Dubai – Healthcare expenditure in the UAE is expected to jump more than 9 per cent between 2017 and 2022 on fast-growing population; implementation of mandatory health insurance and above regional average medical inflation rates, according to a new report from Alpen Capital.
In its GCC healthcare industry report, Alpen Capital noted that the GCC’s current healthcare expenditure (CHE) is expected to reach $104.6 billion in 2022, registering a compound annual growth rate (CAGR) of 6.6 percent from an estimated $76.1 billion in 2017.
The report says the growth is being driven by expanding populations, a high prevalence of non-communicable diseases, rising treatment costs and the increasing penetration of health insurance.
“GCC healthcare industry continues to offer a wide gamut of investment opportunities. Though traditionally regional governments played an instrumental role in building the sector, shrinking oil revenues have slowed spending. At the same time, the role of private sector is increasing, encouraged by government incentives, mandatory health insurance and other reforms. Given the changing demographic and epidemiologic structure, mandatory health insurance, and government initiatives to encourage private sector participation, we expect to see steady growth in private sector investments in the healthcare industry,” says Sameena Ahmad, Managing Director, Alpen Capital (ME Ltd).
“Even though regional governments continue to shoulder a sizeable part of the healthcare expenditure, in the backdrop of budget deficits, the importance of private sector participation is being widely discussed across the GCC nations. With increasing opportunities for the private sector, the healthcare industry is witnessing a surge in mergers and acquisitions. The inorganic route is being adopted by new players to enter the market and by existing providers to expand market share, physician practices and medical capabilities,” says Krishna Dhanak, Executive Director, Alpen Capital (ME) Ltd.
Additionally, the report noted that the outpatient market size in the region is expected to grow at an average rate of 7.4 per cent each year, to $32 billion between 2017 and 2022. The impatient market is forecast to increase at a CAGR of 6.9 percent to $45.4 billion.
On a country-by-country basis, the report predicts that CHE will expand at annual average rates of between 2.6 percent and 9.6 percent. The UAE and Oman are both forecast to witness growth rates of above 9 percent, while Saudi Arabia – the region’s largest market – is expected to see 6.1 percent growth in CHE.
The report says the region is expected to require 12,358 new hospital beds by 2022, which translates into an estimated annual growth of 2.2 percent from 2017 to reach a collective bed capacity across the GCC of 118,295. It added there are over 700 healthcare projects worth $60.9 billion in various stages of development across the GCC. -email@example.com