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Medical tourism in the UAE: Assessing the impact on your company

February 20, 2018

The UAE’s medical tourism industry has grown remarkably in recent years, bringing significant income to the region while boosting its global standing. It’s undeniable that this spells good news for the national economy, but what does it mean for individual companies and residents?

If medical tourist numbers rise rapidly before healthcare services have time to expand, healthcare costs will also increase, making employee healthcare packages more expensive for companies. On the other hand, if the quality and provision of healthcare services rise to match or even exceed demand, companies may enjoy a fall in the cost of employee health insurance packages, alongside the added bonus of a healthier workforce.

But when faced with these two starkly different scenarios, how can you, as an employer, prepare for the change to healthcare expenditure brought by the growth of the UAE’s medical tourism sector? The answer lies in understanding the current medical tourism industry and how the public and private sectors are most likely to respond to it.

The size of the UAE’s medical tourism sector

Transforming the region’s healthcare infrastructure to rival the world-class standards seen in the US and Western Europe has long been, and remains, a focus for the UAE government. Its dedication to achieving this goal has led to the creation of initiatives, such as the Dubai Health Experience (DXH) – the first medical tourism portal in the world that allows tourists to book their entire ‘medical holiday’ online: from procedure to flights and hotel.

Such efforts are working. The Dubai Health Authority (DHA) last year reported that medical tourism in Dubai generated more than AED 1.4bn for the emirate in 2016 and that the city received 326,649 medical tourists – a 9.5% increase from 2015. Furthermore, the Medical Tourism Index (MTI), a tool that ranks countries and cities based on their attractiveness as a medical tourism destination, also indicates that the region is becoming increasingly popular for this purpose. Indeed, in 2016, Dubai and Abu Dhabi were respectively ranked as the 16th and 25th best global destinations for medical tourism. And the DHA has just announced the launch of the first Dubai International Medical Tourism Forum due to take place at the end of February 2018.

The Dubai Health Authority (DHA) last year reported that medical tourism in Dubai generated more than AED 1.4bn for the emirate in 2016 and that the city received 326,649 medical tourists – a 9.5% increase from 2015.

Why is it so attractive?

The DHA reports that orthopaedics, dermatology and ophthalmology are the main types of medical treatments attracting tourists to Dubai, with most coming from Asian (37%) or other Arab and Gulf Cooperation Council (31%) countries.

Conditions that fall under these medical categories often seriously affect a person’s quality of life without being life-threatening. It is this combination of debilitation without the threat of fatality that makes getting on a plane and travelling to the UAE for treatment an attractive proposition to many. And as private healthcare consumers, patients will only go abroad for treatment if they can secure high-quality healthcare at an affordable price.

The UAE’s high rate of expatriate doctors who have been trained in the US and UK is another reason medical tourists come to the region for specialist procedures. It means they can access the same standard of treatment as in the US or UK, but in a more convenient location and at a lower cost.

Added to that, the UAE’s existing popularity as a holiday destination, strategic location for global travel and high level of government support for its development as a healthcare centre, means that medical tourism in this region is on the cusp of massive growth.

So what impact is this likely to have? 

The impact of medical tourism on the UAE

Data from a 2016 industry report suggests that the UAE healthcare sector is expected to grow 7% per annum to reach a market value of USD 19.5bn by 2020, giving tourists access to more than 40,000 healthcare professionals across 4,000 facilities. To achieve this goal, the quality of existing private and governmental hospitals in the UAE has undergone significant improvement in recent years and more state-of-the-art private sector hospitals have been, and continue to be, built. In 2006, Dubai Healthcare City (DHCC) – a healthcare free-trade zone dedicated solely to hospitals, clinics and other medical facilities –was established, with a second free-trade zone currently being launched under DHA regulation.

