The following interview with Don Kay, Chairman ,VHA Global was conducted by the Gulf Research Center, Dubai and published in the latest edition of its Economic Research Bulletin - issue_no_5_7510[1]. It is reproduced by kind permission of the Gulf Research Centre.

Improving Healthcare Management in the GCC

The profile of health sector policies, structures and delivery mechanisms will change dramatically throughout the GCC in the next five years" Don Kay, Chairman of healthcare management and consultancy company, VHA Global.

Don Kay is a health economist, former hospital administrator and well-known health sector entrepreneur. He is an Honorary Senior Lecturer in the Department of Epidemiology and Preventive Medicine at MonashUniversity and the Chairman of VHA Global, an Australian healthcare management and consultancy company with a local subsidiary in the Sharjah Airport International Free Zone.

VHA Global is actively involved with hospital operations, strategic consultancy, medical equipment and supply chain management throughout the UAE, Bahrain, Kuwait, Libya, Saudi Arabia and Qatar, either directly or in alliance with strategic partners. VHA Global has been launched as a partnership between the public and the private sector to apply and adapt the State’s health sector expertise. The company’s current work includes the commissioning and management of the new Sharjah Teaching Hospital and improvement of the Ministry of Health’s Al Qassimi Hospital also in Sharjah.

VHA Global developed a 10-year strategic plan for the Hamad Medical Corporation in Qatar and assisted the Health Authority Abu Dhabi to establish mechanisms to regulate all private health sector activities in the emirate. In March 2007, the company signed an agreement with the American Academy of Financial Management in Kuwait to improve the quality of health services financial management throughout the GCC over a five-year period. In an interview, Kay told GRC that the GCC is “the most exciting region in the world in which to be in the healthcare business”

As a privately incorporated company, why has VHA Global aligned it-self so closely with the Victorian and Australian governments and academic institutions?Healthcare management is inextricably linked with government and academia. To some extent our core product is born out of the very strong public healthcare system of Victoria, Australia. Of course we need to adapt our approach to local conditions and achieve locally defined objectives, but what we are selling is specialist know-how which has al-ready produced positive outcomes in Australia in both the public and private sectors.

Why does government need to be so involved with the health sector? Why not leave it to the market? The health sector market is not self optimizing. At this time there is a marked lack of consumer sovereignty. This is changing over time as consumer’s access infor­mation on the net, via the media and so on. However, I doubt that even the most ardent free marketers would argue that a total withdrawal of government from any role whatsoever in the health sector would optimize costs, access, investment, quality, safety and service integration. Indeed it can be argued that a degree of regulation protects professional investors and profes­sional private health care providers from less scrupu­lous, less professional elements.

What then does that mean for the private sector? Does the private sector have a legitimate role to play in the provision of health services in the GCC?The answer is a definitive yes! The private sector already has a significant and growing grolein GCC health care. Utilizing data from the World Health Report 2004 and the World Fact Book 2005, it is estimated that the pri­vate sector spent $5.7 billion on health. This represented 25 percent of all spending on health. Both total health expenditure and the proportion accounted for by the private sector are growing exponentially.
The private sector, of course, also provides a range of goods and services including facilities planning, construction, medical equipment, consumables, pharmaceuticals, education and training, outsourced services, hospital information systems, clinical waste management, insur­ances and so on, in addition to the direct provision of diagnostic and treatment services. Looking to the future, it is clear that the private sector will play an increasing role in the operational manage­ment of public hospitals and other public health ser­vices as indeed VHA Global is currently doing.

Why choose to start in the GCC?Typically developed countries spend at least twice the proportion of their GDPs on health than has historically been the case in the GCC. However, this region is rap­idly growing with an appetite for improvement of its health, education and other services to the standards enjoyed by residents of developed countries. The political will is definitely there to improve these services, which, combined with the capacity to pay and the in creasing take up of private health insurance, means that this is the most exciting region in the world in which to be in the healthcare business.

