Health Check

What benefits will Mediclinic’s acquisition of Al Noor bring to the company?

The main benefit of the merger is that Mediclinic is known as the quality provider in Dubai throughout the UAE while Al Noor is known as a quality provider in Abu Dhabi. We have been growing into Abu Dhabi and opened our first clinics in Al Ain and the Corniche. With the acquisition we will automatically boost our geographical presence across the entire UAE, and can combine the two groups to the benefit of the patient, where we take the best practices from both, implementing them throughout, and elevate the standards of care across all the facilities.

Do you expect more consolidation in the healthcare industry?

Consolidation is inevitable in healthcare because of the benefit of economies of scale. In the medical insurance market, the more members under the same insurer, the cheaper it is per member, as the risk is spread wider. We will see more consolidation in the insurance market, as is already the case in Dubai. Abu Dhabi is a little different, mainly due to the fact that it is essentially government controlled. There are more good regulations being introduced for operators that will improve quality as well. They want to make sure billing is ethical and that the service provided is appropriate for the diagnosis. All of that is driven by an IT system that requires significant resources to manage. Small operators will certainly struggle to survive in such an industry, and that is the case anywhere else in the world. There are also procurement benefits with scale. We obviously get better prices for equipment than a standalone operator would, which was one benefit in taking our operations global. We are in South Africa, the UAE, and Switzerland, and own 29.9% of Spire Healthcare in the UK. We do that to reap the full benefits of global synergy in terms of pricing and best practices.

In what areas will you be investing your resources?

There will be big innovations in technology in healthcare and we are looking at new hospital information systems. We have just ordered a new laboratory information system. We recently implemented SAP as our back office solutions, and have to have professional coding systems to accommodate the new government regulations. There will be continuous investment in ICT; that is a global phenomenon and it is happening here as well. We do not aspire to be the first in technology; we would rather research and follow the correct technologies that add value, which is one of the reasons we are building the north wing oncology facility, where we are bringing in a linear accelerator.

In what area do you identify the most potential for Mediclinic?

The barriers of entry into outpatient services are low whereas the barriers into inpatient services are high. The level of expertise required to provide a proper inpatient facility are significant. However, the country cannot have hospitals on every street corner—it is not viable, so we focus on both. As Dubai is growing in terms of population, we put primary care facilities in new areas where the market is opening. On the hospital side of things, we are moving into more tertiary care, services that are lacking in the country now, and services that the country will need in the future. Oncology is a prime example of that. The population here is young so there is not much demand for a cancer center, but it will grow because the population is aging and growing. The cancer center itself will be a standalone and will not be profitable at first because patient numbers will be low, but we need to start moving toward more sophisticated healthcare. We have developed trust in the marketplace and the market is ready to trust us to move into more sophisticated healthcare such as oncology.