How Abu Dhabi can Use PPPs for Better Healthcare

01 Jun 05:46 AM

Sector : Healthcare Country : UAE

 By Booz & Company

The Abu Dhabi healthcare sector has undergone important changes in recent years. The government has liberalized the market, encouraging the participation of private providers, such as leading foreign hospitals and health insurers. International companies have entered the Emirate, keen to serve its growing, prosperous population. In just eight years, the healthcare system has gone from being largely public to increasingly privately-run.


The next phase in the healthcare sector’s development will be to use private sector capabilities to address issues related to the sustainability of healthcare costs and consistency in the quality of care. One mechanism for private sector involvement is public– private partnerships (PPPs), which combine the respective capabilities of the public sector and private companies to improve service delivery. Scandinavian countries, along with Italy and Spain, have successfully used PPPs in the healthcare sector to provide additional capacity and enhance quality.

Like most countries, Abu Dhabi is seeking ways to cope with growing healthcare costs. The government remains the largest healthcare player—and so foots most of the bill. This makes the system a hybrid model resembling the healthcare systems of Western Europe, because of the public health side, as well as the US system, where a private model of healthcare is dominant.

Healthcare costs are rising in part because of higher rates of chronic diseases, such as diabetes, mental, respiratory and heart ailments, and cancer. In addition, the healthcare system is financed through an activity-based payment model, which rewards providers for volumes of care rather than quality of care, as opposed to a performance model which rewards for the quality of the intervention.

Consistency in the quality of care is also an area for improvement. First, there is no single patient records system, such as electronic health records, that allows for the capture of valuable information required to improve quality. Second, consistent staff quality is a challenge given the reliance on an expatriate healthcare workforce composed of multiple nationalities and backgrounds. Third, the quality of care in hospitals varies dramatically because hospital operators have different definitions of standards of care. The difficulty for the operators is that there is no standard definition of what hospitals should do.

To deal with these cost and quality issues, Abu Dhabi should clearly identify areas where the private sector can fill capacity or quality gaps, and where this can be achieved through PPPs. Abu Dhabi will also need to consider the extent of private sector involvement in PPPs. In some PPPs, for example, the private sector absorbs all of the risk of running and financing an asset, such as a hospital, during the lifetime of the partnership. In return, the public sector pays a lease or fees to the private partner. At the end of the PPP, ownership of the asset is transferred to the public sector. In other cases, the private partner’s involvement is minimal and restricted solely to managing the asset; the public sector retains ownership and all the financial risk.

Potential Areas for Partnership

Abu Dhabi can use PPPs to improve quality through information infrastructure, training and certification standards, and, most importantly, the provision of care.

The first area, information infrastructure, is important because the lack of up to date and readily available patient records leads to delays in care, misdiagnoses, and mistakes in filling prescriptions.

From a PPP perspective, the government’s role is to put in place a legislative framework that supports efforts to build information infrastructure. The government should also mandate the collection and eventual distribution of healthcare sector information.

The private sector can contribute technology solutions, along with expertise in knowledge management, patient interaction, and delivery capabilities. Specifically, the private sector can build on the early successes of Abu Dhabi’s Knowledge Engine for Health (KEH) initiative, which collects and analyzes information from providers and insurers, to increase KEH’s reach and impact. One such PPP could be a government-private sector consortium deploying informatics, technology, and public health capabilities to extend KEH’s database, functionalities, and accessibility.

The benefits of improved information infrastructure are higher quality care, fewer unforced errors, and greater efficiency. Additionally, when such data as provider performance becomes available, patients, and healthcare consumers in general, can become empowered participants in their healthcare and can make informed decisions.

A second area for PPPs is training and standards certification. The consistency of care in Abu Dhabi is affected by the very different education and training backgrounds of healthcare professionals. These staff do not lack skills or goodwill. Rather, nurses and other clinical staff often acquire different skill sets and taxonomies from their diverse countries of origin, leading to less than ideal coordination of care that negatively affects patients. The result is mistakes in coordination, interpretation, or simply translation—and many medical errors.

The government can encourage training and certification by collaborating with a private sector organization to create an Abu Dhabi, or even UAE-wide, standard. This would start by defining the expected skillset of an Abu Dhabi nurse. All incoming nurses would attend a course to train them to a minimum Abu Dhabi standard of care before receiving their licenses. The PPP would provide additional training to obtain a certification and license for those nurses already in the system whose original training does not meet the new standard.

Such a training and certification PPP would allow Abu Dhabi, and possibly the UAE, to define its own standards, thereby facilitating the availability of expert healthcare talent across the country.

The third PPP opportunity is in the provision of care. The healthcare sector has highly skilled staff whose stay in Abu Dhabi is too short. Specific expertise, such as for managing labs or intensive care units, is not entrenched.

The government should therefore establish PPPs thatintroduce private operators on the clinical side so that between the private partner and the public system. In particular, the government should avoid asking the private sector to handle functions it currently does not have the capabilities to deliver. Such “management contracts” should be used only for functions and services that the government has decided to outsource permanently, which often do not require a PPP. For all other functions, the first step is a proper and fair definition of the scope of responsibility of each party and robust governance for the PPP to avoid misunderstandings and conflict between the partners. This will allow the private partners to enter the PPP aware of their commitments, and focus on long-term impact rather than short-term revenue maximization.

The private providers can supply high quality clinical services while enhancing the competence and skills of the healthcare sector at all levels. Their aim should be to build institutions, which takes time, by weaving changes in habits and practices into the fabric of healthcare organizations. It is important to have expatriate subject matter experts stay for the long-term to build up continuity and quality of clinical care, and to avoid the disruptions typically caused by their high rotation rate. The private partners would involve expatriates throughout the healthcare organization to train the local team, transfer knowledge, and most importantly institutionalize organizational know-how that can survive after the PPP ends.

By structuring PPPs to bring together the respective strengths of the public and private sectors, Abu Dhabi can increase the quality of care and better manage its healthcare costs. Health outcomes can improve, and the growing healthcare sector can more effectively compete in the regional and international market.

Gabriel Chahine
Partner, Booz & Company
Gabriel Chahine is a Partner with Booz & Company, leading the firm’s media, consumer and retail, and health practices in the Middle East.
Mr Chahine holds an MBA from INSEAD and Masters and Bachelor of Engineering from McGill University in Montreal, Canada.
Jad Bitar
Principal, Booz & Company
Jad Bitar, Principal with Booz & Company leads the firm’s healthcare practice in the ME. He holds a MSc in healthcare management from the Faculty of Medicine, Université de Montréal; is a graduate in finance and healthcare management from McGill University; and a BS in applied mathematics and computer science from Concordia University.
Nikhil Idnani
Senior Associate, Booz & Company
Dr Nikhil Idnani is a Senior Associate with Booz & Company and a member of the firm’s health practice. Dr Idnani holds an MPH (Master of Public Health) in Healthcare Management from the Harvard School of Public Health and an MBBS (Bachelor of Medicine and Surgery) from the Maharashtra University of Health Sciences in India.


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