Message from the EditorLast year, we witnessed an unprecedented level of activity in the healthcare sector in the Middle East and there has been a further ramp up of activity in the first quarter of 2016.

Clyde & Co’s healthcare group has assisted with getting several M&A transactions across the line over the last 18 months and we led Mergermarket’s league table for the number of M&A healthcare deals in 2015.

There have already been some significant corporate healthcare transactions this year including the completion of Mediclinic’s reverse takeover of Al Noor (which creates the largest private healthcare provider in the UAE) as well as the listing of the holding company of the Saudi German Hospitals (which raised $3.2 billion).

It is not just M&A that is driving the healthcare sector in this region. There are also a number of significant greenfield projects which have recently been completed or are in the pipeline. Last month, NMC opened the UAE’s largest private sector hospital, NMC Royal Hospital, a 500 bed multispecialty hospital in Khalifa City, Abu Dhabi which will provide world class emergency, critical and acute cardiovascular care.

It was also announced last month that the construction of Sheikh Shakhbout Medical City in Abu Dhabi is eighty per cent complete. When completed, this four billion dirham medical city will accommodate 732 hospital beds and will become a centre for the treatment of trauma and incurable diseases.

There are a number of government initiatives and changes to the regulatory landscape in the Middle East which are shaping the healthcare sector in this region. For example, at the beginning of this year, the Saudi Arabian General Investment Authority (SAGIA) announced a plan to facilitate the entry of foreign investors into the Kingdom. At present, the healthcare sector in the Kingdom is not fully open for foreign investors, however, SAGIA should grant licences for certain healthcare activities subject to obtaining the pre-approval of the Ministry of Health (please see below for further information).

Qatar’s National Health Insurance Company recently suspended the provision of health insurance services and the government is now encouraging private healthcare insurance companies to provide healthcare insurance cover for Qataris.

The Dubai Health Strategy 2021 was launched in January. The cornerstone of this strategy is establishing Dubai as a regional and international destination for medical tourism and there is also a focus on e-Health initiatives.

The third and final phase of Dubai’s mandatory health insurance scheme concludes in June by which time smaller companies with less than 100 employees are required to provide their employees with health insurance. If a Dubai company fails to comply with Dubai’s mandatory health insurance scheme, it may be subject to fines and, until the company is compliant, it will not be able to obtain visas or renew visas for its employees.

As illustrated by the events described above, there are many moving parts to the Middle East’s healthcare sector and its evolution is happening at a rapid pace.

This healthcare newsletter provides a general commentary on the healthcare sector in the Kingdom of Saudi Arabia and Qatar. Also, Abhay Kumar, Assistant Vice President of Corporate Investments at NMC Health, comments on some of the challenges of completing M&A transactions in this region. We also look at the potential impact of the new Ministry of Labour employment contract process.

MENA

Healthcare newsletterApril 2016

‘Clyde & Co has sterling experience in the healthcare industry where it acts for many leading names.Chambers Global 2016

Barton HoggardPartner, Healthcare D: +971 4 384 4370 E: barton.hoggard@clydeco.com

In this issue we cover:

Market updates and insights

Mergers & Acquisitions in the Healthcare Sector: An Operator’s perspective

Foreign Direct Investment in the Healthcare Sector in the Kingdom of Saudi Arabia

New Ministry of Labour Employment Contract Process – Impact on Employers in the Healthcare Sector

Qatar healthcare system

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Mandatory health insurance for Dubai companies by end-JuneAll Dubai businesses will be required to implement mandatory health insurance for their employees by the end of June, a senior official has said. Dr Haidar Al Yousuf, director of public health funding at Dubai Health Authority, said that the third and final phase of the scheme, which covers smaller companies with less than 100 employees, was nearly complete. The official said that three quarters of expatriates in the city were already covered by the scheme.

Dubai set to bolster healthcare credentialsThe medical industry in Dubai is set to receive a major boost from the country’s new five-year healthcare strategy. Presented by His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, in late January, the Dubai Health Strategy 2021 was developed as a five-year blueprint for improving the quality and cost effectiveness of health services in the emirate, and strengthening collaboration between the public and private sectors.

