Economic 360 for the UAE: Growth Prospects and Emerging Opportunities in the Healthcare Industry

The UAE's healthcare industry is expected to witness strong growth, due to factors such as strong government support, rising population, and increasing incidence of non-communicable diseases. In addition, higher participation of private participants in the healthcare industry has resulted in improved healthcare infrastructure as well as insurance penetration. Healthcare services in Dubai and Abu Dhabi are world class, and the setting up of Dubai Healthcare City has helped the UAE emerge as an important destination for medical tourism in the region. With such favorable factors, the country is emerging as a hub for medical services in the Middle East.

Executive Summary

Political Analysis

• The United Arab Emirates (UAE) is a federation of seven emirates/monarchies headed by Sheikh Khalifa bin Zayed Al Nahyan. The Federal National Council, the nation’s legislative branch, is unicameral and comprises 40 members. The position of a political head in the UAE is hereditary; therefore, successors are announced according to the traditional rule of governance.
• The UAE is favorably positioned relative to the other southern Gulf nations. It is expected to attract large investors to Dubai, leading to increased deposits in Dubai banks and, in turn, increase in the lending capacity of the nation.
• The UAE has not been much affected by the political turmoil in the Arab world. Factors such as declining growth, rising food prices, and youth unemployment, which have contributed to unrest elsewhere in the region, are less prevalent in the UAE. As the local population is content with their standard of living, the government has not prioritised political reforms. The UAE is likely to remain politically stable in the short-to-medium term.

Economic Analysis

• The pace of economic growth is expected to gain momentum between 2011 and 2012. An increase in the government’s expenditure and a rise in oil production and prices between 2011 and 2013 are likely to promote economic growth.
• The government’s debt burden is under control. Real estate and the banking sector are predicted to grow between 2011 and 2015.
• The growth of the non-hydrocarbon sector and capability of the economy to diversify between 2011 and 2015 are forecast to support the UAE economy. Hydrocarbon production and counter-cyclical fiscal spending are expected to drive real output growth between 2011 and 2012.

Social Analysis

• The UAE’s demographic trends are characterized by rapid urbanization and rising population growth. The UAE has the most varied population groups in the Middle East. The population is majorly grouped into native Emiratis, Arabs, Iranians, Westerners, South Asians, and East Asians.
• The UAE’s economy is expected to achieve its Millennium Development Goals (MDGs) by 2015. The primary education enrolment rate is xx.x percent, and the literacy rate among the population aged xx-xx years isxx.x percent. The government is focusing on national human resources and creating job opportunities in the private sector. It also focuses on building hospitals and townships as part of its humanitarian aid policy, as well as building organizations such as the Abu Dhabi Fund for Development (ADFD), Red Crescent Authority (RCA), and Humanitarian Foundation (HF), which provide billions of dollars to support disasters and drought-stricken areas across the globe.

Technical Analysis

• The science and technology undertakings in the UAE are governed by the state. Most of the expenditure is undertaken by the government. There has been an increased private participation, with foreign direct investment (FDI) inflow into R&D. There is increasing research on new sources such as solar, wind, and geo-thermal energies. The Masdar Institute of Science and Technology (MIST) is expected to advance entrepreneurship and help technology-led companies to grow through the use of shared resources, management expertise, and intellectual capital. R&D investments in areas such as drugs, defense, fuels, biotechnology, information technology, automotive, telecommunications, and healthcare are anticipated to strengthen the UAE’s technology base.

Legal Analysis

• The UAE has a liberal law system compared to other Middle East nations. It follows civil law jurisdiction, but Islamic law is applied to family and inheritance issues and certain criminal acts. The Sharia law is applicable to all individuals or groups involved in business activities. A federal court system applies to all Emirates except Dubai and Ras al-Khaimah. Sheikh Zayed bin Sultan Al Nahyan led the era of liberalization and development in the UAE.

