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Importing Health Care to Arabia: Analysis of the HMS/Dubai Relationship

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Importing Health Care to Arabia: Analysis of the HMS/Dubai Relationship Importing Health Care to Arabia: Analysis of the HMS/Dubai Relationship Michael Matly and Donovan Campbell Harvard Business School February 20, 2007 Partially funded by the DUBAI INITIATIVE, Belfer Center for Science and International Affairs, John F. Kennedy School of Government, Harvard University Introduction Emirates (UAE), a region that has undergone an impressive economic Dubai is currently undertaking a massive transformation over the last 10 years. transformation of its health care system, Since the 1970’s, Dubai’s rulers, worried opening up billions of USD to top about dwindling oil reserves, have healthcare providers who are anxious to invested their oil money in a number of expand dwindling domestic revenues. different initiatives designed to wean However, in their rush to make the most Dubai’s economy off of oil dependence. of this emerging opportunity, many However, as one government official operators are facing a number of stated, “Dubai has become an challenges due to inappropriate and international leader in areas of IT, incomplete due diligence resulting in an Media, Trade, Ports, Tourism, Airlines, unclear understanding of the region’s but in terms of health care, we are still in complexities. In our paper, we explore the third world.”2 As a result, Dubai has many of these challenges by examining recently turned its attention, and money, the experience of a top US healthcare to establishing a first-world healthcare operator—Harvard Medical International system. (HMI)—in Dubai. This analysis, we believe, will outline the problems that The effort has not been easy—Dubai is future entrants are likely to face and thus part of a complex, highly political health help them develop a strategy that avoids care system. Currently, the city has the pitfalls faced by competitors three governing bodies: the Dubai Department of Health and Medical Dubai’s Health Care Story Services (DOHMS), the Ministry of Health (MoH), and the UAE General Dubai is one of seven semi-autonomous Authority of Health Services. Each city-states1 within the United Arab governing agency licenses physicians and operates its own hospitals completely independently of the others. 1 Each city-state is called an emirate. The UAE is a DOHMS is the most powerful regulator, federation of seven emirates (Abu Dhabi, Ajmān, Dubai, and the agency is led by the older Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain) with a royal family that rules each. These emirates form a brother of Dubai’s ruler Sheikh federation with the ruler of the most powerful emirate, Abu Dhabi, serving as President of UAE and the ruler of the second most powerful emirate, Dubai, serving as Vice President. The UAE is ruled through a 7 member supreme 2 Author’s interview with Shaher Bashir, Administration, council made up of the ruler of each emirate. Dubai Health Care City, Oct. 30th, 2006. Mohammed bin Rashid Al Maktoum.3 Dubai eventually settled on Harvard However, during the late 90s it became Medical International (HMI), Harvard apparent that the DOHMS hospitals Medical School’s international desperately needed revamping. Rather consulting arm.8 For Dubai, partnership than transform the existing DOHMS with a world-class operator like Harvard hospitals, Sheikh Mohammed decided to would bring immediate internal and create an entirely new entity combining external credibility that would otherwise top health care providers with a business take years to obtain.9 For HMI, Dubai’s park/health care cluster. 4 economic free zone concept seemed quite appealing, and the city promised As with all business parks that were choice real estate, free of charge. With developed in Dubai, the DHCC would these considerations in mind, HMI be a free-zone offering 100% ownership agreed to begin operations in Dubai, in a tax-free environment.5 According to entering into a 15-year consulting the plan, 20 million ft2 will host a post- contract with the city.10 graduate residency and fellowship program established by Harvard Medical To fulfill its commission, HMI has School, 350 independent clinical embarked upon a two-pronged approach operators (including the Mayo Clinic), targeting quality education and research. 17 hospitals, CAM centers, 5 star hotels In pursuit of this goal, HMI created two and spas, residences, retirement centers, entities, the Center for Healthcare pharmaceutical and biotech offices, and Planning and Quality (CPQ) and a number of commercial businesses. Harvard Medical School, Dubai Center Dubai hopes that the DHCC will become (HMSDC), with a vision of quality the regional destination of choice for education tied to strict licensing health. 6 requirements. 