Healthcare boom said to propel UAE jobs marketThe UAE remains one of the best performing GCC markets in terms of employment opportunities, according to the latest Monster Employment Index, with strong job demand coming from the healthcare, education and IT & telecom industries. E-demand for jobs in the healthcare industry has increased 76 percent year to date, while demand for healthcare professionals in the UAE has also exhibited impressive growth of 66 percent year to date.

UAE is model for delivering best healthcare to woman, kidsThe UAE has taken significant measures to heighten awareness about the risks women, children, and adolescents are facing across the world, Sheikha Fatima bint Mubarak, Chairwoman of the General Women’s Union (GWU), Supreme Chairwoman of the Family Development Foundation (FDF) and President of the Supreme Council for Motherhood and Childhood, said.

Dubai says planning to open 22 new healthcare facilitiesDubai’s new healthcare strategy will generate numerous openings for investors across the sector, with medical tourism, e-services and specialised-hospital expansion ripe for development, a senior official has said. Humaid Al-Qatami, the chairman and director-general of Dubai Health Authority (DHA) said in an interview with Oxford Business Group that the Dubai Health Strategy 2021 had been developed to take account of both “strengths and gaps” in the current services available.

MENA healthcare real estate ‘an untapped asset’The demand for healthcare real estate in the Middle East is rising on the back of increased medical tourism into the region, consultancy Knight Frank said. Healthcare clusters, such as Dubai Healthcare City in Dubai and Dilmunia in Bahrain are also gaining increased enquiries. Matthew Dadd, partner at Knight Frank, said: ‘‘Rising life expectancies, rapidly growing populations and per capita incomes, a high incidence of lifestyle-related diseases, and ambitious medical infrastructure projects are driving health care industry growth in the Middle East.

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Despite oil prices experiencing a sharp decline and the regional economy bracing for a challenging period, transactional activity in the healthcare sector in the UAE and across the GCC has been at an all-time high. One of the key players that we have had the privilege of working with has been NMC Health plc, a UAE grown family business turned multi-national healthcare giant listed on the London Stock Exchange.

NMC has entered into deals to complete five significant acquisitions in the last twelve months, including four acquisitions in the GCC and one acquisition of a fertility clinic in Spain. We sat down with Abhay Kumar, Assistant Vice President of Corporate Investments at NMC, to gain his insight into a client’s perspective of the M&A landscape in the region.

Question:

What are some of the key legal challenges faced when acquiring a healthcare asset in the region? Mr Kumar’s answer:

“You would know better as you have been our trusted advisors on almost all of them – one side or the other! The regulators in the region are constantly working towards creating a business-friendly environment. However, we faced a few challenges, which were a learning experience for us, especially when we found that some of the licensing framework may not be uniformly implemented across the different Emirates. Another challenge for us in has been some of the smaller transactions, where the doctors, who were also the owners, did not engage professional advisors. Good doctors may not be the best M&A executors. Therefore, the smaller deals have been relatively more challenging.” We fully agree with Mr Kumar’s response. For example, the historic regulatory regime in the UAE has resulted in numerous healthcare establishments that are set-up as sole proprietorships legally owned by individual UAE nationals. In the eyes of a potential acquirer, such a structure could be (i) legally unattractive given that

a sole establishment is exposed to unlimited liability and (ii) difficult to integrate into the existing corporate structure of the relevant purchaser. Consequently, a potential acquirer would typically expect a pre-completion reorganisation of the relevant asset as a condition to completing the transaction.

When advising clients on the acquisition of healthcare assets in the UAE, there are several key issues we commonly encounter in relation to the transaction structure. These issues tend to include:

• determining whether to acquire the target by way of an asset purchase or a share purchase; and

• the foreign ownership restrictions imposed by UAE Federal Law No 2 of 2015 (the Companies Law), pursuant to which a non-UAE national may only hold 49% of the share capital of a limited liability company in the UAE.

A purchaser will likely consider many factors when making its determination as to whether it will acquire the shares in a target or specific assets owned by the target. The key advantage of a share acquisition in this region, which would carry with it the potential liabilities attached to the shares, would be the relative ease of continuity of operations. By acquiring the shares in an existing healthcare target, the purchaser may circumvent what could otherwise be a cumbersome process of setting-up an entity in the UAE that is duly licensed by the relevant health authority and the process of transferring employees from one entity to another. This advantage may be less of an incentive for the purchaser if there may be significant liabilities attached to the shares or the target company. An asset/business purchase may be particularly attractive if the healthcare target is part of a diverse group including assets or business verticals that may not be of interest to the purchaser. Completing an asset/business transfer may be particularly challenging in the context of assigning contracts, transferring licences and employees and obtaining regulatory consents in relation to an asset/business transaction.

