(MENAFN - Arab News) The health care industry in the GCC is expected to continue its robust growth propelled by demographic and macroeconomic factors in the region.
GCC health care spending is expected to increase by a CAGR of 11.4 percent from 2010-2015.
The main growth drivers of the industry include the region's fast growing population, rising income levels, increased prevalence of lifestyle diseases, growing demand for quality health care and mandatory health insurance policies.
GCC governments are trying to make significant investments to support health care provision and help the industry to grow to international standards
Several GCC nations have announced plans to ramp up infrastructure to cater to rising demand, with major health care projects across the region being planned to accommodate the ever growing demand
Even though GCC governments continue to lead in health care expenditure, increased participation by private players has been seen in the GCC health care industry.
Andrea Longhi, MENA advisory health care leader, EY, said: "The health care industry is driven by positive growth prospects and increased purchasing power
The growing demand for health care services coupled with regulatory changes and emphasis on quality health care makes the GCC an important destination for both domestic and international investors
Health care spending in the region has witnessed significant growth over the past few years and we expect the growth to continue in the future with the higher incidence of lifestyle diseases and an increasing amount of GCC governments enforcing mandatory medical insurance."
With programs such as mandatory insurance, there is an increasing reliance on the private health care sector and most well established facilities are focusing to expand rapidly to create capacity for their growing markets
One way of doing this is by way of an IPO and raising capital for expansion
The recent IPO of several health care facilities have set a precedent and more are to follow in the coming years
Not only this, numerous new facilities are planned in almost all GCC countries.
Imad U. Bokhari, MENA transaction advisory services health care leader, EY, said: "Health care in general is now a major topic for private investors, as it weathered the recent financial crisis
The inclusion of this sector as part of the overall investment strategy for major institutions has become vital
We are at the dawn of a major expansion in the health care sector in the region, even if only few of the many planned facilities come to fruition
Some of these health care developments are so large that they can only be called medical cities
These promise to bring more successful medical treatments, world-class health care education, significantly experienced human capital and some concepts that are entirely new to the region."
Despite the fast growth of the industry as well as the increasing demand, there are challenges facing the GCC health care sector
Considerable shortage of local physicians and qualified allied health care staff in the region poses an obstacle to the industry's growth as GCC countries are heavily depending on expatriates for health care workforce.
Health care expenditure in the region as a percentage of the gross domestic product (GDP) still remains low, despite the considerable health care spending, which was witnessed over the past few years
Health care infrastructure in the GCC also continues to lag international standards, which restrains the market from expanding, given GCC's strong demand and high income per capita.
"The region will need to invest in training their local talent to help build a larger pool of physicians to cater to the growing demand. As the GCC governments continue to invest in health care, we should see health expenditure as a percentage of GDP increase in the future. The new health care projects will help to attract people to the region as a medical tourism destination. Additionally, establishing research and clinical trial centers will have significant impact on retention of talent," Bokhari added