A report by Alpen Capital Group says that Qatar and the UAE will be the fastest growing healthcare markets in the GCC in the next six years, and the overall growth rate for the whole region will hit 12 percent by 2018.
Healthcare demand in the GCC countries is rising due to shifting demographics, higher income, steady population growth and lifestyle changes which in turn have led to a corresponding increase in conditions like obesity, diabetes and cardiovascular diseases. Both the public and private health sectors are meeting the challenge by increasing healthcare spending.
In the six-year period from 2013-2018, Qatar’s healthcare market will lead the region with a 14.4 compound annual growth rate (CAGR), followed closely by the United Arab Emirates with 13.1 percent, according to a report by investment bank Alpen Capital. Qatar has been the fastest growing healthcare market in the GCC from 2006-2011, experiencing a CAGR of 23 percent during that period.
Remaining the largest market, Saudi Arabia will comprise 58.2 percent of the total GCC healthcare sector which is expected to grow by 12 percent yearly to $69.4 billion by 2018. Following in second will be the UAE which will take 18.1 percent of the overall market. The UAE healthcare sector will be worth $18.6 billion by 2018, from a projected $14.6 billion in 2014 and $10 billion in 2013. It is also second overall in per capita healthcare spending which is expected to increase to 5 percent this year.
“Rising affordability, lifestyle related diseases, the treatment of which is both costlier and lengthier, and increasing insurance penetration will ensure vigorous rise in health care spending in the GCC,” Alpen Capital managing director Sanjay Vig said in a statement quoted by Gulf News.
Saudi Arabia and the UAE are the leading insurance markets in the GCC, with 26.5 percent and 14 percent cumulative annual growth rate from 2012-2017 according to a separate report. Analysts expect that the expansion in the insurance market will continue as part of the initiative for greater private sector participation in the region to keep healthcare costs down.
“The governments, which play the predominant role in healthcare services, are taking steps to ensure continuous development of infrastructure through nurturing management skills, increasing the share of the private sector and utilizing IT skills to spread the reach and range of healthcare services,” said Sameena Ahmad, managing director of Alpen Capital.
According to the report, the outpatient sector will account for 79 percent of the total market while inpatient services will get 21 percent, the report said. Demand for hospital beds will reach 115,544 by 2018, an increase of 11,241 beds from 2013.
Dubai has initiated a hospital construction boom as part of its bid to become a medical tourism hub. It plans to build 22 hospitals by 2020 to attract 500,000 medical tourists, aside from existing projects like Dubai Healthcare City. Medical tourism spending hit $1.69 billion in the UAE in 2013, up from $1.58 billion from the year before.
Oman, another medical tourism destination which is set to expand its healthcare market to 12 percent in six years, is completing the International Medical City (IMC) by 2016. The 250-bed multispecialty hospital will also feature a healthcare resort aimed to attract tourists from the Middle East, Africa, Europe and Asia.
Saudi Arabia is building 79 new health facilities, including the new 500-bed King Faisal Medical Tower in Makkah, and a 1,000-bed maternity and children’s hospital extension of the King Abdullah Medical Center in Jeddah.
By investing in healthcare infrastructure projects and building world-class yet affordable quality healthcare services, GCC countries look poised to tackle the demand of a graying population. Quoting the International Monetary Fund (IMF), the Alpen Capital report said that the number of people age 65 and older in the region will jump from 1.2 million in 2015 to 14.2 million in 2050.