Skip to content Skip to Search
Skip navigation

Dubai mulling ratings for hospital performance, says Aster founder

A doctor consults medical records. Aster employs 1,651 doctors and 3,679 nurses Shutterstock/M Agency
A doctor consults medical records. Aster employs 1,651 doctors and 3,679 nurses
  • Dr Azad Moopen interview
  • Ratings would affect prices
  • Insurers ‘call the shots’
  • Profits down in health sector

Dubai is considering the introduction of performance ratings for healthcare providers, Dr Azad Moopen, the founder and chairman of Aster DM Healthcare, has told AGBI.

The system would allow operators to adjust their insurance tariffs – the prices that insurers agree to pay for medical services or procedures – based on their classification, providing an incentive to raise care standards.

Speaking on Monday on the sidelines of the Arab Health conference, Moopen said studies conducted by the Dubai Health Authority and the Dubai Chamber of Commerce had shown the need for performance-based tariffs.

The studies were launched after local healthcare businesses raised concerns about cost and profitability, he added.

The Dubai Health Authority did not respond to AGBI‘s request for comment.

The healthcare sector in the emirate faces a challenging economic climate, marked by stubborn inflation, high interest rates and slow growth. Mandatory medical insurance policies have also had a big impact.

“In a totally insured market, it is the insurance companies which call the shots,” Moopen said. 

“In the last three years, there has not been any increase in the tariff from insurance companies, whereas [our] costs have gone up significantly. There have been rental increases, salary increases.” 

He added: “That is one of the major reasons why profitability has come down.”

Medical insurance was made mandatory in Dubai in 2014 for all Emiratis and expat residents, along with their dependents.

Dr Azad Moopen founded Aster, which is demerging its Indian and Gulf operations

A Dubai healthcare rating system could operate in a similar way to the classification process used by the emirate’s education regulator, according to Moopen.

The Knowledge and Human Development Authority evaluates private schools, with those achieving a higher rating allowed to increase their fees.

Aster DM Healthcare, which is based in the UAE and listed in Mumbai, runs 34 hospitals, 131 clinics and 502 pharmacies in India and across the Gulf. It employs 1,651 doctors and 3,679 nurses.

For the fiscal year to March 31, 2023, its revenue grew 16 percent to $1.46 billion. Net profit stood at $51.36 million.

The company derives 75 percent of its revenue from its Gulf business.

It reported a drop of nearly 93 percent in first-quarter profit in 2023, its fourth successive quarterly fall. It attributed the reduction to the cost of opening new hospitals in Oman and India and a one-time tax expense.

Pre-tax profit fell by 14 percent, weighted by a rise of nearly 20 percent in expenses.

Revenue from Aster’s hospital segment, which accounts for more than 58 percent of total revenue, rose 23.5 percent.

The company is demerging its Gulf and Indian businesses.

It will sell a majority investors’ stake in its Gulf operation to private equity firm Fajr Capital in a $1 billion deal, and a 30 percent investors’ stake in its India business for about $300 million.

The family maintains its controlling stake and a board majority in both areas, Moopen said, describing the deal as a “refresh of other investors in India and the GCC” as part of the segregation.

The deals will close “before the end of March”.

Latest articles

Musicians perform at the Sharjah Ramadan Festival. Retailers offered discounts of up to 75% on local and international brands

Sharjah’s Ramadan retail sales peak at nearly $110m

Ramadan retail sales in Sharjah hit a new record high of AED400 million ($109 million) in 2024, reinforcing the positive outlook UAE companies had ahead of this year’s holy month. Sales jumped 25 percent year on year during the Sharjah Ramadan Festival 2024, which concluded last Saturday, the UAE state-run Wam news agency reported, quoting […]

The UAE wants dialogue to address the ripple effects of geopolitical challenges on global trade

UAE to advance talks on debt sustainability at global event

The UAE’s finance ministry intends to advance discussions on global macroeconomic stability and debt sustainability at the 2024 Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG). The spring meetings will be held in Washington, D.C., from April 15 to 20. The UAE will also promote a dialogue to address […]

A woman buys cooking oil at a market in downtown Cairo, Egypt

EU to provide ‘urgent’ $1bn short-term aid to Egypt

The European Union (EU) will provide €1 billion ($1.1 billion) in urgent short-term financial aid to support Egypt’s economy. The funding is part of the larger €5 billion macro-financial assistance package.  The remaining €4 billion will be released as longer-term assistance over 2024-2027 but is yet to be cleared by the 27-member bloc. The aid […]

Adnoc sought advice from investment banks on buying a significant stake in BP, a media report said

UAE’s Adnoc explored acquiring BP

Abu Dhabi National Oil Company (Adnoc) explored the possibility of acquiring British oil major BP but abandoned the plan as it did not fit into its strategic growth objectives, a media report said.  The talks did not advance beyond the initial stages, Reuters reported, citing informed sources.  The UAE state oil company also sought advice […]