Alpen Capital predicts steady growth for the UAE Healthcare industry

SanjayVig_ManagingDirector_AlpenCapitalDubai, 16th February, 2016: Alpen Capital announced the publication of its GCC Healthcare Industry report. The report presents the current state of the healthcare industry across the GCC countries. The report also covers the recent trends, growth drivers, and challenges in the industry, along with Alpen Capital’s outlook until 2020. It profiles some of the prominent healthcare companies in the region, while highlighting their financial and valuation metrics.

“Development of the healthcare sector has taken a center stage in the GCC countries, as they witness an era of demographic transition accompanied by rising prevalence of lifestyle-related diseases. In order to ease the growing pressure on the healthcare system, the GCC governments are injecting huge funds as well as encouraging private sector participation to build hospitals and clinics, upgrade the existing infrastructure, and match the quality of services offered in developed countries. They are also investing heavily in technological advancements as well as rolling out mandatory health insurance schemes in all the countries to further accelerate the growth of the healthcare sector”, says Sameena Ahmad, Managing Director, Alpen Capital (ME) Limited.

“The GCC governments’ emphasis on the development of the healthcare sector has resulted in several investment opportunities for the private sector. Over the last year, we have seen a steady flow of private equity funds into the sector and the region has witnessed several successful M&A transactions. The GCC governments’ budgets are increasingly coming under pressure amid falling oil prices thereby opening up investment arenas for regional and international private sector players to make their entry into the healthcare market. We see this trend strengthening as governments and private companies work with each other to benefit from the opportunities presented by the GCC healthcare sector”,says Sanjay Vig, Managing Director, Alpen Capital (ME) Limited 

Industry Outlook

According to Alpen Capital, the GCC healthcare market is projected to grow at a 12.1% CAGR from an estimated US$ 40.3 billion in 2015 to US$ 71.3 billion in 2020 (Exhibit 1). An increase in the population and rising cost of treatment are the primary factors aiding this growth.

From an estimated US$ 24.0 billion in 2015, the outpatient market is forecasted to reach US$ 42.4 billion in 2020. The inpatient market is anticipated to grow from US$ 16.4 billion to US$ 28.9 billion during the same period.

The healthcare market in each GCC country is anticipated to expand by 11%-13% between 2015 and 2020 in terms of annual average growth rates.

The demand for number of hospital beds in the GCC region is projected to grow at a 2.3% CAGR from an estimated 101,797 in 2015 to 113,925 in 2020 (Exhibit 2).

The UAE Healthcare Sector

With its vision to develop world-class healthcare infrastructure, expertise, and services, the UAE government is extensively expanding and upgrading its healthcare systems to match international standards. UAE accounts for 26% of the total healthcare spend by GCC governments and the per capita healthcare spending in the UAE was at US$ 1,569 in 2013, the second highest in the GCC.

The healthcare market in the UAE is projected at US$ 19.5 billion in 2020, indicating an annual average growth of 12.7% from 2015 (see Exhibit 3) and is marginally higher than the GCC growth average. The outpatient and inpatient markets are projected to reach US$ 12.1 billion and US$ 7.5 billion, respectively, in 2020. The country is likely to see an increase in demand for the number of hospital beds at nearly 3% every year to reach more than 13,800 beds by 2020 (see Exhibit 4).

Growth drivers

Rapidly growing population and a shift in age-group distribution are among the key factors driving the GCC governments to improve the healthcare infrastructure as well as standards of care

A sedentary lifestyle coupled with a penchant for packaged and fast food have led to an increase in the occurrence of lifestyle-related diseases such as obesity, diabetes, hypertension, cancer, and heart ailments in the GCC nations. A rise in lifestyle-related diseases is likely to add to healthcare expenses as well as augment the need for specialized care centers and doctors.

As the healthcare costs rise as a result of increasing population, most of the GCC governments are introducing mandatory health insurance. The gradual expansion of medical insurance coverage across the region is likely to boost the overall healthcare spending. While Abu Dhabi already has mandated health insurance for expatriates, Dubai introduced the same in 2014 with a plan to expand in phases by 2016. This coupled with the individual Emirates health ministries’ long-term healthcare development strategies are strengthening the sector.

Each country in the GCC has devised a long-term strategic plan or vision to expand and upgrade its healthcare system. The successful execution of the plans is expected to scale up the healthcare infrastructure and quality standards.

