According to a recent report by Alpen Capital, healthcare spending by UAE residents is expected to grow by nearly one-third in the coming years. This is due to the rise in the aging population and an increase in lifestyle diseases. The per capita healthcare spending in the UAE was the second-highest in the GCC, standing at $1,992.1 (Dh 7,300) in 2020. The report projects that the country’s healthcare spending will outpace its GCC peers at a CAGR of 7.4% to reach $30.7 billion by 2027, up from $21.5 billion in 2022.
Krishna Dhanak, managing director of Alpen Capital, said that the density of physicians and nurses in the UAE has improved over the years. The private sector accounted for 93.6% of physicians and 88.4% of the nurses’ population in 2020. The Gulf region had 5.7 nurses and 3.2 physicians and dentists per 1,000 population as of 2019. Although physicians’ density was higher than in developed nations such as the US, Japan, and Singapore, nurses’ density in the region was significantly lower. To build and develop the necessary healthcare workforce, the GCC governments have started undertaking initiatives such as promoting exchange programs for training and introducing post-graduate programs.
The study projected that the rise in the aging population would be one of the key drivers of the healthcare sector in the UAE and Gulf as the number of older people aged 50 and above would increase to 32% in the region. The UAE recorded the highest improvement in bed density, moving from 1.4 beds per 1,000 people in 2016 to 2.2 beds per 1,000 people in 2020.
Alpen Capital projected healthcare expenditure in the region to reach $135.5 billion (nearly Dh 500 billion) in 2027, implying an annualized growth rate of 5.4% from $104.1 billion (Dh 382 billion) in 2022. The GCC healthcare industry is expected to grow at a healthy pace owing to a rise in the aging population, improving economic activity, increased focus on preventive care, and mandatory health insurance. While digitization 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 the treatment of non-communicable diseases are likely to support growth.
The report added that Saudi Arabia and the UAE are likely to witness a demand for over 8,197 and 1,584 new hospital beds, respectively. While most of the GCC countries are likely to experience demand for new beds, the requirement for beds in Qatar is expected to remain flat amid lower-than-average population growth. Increasing life expectancy at birth, improvements in the infant mortality rate, and an aging population are the key demographics driving the region’s healthcare system. GCC governments are encouraging the involvement of private players through PPP models as part of their long-term strategies aimed at capacity expansion and enhancing the delivery system.
