The GCC healthcare market is projected to grow at a 12.1 percent compound annual growth rate (CAGR) from an estimated $40.3 billion in 2015 to $71.3 billion in 2020, according to Alpen Capital.
Its new GCC Healthcare Industry report said the increase in the population and rising cost of treatment are the primary factors aiding this growth.
From an estimated $24 billion in 2015, the outpatient market is forecast to reach $42.4 billion in 2020 while the inpatient market is anticipated to grow from $16.4 billion to $28.9 billion during the same period.
The healthcare market in each GCC country is anticipated to expand by between 11-13 percent between 2015 and 2020 in terms of annual average growth rates.
Alpen also said 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 in 2015 to 113,925 in 2020.
“Development of the healthcare sector has taken centrestage 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) Limited.
“The GCC governments’ emphasis on the development of the healthcare sector has resulted in several investment opportunities for the private sector. Over the last year, we have seen a steady flow of private equity funds into the sector and the region has witnessed several successful M&A transactions,” added Sanjay Vig, also managing director, Alpen Capital (ME) Limited.
The report said the UAE accounts for 26 percent of the total healthcare spend by GCC governments.
The healthcare market in the UAE is projected at $19.5 billion in 2020, indicating an annual average growth of 12.7 percent from 2015 and is marginally higher than the GCC growth average. The country is likely to see an increase in demand for the number of hospital beds at nearly 3 percent every year to reach more than 13,800 beds by 2020.
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, the report said.
It added that a sedentary lifestyle coupled with a penchant for packaged and fast food have led to an increase in the occurrence of lifestyle-related diseases such as obesity, diabetes, hypertension, cancer, and heart ailments in the GCC nations. A rise in lifestyle-related diseases is likely to add to healthcare expenses as well as augment the need for specialised care centers and doctors.
Alpen said GCC governments’ budgets are increasingly coming under pressure amid falling oil prices and a prolonged low oil price environment may influence future healthcare spending.
Its report also warned that the GCC faces a dearth of local talent to meet the requirement at healthcare centres while another challenging factor is the high dependence on expatriates, who consider the GCC healthcare facilities as a stepping-stone to gain experience and then seek careers in the West.
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