Rising demand for healthcare in Gulf Arab states means governments have to recruit the private sector to share some of the burden – and the benefits.
Investment in GCC healthcare infrastructure has risen considerably in recent years but the pace of development still lags behind the needs of a rapidly growing population and healthcare standards in other developed economies.
Regional governments have launched initiatives, such as soft loans and land grants, to increase private sector participation and kick-start investment plans, according to financial advisory firm United Securities.
“This disconnect between the demand for healthcare services and the available infrastructure is what makes the healthcare sector a compelling story moving forward,” it said in a report.
Overall, Gulf states spend on average around 3% on healthcare, compared to
9% in OECD countries, which underscores the healthcare infrastructure gap between the GCC and developed markets.
Kuwait Finance House expects the Gulf’s healthcare expenditure to reach almost USD 80 billion this year, with public expenditure accounting for nearly two-thirds of investment.
Saudi Arabia is expected to spend 18.6% of its total 2015 budget on healthcare, while Kuwait and Oman have also earmarked funds for the sector.
“After several years of large budgetary spending increases, the Saudi government is intensifying its efforts to promote private healthcare, via expanded health insurance, increased loan limits to build private hospitals and support for public-private partnerships,” management consultancy Deloitte said in a recent report.
“The UAE government is encouraging more private participation in the sector; however, it will likely continue to finance the bulk of healthcare spending in the near term.”
In the UAE, overall health care spending is expected to increase 6.9% a year to reach USD 19.6 billion by 2018, compared to its current level of USD 14 billion.
Saudi Arabia’s total health care spending is projected to rise by an average of 6.2% a year between 2014 and 2018, to an estimated USD 48.3 billion.
Shortage of healthcare professionals
Per capita healthcare workers and bed capacity are important metrics where there’s room for improvement for GCC nations.
The GCC region’s average bed capacity is 18.45 per 10,000 residents while the Organisation for Economic Cooperation and Development’s (OECD) average bed capacity is 50.12 and the EU average is 53.17 beds per 10,000 residents, respectively.
The UAE for example needs to double its existing capacity of 13,363 hospital beds over the next few years.
Unequal access to healthcare facilities and a continued shortage of healthcare professionals across the region highlight the need for more private sector involvement to fill the gap between increasing needs and available capacity, according to Deloitte.
“Governments are responding to this imperative by introducing programs and incentives to encourage private sector growth, optimize current operations, and leverage technology to raise the quality of health care services in GCC countries.”
Gulf states have a relatively young population but sedentary lifestyles have led to disproportionately higher health issues compared to the rest of the world.
The International Diabetes Federation notes that over the next two decades, the UAE, Oman and Qatar will emerge as countries with the highest growth in diabetes prevalence. Around 50% of Saudis are in danger of getting diabetes by 2030 if the country does not take measure to improve people’s lifestyles.
© Zawya 2015Mar 2015