Why invest in Healthcare in Dubai? 

Source: Dubai Statistics Center 

• Government hospitals enjoy an occupancy nearing 80%, whereas private hospitals not affiliated with the government operate at a significantly lower capacity.
• The public sector incurs 75% of the total healthcare expenditure in the region, indicating a very low private sector penetration.
• As GDP per capita is increasing, per capita spending on healthcare is also on the rise.
  The healthcare services market in the GCC is expected to grow from AED 66 billion (US $18 billion) in 2008 to AED 175-202 billion (US $47-55 billion) by 2020.

Source: Alpen Capital 2009 GCC Healthcare Industry Report

Exhibit 5: Utilization of Healthcare Services

Primary healthcare services utilization by UAE Nationals is at or slightly below benchmark levels, and should be higher given disease patterns and the role of primary health care in preventing chronic diseases.

Utilization among expatriates is well below benchmark levels. Unusual demography and constrained access leads many expatriates to seek treatment at Emergency Departments at the government's final expense.

Exhibit 2: Utilization of Primary Healthcare Services by Nationality

 Population Growth

 Chronic Disease Prevalence

Aging Population

• Improved social and economic conditions have resulted in mass immigration and a significant decline in mortality rates, which have boosted population growth in the region.
  
• The population growth in the GCC has averaged 3% per annum over the past 5 years, among the highest growth rates in the world. This will fuel a rise in aggregate healthcare demand.
  
• Improved healthcare systems have improved many aspects of life and health in the GCC. To give one example, infant mortality fell from 69 deaths for every 1,000 live births in 1978 to only 10 for every 1,000 in 2007.
  
• Fertility rates in the region are quite high, resulting in average family sizes as high as eight to ten persons per family in Kuwait and Saudi Arabia, respectively.
  
• The Gulf’s real estate and construction sector boom attracted many expatriate workers to the region, and they now comprise of 25% of the total GCC population. Expatriates account for about 80% of UAE’s population, or about 4.8 million out of a total population of 6 million.
  
• As a result, the total GCC population in 2025 is estimated to be almost twice what it is today.
  

• Urbanization and rising per capita income have led to consumption of unbalanced diets and a more sedentary lifestyle in the GCC, which now has among the highest obesity levels in the world. This has aggravated the prevalence of lifestyle ailments such as diabetes, hypertension, high cholesterol and other cardiovascular diseases.
  
• A higher incidence of lifestyle diseases translates into higher per capita healthcare costs, as the average treatment cost in the case of lifestyle-related ailments is higher than other hospitalized cases.
  
• The UAE ranks second highest in the world for diabetes prevalence (20%), followed by Saudi Arabia (16.7%), Bahrain (15.2%) and Kuwait (14.4%).
  
• Diabetes patients in the UAE are expected to double from 350,000 in 2000 to 700,000 in 2030.
  
• Coronary problems and other obesity-related diseases are also on a rise in the Gulf region.
  
• A striking 70% of men and 67% of women aged 15 years and older in the UAE are considered overweight.
  

• Life expectancy in the GCC rose from 60.5 years in 1978 to 73 years in 2004.
  
• The population above the age of 60 years in the GCC is expected to increase to 15 million by 2050. In Saudi Arabia, for example, the number of people over 65 is expected to increase by more than sevenfold during the next 25 years.
  
• The region’s per capita healthcare spending will escalate as Gulf baby boomers born during the region’s first oil price boom enter the aged category.
  
• 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. This will be followed by significant spending on infectious diseases, digestive diseases, maternal and prenatal conditions, genetic disorders, cancer and other diseases.
  

 Overseas Treatment

Access to Healthcare 

•  The GCC lacks the expertise and specialist hospitals to deal with the health challenges it faces. Brendan Hughes, Director of Information Analysis at Dow Jones comments, “The range of care available in today’s GCC facilities, both public and private, is increasingly misaligned with the conditions which are coming to define the region.”
• This is reflected by the fact that GCC governments have spent millions of dollars sending patients overseas for treatment – the UAE spends approximately AED 7.5 billion (US $2 billion) annually to send its citizens abroad to receive treatment otherwise not available locally.
• In 2007, Dubai sent close to 1,000 patients overseas for medical care at a total cost of over AED 176 million (US $48 million). The majority of these patients were treated in Germany, some in the UK, US and India, and most consultations were in the fields of Oncology, Cardiology, Pediatrics and Orthopedics.
• For those countries receiving patients for medical tourism, the potential financial rewards can be quite high. For example, Turkey's revenues related to medical tourism from the Gulf alone was estimated at AED 7.5 billion (US $2 billion) in 2005.
  

•  Approximately 75% of healthcare financing today is provided by GCC governments.
• The GCC’s per capita insurance stood at AED 475 (US $129) in 2007, significantly lower than the global average of AED 1905 (US $519).
• The same pattern of lower insurance coverage is prevalent in the healthcare sector, with no more than 10% of the population of any one GCC country covered under a health insurance program.
• However, latent potential in the form of an under-penetrated health insurance market is slowly unlocking with the introduction of mandatory health insurance for expatriates.
• Saudi Arabia was the first to mandate health insurance for nationals and expatriates, followed by Abu Dhabi.  Qatar and Oman also have a mandatory health insurance policy in its planning stages.
• When Abu Dhabi introduced employer-funded healthcare insurance in 2007, demand increased by 40% virtually overnight.
• Once private health insurance takes hold, it is expected that patient volumes for private providers will rapidly increase as patients are allowed to pursue reimbursed care at private institutions.