These changes make one thing clear: healthcare provision in the UAE is transforming and this means that UAE residents will have a greater variety of treatments available to them in addition to an improved overall standard of healthcare. And that’s good news for companies and their employees because improved healthcare should lead to less ill health, less absenteeism and more comprehensive healthcare insurance packages for employees, including treatments they would previously have had to go abroad to receive.

Healthcare provision in the UAE is transforming and this means that UAE residents will have a greater variety of treatments available to them in addition to an improved overall standard of healthcare.

The result? A happier, healthier and more productive workforce at a lower cost. 

The potential drawbacks

However, this may not go to plan if the UAE’s medical tourism industry follows a similar path to that revealed in the World Health Organization’s (WHO) bulletin, The effects of medical tourism: Thailand’s experience. Specifically, the report suggests that Thailand’s boom in medical tourism in the noughties created a rise in demand in specific fields, exacerbating pre-existing shortages of certain specialists, despite the training and recruitment of new physicians. It emphasised that the training of more doctors does not necessarily prevent demand from outstripping supply, because most tourists request specialist treatment from doctors who have more than 10 years of experience.

It is possible that something similar could occur in the UAE, especially for specialties such as ophthalmology and orthopaedics, which are in high demand from both tourists and residents alike. This would be particularly problematic for employers because if the demand for healthcare were to rise at a faster rate than the number of suitably experienced doctors, the overall price of healthcare would also increase. As such, not only would a rapid boom in tourism negatively impact locals’ access to healthcare, it would also increase how much they have to pay to receive this healthcare – meaning higher insurance premiums and more expensive healthcare benefit costs for employers. 

Assessing the potential outcome

However, while it’s never possible to predict the future with 100% accuracy, an assessment of the main factors would suggest that, happily, the former scenario is more likely. The UAE government has long been developing its medical tourism growth plans and has a strategy for ensuring that the supply of healthcare services can keep up with increasing demand. For example, the launch of the aforementioned second free-trade zone in Dubai will create a concentrated source of new medical facilities in addition to the new private hospitals being opened in other UAE cities, such as Abu Dhabi. Furthermore, large healthcare providers Aster DM Healthcare and NMC Health have recently announced ambitious expansion plans for opening new hospitals and medical centres in the UAE in the near future.

The UAE government has long been developing its medical tourism growth plans and has a strategy for ensuring that the supply of healthcare services can keep up with increasing demand.

And while the country is training more medical students to increase the future number of doctors in the region, it is also running initiatives to improve the quality of existing doctors. It is also actively recruiting experienced specialist doctors from developed markets to ensure that tourists’ requirements for doctors with more than 10 years of experience can be met without taking resources away from residents.

Ultimately, this means two things for employers. First, if the UAE’s hospitals, quality of healthcare service and number of experienced specialist doctors and medical staff all continue to increase, it is likely that healthcare costs will remain similar to current levels. In fact, they could even fall if the private providers grow to the point where they need to compete for custom. This in turn should keep the cost of employee health insurance packages reasonable and also widen the variety of health services covered by these packages.

Second, it’s been shown time and again that health benefits offered by an organisation can strongly influence an individual’s decision to join, or stay with, that organisation. This means that the companies that are able to offer the most attractive health insurance packages, covering the spectrum of services that employees value, will have a distinct advantage when it comes to recruiting and retaining the best talent from across the globe.

Lifecare is an insurance advisory firm. We help people build happier and healthier workforces. For more information please call +971 4 305 9500, send an email to info@lifecareinternational.com or click here. 

About the author: Nausheen Popat, Founder & Chief Operating Officer

Nausheen Popat cofounded Lifecare 20 years ago with Alniz Popat, and is today responsible for managing and coordinating the operational running of the business across Dubai, Kenya and Qatar. Nausheen focuses on delivering Lifecare’s operational excellence strategic initiatives. She has been integral in developing relationships with customers and major service providers in the market in order to promote strategic partnerships that serve our clients and promote the growth of the business. Nausheen is a graduate of the University of Northridge, California and holds a bachelor’s degree in Hotel Management.