11 CPQ Harvard Medical International (HMI) Involvement The purpose of the Center, a JV between HMI and its Emirate overseers is DHCC’s first step was to partner with a twofold: 1) to establish laws and brand name operator, and a search team licensing procedures applicable to all began pitching the concept to a number healthcare providers and 2) to carefully of world-renown clinical operators.7 plan the evolution of DHCC to ensure that its ultimate form aligns with the 3 Emirate’s goals and vision for the Sheikh Mohammed is the third oldest son of Sheikh Rashid complex. In pursuit of these aims, HMI and became ruler on Jan. 4, 2006. 4 Professor Michael Porter of Harvard Business School and DHCC have created a licensing developed the clustering strategy which grouped businesses council whose job it is to write both the and activities into a close geographical area, Dubai capitalized this strategy starting with the Dubai Internet City and then creating the Dubai Media City, Dubai Humanitarian City, Dubai Knowledge Village, Dubai Industrial City, Dubai 8 Author’s interview with Dr. Muhadditha, Deputy CEO, Studio City, Dubai Outsource Zone, etc. Dubai Health Care City, Oct. 31, 2006. 5 Outside designated free-zones, foreigners must be 9 Author’s interview with Dr. Robert Thurer, Chief Academic sponsored by a national to establish a business Officer for HMI in Dubai, Oct. 24, 2006. 6 Author’s interview with Shaher Bashir, Administration, 10 Ibid., Dubai Healthcare City (DHCC) website; Dubai Health Care City, Oct. 30, 2006. www.dhcc.ae.en/default.aspx 7 Author’s interview with Mr. Taysir Khatib, Director, Mayo 11 Author’s interview with Dr. Robert Thurer, Chief Clinic Dubai Center, July 3, 2006. Academic Officer for HMI in Dubai, Oct. 24, 2006. process for operators to obtain a DHCC As the major player in Dubai’s emerging license and the laws that ensure healthcare strategy, HMI finds itself continual compliance. Additionally, caught up in tangled web of political, HMI has established a planning council regulatory, and ruling family that plots the strategic evolution of relationships in a constant balancing act DHCC. Though both of these councils whose roots go back to the earliest days are staffed and administered primarily of DHCC. For the first few years of the by HMI, the organization’s stated goal is Healthcare City existence, there was no to develop local expertise so that communication between either MoH and knowledge transfer occurs in time.12 DOHMS with DHCC.14 In absence of input from either MoH or DOHMS, HMSDC decisions made by DHCC and HMI could result in a substantial backlash HMI’s second initiative in Dubai is the from these two bodies and their ruling establishment of medical teaching family overseers. For example, CPQ’s center, working in concert with a 400 earliest licensing requirements stipulated bed teaching hospital, that will offer that all DHCC physicians have either US both residency programs and continuing or Western European residency training. education to licensed MDs. This center As a result, no Dubai-trained physician will be patterned after the Harvard was eligible to practice in the DHCC. Medical school/teaching hospital model However, HMI is currently well aligned that has been established in Boston: with the one public policy force that has HMSDC will be administered by the final say in all issues—Sheikh Harvard Medical employees who have Mohammed15- but should he ever decide all been appointed by the Harvard against HMI, public policy support Medical School (Boston) dean, and key would disappear overnight. doctors on the HMSDC staff will have to obtain Harvard faculty appointments. Structure: Poor The thinking behind this model is that tight central control of all key HMSDC DHCC’s and HMI’s lack of coordination players will ensure maximum with DOHMS has ensured widespread accountability for a geographically structural opposition to HMI’s success. distant, newly-established institution Dubai physicians are highly unlikely to operating in a relatively immature refer patients to HMSDC’s teaching healthcare market.13 hospital since they can’t be part of the city, and the aforementioned licensing After examining HMI’s initiatives requirements are greatly hindering local through the lenses of the six forces, we physician recruitment. Additionally, concluded that the HMI model aligns as government insurance will only pay for follows: resident’s visits to government-run hospitals, and the likelihood of DOHMS extending coverage to DHCC is Public Policy: Strong unlikely. 12 Ibid. 14 Ibid 13 Ibid. 15 Author’s interview with Dr. Thurer, 24 October 2006 Technology: Slightly Poor nations are willing and able to subsidize their doctors’ training in Dubai. Sheikh Mohammed is willing to bankroll capital expenditures for advanced Consumers: Neutral technology, and companies like GE and Siemens have offered to reduce prices in The two-piece HMI model outlined the hope of creating a regional center of earlier has two main consumers: 1) the excellence. However, if the equipment Emirate government and 2) physician were actually purchased and transported residents. To date, the Emirate to the teaching hospital, it would likely government has proved itself a model sit idle. Dubai simply does not have consumer, but, like public policy enough well-trained technicians to be support, this consumer could disappear able to operate a whole array of cutting overnight.
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