If you build it, will they come?

Despite its substantial growth in the sector, the UAE faces a number of hurdles to achieve its full potential as an international medical tourism hub.

Over the past few years, the UAE has focused on scaling the medical tourism rankings, with the government aggressively expanding and revamping its healthcare systems and infrastructure to meet international standards. However, with tough competition from both the West (Canada, UK) and East (Singapore, India), the UAE is in for a tough battle to attract people in what is becoming a key sector in the UAE’s post-oil vision of economic development.

Medical tourism’s global popularity stems from the high cost of health care (particularly in the US), long waiting times for certain procedures, the continuing ease and (relative) affordability of international travel, and technological improvements as well as standards of care in many countries. According to the Medical Tourism Index, the UAE is one of the top 25 medical tourism destinations in the world, and it is a preferred destination for orthopaedic and sports medicine, ophthalmology, dental procedures, and dermatology. Medical and cosmetic plastic surgery remain the most popular procedures, especially for medical tourists travelling to Dubai. Speaking to World Business Times, CEO of Dubai Healthcare City’s Investor Sector, Bader Saeed Hareb commented that: “The expansion of the health sector is majorly driven by the Dubai Government’s mission to transform the emirate into a global medical hub. DHCC is playing an instrumental role to achieve the mission of the Dubai Government through developing a global healthcare and wellness destination. Our objective to develop Phase 2, an area of 22 million square feet, into a global wellness destination, is to meet the needs for preventative healthcare offerings such as management of obesity, hypertension and diabetes, and unique concepts and specialised services such as rehabilitation, counselling, sports medicine and elderly care. As DHCC is planning to design a true wellness destination experience for residents and visitors there is also a growing need for wellness centres and resorts. “

Dubai has pulled ahead of its regional competition with international medical tourism numbers increasing steadily year-on-year. “In 26 hospitals in Dubai we witnessed traffic of 638,000 medical tourists, of whom nearly 47,000 were international tourists. This high traffic was recorded at just the 26 private and public hospitals and we are not even talking about the medical procedures conducted in over 1,000 clinics and ambulatory care centres in Dubai. Every year the number goes up by 12% to 15%” said Dr. Laila Al Marzouqi, head of Dubai Health Authority’s medical tourism initiative. Dubai expects an annual increase of 12% and aims to attract more than 500,000 medical tourists by 2020, generating approximately $710 million per annum.

The strength of the UAE’s competitiveness in the medical tourism field rests on several key factors. With a workforce that relies heavily on skilled expatriates, the UAE has cultivated a talented medical field in a remarkably short amount of time, allowing it to compete with countries lacking a knowledgeable workforce. The UAE’s robust private medical sector has been experiencing a hospital building boom recently. Dubai now has 38 hospitals of which 32 are private sector, and include a variety of specialty offerings, including an all-woman facility. These private sector hospitals focus on international healthcare standards, and 20 out of Dubai’s 38 hospitals are Joint International Commission (JCI) accredited. With this investment in high-grade facilities, the UAE beats most GCC countries across the majority of healthcare indicators. Dubai’s beds per 1,000 people ratio stands at 1.9, considerably higher than the average ratio of 1.7 across the GCC. Dubai’s ratio for physicians per 1,000 people is 2.7, much higher than the average ratio across the GCC of 1.75.

Additionally, the government’s proactive initiatives drive medical tourism in the UAE. In April, the Dubai government launched the “Dubai Health Experience” (DXH), a single window smart application, allowing medical tourists to manage their procedures, accommodations, visas, leisure activities, and enjoy discounts across a number of partners. Regarding the DXH app, Dr. Al Marzouqi said, “The time is perfect to launch this electronic portal that will connect the world with Dubai’s medical facilities.” Location also works to the UAE’s advantage. Dubai is a popular tourist destination and ranks as the fifth most popular city in the world for international travellers. With the third best air transport infrastructure in the world according to the World Economic Forum and located between Europe, Asia, and Africa, the UAE’s position as a global hub means there is an ease of travel lacking in other medical tourism locations.

Despite its substantial growth in the sector, the UAE faces a number of hurdles to achieve its full potential as an international medical tourism hub. A limited number of medical professionals and high recruitment costs have led to poaching between competitors. This trend has also driven up salary expectations, which are not sustainable in the long term and have a negative impact on profitability. Healthcare SMEs have particularly suffered, finding it difficult to retain staff with high salaries or hire replacements. Regarding professionals in the industry, Mr. Hareb told World Business Times that: “So far more than 5,000 healthcare professionals have been licensed in DHCC to provide patient-centred services across more than 150 specialties. The expansion of the UAE’s healthcare sector brings with it a set of challenges including a growing need for qualified healthcare professionals and the reliance on foreign manpower. To help increase the supply of local talent and increase qualified healthcare professionals in the industry, the free zone provides undergraduate and postgraduate medical education and continuous professional development programs for licensed healthcare professionals. The free zone is home to medical institutions and learning resources such as the Mohammed Bin Rashid University of Medicine and Health Sciences (MBRU) and Khalaf Ahmad Al Habtoor Medical Simulation Centre.

The UAE will also need to address the issue of pricing for procedures. Though its prices compare favourably with most Western markets, the UAE’s pricing structures currently cannot compete well enough to attract patients from Asia and Africa. A complex heart surgery costs between $15,000 and $20,000 compared to $7,000 to $8,000 in India. The UAE can compete easily with these lower priced destinations with easier access and luxury accommodations, but if the procedures continue to outprice competitors, the sector’s growth will remain stunted. This issue is reflected in the local population’s own preference to travel abroad for medical services. Whilst Asia is the most cost-effective option, Europe and America bring an element of prestige. UAE nationals themselves have the option to embrace medical tourism. Why not visit Germany and France whilst receiving care from some of the best hospitals in the world? Meanwhile, the family can take in the sites.

The UAE’s medical tourism industry is well positioned to grow as projected and develop as a fundamental sector for the post-oil economy, and according to Mr. Hareb, DHCC will play a key role. “Our dynamic free zone structure, based on a balance between governance and flexibility, strengthens our investment environment and enables us to grow as a healthcare and wellness ecosystem which offers patient- centred world-class care.” However, in order to achieve its objectives, the UAE government should maintain its current momentum, addressing current market drawbacks before they evolve further. Removing these obstacles will allow this sector to expand to its full potential, making the UAE one of the top five medical tourism destinations in the world.