a healthcare investor looking at opportunities in Abu Dhabi, I would take a look at where the gaps are and where the government hospitals are not providing some services and use that as a vehicle to come into the marketplace. So the things that we don’t do very well in Abu Dhabi today is outpatient, it is still very much focused on a heavy hospital type delivery system and I think there are opportunities to look at more imaging centers, surgery centers, home health, and those offer an opportunity for private investment or for business to come into the market, find a niche, and make a go of it. I also think that if you look at it from some ancillary type services, including billing and coding, materials management, providing of medical supplies, in all of that there are cottage industries that can still be very lucrative for people to come into the healthcare sector versus just thinking about building a big hospital with 400 beds. I think the government has that and until the reimbursement rates change, which is a long-term program with insurance, I think the investment needs to be around smaller niche players.