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The UAE-based banking advisory firm released its healthcare industry report for GCC projects, saying the current healthcare expenditure (CHE) in the region will hit $135.5bn in 2027.
The figures imply an annualised growth rate of 5.4% from $104.1bn in 2022.
UAE leads Gulf healthcare spending
During the forecast period, CHE in the GCC countries is anticipated to increase at growth rates ranging from 4.4% to 7.4%
Sameena Ahmad, Managing Director, Alpen Capital (ME) Limited, said: “The GCC healthcare industry is expected to grow at a healthy pace owing to a rise in ageing population, improving economic activity, increased focus on preventive care and mandatory health insurance.
“While digitisation and public-private collaborations have made a progressive impact, the resurgence in demand for elective surgeries, a burgeoning medical tourism industry, and an intrinsic demand for treatment of non-communicable diseases (NCDs) are likely to support growth.
“We anticipate that the region will offer an array of investment opportunities on the back of privatization initiatives and increasing adoption of technology to create alternative healthcare models.
According to Alpen Capital, CHE in the GCC is estimated to have grown at a CAGR of 9.5% between 2020 and 2022 to reach $104.1bn.
The two-year period, when the healthcare sector was primarily combating the pandemic, recorded a high growth in inpatient and outpatient levels.
Healthcare expenditure in the GCC is further projected to reach $135.5bn in 2027, growing at a CAGR of 5.4% from 2022.
Krishna Dhanak, Managing Director, Alpen Capital (ME) Limited, said: “The GCC healthcare industry is currently in a phase of transformation moving from a curative care to preventive care model, credited to increased health awareness levels and high incidence of NCDs.
“It is also undergoing significant digital transformation as it has been a key focus area of the GCC governments. Regulatory authorities, in collaboration with private institutions, are investing in smart technologies to diversify the provision of healthcare services.
“Organisations are establishing strategic plans to set up integration of data and leverage cross-functional capabilities that will not only strengthen their competitive advantage but also encourage the establishment of integrated healthcare networks.
“Going forward, the focus is likely to be directed towards value-creating opportunities with larger players targeting small to mid-sized players as well as tech-enabled service providers”.
The region’s expanding population base, high incidence of NCDs, rising cost of treatment, rising medical inflation, and increasing penetration of health insurance are expected to augur growth.
The two-year period, when the healthcare sector was primarily combating the pandemic, recorded a high growth in inpatient and outpatient levels.
Additionally, factors like the anticipated rebound in economic activity, increased health awareness amongst the public, and preventive-care strategies by the regional governments will support the demand for healthcare in the long-term.
Growth rates among the GCC nations varies widely owing to country-specific population projections, economic conditions, cost of healthcare, and prevalence of underlying diseases among other factors.
UAE is likely to witness the highest growth rate of 7.4% compared to its GCC peers in anticipation of a fast-growing population, increased and wider coverage of mandatory health insurance and high medical inflation rate.
The market rankings are expected to remain unchanged, with Saudi Arabia and the United Arab Emirates dominating the region’s CHE with a combined share of 79.6% in 2027.
CHE of Qatar, Bahrain, Oman and Kuwait is expected to grow at a CAGR of 5.1%, 6.1%, 4.7% and 4.4% respectively during the forecast period.
Between 2020 and 2022, the GCC is estimated to have added 1,846 hospital beds.
In view of the anticipated rise in population, the region is likely to require 12,207 new hospital beds by 2027.
This translates into an estimated annual average growth of 1.9% since 2022 to reach a collective bed capacity of 133,731.Between 2020 and 2022, the GCC is estimated to have added 1,846 hospital beds.
The report estimates that Saudi Arabia and the United Arab Emirates are likely to witness a demand of more than 8,197 and 1,584 new hospital beds.
While most of the GCC countries are likely to experience demand for new beds, the requirement of beds in Qatar is expected to remain flat amid lower than average population growth.
The report highlights that the rapid response to mitigate the dual economic impact of the pandemic has fuelled a broad-based recovery in the GCC economies. Increasing life expectancy at birth, improvements in infant mortality rate and an ageing population are the key demographics driving the region’s healthcare system.
Sizable infrastructure investment programmes by the GCC nations and increased purchasing power are expected to further drive growth.
Additionally, promoting the region as a hub for medical tourism and adoption of national health insurance strategies would increase adoption and utilisation rates of private hospitals and healthcare services.
