There is a long tradition of partnerships between U.S.-based hospitals and organizations in the Middle East, but domestic factors, such as flat patient volumes and declining reimbursement, as well as the Middle East's ready resources and an appreciation for the American hospital system, have led to an increasing number of these types of arrangements.
Ochsner announced its academic contract with the University of Tabuk in March. Pinsky says the system is finalizing the hospital management contract with the university and is in discussions to sign similar contracts with other organizations elsewhere in the Middle East. “The Middle East has resources; that's not a secret,” Pinsky says. “Having said that, the government and institutions in the Middle East are not going to spend money just to spend money. They have to see value.”
The Cleveland Clinic and Baltimore-based Johns Hopkins Medicine, which have maintained relationships in Middle Eastern countries for decades, also announced new partnerships at the start of the year.
The Cleveland Clinic signed an affiliation agreement in January with a Saudi company to provide medical education and training to healthcare providers in Saudi Arabia. The Riyadh office, while not a clinical facility, will serve as a place for Cleveland Clinic staff to provide consulting and patient support to Cleveland, such as through the system's electronic second opinions.
Johns Hopkins Medicine International agreed to a five-year contract in December with the Kuwait Ministry of Health to provide consulting services that include hospital management, medical education, patient safety, nursing, preventive medicine and healthcare policy.
McLean Hospital, a 177-bed psychiatric affiliate of Harvard Medical School in Belmont, Mass., signed a five-year contract with the National Rehabilitation Center in Abu Dhabi to consult with NRC providers on the expansion of substance-abuse treatment programs in the United Arab Emirates.
“If you look at the things that the world wants from the United States now, they're not particularly excited about having our cars or our refrigerators,” says Dr. Toby Cosgrove, president and CEO of Cleveland Clinic, “but they want our graduate education, our entertainment, our financial services, our innovation and our healthcare.”
Cosgrove says the 12-hospital Cleveland Clinic started to evaluate international opportunities shortly after Sept. 11. The majority of the clinic's international patients travel for care from the Middle East.
The hospital was conducting up to 35 heart operations a month on patients from the Middle East. Immediately after Sept. 11, it was providing fewer than five heart operations a month among patients from the region and has still not fully recovered to pre-2001 numbers.
“We were looking for a long-term relationship where we could really bring the value of the Cleveland Clinic and not just in a hospital-management way, but in actual care delivery,” Cosgrove says.
The Clinic considered London as a potential locale and looked at 150 proposals in about 70 countries before establishing several partnerships in the Middle East. Now, it has managed Sheikh Khalifa Medical City, a 750-bed facility in Abu Dhabi, for five years and is planning to open the Cleveland Clinic Abu Dhabi, a project slated to be completed in 2013.
“We're really the first major academic medical center in the United States to take on the entire program of actually being responsible for the doctors, managing the hospital and delivering the care,” Cosgrove says.
The new facility, which encompasses 4 million square feet, is expected to provide inpatient and outpatient services, cost $3 billion to build, employ 3,000 staff members and have 360 beds. The Clinic partnered with Mubadala Development Co., Abu Dhabi's investment company, on the project and is being paid an undisclosed consulting management fee. The facilities and salaries are paid by the Abu Dhabi government.
“Healthcare is generally about intellectual capital,” Cosgrove says. “The world is a knowledge economy now and we think that we need to participate in a bigger way. A global organization gives you tremendous opportunities, and we're beginning to see those.”
In a report released by Pricewaterhouse-Coopers in February, the authors wrote that academic medical centers are developing “international expansion relationships” as a means to establish new revenue streams and strengthen their brand recognition.
The study, titled “The Future of the Academic Medical Center: Strategies to Avoid a Margin Meltdown,” reported that Qatar spent about $750 million in 2001 to establish a branch of New York's Weill Cornell Medical College. The cost included building a medical center, hiring faculty and paying the university's fees. Since 2002, 112 students have graduated from the program.
“The reality is that these institutions are absolutely concerned about their future,” says Alicia Harkness, a principal with PWC. “If (academic medical centers) do nothing and they continue to operate as they do today, they're not going to be financially sustainable tomorrow. That's one of the reasons why you're seeing partnerships in new places that you haven't seen in the past.”
Pinsky and Cosgrove declined to disclose the terms of the recently announced partnerships in Saudi Arabia. Pinsky says the contract starts off modestly but will ramp up to become “significant” for the health system.
“As we get more cost-effective, we also need to be looking for revenue opportunities,” Pinsky added. “The goal of this is to bring new revenue streams in and help us offset other costs. There's a positive margin built in to the contracts that help our overall operational effectiveness.”
He cited the system's “e-stroke” and “e-ICU” programs as clinical examples of how international partnerships can benefit the hospital system. Expanding the programs internationally, and also domestically, would defray the fixed cost of installation and overhead, Pinsky says.
“Whether we're connected to a hospital 100 miles away in Louisiana or 1,000 miles away in the United States or 7,000 miles away in some part of the world, we can still help manage patients and improve on the outcomes,” he says.
The University of Alabama at Birmingham also announced a partnership in Saudi Arabia in the past year. As part of a two-year partnership, King Fahad Specialist Hospital in Dammam is paying $2.2 million to the university, which has enrolled 35 physicians and administrators employed at the hospital in UAB's master of science in the health administration executive program. The 400-bed hospital is planning to open a new 1,500-bed facility within the next four years.
“We're trying to give them the fundamental tools that will help them to be the problem-solvers,” says Gerald Glandon, chairman of UAB's department of health services administration, from Dammam.
Glandon, along with another educator, was in Saudi Arabia for two weeks of classes during the summer semester. The students who are enrolled in the program range from senior nurse educators and oncologists to the head of radiology and CEOs.
Glandon says that UAB signed a memorandum of understanding with Prince Mohammad Bin Fahd University in Al Khobar, Saudi Arabia, a nearby suburb of Dammam, during the trip. The new partnership is expected to help the university and King Fahad Specialist Hospital build out health sciences training in the region. However, Glandon notes that UAB is not pursuing multiple partnerships with other organizations at this time.
“At some future data, is that a possibility? Maybe,” he says. “But not right now. This is a pretty big endeavor for us.”