New Dubai hospital to be built on public-private model

Dubai: The Dubai Health Authority (DHA) will next month call “request for quotations” from private sector investors for a new $100 million-plus specialist cardiology hospital at the Rashid Complex. The hospital is scheduled for a 2022 opening.

From these submissions, the DHA will ask selected bidders to provide RFPs (request for proposals) by April next. A final decision on the partner would be made by end 2019, according to a top DHA official.

The chosen one will get to build and manage the new cardio facility for a 25-year term, as well as have shareholding in the venture. The Dubai Government will hold the rest of the equity.

This way, the Dubai Government is making a push for public-private partnerships (PPP) in health care. But the focus is to develop such investments in speciality categories rather than go in for yet another general purpose hospital in the emirate.

DHA had received “expressions of interest” (EoI) from bidders in more than 15 countries for the cardio project.

“We have EoIs from leading health care providers, investors and construction companies,” said Dr. Ibtesam Al Bastaki, Director, Investment & Partnership. “This will be a 110-120 bed facility. Even after doing this hospital, there is still a gap for 60 more beds in cardio by 2030.

“This gap will start emerging after 2025, and we will leave this opportunity to the private sector to invest in these services.”

Dubai and the UAE’s health care sector had been one of the fastest growing since 2012, in terms of attracting new investments and raising new bed capacities. Private sector players such as NMC, Aster and Lifeline as well as operators from outside have been bulking up capacities where possible.

With the private sector pulling its weight, does DHA need to have its own equity in the new hospital, even if it is a specialist one? Wouldn’t it be competing with the private sector then?

According to Ahmad Faiyaz Sait, Advisor at the Office of Investment & PPP, “The Government is playing the role of a strategic partner by providing land and ensuring patient flow by shutting down the cardio facility in Rashid (Hospital) in 2022 and bringing down 80-90 per cent of cardio services in Dubai Hospitals.

“We are guaranteeing them [the private sector partner] a patient flow for the next 25 years. It’s a public hospital entirely delivered and managed by the private sector, but backed and overseen by the Government.

“Sure, there are some upcoming investments in (private sector owned) hospitals that also include cardio services. But based on our studies, even with the upcoming supply, growing demand outstrips available and future capacity for cardiology services. And much of the supply addresses the needs of middle to high-end patients.

“Our Cardiology Centre of Excellence PPP is different in that everyone in Dubai will have access to its services through health insurance coverage.”

It’s been 18 months since the Department of Investment & Private Partnership was formed under DHA, to streamline fund flow into health care. Officials declined to reveal any of the other categories that could have PPP interests once the cardio venture gets off the ground.

But there are going to be other in it

“Next year, we are working on something called the Certificate of Need Programme to guide investors who would like to expand or invest in health care services linked to opportunities and gaps,” said Dr. Ibtesam. “Incentives will be offered to those health care projects that are addressing the identified gaps in the “Health Investment Guide”.

“By the third quarter of next year, we will have the Certificate of Needs policy out and this will integrate with existing licensing regulations.”

The intent is on speciality and not quantity

New private sector players entering the health care space in a specialist field will be given fixed-term exclusivity arrangements to ease their decisions.

“For instance, if somebody wants to open a bone-marrow transplant clinic, which does not exist in Dubai, we will take them through the Certificate of Need process,” said Dr. Ibtesam Al Bastaki. “And subject to the evaluation and issue of Certificate of Need, they might have two- to three-year exclusivity. And then the market can be opened up to allow for more new entrants … if there is unmet demand.

“That would be for the entire city and not just a particular area. We need to do this to protect investors and providers in Dubai and bring in highly specialised services to augment Dubai’s health ecosystem.”