An archipelago of 40 islands, the Kingdom of Bahrain is located off the coast of Saudi Arabia in the Persian Gulf. With a total area of 735.8 sq km, Bahrain is geographically divided into five main governorates. Manama (the Capital) and Muharraq is home to majority of the population (1,234,571), 50 per cent of which are expatriates. Over the past century, Bahrain has carved a niche for itself in a range of fields from trading through oil exploration to finance and education giving it a sophisticated, forward-thinking outlook.
 “Fast growth in the GCC offers a wealth of opportunity for Indian healthcare providers. Bahrain also has a FTA with the US that Indian manufacturers can take advantage of.”Kamal bin Ahmed Transport Minister & CEO Bahrain Economic Development Board |
Boosted by the economic and political reforms as well as higher oil prices Bahrain’s economy has, in the past few years, seen promising growth. The Kingdom’s prosperity is due as much to higher oil prices as to the deep economic and structural reforms being implemented. In the past few years, the reform process has led to an increased private sector involvement in the economy and reduction of government intervention, to create a more transparent and business-friendly environment for all businesses based in Bahrain, whether commercial or financial. The reform process is broad and touches every segment of the economy, including the education and healthcare sectors. “The government of Bahrain sees healthcare as paramount to the Kingdom’s evolution into a service-oriented economy, a place where high skilled practitioners and comprehensive facilities are the norm,” says HE Kamal bin Ahmed, Minister of Transport and Chief Executive, Bahrain Economic Development Board.
Healthcare scenario
Bahrain’s healthcare system is modern, technologically-advanced and comprehensive. The quality of life and other healthcare indicators have raised Bahrain above its other Gulf neighbours and it is considered as one of the healthiest countries in the region. Bahrain has managed to control communicable diseases and reach almost 100 per cent in its immunisation coverage of basic vaccines. However, Bahrain is witnessing a continued rise in the chronic non-communicable diseases such as cancer, cardiovascular diseases and diabetes. These now are the major causes of death in the country.
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Indicator (2009)
|
|
| Outpatient Market Size (USD Bn) |
0.5
|
| Inpatient Market Size (USD Bn) |
0.1
|
| Total Number of Beds |
2,086
|
| Total Number of Inpatient Treatments |
104,681
|
| Total Number of Outpatient Visits |
5,607,697
|
| Average Length of Stay (days) |
5
|
| Source: Alpen Capital | |
Healthcare financing
 “The healthcare spend in Bahrain is roughly around 4.5 per cent of its GDP and 70 per cent of this is financed by the Government.”Jacob Thomas Director Operations, KIMS Management International |
The Ministry of Health (MOH) is the major financer and provider of health services. Healthcare spending in Bahrain remains robust with total expenditure on health (3.8 per cent GDP in 2011) (WHO). “The healthcare scenario in Bahrain is still predominantly government driven and funded. The healthcare spend in Bahrain is roughly around 4.5 per cent of its GDP and 70 per cent of this is financed by the Government,” explains Jacob Thomas, Director Operations, KIMS Management International. As good as it may seem Bahrain has yet to reach the standards of the developing nations in healthcare spending.
 “There is urgent need for increasing private sector participation as healthcare expenses are expected to increase substantially.” Sanjay Vig MD, Alpen Capital (ME), United Arab Emirates |
“Bahrain’s healthcare expenditure as a percentage of GDP is higher than the Gulf Cooperation Council (GCC) average; however, its per capita expenditure on health is marginally lower than the region’s average,” says Sanjay Vig, MD, Alpen Capital (ME), UAE.
According to WHO, private health expenditure (per cent of GDP) in Bahrain was 1.10 as of 2011. The private healthcare sector in Bahrain caters primarily to the non-Bahraini population and there has been an increase in the utilisation of private healthcare by the Bahraini population in the recent years. Health insurance is in its infancy in Bahrain with a huge potential for growth. Currently, some large employers pay annual levy to the Minister of Health and private sector employers contribute three per cent to Government Organization for Social Insurance (GOSI) for employee’s occupational accidents and disease. Private health insurance is provided by a small number of local and international insurance companies.
The market is sure opening up and more private sector players are expected to set up base in Bahrain. As Vig explains the market in Bahrain is small but has positive potential for growth. “Given its low population base, the market size of Bahrain’s healthcare services is the smallest market in GCC. The market expanded at a CAGR of 15 per cent over 2004-09 to reach $0.6 billion. The outpatient segment accounted for over 83 per cent of the market in 2009, while inpatients accounted for the rest,” informed Vig.
