It's a fallacy to imagine chronic illnesses are confined to the wealthy and elderly. There is an economic cost to being blind to reality. Image Credit: AP

Chronic diseases have traditionally been considered “diseases of affluence” that affect only the elderly among the wealthy. While the observed patterns defy simplified conclusions, data strongly suggest that chronic diseases and related risk factors impose a significant burden on both the poor – across countries – and those of working age.

To the extent that the traditional view has prevailed among economists, it may be partly responsible for the lack of research into the economic implications and public policy relevance of chronic diseases. In fact, they account for the largest share of the overall mortality in all regions of the Gulf and the wider Middle East and North Africa.

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While the prevalence of risk factors varies across countries, it is clear that they are significant in those other than the most affluent. As for the public health burden of borne out of prevalent chronic diseases, evidence of the economic consequences is comparatively scarce. Though the economic language can sometimes appear to trivialise human lives involved, there is, in fact, a strong immediate relationship between improved health (in the form of reduced mortality or morbidity) and economic gain.

Matter of utility

Good health increases the lifetime consumption possibilities of individuals, thereby directly augmenting utility – the maximisation of which is seen by economists as the ultimate objective of human endeavour. There are, of course, different ways of measuring the economic consequences of such disease, even if the boundaries between them are not always clear.

Weighing the cost

Broadly, three approaches are distinguishable - the cost-of-illness (CoI) approach, the microeconomic approach, and the macroeconomic approach. CoI studies are a useful means of beginning to illustrate the economic magnitude of these disease or its risk factors, accounting for both direct medical expenditures and losses due to lost productivity.

The microeconomic perspective – examining economic consequences at the level of the individual and the household – is another way of analysing the costs of carrying the disease. The consequences can also be analysed at the macroeconomic level. Based on available research on health in general as a determinant of growth, it is credible to assume that chronic diseases have an impact on economic growth (measured as annual per-person GDP).

The macroeconomic perspective is important because of its immediate appeal to policymakers. Based on the selective literature review undertaken, the cost of such diseases and their risk factors – as measured by cost-of-illness studies – is significant and sizeable, ranging from 0.02 per cent to 6.77 per cent of a country’s GDP.


The burden of prevention or spread requires an associated infrastructure build-up in the concerned disease areas. Accordingly, the key trends in the region’s healthcare sector are going to be the specialized centers of excellence (CoEs), home healthcare services, long-term and post-acute care rehabilitation, among others.

Perhaps, this explains the healthcare sector’s growth as upwards of 10 per cent per annum across MENA, with significant potential in quality care over the short-term. Furthermore, mandatory insurance has been and will continue to be a big driver, particularly in Oman, Saudi Arabia, and parts of the UAE.

Despite investments, demand for quality care continues to outpace supply as GCC countries continue to rank among the highest in the world on risk factors related to lifestyle ailments such as diabetes, hypertension, cardiovascular conditions and obesity. It is critical, now more than ever, to invest in the key areas that can accelerate the development of healthcare in the region.

While the private sector is aiming high, the winners will focus on the right propositions, delivery models and partnerships. On the ground execution of patient-centric models will be the long-term differentiator.

The healthcare industry in the Gulf is in the midst of a transition, one that will help improve the operating environment, reduce costs and increase opportunities across the value chain of a multi-billion dollar sector. However, many gaps must be bridged and several weaknesses - ranging from insufficient access to uneven quality to high costs and a lack of home-grown manpower and access to capital - need to be addressed to reach global standards.

- Michael Davis is CEO of NMC Healthcare.