Healthcare-related expenditure in the GCC states grew from $60 billion in 2013 to $76 billion in 2019 and is expected to grow to a further $89 billion by 2022, an overall increase of nearly 50 percent from 2013 to 2022, according to global accounting and consulting firm KPMG.
From 2018 to 2022, private-sector healthcare spending is forecast to increase at a cumulative annual growth rate (CAGR) of 9.5 percent, compared to a government contribution growth rate of 4.4 percent, KPMG said in a new report titled UAE Healthcare Perspectives: Who cares.
COVID-19 had ‘a momentous impact’ on all aspects of the healthcare industry, it said.
Healthcare is one of the fastest-growing sectors in the UAE, with the latest Medical Tourism Index ranking Dubai and Abu Dhabi in sixth and eighth place respectively for medical tourism, KPMG said.
Nitin Mehrotra, Partner, Infrastructure, Government and Healthcare, said: “While responses from local regulatory bodies to the Covid-19 pandemic were swift and thoughtfully constructed, to survive and thrive, healthcare organisations will need a well-planned approach to curtailing disruption, and its impact on national well-being and standards of care.”
Growth of private investment
The KPMG report highlights the growth of private investment, as although the UAE government funded approximately 69 percent of the country’s $16 billion healthcare expenditure in 2019, from 2018 to 2022, private-sector healthcare spending is forecast to increase at a cumulative annual growth rate (CAGR) of 9.5 percent, compared to a government contribution growth rate of 4.4 percent.
Richard Stolz, Associate Director, Transaction Services, said: “Some of the key drivers for increased private investments are the demand for niche specialties, the rising emergence and support for public-private participation, and increasing demand for treatment and hospital beds in an ageing population. Further, the privatisation of hospitals and mandatory medical insurance, especially in Dubai and Abu Dhabi, will likely encourage spending and contribute to a more integrated health system.”
KPMG said there will be increased consolidation through merger and acquisition (M&A) activity in the global and regional healthcare sectors, as smaller private healthcare groups face liquidity challenges caused by the pandemic.
The report also predicts the emergence of new models of healthcare, with greater digitalisation and increased spending on healthcare research and development and innovation.
Telehealth, the use of communication technologies to access healthcare remotely, is likely to be integrated into public private partnership (PPP) models and government healthcare systems.
According the KPMG, some healthcare sectors such as maternity, paediatrics, elderly care, fertility, one-stop primary care centres, and diabetes remain underserved in the UAE.
The prevalence of lifestyle diseases such as diabetes also mean there is an opportunity to significantly improve the population’s general wellbeing with more primary care offerings such as neighbourhood clinics for initial diagnosis and treatment, KPMG said.
(Writing by Imogen Lillywhite; editing by Daniel Luiz)
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