Thousands of patients being treated by one of the largest healthcare groups in the country may be forced to foot the bill for medical expenses from next month if a deadlock over fees between the company and insurers is not broken.
Mediclinic Middle East, which operates 10 clinics and hospitals across Dubai, has told insurance providers it will need to raise tariffs by 6 per cent this year to keep up with rising costs.
Most insurance companies have agreed to the rise but several including Enaya, the Dubai government healthcare scheme that insures about 100,000 public-sector staff, and Oman Insurance have so far refused to consent to the hike, said Mediclinic.
Unless a deal is reached before January 31, the deadline Mediclinic has set for resolving the row, patients with those insurers may have to pay for their care directly and seek reimbursement from their insurers.
The disagreement is the latest sign of the deepening pressure facing the country’s healthcare industry because of rising medical costs.
“The doctors are demanding higher salaries, that’s the biggest cost, and nurses are asking for more, and the only way we can keep up with the rising cost of living is to raise the tariffs,” David Hadley, the chief executive of Mediclinic Middle East, part of the South Africa-headquartered Mediclinic International, one of the top 10 listed private hospital groups in the world.
“We have not been unreasonable depending on the 10 to 20 per cent increase in medical insurance premiums some have encountered.”
It has raised tariffs most years to reflect rising wages for medical staff, as well as increases in the cost of rent, utilities, licensing fees and medical technology.
Salaries make up 40 to 50 per cent of Mediclinic’s expenses.
But some medical insurers have baulked at this year’s rise. They argue a 5 to 6 per cent tariff increase will squeeze already wafer-thin margins at a time when many are having to sell policies below market value to compete.
Nobody from Enaya or Oman Insurance was available to comment on the matter.
The Dubai Health Authority (DHA) has been involved in negotiations between Mediclinic and the insurance companies. Enaya operates under the umbrella of the DHA.
“The DHA is well aware of this situation and has been in talks with both the concerned health service provider as well as all insurance companies operating in the emirate of Dubai,” said a DHA spokeswoman.
The deadlock reflects growing pains within a fast-expanding industry as a rising number of people sign up to medical insurance schemes and their companies seek to control the cost of premiums.
An epidemic of “lifestyle” diseases such as diabetes and obesity as well as more people seeking medical treatment are further weighing on companies’ bottom lines.
Mr Hadley said medical insurance would have to rise in the coming years closer to the level of developed markets such as the United States.
“It’s a very difficult pricing market,” he said. “We are experienced in it, but in essence the price of medical insurance has to go up because it’s such an expensive country to live in and the cost of medical care is rising.”
Daniel Whitehead, the regional healthcare lead at the consultancy Booz Allen Hamilton, said a potential solution to runaway health costs was imposing an annual cap on rises in medical expenses. Authorities have already imposed similar increases in rent and education fees.
“Uncontrolled price increases will effect insurers and other payers – and ultimately patients,” he said. “What they [health authorities] may need is more oversight. Perhaps there needs to be a mechanism to make sure that price increases are valid.”