Mark Adams, Chairman, The Healthcare Network.
It’s no secret that the UAE has its sights set on becoming a global medical leader. And to achieve this, health facilities are opening across our region at a rapid rate.
There’s just one problem: this surge in numbers of health providers is making it hard for independent clinics to compete. They are under threat from the large medical groups with their vertically integrated clinics and hospitals and their better purchasing power with insurers.
Fortunately, medical zoning – careful regulation of land development for medical facilities – provides an opportunity to even the playing field over time.
Specifically, zoning could prevent the opening of ‘me too’ clinics in oversaturated areas, levelling out distribution of medical services across the region, and freeing up funds to develop more essential medical resources. In oversaturated areas, zoning can help by holding capacity as, over time, the population grows, while in new area, careful licencing can help ensure overcapacity is never reached.
Is this wishful thinking? Here’s how medical zoning could save the UAE healthcare industry in three steps.
Step 1: Reversing the oversupply problem
Medical zoning would ensure that new facilities are only built if the specialism they offer is missing or they are located in a residential area that needs a new clinic.
The continued oversupply of hospitals and clinics underlies the bulk of the problems currently facing the UAE’s healthcare industry. Dubai alone has 37 hospitals, 3,700 private clinics, 40 governmental health centres… and counting.
Approximately 12.5 million outpatient visits are made in the UAE each a year, creating an annual demand of up to 250,000 inpatient beds. And this figure doubles to a maximum of 500,000 beds if you consider that the average inpatient stay is two days long.
Despite this, the annual number of bed spaces provided by all the health facilities in the private sector exceeds one million – that’s more than double the demand.
The annual number of bed spaces provided by all the health facilities in the private sector exceeds one million – that’s more than double the demand.
With more and more clinics and hospitals opening each year, this oversupply shows no signs of slowing down. But by preventing the building of health facilities that cater to the same patient needs as existing providers, medical zoning could finally put a stop to this cycle.
The benefit of medical zoning for independent clinics
Independent clinics are currently being hit hard by the oversupply problem. With fewer resources, manpower and marketing budget, it can be a struggle to stand out against larger hospitals and clinics. And as more copycat facilities enter the market, it becomes even harder for existing independents to maintain the patient numbers they need to stay in business.
If oversupply was reduced by restricting the opening of identical facilities, demand and supply would equalise. This would allow independent clinics to stop fighting for the attention of patients who are overwhelmed by an excessive amount of choice.
Step 2: Levelling out the distribution of medical services
By placing restrictions on the opening of new health facilities in well-serviced areas, medical zoning could encourage health centres to open only in areas where they are most needed.
Over 70% of the hospitals in Dubai are located in the area known as ‘Old Dubai’. It’s a trend that’s prevalent across the UAE and reflects the common practice of health providers clustering in easily-accessible areas that deliver the high footfall they need to stay in profit.
In fact, by gathering all health services in one area, providers are missing out on an opportunity to capture a new slice of the market. It also creates a problem for patients who live on the outskirts of towns and cities – especially patients with limited mobility and no access to transportation.
By restricting the opening of similar health facilities in one area, medical zoning could provide the motivation new hospitals and clinics need to start opening in and servicing less popular areas.
The impact of better distribution on independent clinics
Ensuring an even spread of health facilities across our entire region benefits everyone. Firstly, patients who currently struggle to find good local healthcare will finally have access to the services they need.
Secondly, private hospitals and clinics that are currently fighting to win the custom of the same pool of patients will no longer have to worry about the threat posed by more clinics opening on their doorstep.
Finally, restrictions on similar openings in the same part of town will provide smaller clinics with the chance to make their mark in brand new territory.
Step 3: Preventing wasting money and talent
Money that could be invested in transforming care or improving healthcare tech is being wasted on building new clinics.
Recent figures suggest that the business value of the UAE’s private hospitals will hit USD 5.56bn by 2020. This figure demonstrates the sheer amount of money the region is investing in healthcare. But as so many of these health providers are surplus to requirements, vital funds are clearly being wasted.
Recent figures suggest that the business value of the UAE’s private hospitals will hit USD 5.56bn by 2020.
It isn’t just money that is being squandered on non-essential services. The skills and expertise of doctors and healthcare professionals are also being wasted when they’re staffing hospitals and clinics with minimal patients.
The widespread introduction of medical zoning could allow better use of resources by minimising the opening of unnecessary facilities. This, in turn, would free up funds and talent, which could both be used to develop initiatives and innovations that will truly propel the UAE to the top of the global medical field.
How medical zoning could improve health innovations
Advanced medical technology is quite easily the greatest game-changer for the healthcare industry. Take artificial intelligence (AI), for example. It opens up so many possibilities for patients and healthcare providers. From transforming research and patient care through rapid data analysis, to optimising current delivery of personalised care, and improving the speed and accuracy of disease diagnosis and treatment. In short, AI is an area that the UAE would do well to invest in.
However, with so many applications still in their infancy, there is still a lot of work to be done.
Diverting some of the money and talent currently being spent on unnecessary hospitals and clinics into developing and refining machine-learning tools for use in clinical practice could improve the quality of care provided by health providers – big and small.
It could also solidify the UAE’s standing in the global market. This would attract more medical tourists and ultimately boost custom and profits for clinics that are currently struggling to make their mark in a saturated market.
Rethinking our approach to healthcare provisions
The days in which the UAE lacked good quality healthcare are long gone. However, we cannot rest easy. Failing to address the rates at which new hospitals and clinics are opening could lead to a new crisis – one in which small, private hospitals and clinics are outcompeted by larger ones.
Many strategies can be used to tackle this problem. However, medical zoning sits at the top of the list. It not only cuts down on unnecessary openings but also levels out the distribution of healthcare facilities and frees up much-needed funds and talent.