Mergers & AcquisitionsAn Operator’s PerspectiveWritten by Abhi Jalan, Naji Hawayek and Munisha Khatwani

in the Healthcare Sector:

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Increasingly, purchasers are looking at investing in the region through a special purpose vehicle incorporated in an offshore jurisdiction, such as the British Virgin Islands or the Cayman Islands. The decision as to which jurisdiction to incorporate in is often driven by, amongst other things, tax considerations and the relative ease of registering an entity in the relevant jurisdiction. We are also seeing an increase in clients opting to use holding companies or special purpose companies (where there is a structured financing element) in the Dubai International Financial Centre (DIFC). We have seen a lot of value from utilising the robust legal framework in the DIFC, including the reliable dispute resolution mechanism of the DIFC courts or the effectiveness of the DIFC-LCIA arbitration rules.

The purchaser of a healthcare asset in the UAE and the wider region must also be mindful of the prevailing licensing regime: a healthcare facility must have a licence issued by the Economic Department in the relevant Emirate in the UAE and a facility licence issued by the Health Authority in the relevant Emirate. For example, a hospital in Dubai that is owned by a limited liability company should hold a licence issued by the Government of Dubai Department of Economic Development and the Dubai Health Authority (DHA). The equivalent authorities in Abu Dhabi are the Department of Economic Development in Abu Dhabi and the Health Authority – Abu Dhabi (HAAD). Each licensing authority has its own set of rules and the completion of an acquisition in the UAE is contingent on obtaining the

relevant approvals of the relevant authorities. It is very encouraging to see, from our experience, that the UAE licensing authorities have been very professional and responsive.

Question:

Where do financial and legal advisors add the most value? Mr Kumar’s answer:

“We very much value both our financial and legal advisors and we all work closely together to achieve a successful outcome. We have found that our financial advisors are particularly helpful at the outset in identifying potential assets and getting a deal on the table. Our legal advisors enter the picture a bit later and assist in every step and challenge along the way to get the deal across the finish line.” Where a legal advisor like Clyde & Co can add particular value is not only in drafting and negotiating transactional documents, but also in identifying particular areas of risk and potential road blocks in completing an acquisition of a healthcare asset and ensuring that these risks are adequately addressed. Our deep understanding of the healthcare sector, and substantial expertise in M&A transactions, means that we are able to appreciate the particular business demands while assisting with the legalities of the transaction.

A finger on the pulse of

Abhi JalanPartner E: abhi.jalan@clydeco.com

Naji HawayekLegal Director E: naji.hawayek@clydeco.com

Munisha KhatwaniAssociate E: munisha.khatwani@clydeco.com

For more information, please contact:

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Upon accession to the World Trade Organisation (WTO) in 2005, the Kingdom of Saudi Arabia (the Kingdom) made bilateral free trade commitments to the other members of the WTO with respect to curtailing limitations on market access and national treatment in various industry sectors. The Saudi Arabian General Investment Authority (SAGIA), the governing authority for foreign direct investment in the Kingdom, announced in early 2016 their plan to focus on priority sectors that have been identified to have a direct impact on economic and human development, including the healthcare sector. A part of this plan is to facilitate the entry of foreign investors into the Kingdom and remove any regulatory obstacles to investments by having meetings and consultations with foreign investors to identify their concerns and/or anticipated investment plans.

Written by Alain Sfeir, Faisal Al Ammaj and Noura Al Shaikh

At present, the healthcare sector in the Kingdom is not fully open for foreign investors, however, SAGIA should grant licenses to certain providers of healthcare services subject to the relevant party obtaining the required pre-approval from the Ministry of Health (MoH). Healthcare services that cannot be licensed by SAGIA are those included in the “negative list” specified by the Supreme Economic Council (the Negative List) which reserves certain economic activities to Saudi national participation.

The United Nations Statistics Division (UNSD) maintains a classification code that covers product and activity classifications used in different countries around the world.

