Healthcare Sector Trends

Education Sector: About

UAE

The U.A.E. healthcare market is quickly growing. In 2017, according to Business Monitor International, healthcare expenditures in the U.A.E. reached $17 billion and are expected to rise to $21.3 billion by 2021. Overall healthcare spending is projected to account for 4.6% of a country’s GDP by 2026 from 4.2% in 2016.5
Population growth is one driver of this expansion. The World Bank projects that the U.A.E.’s population will grow from 9.4 million people in 2017 to 11.055 million by 2030.
Demographic shifts are also at work, as the U.A.E.’s population slowly begins to age. The estimated share of the U.A.E.’s population above the age of 65 will, according to the World Bank, increase from 1.1% at present to 4.4% by 2030. This will stimulate demand for healthcare, and geriatric care in particular.
Problematic lifestyle habits are also propelling healthcare growth, with poor nutrition and sedentary behavior leading to obesity. In the U.A.E., 66% of the adult population carries excess weight and 31.7% of the adult population is obese.

The healthcare sector in KSA is undergoing evolution on the back of rapid advancements in technology, and research and development (R&D) in line with global and regional trends.
The Kingdom of Saudi Arabia (KSA) with a current estimated population of approximately 32.6 million is the largest country in the GCC. Under Vision 2030, the country is going through fundamental structural changes in all the sectors including healthcare.
The healthcare sector in KSA is undergoing evolution on the back of rapid advancements in technology, and research and development (R&D) in line with global and regional trends.
An increased capacity of privately-managed facilities in Saudi Arabia.
Pilot projects initiated by the Ministry of Health with focus areas such as primary health.
Localization of pharmaceuticals manufacturing in Saudi Arabia.
Expanding markets in Saudi Arabia for both branded and generic products.
A rise in labor productivity in the Saudi healthcare sector.

Consumerism

The percentage of healthcare spending by the Ministry of Health as a percentage of overall government expenditure has stayed relatively stable at around 7%. This is almost 11% of the total budget. However, these figures do not consider the amount spent on healthcare by the other eight related government entities, such as the Ministries of Defense and Interior, and of the Kuwait Oil Company, which make up 10- 20% of the healthcare sector in Kuwait.
Kuwait’s healthcare expenditures are expected to grow at a compound annual growth rate of 7.5% up to 2020 to $8 billion, considering the population growth and the average inflation growth rate forecast by IMF for this period.
Despite the drastic decline in oil prices and the ensuing economic setbacks, healthcare spending remains a priority for the government. Kuwait awarded projects worth $11 billion in the construction of new infrastructure for healthcare, as it seeks to prioritize the transformation of its healthcare sector.
Realizing the need for facilities that cater to life-threatening diseases that previously required Kuwaitis to fly out of the country for treatment, several construction projects are booming in the country.

While there are abundant opportunities for U.S. businesses in the U.A.E. healthcare industry, these opportunities are somewhat limited by the size of the market.
The U.A.E.’s population of 9.4 million people, which is relatively small by global standards, limits the profitability of certain healthcare enterprises that depend on scale and whose scale cannot be achieved by either the U.A.E.’s connections to the wider region or the U.A.E.’s booming medical tourism market. This is particularly the case where there is fierce competition, as there is in the healthcare insurance industry.
This problem of scale has been exacerbated to a certain degree by the fragmentation of the U.A.E. healthcare market by different healthcare regulators.
In addition to scale, another potential challenge for U.S. companies operating in the U.A.E. healthcare market is tightening budgets.
In an environment of lower oil prices and soaring healthcare costs, there have been firmer stances regarding prices throughout the healthcare industry.

One of the key challenges faced while establishing quality hospitals in KSA is the high funding requirement. Despite the fact that banks and other financial institutions actively seek investments within KSA’s healthcare sector, they often limit their exposure by only servicing known market participants with proven track records. International or regional operators contemplating entry into KSA’s market often struggle to secure project finance unless there is a recourse to alternative cash flows. Further, difficulties arise with the terms offered. Healthcare investments are typically long-term investments contradicting a bank’s risk appetite, which typically extends to a tenure that ranges between five to seven years.
The Kingdom is moving towards encouraging more private sector participation in the healthcare sector, however; the extent of investment required is significant.

The need for a Kuwaiti agent, distributor, or partner tends to add to the cost of selling goods in Kuwait.
Potential opportunities can take longer to develop in Kuwait than in comparable markets.
Imports to Kuwait require three certified and legal copies of the commercial invoice, three copies of the transport documents and two copies of the certificate of origin.
The certificate of origin must describe the place of origin of the goods, the full name of the manufacturing plant or producer, and the full name of the freight forwarder.
It must also show gross and net weight, the trademark shown in the manifest, value, type of packaging, and means of transport.
The certificate must be certified by the Chamber of Commerce in the exporter country and most of the time by the Kuwait Embassy or a mission of any of the GCC states in the absence of a Kuwaiti mission.
Kuwait Customs is strict and most of the Kuwaiti importers/companies know the best methods for successful importation