The GCC healthcare industry spending is set to increase by 11.4 per cent from 2010 to 2015 propelled by demographic and macroeconomic factors in the region, said a report.
The main growth drivers of the industry include the region’s fast growing population, rising income levels, increased prevalence of lifestyle diseases, growing demand for quality healthcare and mandatory health insurance policies, said EY, a leader in assurance, tax, transaction and advisory services, in the report.
GCC governments are trying to make significant investments to support healthcare provision and help the industry to grow to international standards, it said.
Andrea Longhi, Mena Advisory Healthcare leader, EY, said: “The healthcare industry is driven by positive growth prospects and increased purchasing power. The growing demand for healthcare services coupled with regulatory changes and emphasis on quality healthcare makes the GCC an important destination for both domestic and international investors.
“Healthcare spending in the region has witnessed significant growth over the past few years and we expect the growth to continue in the future with the higher incidence of lifestyle diseases and an increasing amount of GCC Governments enforcing mandatory medical insurance. ”
With programmes such as mandatory insurance there is an increasing reliance on the private healthcare sector and most well established facilities are focusing to expand rapidly to create capacity for their growing markets by way of an IPO and raising capital for expansion.
Imad U Bokhari, Mena Transaction Advisory Services Healthcare leader, said: “Healthcare in general is now a major topic for private investors, as it weathered the recent financial crisis. The inclusion of this sector as part of the overall investment strategy for major institutions has become vital.”
Despite the fast growth of the industry and the increasing demand, the GCC healthcare sector faces challenges including a considerable shortage of local physicians and qualified allied healthcare staff. The region is heavily dependant on expatriates for healthcare workforce.
The healthcare infrastructure in the region also continues to lag international standard, despite the total spending witnessed over the past few years, the strong demand and high income per capita.
“The region will need to invest in training their local talent to help build a larger pool of physicians to cater to the growing demand. As the GCC governments continue to invest in healthcare, we should see health expenditure as a percentage of GDP increase in the future,” said Bokhari.
“The new healthcare projects will help to attract people to the region as a medical tourism destination. Additionally, establishing research and clinical trial centres will have significant impact on retention of talent,” he concluded.