Dubai: The health care market in the GCC is expected to grow at about 9 per cent annually to reach $47 billion to $55 billion (around Dh172 billion to Dh202 billion) by 2020, according to a recent report, due to solid demand.
“The growth will be driven by both an increase in demand [increased number of treatments] and the cost of health care provision [average cost per treatment],” a report by Alpen Capital said.
Last year, 46 million medical treatments were conducted across the region, of which 91 per cent were outpatients, generating $18 billion in revenue.
Despite massive private sector investment in clinics and hospitals, a large number of people still opt for other countries for treatment and health check-ups.
Dubai Government in 2003 launched Dubai Healthcare City to tap this market and attract patients and boost medical tourism. The facility has attracted a number of health institutions, however the outflow of patients continues.
On the flipside, however, Dubai has also managed to attract a large number of Gulf Arabs for treatment.
The GCC may require in excess of 25,000 additional beds by 2020 to address the growing demand for in-patient treatments. The largest share of the demand increase is accounted for by Saudi Arabia, followed by the UAE.
Despite some significant project delays, particularly in Dubai and Oman, the GCC has a healthy hospital pipeline ensuring robust near-term supply. More than 200 hospital projects have been announced or are under construction with cumulative capacity of up to 27,000 beds, most of which are due to be delivered by 2015.
However, despite such growth, many GCC residents and nationals still travel to India, Thailand, Malaysia, the UK and the US for treatment. Some cite lower costs, others say the quality of health care is the main concern for the outbound treatment.
“The main reason for patients travelling to India is cost. It’s cheaper to get treatment in India,” Dr Azad Moopen, who runs a series of hospitals across the GCC, told Gulf News.
“Besides, there are comprehensive health care facilities in India, Thailand and other places that attract patients. This is yet to grow here.”
Global situation
Global health care, a $2.1 trillion business, is becoming more competitive every year, international experts say.
“Touching its peak over the past few decades, Medical Tourism is a direct result of globalisation of health care. There is a genuine and boosting opportunity emerging for Asian and Middle Eastern countries which are catering for the health care requirements of developed countries like the US, Canada, United Kingdom and other European countries, where the cost is 75-90 per cent higher,” Dr Prem Jagyasi, medical tourism consultant and chief strategic officer of the Medical Tourism Association, says.
“Despite economic recession, which causes a lack of cash flow, it is still far more affordable and viable for the patients from the developed world to travel for health care; hence medical tourism [is] observing growth despite recession.”
A recent Deloitte survey reports 150,000 US citizens experienced medical treatment abroad in 2006 — the majority being in Asia and Latin America. The number grew to an estimated 750,000 in 2007 and could reach as high as 6 million by 2010. According to the survey, by 2017 23 million American travellers are expected to travel to Latin America, Asia and the Middle East and will spend $60 billion in the next few years.
The medical tourism back-office business is $350 billion, while claims have reached $7 billion, according to the Indian Medical Travel Association (IMTA).
Time bomb
“We are sitting on a health-care time bomb,” Philip Archbold, sales director at Intuition Communication, told audiences at the World Travel Market in London last month.
“Google has 20.3 million pages on medical tourism. Although the market is slightly stagnant now, it is going to grow at a fast pace, once the world comes out of recession … The market is becoming competitive. Dubai Healthcare City, for example, will attract a large number of Arab patients, who otherwise would travel to the UK, USA, Thailand or India. Arabs are one of the biggest medical tourism source markets in the world for British hospitals. Once the Dubai Healthcare City takes off, it will change this.”
According to the Alpen Capital report: “Barring major additional project delays, we see a sufficient supply of hospital beds in all GCC countries, except Oman.
“The UAE and Qatar have the most ambitious pipelines as measured by the number of beds per capita, and are banking on medical tourism from within and outside the GCC to maintain adequate occupancy rates across the industry.”
Per capita health care spending in the GCC was $631 in 2006, below the global average of $716. The US and the UK registered per capita health care spending of $6,719 and $3,332 respectively in the same period.
Boosted demand
“Going forward, we expect GCC per capita health care spending to grow faster than the global average. Growth in income levels as well as an increase in health insurance coverage will boost demand for health care services,” the Alpen report said. “Moreover, per capita health care requirements and spending will also increase as the GCC population ages and the disease mix changes.”
The Gulf’s health-care market has a strong potential to grow, Moopen says. “Dubai, the regional hub, is already attracting patients from other GCC countries. There will be more patients coming to the UAE for treatment and, once the Dubai Healthcare City takes off fully, the region’s health care tourism landscape will change dramatically.”
Last year an estimated 50,000 Britons went abroad for medical treatment. The number is expected to rise to 75,000 to 200,000 by the end of the decade, creating an £886 million market. “Yes, recession has affected the health industry marginally. However, medical tourism offers significant savings combined with tourism; it is actually unaffected despite the downturn. Travel expenses are marginally lower as the industry slowed down, hotel expenses have fallen drastically. Patients save around 50 per cent to 75 per cent for a surgery which costs $60,000 in the US while $6,000 in India and $25,000 in the UAE. They enjoy immediate treatment, travel and tourism opportunity and significant savings,” says Jagyasi.