Friday 29 March 2024
 
»
 
»
PRIVATE SECTOR IS KEY

Gulf healthcare market to grow to $144bn by 2020

DUBAI, February 2, 2017

The Gulf Cooperation Council (GCC) countries face massive demand in medical sector, which will spur rapid growth in the healthcare sector, according to a top regional healthcare expert.
 
“We believe that the regional healthcare market will grow to $144 billion by 2020,” said Maurice Faber, regional managing director of Olympus Middle East and Africa (MEA).

Olympus Corporation is a world leader in high-end healthcare optics like endoscopes and digital precision surgery solutions.
 
The regional healthcare market stood at $81.1 billion in 2011. “With a compounded annual growth rate of an estimated 6.6 per cent, Olympus believes that the market can reach $144 billion by 2020,” Faber pointed out.
 
The private sector is a key participant in this expansion. Faber highlighted studies that show that by 2020 the private sector is likely to account for 50 per cent of healthcare compared to 33 per cent in 2011.
 
“GCC countries are aware of the growing need for efficient healthcare delivery. I think a target of 2.6 hospital beds per 1,000 population is reasonable and achievable and will ensure healthcare for every citizen and resident in the short to medium term.”
 
Currently, Saudi Arabia has 2.1 beds per 1,000 people, while UAE has 1.1 and Egypt 0.5. “This indicates the huge demand for capacity building,” Faber pointed out.
 
Need to Invest
The Olympus MEA chief pointed that Gulf countries are faced with the need to invest in healthcare due to several factors.
 
Citizens and residents in the GCC are generally higher income-earners. This has led to rise in lifestyle diseases such as cardiovascular disorders and diabetes, cited as the leading cause of death in absolute numbers.
 
Added to this is the population expansion. Because of opportunities for wealth generation and higher income, there is continuing influx of expatriates apart from the increasing local populations.
 
As healthcare becomes more accessible, mortality rates are dropping leading to longer life spans, especially among citizens who need to be looked after in their later years.
 
“There is a clear understanding among the governments in the region that they alone cannot manage the entire delivery of healthcare for the people efficiently,” said Husein Reka, a health funding economist who has worked extensively with governments in the region and Europe. “The rapid expansion of health insurance to fill this gap is a very coherent change in the funding system. In many cases it is mandatory and it ensures that people have access to healthcare services.”
 
Greater health insurance penetration has led to further demand on healthcare services. For example, hospitals, clinics and paramedical services have mushroomed in Dubai and Abu Dhabi after the introduction of mandatory health insurance in these two emirates.
 
Wider availability of health cover in other markets will have a similar impact, Faber pointed out.
 
New operational models
“Part of the changing market is the development of specialist centres,” explains Faber. “Earlier there was just the primary healthcare through clinics and then the full scale hospitals that offered everything. Today, there are more focused hospitals and clinics for various specialties such as cardiology, maternity, orthopaedics and others.”
 
For equipment firms like Olympus, they too have altered their go-to-market models. “Every healthcare operator would like to keep a stable cost line in their financial model,” said Faber. “Service contracts afford them a stable projection on costs so that equipment can be maintained and replaced at a consistent rate. In the case of our endoscopes; once serviced, they are actually brought back to the same levels as a brand new unit.”
 
Similarly, lease models for equipment could also make a significant positive impact in allowing operators to establish more facilities. Unfortunately, banks here have not yet switched on to the model so a full functioning lease model is only available via international financial institutions.  If lease models were to be available locally, Faber believes that entire diagnostics centres in hospitals could be operated on a lease model from specialist firms. Similarly so for specialist care like dialysis units.
 
In the meantime, Olympus has set up shop in the region. “We always had our presence through distributors. With our regional headquarters here in Dubai, we have also brought in a state-of-the-art precision service centre and training centre. All of these ensure that we are able to support our customers and distributors significantly better and faster,” said Faber.
 
The service centre alone could reduce customer costs on some repairs by up to 40 per cent. And the training centre is expected to provide training to some 500 specialists each year. “It makes sense for us to be here,” emphasises Faber, who cites Olympus’ Japanese philosophy of long term commitment to markets. “The fundamentals for the healthcare market here are strong; there is continuing demand and the funding mechanism exists." - TradeArabia News Service




Tags: Dubai | GCC | Healthcare |

More Industry, Logistics & Shipping Stories

calendarCalendar of Events

Ads