Environmental Analysis

• The UAE’s key environmental issues are rapid urbanization, rising pollution, loss of wildlife habitat, carbon dioxide emissions, and global warming.
• Demand for groundwater for farming and green belt plantations has led to an increased rate of extraction.
• The government is focused on preserving and maintaining plant cover and the biodiversity of the region. It is incorporating strategies to reduce greenhouse gas (GHG) emissions. The UAE has begun to construct a major solar power plant, which is expected to help achieve the target of x.x percent renewable energy by 2020. It is likely to invest $xxx.x million for renewable energy projects between 2011 and 2015. The government is likely to focus on maintaining water resources and air quality, health and safety, biodiversity, and mitigation of and adaptation to the climate change.

Executive Summary—Healthcare Industry

Industry Overview

• Healthcare industry is one of the priority sectors in the UAE, and it is well funded by the government. There is an increasing number of private participants in the industry, and significant investment is expected from the private sector during the forecast period. Public sector undertakes most of the spending in the healthcare industry.
• Although the second-highest healthcare spending in the Gulf Cooperation Council (GCC) is in the UAE, its healthcare expenditure as a percentage of gross domestic product (GDP) is the lowest. Rising life expectancy, along with increasing population (including expatriates), is expected to create a higher demand for healthcare services in the country. Spending on healthcare is mostly directed toward sending the patient abroad for treatment. Private healthcare spending has been increasing over the last few years and has been instrumental in contributing to the healthcare industry growth in the UAE.

Government Initiatives

• It has been made compulsory to obtain Joint Commission International (JCI) accreditation to become a major medical tourism destination.
• The Dubai Healthcare City has been established to provide quality healthcare services.
• In 2011, the Ministry of Health (MOH) has launched Phase II of the health information system, which is expected to be key in linking x public hospitals and 68 other clinics in Dubai and Northern Emirates.
• The strategic framework of 2011–2013 aims to provide primary healthcare services to citizens across all the emirates. Other features of this framework include developing health insurance policies and improving governance in the healthcare industry.

Healthcare Infrastructure

• The government owns approximately xx.x percent of the hospitals and more than xx.x percent of the hospital beds in the UAE. The total number of hospital beds in the country is extremely low when compared to that in developed economies. It has a bed capacity of less than x per thousand people.

IT Healthcare Infrastructure

• Information and Communication Technology (ICT) services in the UAE’s healthcare industry are not many. However, IT spending on healthcare-related projects is expected to grow substantially during the forecast period. Using ICT in the healthcare industry helps achieve higher and better patient outcomes and make optimum use of available resources; it also helps patients actively keep tabs on their health.

Dubai Healthcare City (DHCC)

• The DHCC, launched in 2002 as a hub for the medical equipment and pharmaceuticals markets, has medical teaching institutions, private hospitals, clinics, pharmaceutical offices, research centers, and rehabilitation centers. It is the world’s first healthcare free zone and provides high-quality medical services in the region.
• The DHCC has collaborated with a number of foreign institutions such as the Boston University for Dental Research and Education, Moorefields Eye Hospital, and Novartis to provide world-class medical services.

Health Insurance

• Insurance penetration in the UAE is the highest among the countries in the GCC. Medical insurance was made mandatory in Abu Dhabi since 2005. Dubai’s national insurance scheme, which was to be enforced in 2009, has been postponed to 2013.
• Most expatriates opt to get cover through a comprehensive health insurance policy on their own, to supplement the limited insurance policy coverage offered by their employers. Abu Dhabi has a comprehensive insurance policy for expatriates, as around xx.x percent of the employees in the country are covered by insurance. Health insurance sector is driven by the young population as well as the introduction of new medical insurance products, and it is expected to reach a revenue of $x.xx billion in the UAE by 2014.

Medical Tourism

• The UAE is considered the leading destination for medical tourism in the Middle East. Factors that favor the country in medical tourism are developed infrastructure, specialist doctors, state-of-the-art medical centers, and modern technology

UAE Healthcare Industry Growth Prospects and Emerging Opportunities

Published: May 2012            No. of Pages: 88            Price: US $ 1495

 

Table of Contents

Executive Summary
Political Analysis
Economic Analysis
Social Analysis
Technology Analysis
Legal Analysis
Environmental Analysis
Healthcare Industry
About Frost & Sullivan
List of Figures
List of Charts