Saudi Arabia remains the largest spender on healthcare in the GCC with investments totalling $24.2bn last year, Frost & Sullivan has said in a new report.
It said robust growth is expected to continue in healthcare spending across the region, propelled by demographic and economic factors, resulting in increased demand.
The report said that as a result of increased spending power, sedentary lifestyle, and unhealthy food habits, nations in the GCC rank among the highest in the world with respect to lifestyle diseases such as diabetes, cardiovascular diseases, and obesity.
Growth in chronic lifestyle-related diseases has further led to the increased healthcare spending in the GCC, it added.
However, the GCC also faces considerable shortage of physicians. In spite of continuous efforts by governments to recruit physicians from other countries, this challenge has been persistent.
Increased participation by private players in the GCC healthcare industry is likely to help in overcoming current challenges faced by the industry, the report said.
Frost & Sullivan said healthcare spending in the GCC witnessed compound annual growth rate (CAGR) of approximately 12 percent between 2007 and 2011.
Although healthcare spending has witnessed considerable growth in this period, healthcare expenditure as a percentage of the gross domestic product (GDP) remained low, it said.
Among the GCC countries, Bahrain spent the highest percentage of its GDP (five percent) on healthcare; while Qatar spent the lowest (two percent) in 2011.
Even though Saudi Arabia has maximum healthcare spent among all the GCC economies, healthcare expenditure as a percentage of its GDP increased barely by 1.2 percent from 2000 to 2010.
“The burgeoning and rapidly-ageing population is another growth driver for the healthcare industry in the GCC,” the report said.
“The life expectancy here has increased considerably, and is presently at par with developed countries like the United States of America. This increase in life expectancy can be attributed to improved treatment outcomes of controlling communicable diseases,” it added.
Dr E Saneesh, research analyst, Business and Financial Services (Healthcare), Frost & Sullivan, said: “Growing demand and increasing emphasis on quality healthcare, coupled with regulatory changes, is expected to make the GCC healthcare market a lucrative option for both domestic and international investors.
“Apart from healthcare delivery, healthcare insurance is also expected to provide enormous opportunities to private players in the GCC. In fact, increasing number of private players in the provider segment would lead to more people opting for private insurance to avail better-quality healthcare at affordable costs.”
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