Strap: Frost & Sullivan gives us a peek into the current healthcare trends in the GCC region and where is the industry headed in the year 2018
By: Jayata Sharma & Neelam Jhangiani
Change is the only constant. Change is what defines our future path and where it will lead to. In an industry like healthcare, where the trends change faster than ever, especially due to lifestyle choices, keeping a lookout for changing trends becomes important. If your business has to thrive, you need to keep your vision aligned with the movements of the industry.
Hence, to give us an insight into the healthcare trends of 2018, we caught up with Sandeep Sinha, Vice President – Healthcare & Life Sciences, Middle East, Africa & South Asia, Frost & Sullivan.
Let us find out what he has in store for us…
What is the role of the government in the overall healthcare spending in GCC?
Healthcare is witnessing a sharp increase in private spending and the government is working towards new PPP initiatives. GCC has brought about a positive change in the overall economic situation and the government on its part is looking for participation of private players in healthcare set ups and is open to various private investments in the GCC countries.
What are the main factors contributing to the growth of the industry?
Insurance is coming up big time, for instance, UAE has 100% insurance in Abu Dhabi, Dubai last year had 100% insurance and Saudi and Oman plan to go for it in the near future. Insurance has resulted in an overall increase in healthcare spending and improved access to daily healthcare needs, which have brought about a significant growth in the healthcare setup. While insurance penetration is the primary factor driving the healthcare growth, other elements of growth include private participation in healthcare ventures, government eyeing for PPP opportunities and the last one being lifestyle diseases.
Yes. As per reports, it seems NCDs are on a rise in the region.
The entire GCC region has higher prevalence of diabetes, hypertension and obesity as compared to other developed countries like the UK and USA. These three major diseases resulting from increasingly sedentary lifestyles and high calorie food habits have a clear impact on other non-communicable diseases like cardiovascular, renal, ophthalmic, cancer related, and more. We need to take adequate steps for awareness and treatment facilities, which in turn present a huge opportunity for the private sector players.
Coming back to your main point of mandatory insurance, how will it affect health trends?
Mandatory health insurance will have a significant effect on health trends in the coming years; overall access to healthcare will see a sharp increase, every patient and every citizen with medical insurance will never go back size. Hence, the overall hospital footprint in terms of patients will increase, and hospitalisation rates, out-patients numbers and diagnostics will see an upward trend. While the concept of wellness will come into the picture with mandatory insurance, preventive health will also see a sharp increase, so it is a win-win situation for the patients and the healthcare facilities.
What bearing did the oil prices issue had on the healthcare industry?
Recent past has seen a dip in oil prices resulting in significant decrease in the overall budget of countries, however, if we look at the actual spending on healthcare and do a trend analysis, there has not been a major impact on healthcare. The government might have reduced their budget, but private investment has seen an increase, so on a net to net basis healthcare spending has continued to grow across the region consistently.
Comparison of historical trends of oil prices with respect to household consumption expenditure and healthcare expenditure shows a linear trend in healthcare expenditure, in spite of several spikes in oil prices. For example, in 2009, when the oil prices decreased by 41%, healthcare expenditure actually increased by 18%. Also, despite a sharp dip in oil prices in 2015, the healthcare expenses were increasing. Irrespective of the oil price trend, overall observation of the last 10-year trend shows that healthcare expenditure has constantly increased.
Which locations are witnessing the maximum growth & why?
Health expenditure in the GCC stood at USD 64.4 billion in 2014 and grew at a CAGR of ~14% between 2010 and 2014. The KSA is the largest contributor with ~55% of the total GCC health expenditure because of the sheer population and size of the market, followed by the UAE. Qatar has the highest expenditure on health per capita followed by the UAE. There have been significant budget allocations in healthcare from public sector in the KSA and therefore the Kingdom spent 4.7% of its GDP on healthcare, which is second highest in the GCC after Bahrain. In all the GCC countries, public healthcare expenditure comprises majority of the share. However, private healthcare expenditure has registered significant growth over the last few years due to increased private sector investment and healthcare market emergence towards the PPP model.
What effects will the region’s demographic profile have on healthcare trends of 2018?
Lifestyle diseases will continue to grow and is something which is very important. Diabetes, hypertension, obesity are the leading players here. The year 2018 will see more diseases and more number of patients coming in with these conditions, which will have a significant impact on the overall growth of healthcare.
Major differences in trends to be seen in 2018, as compared to last year?
The year 2018 will see a lot of PPP initiatives as one of the major trends in healthcare; others being insurance and access to healthcare. Across countries, the governments are looking for PPP initiatives, and thus a lot of private participation is coming up. The region is also witnessing a significant amount of merger and acquisitions.
Where will the medical tourism business head this year?
Medical tourism is a profitable business in the current scenario. Overall, GCC countries want to control their outbound medical travel and do not want their patients to travel outside the country for medical needs. The GCC countries want to be self sustainable from the healthcare point of view, and hence the government is trying to control the outbound medical travel budget.
Which type of projects are seeing more growth?
Multi-speciality hospitals and various asset-light models are expected to continue on the growth trajectory in the GCC countries. Due to lower capital requirement and quick return on investment, single speciality and ambulatory centers are expected to witness huge growth given the potential demand for healthcare services in these segments. Also, increasing ageing population and increased prevalence of chronic diseases has led to another growing demand of long-term and home care facilities in the region.
Digitisation has been given a huge boost recently. Kindly tell us more on this.
Across GCC, the governments are concerned about patient data and the manner in which the entire digitisation would take place, therefore, the governments are spending a huge amount of money on it. For example, UAE already has many initiatives being rolled out and the Saudi government is also talking about it. Having the entire thing on an insurance form calls for integration at all levels, otherwise it becomes too difficult to manage the entire care provider network and having a good digitisation platform in place is the foremost prerequisite.
“Lifestyle diseases will continue to grow and is something which is very important. Diabetes, hypertension, obesity are the leading players here. The year 2018 will see more diseases and more number of patients coming in with these conditions”
Sandeep Sinha, Vice President – Healthcare & Life Sciences, Middle East, Africa & South Asia, Frost & Sullivan, gives us a peek into the current healthcare trends in the GCC region and where is the industry headed in the year 2018.
From attached pdf file in email:
Page 12, take the table/graph with this headline: Burden of key Non-Communicable Diseases– GCC
Page 14, take the table/graph with this headline: Oil prices compared to healthcare expenditure and household consumption expenditure