According to the WTO Schedule of Specific Commitments on Services with respect to the Kingdom’s health related services (the WTO Schedule) and SAGIA’s latest guideline, the permitted healthcare services that may be licensed by SAGIA are as follows (using the UNSD’s classification:

(i) “Hospital Services CPC 9311” - the establishment, management and operation of Hospitals; and

(ii) “Other human healthcare services CPC 9319 except CPC 93191” and excluding the services listed under the Negative List.

According to the UNSD’s classification, the activity “Other human healthcare services CPC 9319”is broken down into the following sub-CPCs:

• CPC 93191 – Deliveries and related services, nursing services, physiotherapeutic and paramedical services

This sub-CPC includes:

- services such as supervision during pregnancy and childbirth;

- supervision of the mother after birth;

- services in the field of nursing care (without admission), advice and preventative healthcare for patients at home, the provision of maternity care, and children’s hygiene;

- services provided by physiotherapists and other paramedical persons (including homeopathology and similar services); and

- physiotherapy and paramedical services including services in the field of physiotherapy, ergotherapy,

occupational therapy, speech therapy, homeopathy, acupuncture, and nutrition. These services are provided by authorized persons other than medical doctors.

• CPC 93192 – Ambulance services

This sub-CPC includes services involving transport of patients by ambulance, with or without resuscitation equipment or medical personnel.

• CPC 93193 – Residential health facilities services other than hospital services

This sub-CPC includes combined lodging and medical services provided without the supervision of a medical doctor located on the premises.

• CPC 93199 – Other human health services (not elsewhere classified)

This sub-CPC includes:

- services provided by medical laboratories;

- services provided by blood, sperm and transplant organ banks;

- diagnostic imaging services without analysis or interpretation (e.g. x-ray, ultrasound and magnetic resonance imaging (MRI)); and

- other human health services (not elsewhere classified).

in the Healthcare Sector in the Kingdom of Saudi ArabiaForeign Direct Investment

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We note that the activities described in sub-CPC 93191 are included in SAGIA’s Negative List, therefore, the human healthcare services listed under this classification including nursing care, physiotherapy and paramedical services may not be carried out by foreign investors. Services classified under codes CPC 93192, CPC 93193 and CPC 93199 as listed above should be generally open for foreign investment subject to the MoH’s pre-approval.

Notwithstanding the Kingdom’s WTO obligations referred to above, the MoH still appears reluctant to provide its approval with regard to foreign investors investing in healthcare sectors/services falling under CPC 93192, CPC 93193 and CPC93199. In fact, the MoH’s regulations have not been amended to reflect the international commitments of the Kingdom. The existing applicable regulations, namely the Private Health Institutions Law and its Executive Regulations (the Regulations), currently still require any private healthcare institution to be wholly owned by Saudi nationals except for Hospitals (as defined below).

According to the Regulations, which is the regulatory regime of the private healthcare sector in the Kingdom, a Private Healthcare Institution is defined as “privately owned healthcare institutions, which offer treatment, diagnostic, laboratory, rehabilitation, and nursing services (the Private Healthcare Institutions) and includes:

• Hospitals: a place equipped to diagnose, treat, and admit patients on an inpatient basis.

• General Health Centers: a place established to diagnose and treat patients that offer at least three medical specialisations.

• Specialised Healthcare Centers: a place that focuses on one medical specialty or more.

• Clinics: a place that is established for the treatment and diagnosis of patients.

• Radiology Centers: a place for diagnostic imaging and radiology treatment.

• Medical Laboratories: a place that is established for conducting lab tests.

• Same-day Surgical Facilities (i.e. ambulatory surgery centers): a place that is licensed to admit patients for minor and medium surgeries, provided that patients are discharged on the same day of admission.

• Supporting Medical Services Facilities: a place that provides complementary medical and technical services and includes:

- physical therapy centers, vision centers, and nutrition centers; and

- fitting of artificial limbs, or any other facilities that are classified as a supporting medical facility by the MoH.

• Medical Transport Services Centers: a place that provides transport and first-aid for patients before admission to hospitals in accordance with the standards and requirements of the Saudi Red Crescent Society.

The Regulations stipulate that, except for the Hospitals (as defined above), the Private Healthcare Institution should be 100% Saudi owned. This means ownership of foreign investors in Private Healthcare Institutions is limited only to Hospitals.

