NMC Group, UAE

Health care in GCC

Healthcare in GCC – An Overview

Healthcare market size GCC Countries and growth in the sector

Figures for the year 2007 indicate the total healthcare expenditure as US $ 18 Billion for the GCC Countries

As per a report published by McKinsey & Company, the healthcare spending in the GCC, will increase five folds to US $ 60 Billion by 2025

Considering the past growth pattern in the healthcare sector the healthcare expenditure is speculated to reach US $ 25-28 Billion by 2018, though reports from other firms speculate a higher growth, a PE Investment firm (ALPEN Capital) the healthcare sector outlook is estimated to reach a market value of US $ 47-55 Billion by the year 2020, while the GCG speculates a healthcare expenditure of US $ 24 Billion by the year 2015

The CAGR sums to a range of around 3-8%, as per the various reports

Overview – Healthcare Sector

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Within the GCC Countries, Saudi Arabia and UAE constitute the major portion around 70-75%

Saudi Arabia and UAE constitute a major portion of the healthcare market of the GCC countries, around 70-75%

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Overview – Healthcare Sector

As per the GCG report their is a need of around 22,000 additional beds to be added in the GCC Countries by the year 2015, current beds 83,644 expected need 107,665

As per McKinsey & Company, by the year 2025, GCC countries will need a total of around a 160,000 beds

As per the ALPEN CAPITAL report the additional requirment could reach 25,000 beds by 2020

As per 2007 updated figures the current bed strength for GCC countries stands at around 75,000 beds to 84,000 beds as per various reports

As per the ALPEN CAPITAL report 75 hospitals are announced

As per the HOSPITAL BUILD 132 hospitals are announced5

Overview – Healthcare SectorHospital bed requirements in the GCC Countries :-

The announced construction value of hospital projects make Saudi Arabia, UAE and Qatar to highly attractive markets

As per the Hospital Build Update a total ot 132 hospitals are in pipeline with a total value of US $ 17,917 Million

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Overview – Healthcare Sector

DRIVERS RESTRAINTS

Overview – Healthcare Sector

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Key drivers and restraints for the healthcare industry GCC Countries

• Demographic advantage, higher population growth, ageing population.

• High risk factors, life style advantage, high prevalence of diabetes, obesity and cardio-vascular diseases.

• Compulsory health insurance for expatriates and nationals, direction of most of the GCC Countries

• Inadequacy of public healthcare delivery systems, governments are actively looking for private sector participation.

• A high per capita income and comparable to developed economies

• Acute shortage of human resources in the medical arena, governments have taken initiatives

• Lower penetration of the private sector in most of the GCC Countries.

• High capital intensive with lower rate of returns compared to other industries and sectors

• Unstructured regulatory landscape for foreign investments.

• Lack of trust in the local system.UAE spends around $ 2billion per annum for medical treatment abroad.

Comparing health indicators of GCC Countries to developed economies

A lower allocation for healthcare expenditure as a percentage of the GDP in the GCC Countries speculates probability and need to increase expenditure by the governments

Health-care services are mostly offer by the public sector, inadequacy of these services indicates a potential increase of private participation in the healthcare sector

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Overview – Healthcare Sector

GCC Market Potential Study

59,920

30,801 30,388 30,214

18,488

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Top 10 NorthAmerica

EuropeanUnion

GCC East Asia

Regions

US

D

GCC countries have per capita GDP similar to those of North American and European countries

Source: IMF

Comparing per capita healthcare expenditure GCC Countries to developed economies (In US $)

The average per capita expenditure in the GCC healthcare increases (2007) to US $ 709, but is still far lower compared to the other regions and the international average of around US $ 2,256

Per capita expenditure on healthcare in Qatar (US $ 3.416, 2007) is nearly 5 times more than the GCC average of US $ 709

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Overview – Healthcare Sector

Overview – Healthcare Sector

Favorable demographic profile:- The GCC population growth has averaged 3% per annum over the past five years, among the highest growth rates in the world - This will generate significant healthcare demand

Acc. to re-insurer Swiss Re, GCC per capita insurance stood at US$ 129 in 2007, significantly lower than the global average of US$ 519. And only 10% of the GCC population is covered under a health insurance.

UAE ranks second highest in the world for diabetes. And, the obesity rate for GCC nationals stands at 40%, one of the highest in the world.