GCC on medical tourism mission
Sector to expand big as govts promote region as a healthcare hub
dubai — The GCC medical tourism market is expected to reach $28 billion by the end of 2024 on the back of a sustained drive by governments to promote the region as a hub for medical tourism as part of their economic diversification plans, according to a healthcare industry report.
In tandem with the robust growth of medical tourism at a compounded annual growth rate of 8.8 per cent, the gradual rollout of compulsory health cover across the region will increase the utilisation of medical services at private healthcare facilities. According to projections by the study, this will drive the GCC’s insurance market to $25.5 billion by 2025.
The region has an estimated 161 healthcare projects with a combined value of $53.2 billion under various stages of development. “Upon completion, these projects are expected to add more than 40,326 beds to the region’s existing capacity,” Alpen Capital’s report on the GCC healthcare industry revealed on Wednesday.
The region’s healthcare sector is currently undergoing transformation at an unprecedented pace and scale. “The ecosystem is not only moving from curative to preventive care but also adopting a valuebased and integrated delivery model,” the report added.
Technological advancements and digitisation will also play a crucial role in driving growth and improving healthcare’s operational efficiencies Sameena Ahmad, managing director of Alpen Capital
Elements like AI, data analytics and remote health, supported by the demand for advanced technology and quaternary care will drive the growth of the sector
Dr Azad Moopen, founder chairman and managing director of Aster DM Healthcare
Due to the sharp correction in oil prices, the regional governments have come under increased pressure to aid the healthcare sector in terms of spending. The IMF estimates the GCC economy to shrink by six per cent in 2020.
Demand for primary and secondary care, dental services, mental healthcare, elective surgeries and allied health services have contracted significantly due to Covid-19. It has led to around eight million million fewer patient contacts per week in the region, hampering profitability for many operators, said the Alpen Capital study.
The pandemic has intensified the burden on the region’s limited healthcare resources. “With the accelerated development of medical cities and hospitals underway, the need for skilled medical professionals is expected to rise.”
“The GCC healthcare industry has witnessed unprecedented challenges over the past couple of months due to the pandemic. However, with exceptional planning and fiscal support from the regional governments, the sector has maintained a moderate growth momentum,” said Sameena Ahmad, managing director of Alpen Capital.
“Increasing life expectancy at birth, improvements in infant mortality rate and an aging population are the key demographics expected to drive the region’s healthcare system. Technological advancements and digitisation will also play a crucial role in driving growth and improving operational efficiencies.”
Krishna Dhanak, executive director at Alpen Capital, said GCC governments are encouraging the involvement of private players through public-private-partnership model in order to ease the burden of healthcare expenditure amid the economic slowdown. “Consequently, the sector has seen robust M&A activity over the last two years, specifically in the UAE and Saudi Arabia. While the region observed a handful of crossborder acquisitions, there were several deals as companies are looking to offer integrated services and increase market share,” he said.
Of the total $63.7 billion healthcare spend in the GCC in 2017, 72.7 per cent was financed by the governments, as the sector remains one of the most critical avenues for the region’s economic diversification. Saudi Arabia and the UAE represented around 56.3 per cent and 20 per cent, respectively, of the region’s healthcare market in 2017, said the study.
The pandemic has had a profound impact on the GCC, as the region is not only contending with Covid-19 but also dealing with the lowest oil prices in the past 17 years.
Dr Azad Moopen, founder chairman and managing director of Aster DM Healthcare, said in the GCC, the pandemic hit the healthcare delivery sector the hardest businesswise due to the sharp drop in footfall brought about by lockdown measures, directives to postpone elective procedures and people avoiding visits to medical facilities as a precautionary measure.
“Being in the epicentre of managing the crisis, the situation was aggravated by the lack of an established medicine or treatment protocol to treat Covid-19 and the need to constantly stay vigilant on the findings, as well as adopt quickly as per latest protocols and provide the best possible care to patients even with a shortage of medical supplies during the surge period bringing in large number of patients into the system on a daily basis, all while ensuring the safety of frontline workers and efforts to break the chain of infection spread,” he said.