Experts say that the GCC suffers from a structural deficit in healthcare infrastructure and delivery. Statistics show there are 1.6 doctors per 1,000 people in the region, whereas Germany, for example, has 3.4 doctors per 1,000 people. How are providers addressing this structural deficit?
BATTERJEE: When we talk about structural deficits in healthcare in the GCC area, we talk about deficit in a knowledge industry. The delivery in this industry does not come overnight. It needs heavily regulated institutions and qualified staff and this takes time. If I speak from my own personal experience, in Jeddah we were the last hospital that went on-stream in 1985. The next hospital to come online was just finished 2 years ago. So imagine, in a city like Jeddah, it took more than 25 years to start a private hospital of a certain size. Imagine how much the population has grown since then. The difficulty in healthcare is that not many people want to invest in this field because it is a knowledge industry. Most of the hospitals in the private sector have been owned or started by a doctor from a family group. This is why I believe there will always be a gap in supply and demand in healthcare services. The government of Saudi Arabia realized that and has provided soft loans for the past 30 years to the private healthcare sector.
The UAE has created a benchmark for the whole of the Middle East and North Africa. When it comes to healthcare in the private sector, the emirates have not caught up with the private sector and the reason is the incentives. Recently the government of Dubai has addressed this subject in a more intelligent way than others area in the region. I believe that Dubai will be the medical tourism hub in the region in a very short time because of the smart way of addressing healthcare and because of Emirates Airline. Emirates flies to more than 150 cities daily. Dubai has created a nice, professional place, where the world’s best talents are happy to live and work. We are excited to be here in Dubai because this is the place we can create the benchmark for our own group.
Will the supply of services and facilities be able to meet the demand?
BATTERJEE: When the second phase of SGH Dubai is finished in another 5 years, this will be the biggest healthcare city in the region in the private sector. It is going to be a miniature healthcare city and is going to apply the vision of His Highness Sheikh Mohammed bin Rashed Al Maktoum to make Dubai the leading hub for medical tourism. This world class facility includes a 300-bed hospital, and in the second phase will host 200 clinics for external doctors. This will bring doctors from all over town and doctors from abroad that want to practice in Dubai– and there are many of them. There are many Arabs who have finished their education in Europe and the United States and want to relocate back to this region. We have created this building for them with digital connection to the main hospital where they can treat patients and they do not have to worry about all of the administrative work because we handle that for them. The third phase will be 6 hospitals; each hospital will be a sub-specialty hospital with 50-100 beds. In addition, we have a small university and a small professional training center for doctors. We see Dubai as a city that can attract medical education for both students and professionals. That will align our project with the vision of the government of Dubai. Dubai will be a healthcare attraction for the region as well as Africa,India,Pakistan,Afghanistan,Iran, etc.
What will be the impact of increased demand on specialization of services and facilities?
BATTERJEE: We are not looking solely at the local market. When you have specialty hospitals that address a host of needs and that are branded under well-known German universities, you will be able to attract patients regionally. Imagine having a sub-specialty hospital for children, for orthopedics, etc., this will attract patients from all over the region as well as locally. There are many things still to be done in this industry, we have not spoken about specialized burn units and geriatrics yet. There is a lot of opportunity in healthcare yet in this region.
Most countries in the Middle East are introducing compulsory health insurance in some form. What are the major impacts of this process on private healthcare operators?
BATTERJEE: Compulsory insurance has had a huge impact on us in Saudi Arabia. Imagine you have an industry that was worth $2bn before health insurance and then you have 8 million expats times $1000 on average, there is $8bn in premiums. Imagine the amount of work you have quadrupling overnight. There are many challenges in addressing this kind of demand. The amount of investment it takes to buy the land for a hospital in the vicinity of a city in Saudi Arabia is sizable. Unfortunately, the amount of money that can be made buying and selling bare land yields profits of up to 50% per year. Why would someone want to go into the healthcare industry, for a margin of 5% to 10% and having to deal with headaches and regulations, when he can make 50% buying and selling bare land? That also increases the supply-demand gap in healthcare in the region today. Healthcare is not an easy industry. We are competing with a public sector and with governments that are giving quality healthcare away for free. That is a major challenge for any business or industry.
How would you describe the current state of medical education in the region? What challenges still remain with regards to medical education? What can be done to encourage more local students to go into medicine?
BATTERJEE: Medical education is a real problem. Do you know how long it takes to make a doctor? At least 40 years. He will have to go through medical education and there are countries that require a bachelor degree prior to going into medicine. Our population growth is one of the fastest in the world, so the gap is getting wider and wider. Even universities themselves are not being built to that speed. Most of the governments in the Arab world have not addressed medical specialties adequately. They have been graduating students in political science, Arabic, and business, while forgetting about engineering and medicine. So we have young Arabs and young GCC nationals finishing college without jobs. Now they want the private sector to employ them. We realize our role in this and we have built the largest medical school in the Arab world in the private sector. This is a huge project in Jeddah that hosts 7 colleges in one place and these are addressing medicine, dentistry, pharmaceutical, health informatics, and all the healthcare sciences. It is important for us to address this issue and bridge the gap between supply and demand for healthcare professionals. We are now building 4 more medical colleges in Saudi and we even have one planned for Dubai in the future.
I believe it is going to be very hard to persuade young nationals to pursue careers in healthcare simply because of the time it takes to be a medical graduate. Many people want to be doctors but are surprised when they enter school and see the tedious and rigorous programs they have to go through...The demand is always going to be high and the supply is always going to be short. We have turned to India and China for medial professionals.
I believe it is going to be very hard to persuade young nationals to pursue careers in healthcare simply because of the time it takes to be a medical graduate. Many people want to be doctors but are surprised when they enter school and see the tedious and rigorous programs they have to go through. Many of them drop out and go for other easier specialties. The demand is always going to be high and the supply is always going to be short. We have turned to India and China for medial professionals. We are already employing Chinese nurses and we are very happy with them and there will be more of them. We have also traditionally employed Indians. I believe these two countries might be able to help bridge the gap. I also believe that Saudi Arabia can be an excellent human resource pool for the GCC. Sometime in the future, you will find Saudi Arabia exporting human resources to the GCC in all fields.
What are the benefits of the private sector to healthcare?
BATTERJEE: The role of the private sector is not to be undermined at all. The Saudi government has proven that. With their support to the private sector over the last 30 years or more, they have created many organizations by giving soft loans. There are about 150 private sector hospitals and in the government there are about 250 hospitals. In Jeddah for example, there are about 35 private sector hospitals while there are 8 government hospitals. So in Jeddah, I can proudly say the private sector is working hand in hand with the government to relieve a lot of pressure. Remember that the government of Saudi Arabia is giving free medical care while the private sector is charging for it. This creates a lot of pressure on the private sector. Had it not been for the private sector, the medical scheme for expats in Saudi Arabia would collapse. The private sector is taking that load, which came suddenly over the course of two years. I believe the private sector will realize the potential in this area. It might take a long time because of the price of land in Saudi in the vicinity of the cities. Regardless, I think the private sector will be the future in healthcare in the region and countries need to follow the experience of Saudi Arabia in this.