What structural and other changes do you envisage in the GCC in the next five years?The profile of health sector policies, structures and de livery mechanisms will change dramatically throughout the GCC in the next five years. I envisage a complete re-definition of the roles of government, private and public sector health service delivery organizations. It is clear from initiatives throughout the region that government will become a regulator, planner and funder, leaving the actual provision of health services to hospitals and other health care agencies, be they private or public or a combination of the two.
For example, it is becoming increasingly common for governments to contract private hospital management companies to manage the delivery of health services in accord with international accreditation standards, within defined budgetary and quality parameters, effectively becoming independent business units, responsible to boards of governance appointed by governments. This growing emphasis on clinical and corporate governance is fundamental to improving accountability, efficiency, effectiveness and efficacy of health service delivery.
These structural changes will open the door to the direct use of economic levers, such as case-mix funding, program-based budgeting and other performance-oriented funding arrangements, to impact costs, throughputs and the service delivery profile. Utilization of these economic levers in conjunction with quality improvement pro grams will help to optimize outcomes for governments, providers and consumers alike.

“I envisage a complete re-definition of the roles of government, private and public health service delivery organizations” - Don Kay

What do you see as the major challenges?Challenges abound! Change management is a demand­ing exercise in any region and rarely has any region con­templated the amount of change now being pursued in the GCC. Hospitals and other healthcare facilities are extremely complex and management of such organizations is chal­lenging even in a mature market, let alone in such a rap­idly changing one as this. Therefore it is imperative to rec­ognize the importance of professional health service management, to draw on and learn from international experience and to accel­erate the development of education and training op­portunities for local health service managers. Interna­tional mentoring programs have a great deal to offer in this respect. During a time of significant structural change. It is often difficult to undertake comprehensive planning so as to achieve the development of appropriate and integrated services. It is extremely challenging to foster a greater role for the private sector at the same time as plac­ing greater emphasis on policy formulation and planning. However, I believe that striking this balance is achievable.What are the implications for the health sector workforce?Non-nationals make up the majority of the health sector workforce in the GCC, although the actual proportions vary from country to country. I believe that changing this will be a gradual process. In addition, there is and will be for the immediate future a shortage of some healthcare professionals, especially nurses. The key to addressing these issues is education and training. The skill-level horizon is moving so rapidly that without continuously upgrading his or her skills through ongoing education and training programs, the 21st century healthcare professional will find himself/herself redundant.Medical technology is changing rapidly. What are the im­plications of this for health sector capital expenditure? Notwithstanding an entrepreneurial philosophy, I am a strong advocate of planning: planning of services, plan­ning of the health sector workforce, planning of facilities, planning of resource utilization, planning of governance and management arrangements, planning of qual­ity programs and the frequently overlooked planning of medical equipment. Planning can be enhanced by the utilization of advanced health information systems to collect and analyze accurate, relevant data in a timely manner. Recent press articles indicate that there are over $10 billion of Capex projects currently in progress in the GCC. This represents a se­rious opportunity for the private sector and a chal­lenge for any government wanting to optimize value for money in terms of ser­vices to its citizens and residents. Poor planning results in waste and inefficiency. In the private sector it jeopardizes returns to investors. I frequently encounter situations where ad­equate medical equipment planning has not been undertaken early or thoroughly enough as part of a hospital development program. Such circumstances typically result in costly contract variations, inappropri­ate expense, dissatisfied clinicians and compromised patient services. It is interesting to note that medical equipment and related technologies will actually con­sume more financial resources than facilities from a full-life costing perspective.

“It is extremely challenging to foster a greater role for the private sector at the same time as placing greater emphasis on policy formulation and planning. However, I believe that striking this balance is achievable” - Don Kay.

Why should foreign companies and governments co­operate with the GCC?I know that the Governments of Victoria and Australia believe that their support of initiatives such as those at Sharjah University where Monash University from Mel­bourne, Victoria, provides academic assistance to the medical college while VHA Global is involved in the commissioning of the associated University Teaching hospital, generates export dollars, strengthens interna­tional cooperation and development opportunities for Australian healthcare professionals.The GCC has a unique opportunity to draw on the world’s best practices, while improving its healthcare services in a culturally appropriate manner.

(Note that certain factual errors included in the original article have been corrected and emphasis added)