A finger on the pulse of

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Alain SfeirPartner E: alain.sfeir@clydeco.com

Faisal Al-AmmajAssociate E: faisal.al-ammaj@clydeco.com

Noura Al ShaikhTrainee Associate E: noura.alshaikh@clydeco.com

For more information, please contact:

However, the management and/or operation of Hospitals, General Health Centers and Specialised Healthcare Centers (as defined above) by foreign medical operators or foreign investors is not prohibited and such activities could be carried out subject to certain terms and conditions to be determined by the Assistant Agency for Private Health Sector Affairs and the Central Board for Accreditation of Healthcare Institutions (CBAHI).

Furthermore, the MoH has recently required all Private Healthcare Institutions operating in the Kingdom, including Hospitals, to be accredited by CBAHI which is designated as the official authority to grant accreditation certificates to healthcare facilities. CBAHI was formed by the Saudi Health Council as a non-profit organisation and is responsible for setting the healthcare quality and patient safety standards against which all healthcare facilities are evaluated.

Accordingly, it is now mandatory for all Private Healthcare Institutions in the Kingdom, whether they are Hospitals or otherwise, to comply with national standards set by CBAHI and to obtain its accreditation through a survey process. CBAHI has emphasized the importance for

Hospitals to obtain such accreditation. It has been reported that if CBAHI discovers, at any time, that a Hospital has not been honest or did not meet the requisite ethical standards, the relevant Hospital may lose its accreditation status which could put the Hospital’s operations in the Kingdom at risk and may result in the non-renewal of its licenses and other legal issues.

In summary, the permitted healthcare services that may be carried out by foreign investors, and should generally be approved by the MoH and SAGIA (subject to the relevant foreign investor satisfying the requirements of the MoH and SAGIA), are as follows:

- establishing and owning Hospitals but not the other different types of Private Healthcare Institutions listed above;

- the management and operation of Hospitals, General Health Centers and Specialised Healthcare Centers (as defined above); and

- other human healthcare services described under UNSD classification CPC 9319 excluding the services listed under UNSD code CPC 93191.

A finger on the pulse of

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The United Arab Emirates’ (UAE) Vision 2021 states that the UAE will “invest continually to build world-class healthcare infrastructure, expertise and services in order to fulfil citizens’ growing needs and expectations”. With human resources shortages a major road block in achieving this vision, will the new contracting arrangements be a positive step moving forward?

This article sets out the impact of the changes from a practical perspective and considers a few notable consequences for healthcare employers as a result of the new contracts issued by the MOL.

New contracting process – practical perspective Decree 764 of 2015 on Ministry of Labour Approved Standard Employment Contracts introduced a new process for engaging employees in the UAE.

Whilst the resolutions strictly only apply to those employers under the MOL’s jurisdiction, it will be interesting to see what impact the resolutions will have on free zones moving forward and the way in which the Labour Courts interpret and apply their provisions.

In addition, although the MOL’s October 2015 resolutions do not formally amend the UAE Labour Law (UAE Law No. 8 of 1980, as amended), the Labour Court has previously applied MOL orders / resolutions / decrees as being applicable in the free zones. An example of this is Ministerial Order No. 176 of 2009 which regulates

the termination of employment of UAE nationals.

Offer letter

In accordance with the Ministry’s vision to “bring greater transparency, clarity and tighter monitoring of labour contract conditions”, employers are now required to issue new employees with a prescribed form offer letter (the Offer Letter).

The prescribed form Offer Letter must be issued to prospective employees before the employer can seek MOL approval for the appointment. It must be signed and filed at the MOL and the subsequent MOL contract issued to the employee must reflect the terms of the Offer Letter (unless the changes are to the employee’s advantage and are approved).

MOL employment contract

The MOL standard form contract has also changed considerably. There are now three separate prescribed form contracts – one for an unlimited term, one for an initial limited term (two years) and one for a renewal of a limited term contract.

The new contracts are considerably more detailed than the previous two page MOL prescribed form contract. In addition to the substantive provisions, each contract contains a number of pages of supplementary notes in the form of an Annex (which are expressly incorporated into the contract) and which set out both the employer’s and the employee’s rights and obligations under the UAE Labour Law.

Recruitment Procedures in Labour Exporting CountriesA primary aim of the new employment documents is to ensure the protection of unskilled or semi-skilled workers who are potentially in vulnerable positions when recruited through overseas labour bureaus. Such measures would be complementary and not in replacement of existing procedures in home countries (such as the requirements applied in the Philippines through the Pilipino Overseas Labour Office which sets minimum terms and conditions of employment for its nationals working abroad and which requires an employment contract to be executed and registered in the Philippines).

