The healthcare sector in the Gulf Cooperation Council countries is currently undergoing a wave of reforms intended to achieve and sustain international standards of healthcare delivery. Datamonitor believes that the region has the potential to achieve these aims if it reforms healthcare insurance, develops a workforce of healthcare professionals, and accepts the use of generic pharmaceuticals.
The Gulf Cooperation Council (GCC) has recently seen structural changes to its healthcare delivery systems. The accompanying financing reforms have forced the private sector to play a greater role in financing healthcare for expatriates, especially in the UAE, Saudi Arabia and Kuwait, where expatriates account for a sizeable proportion of the population. Such reforms have stimulated the development of the private insurers in funding healthcare.
However, Datamonitor believes that the lack of regulation has resulted in haphazard practices which are undermining the health insurance industry, especially for the long run. If the system of financing is to become sustainable, the GCC must establish international best practice and co-ordinate the actions of insurers. Reimbursement controls (e.g. the implementation of drug formulary lists by insurers that are heavy on generics), which are ubiquitous in developed western models, are barely visible in the region.
The GCC also needs to first accept and subsequently embrace the use of generics. In the UAE, 80% of the market consists of western-branded therapeutic agents and, as a result, drugs are priced highest amongst its GCC neighbors. Consumers in the UAE embrace all things western - even pharmaceuticals - resulting in unnecessarily high expenditure on pharmaceuticals for payers (the government and private insurers). The irony is that the healthcare systems of countries such as the US, the UK and Germany (from which many products are imported) focus on the use of generics to curb escalating healthcare costs.
Although suspicion of generics is most often cited as the reason for apprehension towards their use, changing this mindset can definitely be achieved. Japan, the second largest pharmaceutical market in the world, was traditionally averse to the use of generics, but following the implementation of pro-generics reforms in 2007, their use has increased tremendously. Japan has been driving this reform through incentivization programs and changing the public attitude towards generic drugs. The GCC could achieve the same changes alongside the current healthcare reforms.
The GCC also needs to develop the healthcare professional (HCP) workforce to manage its healthcare sector. Governments can roll out red carpets to renowned western healthcare providers but if efforts are not taken to overcome the undersupply of all types of healthcare professionals (physicians, dentists, nurses, midwives, etc.), all efforts at reforming healthcare will go to waste.
Over the last few decades, the large gap in manpower has been filled by attracting expatriates to carry out these functions. However, if more local healthcare professionals are not trained, the consequences will be dire. There is definitely a need for more medical schools and academies to train other healthcare professionals locally, instead of depending on expatriates. In Abu Dhabi, public private partnerships are being established to manage healthcare facilities for the time being while local HCPs are trained to become self-sufficient. Quality healthcare consists not only of quality facilities, technology and equipment, but also of well trained professionals.
Datamonitor believes that the GCC has the potential to achieve and sustain world-class healthcare systems if it successfully addresses the shortage of HCPs, the aversion to generics and the need for health insurance reforms.