Prospects ahead for UAE’s healthcare sector

Undoubtedly, the UAE healthcare sector has witnessed extraordinary growth and remarkable progress in the past few years. And the country is continuously expanding its national healthcare system to meet the ever growing need of the citizens and expatriate population. The healthcare sector market stands at AED 71.6 billion today. It is projected to grow at an average annual growth rate of 7% from 2015 to 2020 as per the ‘UAE Healthcare Sector Outlook 2020’.
Entities such as Health Authority Abu Dhabi (HAAD), Abu Dhabi Health Services Company (SEHA) and Dubai Health Authority (DHA) have developed a highly efficient health service system that includes sophisticated physical infrastructure and cutting edge IT services.
The UAE is composed of a multinational diverse population. Expatriates account for about 80% of UAE’s population. Improved social and economic conditions, a decline in mortality rates and higher fertility rates have led to the population growth. There is chronic disease prevalence. All these led to the boom in the healthcare sector.
As the current population of the UAE ages, there is likely to be a sharp rise in healthcare demand as almost 80% of a person’s healthcare requirements typically occurs after the age of 40–50. Cardiovascular disease is the leading cause of death in the UAE, where it accounts for 41% of all mortalities. Treatment for cardiovascular disease is expected to account for 24% of the total healthcare expenditure in 2025 compared to less than 12% of the total expenditure today.
The out-patient and in-patient markets are also poised to hit $12.1 billion and $7.5 billion respectively by 2020. The demand for hospital beds will go up by 3% every year.
Health and wellness tourism is expected to continue to grow strongly with a predicted value CAGR of 12%. The UAE has also made it to the list of the top 20 countries in the world for health spending per capita, which is around AED4,400 ($1,200).
The UAE healthcare authorities have been moving towards a universal healthcare scheme in order to maintain sustainable healthcare expenditures. Prior to 2014, less than half of Dubai’s population had medical insurance. Today, Dubai is in the process of rolling out its universal healthcare insurance system that mandates that the population of the entire emirate must be covered by 2016.
This will be a big driver for the growth of the healthcare sector in the UAE with the sector expected to expand exponentially in the next 3-5 years.
The World Bank ranked Dubai and Abu Dhabi as being the 2nd and 3rd, respectively, most popular medical tourism destinations in the region, behind Jordan. In the first half of 2015, Dubai attracted 260,000 medical tourists. This figure is expected to increase to 170,000 medical tourists in 2017. It will lead to growth in UAE medical tourism revenues, which are likely to cross US $700 million by 2020.
This is a fantastic forecast for the UAE healthcare industry, but it also highlights the important fact that both the government and private healthcare companies need to work hand in hand in order to realistically serve the patients and generate the estimated revenues. The health infrastructure and its upgradation would require huge investments, which has to come through public-private participation (PPP).
Taking into account the number of medical tourists and the growing health need of citizens and expatriates, healthcare sector is poised for a giant leap creating both opportunities and revenues capable of driving country’s sustainable development agenda.