The UAE’s healthcare sector has dramatically expanded over the past four decades. At the time when it was founded in 1971, the country consisted just 7 hospitals and 12 healthcare centers.

According to Middle East Medical Devices and Diagnostics Trade Association, the annual value of the medical technology market in the region is set to grow to $11 billion by 2021 while overall healthcare spending will
reach $144 billion in MENA by 2022

However, as the consequences of falling oil prices, economic diversification has remained a top priority for governments across the GCC in recent years. Throughout troubled economic times as well as during fiscal stability spending on healthcare has continued to grow. The private sector has increasingly been considered as a key partner in the long-term development of the healthcare industry, particularly in terms of the quality of care in medical services.

According to a 2018 GCC Healthcare Industry Report by Alpen Capital, the current healthcare expenditure (CHE) in the GCC is projected to reach $104.6 billion in 2022 from an estimated $76.1 billion in 2017, implying a CAGR of 6.6%. Between 2017 and 2022, CHE on outpatient services is predicted to grow at an annualized average rate of 7.4% to $32 billion, faster than an anticipated CAGR of 6.9% on inpatient services to $45.4 billion. The inpatient market will remain the largest segment with a contribution of 43.4% in 2022. CHE in the ‘Others’ category is expected to grow at a CAGR of 5.2%.

Arab Health, the largest exhibition for healthcare and trade profession in the MENA region, has underscored the importance of the event as a vehicle for the delivery of economic growth in the Middle East, with the announcement that more than $824 million worth of business was generated by exhibitors during the 2019 edition of the show, a year-on-year (YoY) increase of 5.9%.

Mediworldme met with Mr. Mansoor Ahmed, Director (MENA Region) Real Estate, Healthcare, Education and PPP of Colliers International to discuss what is driving the growth in the healthcare sector in the MENA region particularly in the UAE?

MENA growth driver

As the delivery of healthcare in the Middle East and around the world continues to evolve, hospital and health system executives are grappling with many challenging new paradigms. Integrating the transition from ‘fee for service’ to ‘fee for quality’ delivery models, new compliance requirements, driving wellness and prevention, and ensuring better coordination and efficiencies are but a few of the critical initiatives hospital and health system executives face. Trends and industry changes require investors and operators of healthcare facilities to make challenging decisions.

Mansoor Ahmed notes, “Over the years the healthcare systems have improved across the region however the healthcare sector still continues to offer significant opportunities for investors/operators due to number of factors including high population growth, young population profile, expatriate factor in the GCC and so on. The main driver forces are high population growth rate, introduction of mandatory healthcare services and growing medical tourism”.

As the delivery of healthcare in the MENA region and around the world continues to evolve, the real estate and operational needs of healthcare providers become increasingly complex. Trends and industry changes require investors and operators of healthcare facilities to make challenging decisions.

The growth in business is representative of the latest research released by Colliers International Healthcare Analysis, which has revealed that healthcare spending in the UAE alone has grown at a Compound Annual Growth Rate (CAGR) of 8.8% between 2011 and 2019, and expected to reach $2.4 billion by 2025 and $3.6 billion by 2030.

Growth in the Saudi market is even more pronounced with a CAGR of 12% during the same period and healthcare expenditure, which is predicted to top $160 billion by 2030.

Commenting, Ross Williams, Exhibition Director of Arab Health, said, “Business confidence in the healthcare sector in the GCC and broader MENA region is understandably buoyant. Increases in healthcare spending from private and public sources are the most significant drivers, closely followed by rapid market and infrastructural growth. Furthermore, an increased focus on medical tourism and mandatory medical insurance, which will continue to encourage spending and contribute to a more integrated health system, are spearheading exponential growth over the coming years.

“The 2020 edition of Arab Health, which will be the first mega-event to be held in the region during the Expo 2020 year, will showcase the very latest market insights, trends and innovations in healthcare.From state-of-the-art imaging equipment to the most cost-effective disposables,to developments in surgery to advances in prosthetics, Arab Health continues to be at the forefront of healthcare in the Middle East.”

Last year, many companies generated a high level of commercial interest during the show with Spanish tech start-up MedLab Media Group signing a memorandum of understanding (MoU) with Saudi Arabia’s Advanced AI Company to boost AI development under Saudi Arabia’s 2030 vision.

Other deals signed at the event included an announcement by Philips who signed an MoU with Saudi German Hospital Group for collaboration on tele-ICU and other key healthcare initiatives to further their offering in KSA hospitals. Gulf Medical University Ajman also entered into a partnership with Vita-Salute San Raffaele University, a leading University in Italy, for strategic collaboration in the areas of academic and clinical cooperation as well as research.

Emphasis on healthcare infrastructure

The theme for the 45th edition of Arab Health will be Connectivity for better healthcare delivery, with the show floor split into eight distinct sectors, including medical equipment and devices; disposable and consumer goods; healthcare infrastructure and assets; imaging and diagnostics; and preventive and post-diagnostics treatments, amongst others.

“This year we’re doing things slightly differently. For the first time, the show floor will be split into sectors bringing the show layout in line with the rest of the industry. Ultimately, sectorization promotes targeted traffic, fast-track connections and generates an increased number of better-quality leads for exhibitors,” said Williams.

Due to the emphasis being placed on healthcare industry infrastructure – $200 billion is expected to be injected into this market in the next five years – several halls will be dedicated to the Healthcare Infrastructure and Assets sector. Businesses