Infrastructure
The Kingdom of Bahrain currently provides universal healthcare free to Bahrainis and at subsidised rates to non-Bahrainis.
The Ministry of Health provides healthcare services through 21 primary healthcare centres and two clinics spread throughout the five governorates of Bahrain. Secondary and tertiary care is provided through the 891-bed Salmaniya Medical Complex which is the main hospital in the country and has extensive outpatient services. In addition, there is a 214-bed psychiatric hospital, 130-bed geriatric hospital and five satellite maternity hospitals taking care of the needs of the patients.
Another major healthcare provider is the Ministry of Defence through the Bahrain Defence Force Hospital (BDF). The hospital provides services to members of the Bahrain defence force and their families as well as emergency care to the public and cardiac care services to the whole population.
The 349-bed Shaikh Mohammed Al-Khalifa Cardiac Centre provides advanced cardiac care services to the people of Bahrain.
The newly constructed King Hamad University Hospital with 300 beds is the latest addition to the government repertoire. Managed by the Bahrain Defence Force, the hospital offers its services to all and is set to become the Centre for Organ Transplant Surgeries and Trauma in Bahrain.
 “The diseases of the elderly and chronic medical diseases like diabetes and hypertension are big time challenges of the future.”Dr George CheriYan CEO, American Mission Hospital, Bahrain |
As compared to the government sector, the private healthcare sector is currently limited however it is growing very rapidly. “There are six main private hospitals in Bahrain with the American Mission Hospital being the oldest in the GCC established 115 years ago by American Missionaries,” says Dr George Cheriyan, CEO, American Mission Hospital, Bahrain. Other prominent private healthcare providers are The Bahrain Royal Hospital (KIMS), Awali Hospital, Bahrain Specialist Hospital, Bahraini German International Medical Centre, Ibn Al-Nafees Hospital, International Hospital of Bahrain,etc.
Regulatory reform
The Economic Vision 2030 provided a clear direction for the continued development of the Kingdom’s economy and pointed to the need for the regulation of the whole healthcare system by an independent health regulator.
In 2010, the Bahraini government instituted the National Health Regulatory Authority (NHRA) to regulate health service provision across both the public and private sectors in Bahrain. “A major achievement which Bahrain can boast of is the setting up the NHRA which is an independent healthcare regulator set up to ensure regulation of the healthcare system and the healthcare delivery by regulating healthcare professionals, facilities where health care services are provided (hospitals, clinics, centres, pharmacies, etc.) alongwith the medicines and drugs that are used in the delivery of healthcare,” informs Thomas.
“The government has a 2030 vision that encompasses education, economic development and healthcare to encourage private public partnership in the provision of healthcare to the citizens and the public living in Bahrain. There has been reforms in the governance of the healthcare sector in Bahrain by establishing an independent body NHRA,” says Cheriyan. “Their role is to oversee standards, licensing of healthcare workers, monitoring quality and acting as an ombudsman dealing with patient complaints and investigating incidents that lead to unexpected morbidity or mortality. They are also responsible for supervision in monitoring standards of new healthcare facilities and sanctioning new ones depending on need,” he adds.
Like its neighbouring countries, Bahrain too has introduced compulsory health insurance for all expatriates. “The most important regulatory reform expected is the announcement of compulsory health insurance for all. As a first step, it is expected that the expatriates would be compulsorily insured like in Saudi Arabia and Abu Dhabi. The expatriates constitute about 50 per cent of the population in Bahrain and this announcement would be a major impact for the industry,” says Thomas.
Encouraging private sector participation
Bahraini government realises that the only way to ease the burden on government health facilities is to open up the sector. “With rising medical costs, a fast growing population and higher incidence of health-related problems, GCC governments seek to transform the model through private sector participation – public-private partnership (PPP) as well as purely private ventures. Setting up private facilities reduces the governments’ burden to fund capital, while private players as managers of public facilities enhance the quality of services through their expertise,” explains Vig.
In an attempt to open up its healthcare sector and encourage private investment, the government will bring in new laws and existing rules and regulations will be updated to bring them more in line with international trends. These new laws will ensure that there are no obstacles in the way of private investments making licensing easier.
