Dubai’s New Health Insurance Payment System

Two years after the implementation of the compulsory medical coverage, Dubai rolls out a new health insurance payment system that will affect all expatriates who are depending on the coverage from the Dubai Health Authority (DHA). 

The launch of the DHA card and coverage disrupted the market for IPMI in Dubai since its launch, and the IPMI market expects more disruptions with the improvement of local insurance services. Pacific Prime’s CEO, Neil Raymond commented on the difficulties of compliance with Dubai’s healthcare reforms during our interview with him last month. Mr Raymond comments

“the challenge is very significant, every insurer has had to go back and essentially redesign the product, redesign the pricing model. Many insurers are struggling to work out the correct pricing model.

We’re not against the reforms, in many ways, the reforms are a good thing for individuals in Dubai. What we are trying to encourage is insurers to participate. There are several leading international insurers who still haven’t launched individual plans in the UAE because it’s very challenging to price and build plans for this market.”

In 2014, Dubai made it mandatory for all expatriates to carry at least the minimum level of medical insurance. Expats in Dubai can get primary coverage thru the state-issued DHA card that has a (minimum) premium of USD 135 to USD190 that provides insurance services of up to USD 40,000 annually. Holders of the health card issued by the DHA are entitled to receive treatment from state-funded hospitals such as Dubai Hospital, Latifa Hospital, Rashid Hospital and all other government clinics.  

The reason behind the launch 

On December 6, 2016, the Dubai Health Authority (DHA) announced that it would adopt a new health insurance payment system that aims at improving the quality and transparency of the universal health care services in Dubai. His Excellency Humaid Al Qatami who is the current Chairman of the Board and Director General of the DHA stated that the executive council had given the 'go' signal to implement the International Refined Diagnosis-Related Group (IR-DRG). Unveiling the new payment scheme is in line with the launch of the third phase of the Insurance System for Advancing Healthcare (ISAHD) Dubai. 

What is the new health insurance payment system? 

With the new health insurance payment system, hospital inpatients will be classified into several groups for billing purposes. Fees will no longer be based on the length of stay of patients but by the hospital resources and level of care that they require. Humaid Al Qatami said that this change would help simplify the payment process and will help develop a clear pricing method for hospitals to come up with fair pricings. 

Side by side with the new payment system is the adaptation of the International Refined Diagnosis-Related Group (IR-DRG) which uses a statistical system that will classify inpatient stays for payment purposes. The DRG classification system also categorises possible diagnoses in order to provide reimbursements with incentives for higher quality providers. 

When will it be effective? 

Dr Haidar Al Yousef, Director of the Health Funding at the DHA, released a statement that the new health insurance payment system will be implemented within three years from the beginning of 2017. The pilot phase which includes shadow billing for hospital accommodation only will start to roll out in 2017. Come 2018, all services including outpatient clinics will be part of the pilot phase, and by 2019, the new payment scheme should already be in full effect.