Going forward, it is expected that further protections will be introduced in labour exporting countries.

Flexibility of remuneration packages Helpfully, the new MOL Offer Letter and contracts acknowledge that employers operate a range of different remuneration structures. There are more options for employers in the new prescribed form documents to express remuneration as an hourly, daily or monthly figure and commission and bonuses are expressly referred to. In addition, a number of optional allowances are also separated out, including, for example allowances for accommodation, transport, travel tickets, cost of living, phone, luggage transportation, schooling and the gym.

Ministry of Labour Employment Impact on Employers

As a result of the resolutions of the Ministry of Labour (MOL) (recently renamed Ministry of Human Resources and Emiratisation) passed in October 2015, which came into operation from 1 January 2016, the employment contract process has been transformed.

in the Healthcare Sector

Contract Process:

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Written by Sara Khoja and Rachael Smith

As it is market practice in the UAE to reward doctors based on commission incentive schemes, the enhanced flexibility in the prescribed form contract should be of assistance to employers. However, the increased flexibility with respect to commission and bonus arrangements is limited to the ability to list a prescribed bonus as a fixed amount and a prescribed rate of commission from profits / sales.

This may be of limited assistance to healthcare employers as doctor commission and bonus incentive schemes are often complex and involve a variety of different factors (including, for example, the doctor achieving particular key performance indicators and the healthcare company meeting overall profit targets).

Employment entitlements and RetentionThe Annexes go into considerable detail in relation to the employer’s and the employee’s respective rights, responsibilities and obligations. The information provided seeks to strike a balance between both parties’ respective interests and there is an express statement in the contracts that the basis of the employment relationship must be mutual consent and agreement.

The issue of labour bans is also brought to the forefront with skilled employees being given freedom of mobility to a large extent in December 2010 and this has now been extended to unskilled employees provided they have completed at least 6 months service and they are not on an initial fixed term contract.

Employers in the healthcare industry will need to consider measures to retain employees such as retention bonuses, benefits tied into length of service, and also the right to claw back certain costs such as training if employees do not complete a specific period of service following their completion.

Company employment contractAs the MOL contract was previously only two pages long, companies often issued company employment contracts to employees to cover off matters not canvassed in the MOL contract. It is highly likely that healthcare employers will continue to issue company employment contracts for skilled employees.

In addition, company contracts are able to outline specific terms and conditions of the employee’s employment that are not otherwise covered off in the now longer MOL contract and can be tailored to the healthcare employer’s business. For example, specific reference to a company’s policies and procedures, protection of confidentiality and intellectual property provisions (which are of paramount importance in the healthcare sector) can be incorporated as well as post-employment restraint of trade provisions. In addition, healthcare sector specific issues can be integrated such as training and continuing education requirements, specific duties and responsibilities of doctors and internal reporting of malpractice issues.

Concluding remarks The introduction of the new contracting process designed to enhance “transparency” may assist, to some extent, in recruiting unskilled employees contributing to the expansion of the healthcare sector in the UAE, however, difficulties remain.

The difficulties with recruiting and attracting healthcare professionals in the UAE are certainly not limited to the contractual relationships between employer and employee and extend beyond the scope of this article to licencing issues, differing public and private interests, and immigration and sponsorship requirements in the region.

Disclaimer: This article provides a snapshot of notable practical consequences in respect of the new Ministry of Labour Contracts of which employers in the healthcare sector should be aware but this article is certainly not intended to be an exhaustive commentary on the new Ministry of Labour Contracts.

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Sara KhojaPartner E: sara.khoja@clydeco.com

Rachael Smith Associate E: rachael.smith@clydeco.com

For more information, please contact:

QatarHealthcare

Despite the changes, the Emir reiterated at a Cabinet of Ministers meeting on 27 January 2016 the importance of healthcare in Qatar.

Qatar’s healthcare sector began developing in the 1950s and became more robust in 1978 when the Ministry of Health developed a comprehensive scheme for building a primary health care system to launch primary health care services through 9 health centres, covering different parts of the country, and capable of providing basic and essential health and medical services (preventive and curative).

