Healthcare revamp

Billions of dollars for the region's health system have developed state-of-the-art technologies and revitalised the sector.

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By  Duncan MacRae Published  June 2, 2007

With the likes of Dubai Healthcare City (DHCC), King Fahd Medical City (KFMC) - and many more healthcare facilities just like them springing up throughout the region - being ill has never before been so appealing. And, of course, technology is proving to be a major driving force behind these super health centres According to industry experts, IT is going to make the Middle East's healthcare the best in the world.

In 2006, Peggy Farley, general partner in the US$100 million Ascent Medical Technology Fund II, a private equity vehicle to promote the development of the medical technology industry in the Middle East, stated it was going to happen sooner rather than later.

While there are the grass-roots of medical technology here, this is principally the manufacturing of basic supplies in Oman and generic drugs in Jordan.

Farley is confident that intellectual property and advances in medical technology can originate in the Middle East, and be kept here, if funds are diverted into developing clinical research facilities and medical technology manufacturing facilities The injection of $100 million, likely to be from American firms in the first instance, will catapult the value of the regional medical technology investments sector to levels that will surpass any non-oil sector in the region, according to Farley.

"The Middle East has the capacity to provide competition to a fat, lazy and complacent American healthcare sector that is stifling innovation through its bureaucracy."

Karl Groth, Farley's Partner in the Fund, says: "While there are the grass-roots of a medical technology industry in the Middle East, this is principally the manufacturing of basic supplies in Oman and generic drugs in Jordan.

But the real money is to be made in new patents, and the Middle East can be supported and nurtured to the extent that localised discovery of new drugs, new medical devices such as therapeutic products that enable heart function, new cell therapies, and new cures will follow."

Ascent medical technology investments are exceptional, having had an average return on investment of 824% year on year.

"One principal reason for the high returns, beyond selecting outstanding technologies, is a history of successful IPOs from the US medical technology sector," explains Farley.

As certain sections of the vertical come on in leaps and bounds, there is a very real danger that some smaller health centres could be left in their wake. According to Oracle, a major player in healthcare back-end systems, this is highly unlikely to be the case.

"Let me just be very blunt," says Ammar Mamlook ,Oracle's healthcare accounts manager for the region. "What we're seeing in the Middle East are islands of excellence - some hospitals and health centres are fantastic but the rest of them are far from advanced.

With the islands of excellence, there are hospitals that I would say are even better and much more advanced than those in the USA or Europe. But there are still just a handful of facilities up to similarly advanced standards.

"Fortunately, I think the sector as a whole is advancing rapidly and I can see plenty of change taking place. Soon, these smaller and more ‘dated' hospitals could soon be up to the same excellent standards that we see with the likes of King Fahd Medical City. Mamlook feels that one thing this region's healthcare sector needs to further develop is the back-end applications. "Most hospitals have their front-end systems fully in place but less attention seems to be given to the back-end," he says.

"Although the front-end systems are obviously very important in delivering care, it's important to remember that it's the back-end applications that are used to actually run the businesses and keep the facilities ticking over."

ITQAN, a local systems integrator that specialises in healthcare informatics, has seen vast changes in the sector since it began working in it ten years ago.In 1997, Feras Al Jabi, general manager at ITQAN, felt that although many vendors had started talking to end users about the need to start digitising, the solutions in Middle Eastern healthcare needed more attention from system integrators.

"I still believe that it needs more support from pure IT vendors - those who develop programming languages, databases or platforms," explains Jabi. "They need to support the implementation providers to make the technology more applicable to the end users in the industry - doctors and nurses.

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