DUBAI: NMC Health has a reasonable claim to be the most successful company to emerge from the UAE on the global stage.
Started by the legendary Indian entrepreneur BR Shetty out of a door-to-door business selling basic medical supplies in the 1970s, NMC gradually became a universal health-care provider, expanding from the UAE capital across the region. For Emiratis, it was the closest they got to a national health service, obviating the need in many cases to travel abroad for medical treatment.
In a corporate sense, NMC is a standard bearer too. Its 2012 listing on the London stock market was a wealth creator for its backers — mainly prominent Emirati investors — who have seen the value of their shares more than triple.
Valued at around £7.5 billion ($9.6 billion), NMC is the only UAE entity included among the FTSE 100 list of blue-chip companies.
Prasanth Manghat has been part of the NMC growth story for many years, masterminding the London IPO as chief financial officer and as chief executive since March 2017. But now he has two priorities: Cracking the health-care market in the biggest economy in the region, Saudi Arabia; and going global with NMC’s fertility business, which the group has identified as the key business sector of the future.
“We are growing in Oman and the UAE, but Saudi Arabia is our key market for growth. The team is really focused on expanding in Saudi Arabia,” he said.
Saudi Arabia shares the demographic attractions of the UAE and other regional markets.
“When it comes to health care in the region my strong view is that this is a market that has immense potential for health care companies to grow. If you look at a market of 55-million population there is a very low penetration of medical insurance. Illnesses like diabetes and cardiovascular diseases are on the rise.
“There is a big population below the age of 20 so in the next few years you will see a large number of people moving into the reproductive age. We’re also seeing an aging of the population. More people are living longer, and 8 percent of the region’s population is above 65 years. So from any health-care perspective, whether it’s aging, people moving into a different lifestyle with associated disorders, and then reproduction, you will see a big uptake happening naturally in health care,” he said.
Born - 1972, Kerala, India
Education - St. Albert's College // Mahatma Ghandi University, Kochi India
Career - Financial Manager, Neopharma // CFO at NMC Healthcare // CEO NMC Healthcare
All those factors apply to Saudi Arabia too. Health has been identified as a priority in the Vision 2030 strategy, both in terms of improving the well-being of citizens and residents, and in terms of streamlining the government procedures that govern the provision of health care.
Manghat sees private-sector health care as the solution to these challenges. “The global hospital business 25 years back was not as efficient as it is today. Today we have more predictability about the way health care will treat a patient. We can say that most emergency cases, if they are able to get a patient to hospitals in time they can deliver proper results and clinical outcomes can be defined and assured,” he said.
“This all happened mainly after corporatization happened in health care. Until then it was very fragmented, with one doctor running a small hospital with 20 or 30 beds or something like that. In the last 30 to 40 years corporates have gone into this world and brought in systems, policies and procedures that eventually improved clinical outcomes.”
Saudi Arabia has some catching up to do to reach the standards that apply in the neighboring UAE. Abu Dhabi has had compulsory medical insurance for many years, and Dubai introduced a similar scheme last year.
But in the Kingdom, only expatriates are obliged to have compulsory private health care, with the vast majority of citizens’ needs left to the government or to employers’ schemes. Manghat believes that Saudi Arabia should introduce a universal insurance scheme, and has teamed up with Hassana Investment Company, a unit of the big government pensions provider General Organization for Social Insurance (GOSI), in a joint venture to provide medical facilities in the Kingdom.
The joint venture was signed with much fanfare at the recent Future Investment Initiative in Riyadh, and it is the central plank in NMC’s strategy to increase the number of beds it provides in the Kingdom’s hospitals from 1,500 to 6,000 five-to-seven years from now.
For NMC the GOSI venture is only the beginning in Saudi Arabia, and Manghat has some very firm views on how the market will play out there, ranging from the privatization of government-owned health-care assets, to the role of the regulatory authorities and the pros and cons of Saudization of the workforce.
“For any country creating a self-sufficient nation, the most important thing is to take talent from elsewhere,” he said. “In Saudi Arabia, in health care, there are not sufficient nationals available … So you have to bring it in from outside.”
He was talking about nursing and other support staff rather than doctors, who have their own career dynamic, and he pointed out that the Kingdom is not unique in this respect. Manghat calculates that up to 70 to 80 percent of the global health-care workforce is foreign, especially at the level of general hospital nursing, with large numbers of Indian and Filipino workers in hospitals in the US and Europe.
These are sensitive issues, but Manghat is also determined to expand in a sector where the sensitivities are even greater: Fertility treatment. Helping married couples to have children throws up a host of cultural, social and medical issues, especially for a company like NMC with global ambitions. NMC’s growth in fertility has been remarkable. From virtually a standing start a few years ago, it now has 43 clinics in 15 countries, and ambitions to expand further in the US and Asia.
In Saudi Arabia, in health care, there are not sufficient nationals available.
The fertility business has not experienced the corporatization process of general health care, he believes. “It’s a doctor-driven program, you will see a very popular doctor in one town, maybe there will be one guy in that place who will be very strong and popular. But he’s not elsewhere in the world,” Manghat said.
“Fertility is a very sensitive subject because it is defined in a different form in different places. You cannot move (practices) between countries easily and there are a lot of restrictions from a political point of view also.”
Given all the regulatory hurdles, corporatization of fertility can free up the doctors for pure medical treatment, leaving corporations to take on the legal issues, Manghat said.
Six years ago NMC’s corporatization strategy took a huge step with the London listing, and Manghat believes that has changed the company fundamentally. “The most important thing is that the profile of the organization has gone up. Today, if you want to attract the best talent from around the world, being a listed company gives comfort about the organization’s credibility. It helps you attract talent, investment, and partnerships,” he said, pointing to the joint venture with GOSI as evidence that being a London-listed company can help attract potential partners.
“A UK listing is the gold standard across the world, especially in governance,” Manghat said.