Private investment in UAE healthcare to rise by 9.5% annually: KPMG report

Healthcare-related expenditure in the Gulf grew from $60bn in 2013 to $76bn in 2019 and is expected to grow to a further $89bn by 2022. This represents an overall increase of nearly 50 per cent from 2013 to 2022, a new report by KPMG shows.

Among the dynamics impacting the present and future of the UAE’s healthcare sector, the KPMG report highlights the growth of private investment. The UAE government has been the primary investor in the country’s healthcare sector: in 2019, it funded approximately 69 per cent of the country’s total healthcare expenditure of $16 billion. From 2018 to 2022, private-sector healthcare spending is forecast to increase at a cumulative annual growth rate (CAGR) of 9.5 per cent, compared to a government contribution growth rate of 4.4 per cent.

The report, “UAE Healthcare Perspectives: Who cares, wins” identifies several challenges and prospects, representing the ‘new normal’ for the healthcare sector. These include increased consolidation through merger & acquisition (M&A) activity in the global and regional healthcare sectors, as smaller private healthcare groups increasingly face liquidity challenges caused by the pandemic. The report also predicts the emergence of new models of healthcare, with greater digitalisation and increased spending on healthcare R&D and innovation. Telehealth, the use of communication technologies to access healthcare remotely, is likely to be integrated into a public-private partnership (PPP) models and government healthcare systems.

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The latest Medical Tourism Index Ranking places Dubai sixth and Abu Dhabi eighth in the rankings of leading global destinations for medical tourism. According to the KPMG report, inbound medical tourism in the UAE has been growing steadily, with visitors seeking treatment ranging from major surgery to rehabilitation, to cosmetic corrections.

While the UAE’s healthcare infrastructure is rapidly improving, some specialties remain underserved, such as maternity, paediatrics, elderly care, fertility, one-stop primary care centres, and diabetes, the report says. Given the increased occurrence of lifestyle diseases such as diabetes in the UAE, there is an opportunity to significantly improve the population’s general wellbeing with enhanced, relevant primary care offerings such as neighbourhood day care centres for initial diagnosis and treatment, before medical issues become complex or life-threatening, the report concludes.

“Some of the key drivers for increased private investments are the demand for niche specialties, the rising emergence and support for public-private participation, and increasing demand for treatment and hospital beds in an ageing population,” said Richard Stolz, associate director, Transaction Services at KPMG.

“Further, the privatisation of hospitals and mandatory medical insurance, especially in Dubai and Abu Dhabi, will likely encourage spending and contribute to a more integrated health system,” he added.

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