The GCC's healthcare sector is set to grow by an annual rate of 11 percent and will be worth nearly $44bn by 2015, Alpen Capital has said in a new report.
Saudi Arabia and the UAE will leave the growth in the region with outpatient and inpatient markets are expected to account for 82 percent and 18 percent respectively of the overall market size, Alpen added.
The demand for number of hospital beds is expected to be 93,992 in 2015, an addition of 8,669 beds from 2010, which is in line with the expected supply pipeline, the study said.
Shortage of medical personnel is a key concern in the region, it said, with GCC governments continuing to spend millions of dollars on healthcare imports each year due to lack of sufficient services.
"With soaring healthcare costs and the consequent additional burden on state finances, the GCC governments are actively pursuing reforms and policy measures to promote private sector participation" said Sanjay Vig, managing director at Alpen Capital.
"The gradual improvement of healthcare infrastructure and standards in the GCC along with increasing insurance penetration should see an increase in number of patients opting for treatments locally, thus seeing an increase in demand for hospital beds," the Alpen report added.
The study said demographic factors are likely to be the main driver for healthcare services in GCC.
According to the United Nations, the GCC population is expected to increase at an annual rate of 2.2 percent during 2010-2015 compared to 1.1 percent globally.
The proportion of obese people in the GCC population is considerably higher than the global average, Alpen added.
"This has increased the prevalence of chronic diseases and, in turn, boosted demand for healthcare services. Health insurance coverage is likely to expand over the next few years as the GCC governments mandate health insurance, giving a further boost to the healthcare sector in the region," the report said.
The study added that the cost of healthcare in the GCC was on the rise due to increasing use of new and advanced technologies.
Alpen said the dependence on government spending on healthcare was "a major challenge" for the region.
"Despite growing investments in the sector, healthcare infrastructure in GCC countries lags developed nations in terms of hospital beds, diagnostic labs and clinics as well as medical staff. For private sector players, investment in the healthcare sector remains a challenge as it is capital intensive with a long payback period," Alpen said.
"The GCC healthcare sector offers attractive opportunities as reforms gather pace and the market opens up further. Underlying demand in GCC's healthcare sector is increasingly attracting private equity investors."For all the latest GCC news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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