The following year, Hamad Medical Corporation (HMC) was established as the premier non-profit health care provider managing 5 specialized hospitals and 24 primary health care centres - covering every area of medicine. Access to HMC was through the national health care card provided to all citizens and residents of Qatar.

In 2005, SCH was created and became responsible for regulating both public and private health care, as well as setting policies, goals and objectives.

The introduction of the Qatar National Vision 2030 by Qatar’s General Secretariat for Development Planning in 2008 (QNV 2030), launched as a roadmap for Qatar society, set out a number of significant developments to Qatar’s healthcare sector, including but not limited to the following:

• LaunchoftheNationalHealthStrategy 2011 – 2016 (NHS) to implement QNV 2030.

• EstablishmentofaProgramManagement Office to support and enable the implementation of the NHS.

• EstablishmentofthePrimaryHealthCare Corporation as an independent corporation with its own independent budget.

• TheoftheintroductionofLawNo7 of 2013 governing Social Health Insurance for the purpose of providing basic healthcare services to everyone in Qatar (Social Health Insurance Law).

• TheproposalofthelaunchofNational Health Strategy 2017 – 2022.

The Social Health Insurance Law set up the Social Health Insurance Scheme, which is now called “Seha” which was run by the National Health Insurance Company (NHIC), a Qatari joint stock company wholly owned by the Government of Qatar. In accordance with the NHIC Mission Statement “to run the National Health Insurance Scheme providing access to reliable and quality healthcare for all people in Qatar in a cost effective manner,” Seha was launched and by 2014 provided health care coverage for all Qataris (and this was to be extended to cover white-collar and then blue-collar expats by 2015). On 31 December 2015, Seha was suspended by SCH. The Qatar Cabinet of Ministers have publically confirmed that they intend to support the private sector in a far more comprehensive manner, by allowing private sector healthcare insurance companies to provide healthcare insurance cover for everyone.

A recent GCC Healthcare Industry Report has predicted that, in the five years to 2020, spending in the healthcare sector in Qatar is to double again to reach $8.8 billion, reflecting a compound annual growth rate of 12.7 percent, placing Qatar in the middle of the table in terms of healthcare spending forecasts for the region. The report also stated, amongst other things, that:

• Qatartoppedtheregionaltableinterms of per capita spending, which stood at $2,043 per person according to 2013 figures.

• HistoricallytheQatargovernmenthas paid for 80 percent of the country’s total healthcare spending, with the remainder met by the private sector.

• theMinistryofEconomyandCommerce and the then-SCH have identified five sites that could be used for public-private partnership health projects.

The above comes as a result of “a rising population, high disposable income, rising life expectancy, low infant mortality, and increasing prevalence of lifestyle diseases such as diabetes, high blood pressure, and obesity which have led to a concurrent increase in the demand for healthcare services” according to Alpen Capital.

While the region may be currently facing economic challenges, the development of healthcare in Qatar continues to be fundamental to Qatar meeting its QNV 2030 and the suspension of Seha’s activities appears to indicate that the government intends for the private sector to play a significant role in off-setting the government’s expenditure.

The Qatar healthcare system has undergone some recent changes including the suspension of the Social Health Insurance Scheme (Seha), the disbanding of the Supreme Council of Health (SCH) whose role will now be taken over by the Ministry of Public Health, and the appointment of H E Dr Hanan Mohamed Al Kuwari as Minister of Public Health.

systemWritten by Najwan Nayef and Lee Keane

For more information,please contact:

Najwan NayefAssociate E: najwan.nayef@clydeco.com

Lee KeanePartner E: lee.keane@clydeco.com

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Further advice should be taken before relying on the contents of this Newsletter.Clyde & Co* accepts no liability for loss occasioned to any person acting or refraining from acting as a result of material contained in this document. The content of this document does not constitute legal advice and should not be relied upon as such. Advice should be taken about your specific circumstances. No part of this summary may be used, reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, reading or otherwise without the prior permission of Clyde & Co.

*Clyde & Co LLP, Clyde & Co Technical Services JSC and Ab-dulaziz Al-Bosaily Law Office affiliated with Clyde & Co LLPClyde & Co LLP is a limited liability partnership registered in England and Wales. Authorised and regulated by the Solicitors Regulation Authority.

© Clyde & Co LLP 2015

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CC010151 - April 2016

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