“Dubai – Hospital Pricing Pressure to Begin Early 2009,” would be a better headline.
Aetna (NYSE: AET) announced today that it has been appointed by the Dubai Health Authority (DHA)Dubai Health Authority (DHA) as one of the health care management companies (HMCs) to provide health management programs and services to outpatient care practices (OCPs), also known as primary health care practices, in Dubai.
Aetna is one of two HMCs appointed to assist in leveraging the opportunities the new system provides. Aetna, in partnership with Gateway Healthcare, will provide administrative, financial and other value-added services, including the management and flow of funds to OCPs, negotiation of arrangements with hospitals and specialist clinics, and development of care and disease management programs for use in the clinical setting.
Yes, “Dubai – Hospital Pricing Pressure to Begin Early 2009,” would be a better headline.
This press release, one we normally wouldn’t comment on but for two reasons – it concerns news about the Dubai Health Authority and it illustrates a very good fit for American health insurance companies.
Readers know we are no fans of American health insurance companies and their ventures in international markets. This includes Aetna. By and large the history and record of US health insurance companies has been dismal, even colonial.
But what Aetna is doing here is taking their expertise in data and risk management and entering into the Dubai market, without bearing the insurance risk.
And additional expertise Aetna brings to Dubai? “…Aetna’s proven experience in managing health care quality and cost to a budget, through effective contracting and procurement techniques, was a key component of the company’s successful bid.”
And so begins the real work on the part of the providers. Downward pricing pressure will be severe. Unless the providers (particularly hospitals) are well versed in the negotiation process and keenly expert on their true costing, we’ll see a reduction in earnings six months post contract, if not sooner………..HK