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1 : UNITED ARAB EMIRATES EMIRATEs HEALTHCARE HAS ESTABLISHED ITSELF AS ONe OF THE MOST TRUSTED PROVIDERS OF HEALTHCARE IN DUBAI David Hadley Chief executive officer: Emirates Healthcare BUSINESS ENVIRONMENT The UAE is showing signs that it has recovered from the economic turmoil which began in Real Gross Domestic Product is estimated to have risen by 3.3% in 2011 (UAE Economy Minister), more than double the pace of 2010, a direct result of higher oil prices, increased oil production and the effects of the Arab Spring. Abu Dhabi accounted for 60% of the GDP and Dubai 29%. Although the Arab Spring has brought conflict to large swathes of the region, speculation that the unrest might move into the UAE has proved unfounded and the UAE remains a stable and peaceful business environment. In fact, the country is viewed as a safe haven by tourists and investors, and it has benefited from an influx of individuals from around the region who are now choosing to spend holidays, make investments or even set up home in the UAE rather than in more volatile countries such as Egypt or Morocco. This obviously has significant implications for the healthcare sector in the UAE and has contributed to some of the outstanding results Emirates Healthcare has seen this year. Of course, the Iran crisis remains a threat and Emirates Healthcare is monitoring the situation closely. However, we agree with the general consensus in the UAE that a major war is unlikely. The hope is that the crisis should be resolved by economic sanctions and political pressure on an Iranian government which does not appear to have the support of its people. The UAE continues to have the second highest rate of diabetes in the world, with estimates suggesting that between 19% and 25% of the adult population suffer from the disease, compared to a global average of just 6%. Diseases caused by a sedentary and unhealthy lifestyle such as diabetes, heart disease and cancer remain significant threats to which the local healthcare sector must respond. Maternity and paediatric services also account for a larger proportion of the healthcare market than in other parts of the world because of the comparatively young population in the UAE. Likewise, geriatric care makes up a much smaller segment of the market. 48 MEDICLINIC INTEGRATED ANNUAL REPORT 2012
2 southern africa Emirates Healthcare has established itself as one of the most trusted providers of healthcare in Dubai. During the period under review it introduced new services such as CVac therapy for ovarian cancer and therapeutic apheresis, set up orthotics and prosthetics services and, excitingly, introduced nuclear medicine and neuroscience programmes: in some cases these are not just new to Dubai but to the UAE as a whole or even the entire Middle East. This means that patients who would normally have travelled abroad for treatment now feel confident that they will receive the same, if not better, treatment at an Emirates Healthcare facility in Dubai. Overall, the UAE s healthcare infrastructure is still insufficient to cope with the demands of an everincreasing population and Emirates Healthcare has identified areas for expansion. number of employees number of hospitals 2 number of beds 334 number of THEATRES 10 number of clinics 8 switzerland united arab emirates MEDICLINIC INTEGRATED ANNUAL REPORT
3 : UNITED ARAB EMIRATES continued INCREASE IN inpatient admissions +22.7% INCREASE IN clinic outpatient consultations +65.4% INCREASE IN REVENUE +32% PATIENT SATISFACTION LEVEL 89% BUSINESS PERFORMANCE Emirates Healthcare achieved revenue growth of 32% during the period under review. If the three additional Emaar clinics acquired towards the end of the previous financial year are excluded from the figures, the revenue grew at 22.9%. This was the result of: a 22.7% increase in inpatient admissions, in addition to a 23% increase last year; a 13.4% increase in hospital outpatient and accident and emergency admissions, compared to a 10% increase last year; and a 65.4% increase in clinic outpatient consultations (a result of the acquisition of the Emaar clinics). The group s EBITDA increased by 40.4%, a direct result of revenue growth across the Group. It is important to note that the acquisition of the Emaar clinics, particularly Arabian Ranches Clinic, had a negative impact on our EBITDA for the year. If the 50 MEDICLINIC INTEGRATED ANNUAL REPORT 2012
4 southern africa three Emaar clinics are excluded, EBITDA would have grown by 41% and our EBITDA margin would have been 21%. These clinics started to perform in the second half of the financial year, once the facilities were adequately staffed, and it is expected that their contribution in the next financial year will be more positive. The straight lining of the rent also had a material (2 3%) impact on this year s EBITDA as a result of the fact that four of Emirates Healthcare s clinics have relatively new lease agreements. Other achievements during the period under review include the establishment of a Funder Relations department, the development of an additional Outpatient Department at The City Hospital, the launch of centres of competence such as a breast medicine unit and the successful implementation of a social media strategy. During the reporting period Emirates Healthcare invested R26m (AED13m) (2011: R26m (AED13m)) on capital projects and new equipment to enhance its business as well as R25m (AED12m) (2011: R20m (AED10m)) on the replacement of existing equipment. In addition, R35m (AED17m) (2011: R31m (AED16m)) was spent on the repair and maintenance of property and equipment, charged through the income statement. For the current financial year, AED14m is budgeted for capital projects and new equipment to enhance its business, AED33m for the replacement of existing equipment and AED18m for repairs and maintenance. The number of licensed hospital beds remained constant at 334 during the period. The City Hospital has the capacity to add another 40 beds (including 10 beds used for dialysis) under its existing licence and this is anticipated to occur in September Patient satisfaction remained at 89% against a target of 90% during the period under review. BUILDING PROJECTS During the period under review Welcare Hospital upgraded its radiology facility, accident and emergency department, first-floor corridors and landscaping. The City Hospital closed the swimming pool, completed a new seminar room on the 9th