Dubai
As the population continues to expand and more people seek medical treatments, spending in private and public hospitals in the UAE will hit $12.5 billion in 2020, the second highest in the Gulf Cooperation Council (GCC) countries, according to consultants.
Based on the Ministry of Health data in 2012, Falak Consulting’s Research Department (FCRD) estimated that the market size for health care delivery services in the GCC will jump from $37 billion in 2012 to $56 billion in about six years.
The health care market in Saudi Arabia will remain the biggest at $28.7 billion by 2020, while Kuwait’s inpatient and outpatient treatment expenditures ($6.9 billion) will be the third highest in the region, followed by Oman ($3.8 billion) and Qatar (2.7 billion).
The private management advisory and consultancy firm said that the GCC health care market is set to grow as the population continues to increase partly due to a high influx of expatriates, and as lifestyle diseases and household incomes keep rising.
The number of people aged more than 65 years old, who are likely to spend more money on common ailments like heart diseases, hypertension and diabetes, is forecast to double by 2020.
Residents in the region have a high purchasing power, with the gross domestic product (GDP) per capita standing at nearly $33,539 as of 2012. There is also a growing prevalence of lifestyle-related diseases such as diabetes, cardiovascular ailments, cancer, psychiatric and musculoskeletal disorders
“There are several major factors that will contribute towards increased health care spending across all GCC nations. This includes a higher than average growth rate in the populations of the GCC countries and an increase in the future burden of the over-65 age bracket, which looks set to double its present number in the coming years,” said Maniza Dewan, principal director, Falak Consulting.
“In addition to that, recent years have seen lifestyle-related diseases on the rise, bringing forward an added need for investment in these areas. A higher purchasing power in the region, owing to the increasing high per capita incomes and insurance penetration, has revealed the growing market opportunity and potential this region presents,” Dewan added.
However, the overall health care expenditure in the region, pegged at $46 billion in 2012 and which includes both capital and individual spending at hospitals and clinics, remains “relatively low” compared to countries under the Organisation for Economic Cooperation and Development (OECD).
This is perhaps partly because a significant proportion of GCC patients seek treatments abroad. Many of the health care facilities are also run by the government and the “insurance burden of the expenses is borne by the state.”
Health care expenditures in Saudi Arabia and Oman, which account for 67 per cent of the GCC population, represent only less than 60 per cent of the total spending in the region. “
“The GCC countries, especially Saudi Arabia and Oman, need to allocate higher shares of their GDP towards health care in line with demands of a fast growing population in order to reach standards achieved by advanced economies worldwide,” a report by Falak Consulting said.