Further, the government is also trying to woo the investors by providing lucrative incentives.”Bahrain is offering incentives to private players in healthcare by guaranteeing minimum cost coverage. The authorities guarantee reimbursement of cost of minimum patient visits to hospitals even if the minimum number of patient visits is not met. These measures are expected to boost private sector start-ups,” informs Vig.
Entry of private players is also expected to modernise existing infrastructure, boost capacity for catering to rising demand as well as enhance operations and efficiency to offer high-quality services at affordable and competitive prices.
Attractive investment destination
Bahrain maintains a liberal and trusted business environment and boasts of unrivalled access to the markets of the GCC which comprises Bahrain, Kuwait, Oman, The Kingdom of Saudi Arabia, Qatar and the United Arab Emirates (UAE). “Fast growth in the GCC offers a wealth of opportunity for Indian healthcare providers. Our markets have a combined value of $1.5 trillion, expected to reach $2 trillion by 2020, and have increasingly sophisticated mass-affluent populations on the lookout for cutting edge medical technologies and treatments,” says Ahmed.
The Kingdom enjoys a reputation as the ‘Gateway to the Gulf’, with the best market access to the economies of the GCC countries, a market which now exceeds $ one trillion. As an investment destination and operating base, this has given Bahrain an edge over other countries. With its strategic location next to GCC’s largest market – Saudi Arabia, this trend is expected to continue as increasing number of Saudi patients visit the country. Bahrain also enjoys a liberal social climate, good shopping and minimal travel restrictions attracting about two million tourists a year, mostly from neighbouring Gulf countries. The healthcare services market in Bahrain is focussed and expecting major reforms becoming the choice for medical tourism in the Gulf. Bahrain’s healthcare facilities are at par with other facilities around the world as several healthcare facilities in Bahrain have received accreditation from the US (Joint Commission International) and Canadian (Accreditation Canada) authorities.
Bahrain has the most favourable tax regimes in the world with no corporate tax, no personal tax, no capital gains tax, no withholding tax and no restriction on the repatriation of capital, profits or dividends. “Bahrain offers an attractive and supportive business environment, including competitive tax rates, transparent regulation, excellent transport connections by air, sea and road to the other countries of the GCC, and a highly skilled local workforce, making it an ideal platform from which to access the GCC market. Bahrain also has a free trade agreement (FTA) with the US that Indian manufacturers can take advantage of, particularly as India and the US do not currently have a FTA in place,” says Ahmed.
The Kingdom is also negotiating a FTA with India which may take shape soon. “The countries of the GCC, which include Bahrain, Saudi Arabia, Qatar, UAE, Kuwait and Oman, and India, are currently negotiating a FTA which is anticipated to be completed in the near future,” informed Ahmed.
Impetus for growth
Key growth drivers for the healthcare sector in Bahrain are the changing population matrix and rising chronic diseases. Bahrain’s population is currently made-up of working age group. This will convert to ageing population in 20 years and will need maximum healthcare support. The changing mix of population can further be expected to change the epidemiologic profile and the burden of disease in the country. “The key drivers of growth in the healthcare sector is the changing demographics of people living longer, thereby the diseases of the elderly and chronic medical diseases like diabetes and hypertension are big time challenges of the future. Obesity in the young is also a major issue that in increasing the incidence of diabetes. Bahrain has one of the highest incidence of diabetes in the world,” explains Cheriyan.
“Increasing incidence of lifestyle-related diseases in GCC is expected to drive per capita spending on healthcare. GCC nations are witnessing a paradigm shift in lifestyle with drastically changing eating habits. High per capita income coupled with sedentary lifestyle and dietary patterns has increased the incidence of obesity,” opines Vig. “All GCC countries exceed the global average obesity ratio of 10.0 per cent of total population among males aged 20 years and above and 14.0 per cent among females. According to WHO, obesity is a major risk factor for diabetes and cardiovascular diseases. Notably, the International Diabetes Federation reveals that GCC countries are among the top 12 globally for diabetes prevalence. The average cost of these lifestyle-related ailments is higher and extends over a longer term leading to higher healthcare related spending,” Vig says.
