Healthcare Business News

Rising in the Persian Gulf

Dubai and other United Arab Emirates states are using U.S. know-how to build a cutting-edge healthcare infrastructure

By Gregg Blesch
Posted: August 6, 2007 - 12:01 am ET

Through the window of his apartment in the Grand Hyatt Dubai, Bruce Solomon can watch workers erecting the Burj Dubai skyscraper, which became the world’s tallest building last month, even though it’s well shy of its ultimate height.

“You’re outside for three minutes and you’re sweating profusely,” Solomon says. “These guys work on skyscrapers in the middle of the day.”

Solomon has been shuttling between Dubai and Boston since he was hired by Harvard Medical International 18 months ago as acting chief executive officer and project director for a teaching hospital that will anchor a healthcare metropolis in some ways as brashly ambitious as that skyscraper.

Schematic drawings for the HMI-planned 410-bed medical center are complete. Excavation is set to begin in the fall, and the hospital is scheduled to be finished in 2010 at a cost of $472 million, not including equipment.

Dubai is one of seven states of the United Arab Emirates, a country that forms a cradle under the eastern half of the Persian Gulf. With massive investments in infrastructure in the past decade, Dubai has been working furiously to become a commercial hub for a region stretching from North Africa to India, diversifying an economy that was nearly 50% oil-dependent 30 years ago (oil is now closer to 3% of its gross domestic product).

Its leaders believe they can replicate their transportation and tourism successes in healthcare, and they’re hiring elite U.S. organizations for their expertise and star power to reverse a medical trade imbalance. Persian Gulf residents are estimated to spend billions of dollars every year seeking treatment abroad.

Tatweer, the Dubai government-owned development company managing the healthcare project, likes big names. Its Tiger Woods Dubai is a 574-acre development project that promises a cluster of palaces (of 100,000 square feet each), mansions and villas, and a golf course designed by Woods himself, all scheduled to be finished by September 2009.

HMI, now working in more than 30 countries, was founded 13 years ago to extend the Harvard Medical School’s mission of fostering quality education, delivery and research through partnerships with academic institutions, governments, healthcare organizations and corporations around the world.

Advertisement | View Media Kit


A city for healthcare

In 2003, Dubai officials handed HMI its biggest project ever, enlisting the organization to help turn 82 acres of sand into an international hub of elite medical services and research—Dubai Healthcare City—and earmarked $1.8 billion for the project. To match the blank slate offered by the expanse of hot sand, Dubai decreed the area a “free zone” beyond the reach of the emirate’s laws and regulations.

Dubai won the prestige of the Harvard name as well as Harvard brainpower to help create, from scratch, the rules and regulations within the free zone, and then plan a postgraduate training center and an affiliated hospital. HMI won a high-profile role in a grand experiment as other famous U.S. institutions are planting stakes in what may be a highly competitive and lucrative market.

“It’s globalization of an industry that frankly has been very insular,” says Robert Crone, HMI’s president and CEO. Institutions that have viewed themselves as international leaders, Crone says, have to re-evaluate what that means.

Besides HMI, Dubai Healthcare City already has drawn participation from some of the other major U.S. healthcare players, both providers and vendors. The Mayo Clinic is establishing a cardiovascular program; Johnson & Johnson has already established a regional headquarters there; and an American Academy of Cosmetic Surgery-branded hospital is expected to open this fall, in time to play host to this year’s World Congress on Liposuction Surgery and Advances in Cosmetic Surgery.

Meanwhile, Joint Commission International has been selected to accredit the hospitals in the zone, and Boston University late last month signed an agreement to operate a dental school.

Fueled by ‘free zones’

Dubai’s leader, Sheikh Mohammed bin Rashid al Maktoum, said in a February news conference that the emirate’s economy grew at an average of 13.4% per year between 2000 and 2005. The pace of growth has been fueled by free zones—the emirate’s busy airport and container ports fall within them—that allow 100% foreign ownership and provide incentives for economic investment and activity.

“They felt the same thing could happen in healthcare,” Crone says.

Organizations and companies working in Dubai Healthcare City are exempt from taxes, including personal income tax, as well as duties on goods they produce, and they’re free to repatriate profits and wages for 50 years.

The HMI team, working with partners in Dubai, established regulations and licensing rules for companies, physicians, nurses, pharmacists, dentists and allied health professionals. A tribunal handles claims of medical malpractice, with noneconomic damages capped at less than $300,000; the maximum award is reserved for the “most extreme” cases, according to the published regulations.

“Not having a legacy system does in fact give you a very substantial advantage as you begin to think about redeveloping something,” Crone says. “You can develop a new culture, and you don’t have the system pushing back all the time.”

The HMI-affiliated hospital will be one of several hospitals in Dubai Healthcare City. Designs call for 1.45 million square feet—with nearly 1 million square feet of parking underneath—to be constructed with few load-bearing walls to accommodate changes in healthcare delivery and nimble responses to competition.

About 40 Harvard faculty members were asked what the future of their medical specialties will demand of a “hospital of the future,” says Solomon, who is leading the plans for the medical center’s operations and recruiting a leadership team. As a result, for instance, the hospital planners omitted operating rooms and instead created what they call an “invasive platform” that will flexibly support surgery, cardiac catheterization, interventional radiology and interventional diagnostic imaging, Solomon says.

