KPMG expects private investment in UAE healthcare to grow at 9.5% CAGR from 2018-22

In the UAE, healthcare remains one of the fastest growing sectors, evidenced by the growing number of hospitals and clinics across the country. However, the Covid-19 pandemic has had a momentous impact on all aspects of the industry. A new KPMG report titled UAE Healthcare Perspectives: Who cares, wins offers insight into the opportunities, trends and emerging growth areas.  Healthcare-related expenditure in the Gulf grew from $60 billion in 2013 to $76 billion in 2019, and is expected to grow to a further $89 billion by 2022, an overall increase of nearly 50% from 2013 to 2022.

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% of the country’s total healthcare expenditure of $16 billion. From 2018 to 2022, private-sector healthcare spending is forecast to increase at a CAGR of 9.5%, compared to a government contribution growth rate of 4.4%.

The report identifies a number of challenges and prospects, representing the new normal for the healthcare sector. These include increased consolidation through merger and acquisition 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 public private partnership models and government healthcare systems.

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. 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.

Nitin Mehrotra, Partner, Infrastructure, Government and Healthcare, KPMG commented: “While responses from local regulatory bodies to the Covid-19 pandemic were swift and thoughtfully constructed, to survive and thrive, healthcare organisations will need a well-planned approach to curtailing disruption, and its impact on national well-being and standards of care. The first edition of the UAE Healthcare Perspectives report identifies the dynamics that are likely to be crucial to understanding the future of the UAE’s healthcare sector.”