floor, constructed a second-floor outpatient department to expand the services to 25 more consultation rooms, six treatment rooms and six discipline-specific treatment rooms for urology, ophthalmology, breast imaging, neurosciences and general surgery, created a new Medical Records department, which has been completed to cope with the growth of The City Hospital, as well as new prayer rooms and ablution facilities. The next financial year will see the relocation of the Emirates Diagnostic Clinic to new premises, the relocation of the group s corporate staff to new offices to free up space for the implementation of a new centralised laboratory at EHL Dubai Mall Medical Centre, the expansion of the Neonatal ICU and the introduction of the UAE s first maternity high-dependency unit at The City Hospital and the building of a new structure at The City Hospital to accommodate the expansion of the accident and emergency department as well as the operating theatres. SUSTAINABILITY Patient trust Winning patient trust is paramount to the success of Emirates Healthcare s business and the marked increase in inpatient/outpatient admissions and consultations is a clear indication that Emirates Healthcare is achieving this. The company endeavours to communicate with patients through many different channels to ensure that information is relayed quickly, accurately and at the convenience of the patient or prospective patient. These channels include patient satisfaction surveys, free health checks, seminars and talks, the positioning of Emirates Healthcare doctors as switzerland united arab emirates MEDICLINIC INTEGRATED ANNUAL REPORT
5 : UNITED ARAB EMIRATES continued EMIRATEs HEALTHCARE IS COMMITTED TO WORKING WITH THE COMMUNITY IN WHICH IT OPERATES figures of authority through media appearances and, most importantly in this financial year, social media. Social media was identified as a key opportunity for communication with the patient audience; a social media strategy was developed, a social media agency retained, a digital media team appointed and Facebook pages launched for each individual facility. To date, engagement on the Facebook pages has risen almost 200% for the hospitals and there is a high level of positive interaction between the facilities and participants on the pages. People Emirates Healthcare has undergone rapid expansion in terms of employee numbers, with a 7% increase in staff during the period under review. It looks to attract and retain the very best professionals with market-related salaries and benefits, including newly introduced life insurance and permanent disability benefit, comprehensive training, open communication, sound management practices and staff recognition in the form of social events. Emirates Healthcare organises Continued Medical Education (CME) sessions both at an individual facility level and a corporate level for Emirates Healthcare and community-based doctors. It also held two nursing conferences, each attended by approximately 250 nurses from the group and beyond. In the next financial year Emirates Healthcare will be introducing a succession management programme with particular focus on specific managerial positions. Community Emirates Healthcare is committed to working with the community in which it operates to facilitate better awareness and understanding of health issues and to provide assistance to the less fortunate where it is able. Corporate social investment initiatives run by the company have included free health screenings, health talks, awareness campaigns on particular health topics and blood donation campaigns. Emirates Healthcare also actively supports members of its medical staff who wish to volunteer their services in regions affected by conflict or natural disasters. Individual units work at a local level to support causes of their choice, but at a corporate level EHL takes part in major community events such as World Health Day, World Heart Day and World Diabetes Day with free health check-ups for the general public at locations across Dubai and as First Aid provider at events such as the Dubai Terry Fox Run (6 000 participants), South African Weekend (2 000 attendees), Dubai Cycling Challenge (2 000 participants) and the 5 km Women s Run (2 000 participants). Emirates Healthcare has budgeted AED for community initiatives in the year ahead, compared to the AED spent during the period under review. Environment Emirates Healthcare is aware of its environmental responsibilities and each facility works individually to minimise its environmental impact, no matter how big or small the initiative. The City Hospital has restarted its Go Green committee after several months of inactivity; it is responsible for spreading the message of environmental awareness to all staff. The group has installed movement sensors and electronic lights in its outpatient consulting rooms and all bathrooms, and doubled the amount of recycled waste. Welcare Hospital has also introduced measures to control the consumption of water in areas such as the toilets and kitchens, proper servicing of airconditioning systems and eliminating unnecessary usage of air-conditioning. 52 MEDICLINIC INTEGRATED ANNUAL REPORT 2012
6 southern africa Overall energy usage increased slightly as a result of increased patient volumes, but water usage declined despite the uplift in patient numbers. OUTLOOK Emirates Healthcare remains positive about the outlook for the year ahead, despite the challenges it will face from increased competition and tariff reform. The current economic climate in the UAE, combined with the strong reputation for quality healthcare that the group s hospitals and clinics have built up, a focus on engaging with community doctors to increase referrals and the expansion of social media activity into new channels should all assist the business to grow at a significant rate. The group is actively seeking new opportunities for the expansion of its facilities. In terms of the healthcare sector as a whole, Emirates Healthcare is proud to be working with the Dubai health authorities on a number of initiatives such as setting standards for electronic claims communication, coding and billing. These should all help to ensure that, going forward, the healthcare sector in Dubai becomes more transparent, ethical and in line with international best practice something which is long overdue. switzerland united arab emirates MEDICLINIC INTEGRATED ANNUAL REPORT
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