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Healthcare Reforms throughout the Region Set to Trigger Massive Investments

The Middle East & North Africa region is currently faced with a rapidly growing population and escalating health concerns that require a stronger healthcare infrastructure capable of catching up. According to Ki Wan Kim, CEO, LG Middle East and Africa Regional Company, healthcare business in the Middle East is expected to touch $60 billion (Dh220bn) by 2025. “The population of the region, and especially the UAE, will increase at faster rates than the global average,” said Kim. “With increases come the associated burden on the existing healthcare infrastructure and while governments are
investing to develop the infrastructure, they are and
will be for the foreseeable future, playing catch up.”
Total regional spending on healthcare is slated to have touched $137bn last year, according to Adil Ameer, Vice-President at Dubai Healthcare City. He said revenue from healthcare services in the UAE is expected to hit $12bn by 2015, adding that the country is spending $1bn on sending patients abroad for specialty cases.

The GCC

According to an extensive review of the healthcare sector in the GCC by NCB Capital, the concerted reforms underway in each country to achieve and sustain international standards of healthcare delivery will provide a catalyst for expenditure to boom, benefiting the growing population and providing investors with new opportunities. Commenting on the study, Chief Economist of NCB Capital Dr. Jarmo Kotilaine, said, “While the

development of healthcare provision has traditionally relied almost exclusively on government expenditure, the mounting demand has more recently paved the way for massive private-sector investment in healthcare. Moreover, treatment of cancer and ‘lifestyle’ ailments -- notably diabetes and coronary diseases -- calls for the establishment of specialized facilities on a large scale.” At the same time, greater resources will be needed for public awareness and preventive care. The bank noted that income levels in the GCC region are broadly comparable to developed economies, but healthcare expenditure lags far
behind. It has extrapolated that overall healthcare expenditure in the Gulf is set to increase by more than
400% to reach $60 billion in the course of the coming
17 years. The study also concluded that:
• Governments, especially in the UAE and Qatar,
have taken initiatives to create world class medical
infrastructure to attract medical tourists and both Bahrain and Qatar have been regional leaders in providing medical services to their citizens.
• Due to its size, Saudi Arabia faces one of the greatest logistical challenges in providing comprehensive primary healthcare services but is home to some of the most ambitious medical cluster projects in the region.
• Some 40% of the population in the region is under 14 years, which amplifies the need for childcare centers and robust immunization programs.
• The ageing population, though small in proportion, is expected to double in the next decade and create demand for a range of geriatric healthcare services.

The Levant For a country of its size, Lebanon boasts some of the most advanced technological resources in the region and a great record for the quality physicians that come out of its world-class teaching hospitals. However, the country’s healthcare scheme is not without its problems, according to The Daily Star.

In the context of the Middle East, Lebanon is both winner and loser of the health game. Health is higher on the national agenda than neighboring Syria and Jordan, but the results don’t always match up. A look at primary health indicators, such as doctor-topatient ratio, shows that Jordan rates very high: for every 10,000 Jordanians there are 28 doctors and 10 nurses. In Syria, the rate is 10.9 physicians and 21.2 nurses while in Lebanon there are reportedly only
6.5 physicians for every 10,000 people, according to 2008 WHO figures. Jordan’s healthcare system has dramatically improved over the last two decades, which has placed it among the top ten countries in reducing infant mortality. Jordan attracts health tourists from around the world to undergo routine operations at a cheaper price than in their home country, with many visitors from northern Africa in particular. Lebanon’s Ministry of Health recently won a battle with pharmaceutical companies to lower the price of
medicine: where companies were once making a 75
percent profit government intercession means it is now as low as 45 percent. Medication above the $10 bracket, as stipulated by new legislation, can now be purchased in the country at a cost-cutting price.

North Africa

Algeria recently announced a US$28 billion investment plan to revamp the old and decaying hospitals and to modernize its health infrastructure between 2009 and 2025. The official at the Ministry of Health, Slim Belkessam said management of health sector has decided to set aside this sum for the construction of new health facilities to reduce congestion in the public health centers and to modernize the existing hospitals.

The Moroccan government is trying to remedy the unequal distribution of health services across the country, with a new restructuring and decentralizing plan set to run from 2008 to 2012. This will aim at reducing the cost and increasing the availability of drugs, which currently cost about US$93 of the state budget. In Egypt, factors such as the government’s plans for universal health insurance coverage, privatization of pharmaceutical production and growing health awareness will be some of the key drivers of increased pharmaceutical expenditure over the next five years.

Sources
Emirates Business 24|7 •
Zawya •
The Daily Star •

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