Healthcare cost to rise by 12.9% annually: Report
As Oman reviews its five-year plan for the healthcare industry, the country’s health expenditure will rise until 2020
MUSCAT: Oman’s healthcare expenditure is expected to reach $4.3 billion by 2020, from $2.3 billion in 2015, which translates into a five-year Compound Annual Growth Rate (CAGR) of 12.9 per cent, according to Alpen Capital’s GCC Healthcare Industry Report 2016.
As the Sultanate reviews its five-year plan for the healthcare industry, the country’s health expenditure will rise until 2020 as additional beds and hospitals are expected to be added and construction of a medical city is currently being considered.
Expenditure is set to rise as the population grows, with the Sultanate expected to experience a 3.1 per cent population growth rate between 2015 and 2020, which is considered as one of the key drivers for the surge in expenditure.
“Healthcare in GCC (Gulf Cooperation Council) is in the midst of a positive transformation. We are seeing significant invest- ments from both government and private entities towards an improvement in infrastructure and the recruitment of talent,” said Dr. K. P. Raman, founder and senior cardiologist, Al Hayat International Hospital.
“These investments are bearing fruit as the number of citizens and expats availing of medical services locally is increasing steadily,” he added.
“Two major healthcare projects worth one billion dollars each are under construction. While one is a healthcare cluster to promote inbound medical tourism, the other is a medical city comprising five major hospitals that cater to the residents.
Additionally, there are other small projects underway, which once operational, will boost the healthcare sector’s revenue,” the report stated.
In January 2016, the Omani government allocated $3.4 billion (OMR1.3 billion) of its expenditure on the healthcare sector, which accounts for about 11 per cent of the total budget of $30.8 billion (OMR11.9 billion) in 2016.
Mandatory insurance
“Like its GCC allies, Oman is planning to introduce mandatory health insurance for expatriates. This policy is expected to be implemented in phases over a period of 5 to 10 years. Consequently, the number of patients visiting private hospitals is set to increase.”
“The concept and usage of medical insurance is still in its infancy in several countries in the GCC. Once medical insurance becomes more widely available and mandatory, it will drive significant growth to this sector,” said Raman.
“In addition, governments in the GCC are encouraging the privatisation of medical care and services. Both these factors when coupled together create an environment of significant growth and innovation,” he added. Raman went on to say that medical talent usually does not see the Middle East as an ideal place to work, however some are changing their view because of the advancement in healthcare.
“While the challenge has always been recruitment of talent in the form of highly specialised doctors and medical staff, they often do not consider the GCC because of a dearth in research and learning opportunities, due to which the scenario is now changing,” said Raman.