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UAE: Healthcare spending to grow by a third in coming years – News

GCC healthcare market to hit AED500 billion mark by 2027, says Alpen Capital

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published: Monday, March 20, 2023 at 5:43 pm

Last updated: Monday, March 20, 2023 at 5:53 pm

Healthcare spending by UAE residents is set to grow by nearly a third in the next few years as the population ages and more people suffer from lifestyle diseases.

According to Alpen Capital’s latest report on GCC healthcare, the UAE’s per capita healthcare spending was $1,992.1 (AED7,300) in 2020, the second-highest among GCC countries.

“The country’s healthcare spending is projected to outpace its GCC countries at a compound annual growth rate of 7.4 percent, from $21.5 billion in 2022 to $30.7 billion in 2027. According to the International Monetary Fund, the UAE’s population The base is projected to grow at a CAGR of 1.6% between 2022 and 2027 to 2027. As a result, healthcare expenditure per capita is expected to grow from US$ 2,041.3 (AED 7,500) in 2022 to US$ 2,689.4 in 2027 (AED9,870),” said Krishna Dhanak, executive director of Alpen Capital.

Due to the growing demand for healthcare services, Dhanak told Khaleej Times that the density of doctors (including dentists) and nurses in the UAE has increased over the years.

“As of 2020, the UAE has more than 3.4 doctors and almost 6.0 nurses per 1,000 people. By 2020, the private sector accounted for 93.6% of doctors and 88.4% of nurses,” he said.

As of 2019, the Bay Area had 5.7 nurses and 3.2 doctors and dentists per 1,000 people. The density of doctors (including dentists) is higher than in developed countries such as the United States, Japan and Singapore. But the density of nurses in the area is significantly lower.

“In order to build and develop the necessary healthcare workforce, the GCC governments have initiated measures such as the promotion of training exchange programmes, the introduction of postgraduate courses, the provision of career development opportunities and various training courses in medical, scientific, technical and professional healthcare Serving the nation,” Dhanak said.

The study predicts that the increase in the aging population will be one of the main drivers of the healthcare industry in the UAE and the Gulf region, as the region’s elderly population aged 50 and over will increase to 32%.

The UAE saw the largest increase in bed density over the four-year period, from 1.4 beds per 1,000 people in 2016 to 2.2 beds per 1,000 people in 2020, the report said.

GCC: A AED500 billion market

Alpen Capital expects healthcare spending in the region to reach $135.5 billion (almost AED500 billion) by 2027, representing an annualized growth rate of 5.4% from $104.1 billion (AED382 billion) in 2022 .

“The GCC healthcare industry is expected to grow at a healthy pace due to increasing aging population, improving economic activity, increased focus on preventive care and mandatory health insurance. While digitization and public-private partnerships are having a gradual impact , but a resurgence in demand for elective surgeries, a booming medical tourism industry, and an intrinsic need to treat non-communicable diseases (NCDs) could support growth,” said Sameena Ahmad, managing director at Alpen Capital.

Alpen said the UAE healthcare sector is likely to register the highest growth rate of 7.4 percent compared to its GCC peers due to expected rapid population growth, increased and expanded mandatory health insurance coverage and high medical inflation.

Between 2020 and 2022, the GCC is estimated to add 1,846 hospital beds. Given projected population growth, the region could need 12,207 new hospital beds by 2027, the report said. This implies an estimated average annual growth rate of 1.9% from 2022, bringing the total bed capacity to 133,731.

The report added that Saudi Arabia and the UAE are likely to witness demand for more than 8,197 and 1,584 new hospital beds. While demand for new beds is likely to emerge in most of the GCC countries, demand for beds in Qatar is expected to remain flat due to below-average population growth.

“Increasing life expectancy at birth, decreasing infant mortality and aging populations are key demographics driving healthcare systems in the region,” it said, adding that GCC governments are encouraging private sector participation through the PPP model , as part of its long-term plan. A long-term strategy aimed at expanding capabilities and strengthening delivery systems.

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