Sensing the demand, the government as well as private players have injected multi-billion dollars into the healthcare sector to construct large and specialized healthcare facilities. The GCC region has nearly 350 hospital projects under various stages of development.

There are several initiatives  within the GCC healthcare sector that are focused on medical tourism which are likely to not only attract patients from across the world but also reduce the outbound visits of locals for specialized treatment thereby aiding the growth of the healthcare section in the region. The UAE is at the forefront, having simplified the entry process for patients by introducing new visa options including visas for multiple entries and the patient’s escort. Dubai is already a popular medical destination and has unveiled a master plan to attract half a million foreign patients annually, which is likely to bring in revenue of AED 2.6 billion (US$ 0.7 billion) by 2020. 


The GCC governments’ budgets are increasingly coming under pressure amid falling oil prices. Accordingly, governments across the region are likely to curtail or defer their expenditure. A prolonged low oil price environment may influence the budgets of the GCC governments and, therefore, the healthcare spending.

The cost of medical treatments in the GCC is high compared to the developed as well as emerging medical destinations leading several local patients in the GCC to travel  abroad to seek treatment. In addition to the cost disadvantage, another factor driving outbound medical tourism is limited super-specialized care in areas such as oncology and cardiology.

The GCC faces a dearth of local talent to meet the requirement at healthcare centers. Another challenging factor is the high dependence on expatriates, who consider the GCC healthcare facilities as a stepping-stone to gain experience and then seek careers in the West. The GCC Healthcare sector is likely to experience a dearth of healthcare professionals in the near term.

In the GCC healthcare sector, the private players face entry barriers such as high cost of setting up a hospital and high payback period. Healthcare providers in the GCC are looking at measures to curtail their operating costs in order to offset the impact of high capital expenditure towards constructing hospitals. The current investment climate characterized by global economic uncertainty, low oil prices, and volatility in financial markets has made investors across the globe more cautious and risk-averse. This can have a negative impact on the fund-raising ability of companies in the region to finance their healthcare projects.

Despite a remarkable improvement in the condition of the GCC healthcare system over the last two decades, the lack of homogeneous regulations and adherence to international standards, have led to inconsistencies in the quality of services in the member nations.


Rise of the PPP model: Private sector involvement is becoming imperative to meet the rising demand for healthcare as well as to reduce the burden of costs on the government finances. Government policies to increase insurance coverage and provide other infrastructure support as well as financial incentives are drawing investors. The Government of has Dubai proposed a new PPP law to encourage private sector funding by offering them a degree of protection by structuring the tendering process and partnership contract specifications, among others. As a part of its new healthcare strategy, DHA aims to increase PPP in areas of ambulatory care, LTC, home care and day-surgery centers. Such laws and strategies are likely to increase the private sector involvement in the UAE’s healthcare sector.

Increasing use of Information Technology: The present tech-savvy generation has encouraged the use of innovative healthcare information technology such as eVisits, digitization of electronic medical records (EMR), data analytics, and mobile applications for patient engagement. The adoption of such technologies has the potential to improve the quality of care and reduce the cost substantially for both patients as well as providers.

Rising focus on preventive care: Growing health awareness among the residents along with the GCC governments’ effort to improve the basic health indicators is leading to a shift from curative care to preventive care. Focus on the prevention of diseases will not only improve the public health profile but can also help reduce healthcare expenditure and enhance the quality of care.

Long-term and post-acute care facilities (LTPAC): The rising prevalence of chronic diseases alongside an anticipated increase in the ageing population is prompting the need for long-term and post-acute care facilities in the GCC region.LTPAC facilities offer medical as well as non-medical services to patients with prolonged illness or disability that renders them incapable of taking care of themselves for a long period.

Strengthening specialized care, medical education and research Improvement in the standard of living has increased the incidence of lifestyle-related diseases in the GCC region, creating demand for specialized centers and resources of care. As part of its efforts to boost investments into the healthcare sector, the GCC governments are focusing on providing more specialized care centers.  The GCC nations are also engaging in research and strategic partnerships to strengthen their healthcare system

In conclusion, favorable socio-economic factors coupled with the GCC governments’ focus on adopting a patient-centric model and improving the overall delivery system will continue to drive the growth of the GCC healthcare industry.

If you would like to receive a copy of the GCC Healthcare Industry report, please email your request to

For more information please contact:


Sameena Ahmad, Corporate Affairs

Telephone +971 (0)4 363 43 00   e-mail:

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