DOHA: The GCC healthcare market is projected to grow at a 12.1 percent CAGR from an estimated $40.3bn in 2015 to $71.3bn in 2020. An increase in the population and rising cost of treatment are the primary factors aiding this growth.
From an estimated $24.0bn in 2015, the outpatient market is forecasted to reach $42.4bn in 2020. The inpatient market is anticipated to grow from $16.4bn to $28.9bn during the same period. The healthcare market in each GCC country is anticipated to expand by 11 percent-13 percent between 2015 and 2020 in terms of annual average growth rates, Alpen Capital noted in its GCC Healthcare Industry report yesterday.
The demand for number of hospital beds in the GCC region is projected to grow at a 2.3 percent CAGR from an estimated 101,797 beds in 2015 to 113,925 beds in 2020. The Saudi Arabian healthcare market is forecasted to reach $27.4bn in 2020, registering a CAGR of 11.0 percent from 2015.The healthcare market in the UAE is projected at $19.5bn in 2020, indicating an annual average growth of 12.7 percent from 2015.
Rapidly growing population and a shift in age-group distribution are among the key factors driving the GCC governments to improve the healthcare infrastructure as well as standards of care.
As the healthcare costs in line with increasing population, most of the GCC governments are introducing mandatory health insurance. The gradual expansion of medical insurance coverage across the region is likely to boost the overall healthcare spending. Each country in the GCC has devised a long-term strategic plan or vision to expand and upgrade its healthcare system. The successful execution of the plans is expected to scale up the healthcare infrastructure and quality standards.
Sensing the demand, the government as well as private players have injected multi-billion dollars into the healthcare sector to construct large and specialized healthcare facilities. The GCC region has nearly 350 hospital projects under various stages of development. There are several initiatives within the GCC healthcare sector that are focused on medical tourism which are likely to not only attract patients from across the world but also reduce the outbound visits of citizens for specialized treatment thereby aiding the growth of the healthcare sector in the region.
“Development of the healthcare sector has taken a center stage in the GCC countries, as they witness an era of demographic transition accompanied by rising prevalence of lifestyle-related diseases. In order to ease the growing pressure on the healthcare system, the GCC governments are injecting huge funds as well as encouraging private sector participation to build hospitals and clinics, upgrade the existing infrastructure, and match the quality of services offered in developed countries,” said Sameena Ahmad, Managing Director, Alpen Capital (ME) Ltd.
Healthcare providers in the GCC are looking at measures to curtail their operating costs in order to offset the impact of high capital expenditure towards constructing hospitals. The current investment climate characterised by global economic uncertainty, low oil prices, and volatility in financial markets has made investors across the globe more cautious and risk-averse.
Private sector involvement is becoming imperative to meet the rising demand for healthcare as well as to reduce the burden of costs on the government finances. Government policies to increase insurance coverage and provide other infrastructure support as well as financial incentives are drawing investors to the region.
Growing health awareness among the residents along with the GCC governments’ effort to improve the basic health indicators is leading to a shift from curative care to preventive care. Focus on the prevention of diseases will not only improve the public health profile but can also help reduce healthcare expenditure and enhance the quality of care.The Peninsula
