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GCC health sector predicted to grow by 12.5 percent
January 15, 2017, 5:26 pm
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The healthcare industry in GCC has gained momentum over the past few years, driven by the need to address healthcare service capacity constraints and simultaneously improve the quality of health infrastructure amidst a population that is growing swiftly, showed a recent report Sunday.

Demographic transition, a rise in the region's aging population, rapid growth in lifestyle risk factors (a natural consequence of an increase in household income), and the increasing prevalence of non-communicable diseases were and still are the prime reasons for the demand for healthcare, said the report released by Global Investment House (Global).

Major investments in healthcare by GCC countries over the past few decades have resulted in significant improvement in the outcome of the region's overall health status. The health systems established by GCC states are focused on fulfilling the core public health functions of childhood immunization, food safety, environmental health, and essential child and maternal health services, it added.

Despite growth, healthcare expenditure is still low compared to the world. While, the expenditure on healthcare has increased over the past few years, the level of expenditure is still low when a comparison of different indicators is made with the international community, the report said.

Bahrain has the highest healthcare expenditure as a percent to GDP of 5 percent for 2014 while Qatar's healthcare expenditure to GDP was at 2.1 percent. However, Qatar leads GCC in terms of GDP per capita which stands at a whopping US$ 96,733 in 2014 whereas the lowest GDP per capita is in Oman at US$19,310, it added.

In terms of absolute healthcare spending, GCC spent US$64.4 billion in 2014 as compared to US$58.3 billion in 2013 registering a rise of 10.5 percent YoY, it noted. Population growth is a driving force for any country's healthcare services, which help in giving shape to the system and attract investments.

The collective population of the GCC is around 53 million, as of 2015 and population has been increasing at a 10-yr CAGR of 4.0 percent which is quite high as compared to the world average of just 1.2 percent, it indicated.

Life expectancy in the GCC improved to an average of 76.4 years in 2014 (as per World Bank) from approximately 62 years in 1970. It should also be understood that an ageing population is closely associated with a drain on the healthcare resources since typically 4/5th of a person's healthcare needs are incurred after his age of retirement, it said.

To meet the growing demand for healthcare and reduce the burden of healthcare expenses on the public sector, some GCC countries have recently introduced Mandatory Health Insurance (MHI). This initiative has increased the private sector's share in health infrastructure, establishing facilities growth in private care, which has led to expansion in health service utilization in the region, the report added.

The GCC had 600 hospitals in 2008 which grew to 684 by 2013 which exhibits a CAGR of 2.7 percent. Public sector hospitals dominate GCC's hospital base constituting around 62 percent of the total as of 2013, the report noted. 

Source: KUNA

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