While all Omanis are entitled to free health services, there has been an increasing move towards private health care, with both foreign and local care providers entering the market. The most recent entrant to the sector is the Saudi-based Shifa Al Jazeera Medical Group, which announced on November 18 it would be investing $259m to establish 13 hospitals and medical centers across the Sultanate over the next few years.
The group initially plans to open hospitals in the Ruwi and Al Khuwair districts of the capital, along with a medical Centre at Barka, which are scheduled to be operational by March 2014. Further hospitals will be opened in Salalah, Sohar and Al Khoud, along with medical centers in Duqm, Al Suwaiq, Khaboura, Al Buraimi, Ibri and Falaj Al Qabail, all of which are scheduled to begin operations in five years.
Shifa Al Jazeera’s entry into the Omani market should serve to ramp up competition, as the group is planning to undercut rivals on many services. According to KT Mohammed Rabeeh Rabeeullah, the chairman of Shifa Al Jazeera, this could push down prices by as much as 50%.
If Shifa Al Jazeera does implement a cut-price tariff system, it could put a lot of pressure on existing players in the market, many of who are still in the investment stage of their own operations. However, the sector should be able to absorb new operators.
According to K Jayan, the general manager of the Starcare Hospital, Oman’s newest private hospital accredited by US-based Joint Commission International, there is an increasing demand for private health care in the Sultanate. “Public hospitals in Oman have long wait times and are over-loaded and, as a result, there are plenty of opportunities for growth in the private health care market,” he told OBG in a recent interview.
While potential exists, Jayan believes further investment in advanced technology and development of both research capacity and teaching hospitals is necessary for the sector to expand. “This will in turn attract quality staff and increase the confidence of the public in Oman’s medical systems,” he said.
The private sector has the government’s full support in this. In a recent address to the Council of Oman on November 12, Sultan Qaboos bin Said Al Said told parliament that the private sector was one of the basic pillars of the country’s future development and essential for social and economic growth. His words have been taken as a clarion call to the private sector to take on a greater role in the national economy.
Later on the same day, Ahmed Bin Mohammed Al Saidi, the minister of health, said the Sultan’s speech had direct implications for the health sector and in particular Oman’s private medical service providers. The Ministry of Health regards the private sector as a partner, one that plays an active role in the process of health development of the country, Al Saidi said.
It was a theme that the minister returned to while attending the opening of a new outpatient department at the Muscat Private Hospital on November 25. “Private hospitals are important, as His Majesty had mentioned in his speech that the private sector is contributing to the economy, and this applies to the health sector as well,” Al Saidi said. “The private sector has been playing a key role in health care and has been complementing the efforts of the government in providing quality health care.”
A number of other potential upcoming developments also bode well for prospective investors. In conjunction with the Capital Market Authority and the Ministry of Manpower, the Ministry of Health is considering implementing a mandatory health insurance regime, which could result in rapidly rising demand at private care facilities.
It is likely that most Omanis will continue to use the state-provided health service, at least for more basic treatments. Where private firms will have the most impact is the more specialized services, which require more expertise and, in turn, can generate more revenue. As more Omanis benefit from the economy’s growth, the pool of patients willing to pay for improved and quickly available health care should deepen, allowing the private health care sector to strengthen its footing.
Oxford Business Group