Construction is well under way on the Harvard Medical School Dubai Center, which will open its doors in the fall of 2008 to physicians, other healthcare professionals and research scientists seeking postgraduate training. The $75 million, 350,000-square-foot facility will feature interactive classrooms, a 300-seat auditorium, a computer training center, a professional library and a high-tech simulation training center.

Even with these plans yet to be realized, HMI’s influence is reaching beyond the boundaries of the free zone. The UAE’s Ministry of Health has hired consultants from Dubai Healthcare City and HMI to overhaul the 230-bed Al Baraha Hospital, one of five government hospitals in Dubai.

The emirate of Abu Dhabi likewise has lured U.S. talent and prestige to transform the healthcare system in the city of Abu Dhabi into a regional leader, potentially in competition with the projects rising in neighboring Dubai.

The Cleveland Clinic last September announced a 15-year deal with Mubadala Development, a company owned by the government of Abu Dhabi, to design, build and operate a world-class hospital in the city. The Cleveland Clinic Abu Dhabi is scheduled to open by 2010, with a regional health and economic survey driving the array of specialty services and size of the project.

In June, the health system made another commitment to the emirate, signing an agreement with the health authority of Abu Dhabi to operate its established Sheikh Khalifa Medical City, which includes a 700-bed hospital, a behavioral sciences pavilion, a rehabilitation center and a network of specialty clinics and primary-care centers.

Ken Ouriel, who until June was the Cleveland Clinic’s chief of surgery, was dispatched to be the medical center’s CEO. The Cleveland Clinic team will include, along with Ouriel, a chief medical officer, chief operations officer, chief information officer, chief purchasing officer and director of human resources.

Ouriel has set about integrating the Cleveland Clinic’s medical and administrative procedures and capabilities into the system in Abu Dhabi. His first steps have included recruiting staff from “around the world” and beginning to tackle significant technology challenges, Ouriel wrote in an e-mail responding to a recent query about how things were going so far.

“Fortunately a large electronic medical-record project was already in process,” Ouriel wrote. “Other systems, however, including financial, decision-support management, inventory control and productivity software are virtually nonexistent.”

Johns Hopkins International, a unit of Johns Hopkins Medicine similar to Harvard’s HMI, has been doing similar work in Abu Dhabi since last year under an agreement to manage the health authority’s existing 469-bed Tawam Hospital.

The president of the UAE, Sheikh Khalifa bin Zayed al Nahyan, in May pledged an undisclosed sum of money, described as a “transformational gift,” toward one of two 12-story towers under construction on Johns Hopkins’ Baltimore campus. The building, to be called the Sheikh Zayed bin Sultan al Nahyan Cardiovascular and Critical Care Tower in honor of Sheikh Khalifa’s late father, is scheduled for completion in 2010.

Acts of generosity notwithstanding, the UAE leaders expect to make money on healthcare rather than subsidize services for its fast-growing population. The country is working toward compulsory health insurance paid by employers for foreign workers. In a symbol of growth perhaps more stunning than any of the new buildings going up, foreign residents represent more than 80% of the UAE’s population. In 2006, Dubai’s population alone grew by more than 25%, to 1.4 million, the government reported. That’s largely driven by the frenzied construction of buildings and infrastructure. Men make up 75% of Dubai’s total population.

Care at public hospitals in Dubai has been free for nationals and cheap for residents who have paid a small fee for a health card, and its hospitals have been running with revenue covering just 20% of costs, an official in Dubai’s Department of Health & Medical Services recently told a local newspaper. The department, the official said, plans to overhaul its billing structure and work toward generating a profit.

And government officials are looking far beyond their borders when they envision whom these projects will serve. The Abu Dhabi Chamber of Commerce & Industry this year projected that the country can capture $1.9 billion a year from medical tourism by 2010, citing Dubai Healthcare City and Sheikh Khalifa Medical City as critical to capitalizing on the growing demand.

The university hospital in Dubai Healthcare City “must support itself eventually,” Harvard’s Crone says. “They are very rigorous about getting a return on their investment.”

Bravura mixed with pragmatism

Dubai leader Sheikh Mohammed, asked by the Financial Times why everything has to be the biggest and the tallest, replied: “Why not? Does anyone ever remember the second man who landed on the moon or the second man who climbed Mount Everest?”

The HMI team found that the sheikh’s bravura is matched by pragmatism among the people who work for him. “It’s been the most thorough business plan process I’ve ever gone through,” Solomon says. “It’s not like they said, ‘Build this great thing and send us an invoice.’ ”

And then there’s the matter of speed, which may be as important in Dubai as size and opulence. The Burj Dubai skyscraper grew from bare sand to its record-breaking reach in less than four years.

Judith Mitchell, HMI’s planning director, says the pressure to work fast in the UAE is not just a matter of the sheikh’s vision. The building boom has driven the cost of building materials up as much as 15% in a single quarter, she says, and everyone is keenly aware of the coming competition. “Yes it’s pressured, but at the same time there are reasons why it will be critical to the success of the project to move it forward quickly,” Mitchell says.

Yet as Crone puts it, “They’re a country in a hurry. It’s always important that we remind them that institutions are built over decades, not months.”

What do you think?
Write us with your comments. Via e-mail, it’s; by fax, 312-280-3183.



Switch to the new Modern Healthcare Daily News app

For the best experience of on your iPad, switch to the new Modern Healthcare app — it's optimized for your device but there is no need to download.