Apart from this, increasing penetration of health insurance will also drive up the demand for healthcare. “The key driver of this sector would be increased penetration of healthcare insurance. Bahrain, like other GCC countries has high rates of CVD and lifestyle diseases like hypertension, diabetes, and obesity due to lifestyle related reasons. This is another major factor driving healthcare utilisation,” opines Thomas. Health insurance is also rapidly gaining significant share in the insurance market of the region.
In addition, the rising income and enhanced spending capacity allows the people to seek specialised medical services and latest medical surgical procedures, such as transplants. High literacy rate resulting in higher treatment/ intervention awareness will also be a major factor for higher healthcare spend.
New models of healthcare delivery such as short-stay surgical centres and specialised clinics are also gaining popularity. Growing number of healthcare providers in GCC are focusing on clinics and ambulatory centres due to their lower capital requirement and quick return on investment. “Expanding high-income and expatriate population bodes well for clinics and ambulatory centres due to their close proximity to residential locations and wide array of medical specialities. Besides, the centres include an operation theatre and generally have the facility to transfer a patient to a bigger hospital in case of an unmanageable emergency. We expect clinics and ambulatory centres to continue gaining traction given the potential demand for healthcare services in such regions and institutional interest in this segment,” says Vig.
Key challenges
A major challenge for a private healthcare service provider is the public sector dominance in the healthcare space. However, lately the government has taken steps to open-up the sector for private investments and will offer minimal resistance in future. “While governments subsidise healthcare cost at public facilities, spending at private clinics is an out-of-pocket expenditure. This leads to low utilisation rates of private facilities, which in turn questions sustainability. There is an urgent need for increasing private sector participation as healthcare expenses are expected to increase substantially,” says Vig.
Another area of concern is specialised manpower. Although, Bahrain has four medical universities: the Arab Gulf University, the Royal College of Surgeons of Ireland, the College of Health Science, and AMA International University and industry bodies like Tamkeen that provide high quality, efficient and comprehensive training programmes, there is still a huge talent gap in the healthcare sector.
“The major challenge facing the industry as of now is availability of qualified and experienced manpower, be it doctors, nurses and other related medical manpower. Licensing of medical manpower and the time taken for the same is also sometimes a challenge when the requirement of such manpower is imminent,” says Thomas.
Agreeing, Cheriyan says, “The major challenges of the industry is the supply in locally trained manpower and the self reliance from foreign trained doctors and nurses. Government and private funding into healthcare with uncertain returns or the private investor is yet another challenge.”
Explaining it further, Vig says, “Concerns about insufficient medical staff have amplified amid high dependence on expatriate medical personnel.”
“High proportion of expatriates in medical staff poses a challenge of difference in culture, medical practices and patient care. In addition, they are subject to high attrition as they view their residence in the GCC as a learning experience for international exposure and later move back to home countries or developed markets for higher paid jobs,” he adds.
The future
In future, private healthcare will see a surge. According to a report, ‘Mapping healthcare financing’ ageing population, population growth combined with disease mix trends, will result in a steep change in healthcare demand, with ~ 130 per cent more treatment needed in 2025. Cardiology (~230 per cent more treatments) and cancer (~200 per cent) will grow the fastest. Assuming no difference in the breadth and depth of care provided today, these three factors combined will drive an estimated 504 per cent increase in healthcare expenditures over the coming 20 years, reaching BD 1,148 million in 2025. “Healthcare has always been changing, be it new technology or new techniques. It would be the same for Bahrain. But in particular about Bahrain, we feel that private healthcare will have a major role to play in the future and from the present role as primary, secondary and high secondary healthcare provision, private healthcare could move into the provision of tertiary and even quaternary care in a few areas,” opines Thomas. Another care model expected to emerge in future is the home healthcare model. “The future of healthcare will be care that is provided closer to home and eventually at home as it is much cheaper. Technology will transform the way in which this care is provided. Care will be more ambulatory driven with hospitalisation only for the more serious illnesses. Patients will be responsible more and more for their own health with healthcare providers offering the support to manage their chronic disease to improve the quality of life. In a country as small as Bahrain tertiary care will be centralised into a few hospitals only,” foresees Cheriyan.
References:
Health Systems Profile-Bahrain Regional Health Systems Observatory- EMRO, WHO 2007
Alpen Capital’s GCC Healthcare Industry report December 13, 2011 WHO Country Case Study: Bahrain Health Care Financing, July 30, 2008
[The author visited Bahrain at the invitation of The Bahrain Economic Development Board (EDB)]
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