From an estimated $3.2 billion in 2017, Current Healthcare Expenditure in Oman is expected to grow at a compounded annual growth rate (CAGR) of 9.1 per cent to $4.9 billion in 2022, according to the GCC Healthcare Industry report published by Alpen Capital, an investment banking advisory firm.
The second-fastest growth in the region is attributable to rapidly rising population, the roll-out of mandatory insurance during the year and rising cost of care. Further, treatment of non-communicable diseases and preventive care measures are accounting for a large portion of the healthcare expenditure.
Consequently, Current Healthcare Expenditure on outpatient and inpatient services in Oman is projected to grow at an annualised average rate of 10.0 per cent to $1.5 billion and $2.3 billion, respectively, by 2022. Expenditure on other healthcare services is expected to grow at a compounded annual average rate of 6.6 per cent during the projected years. To accommodate the growing base of patients, the bed requirement in Oman is anticipated to grow at a CAGR of 3.2 per cent through 2022, translating into a demand for more than 1,100 new beds to reach a capacity of 7,937 beds.
“GCC healthcare industry continues to offer a wide gamut of investment opportunities. Though traditionally regional governments played an instrumental role in building the sector, shrinking oil revenues have slowed spending. At the same time, the role of private sector is increasing, encouraged by government incentives, mandatory health insurance and other reforms. Given the changing demographic and epidemiologic structure, mandatory health insurance, and government initiatives to encourage private sector participation, we expect to see steady growth in private sector investments in the healthcare industry,” says Sameena Ahmad, Managing Director, Alpen Capital (ME Ltd).
“Even though regional governments continue to shoulder a sizeable part of the healthcare expenditure, in the backdrop of budget deficits, the importance of private sector participation is being widely discussed across the GCC nations. With increasing opportunities for the private sector, the healthcare industry is witnessing a surge in mergers and acquisitions.
The inorganic route is being adopted by new players to enter the market and by existing providers to expand market share, physician practices and medical capabilities,” says Krishna Dhanak (pictured), Executive Director, Alpen Capital (ME) Ltd.
According to Alpen Capital, Current Healthcare Expenditure (CHE) in the GCC is projected to reach $104.6 billion in 2022, registering a CAGR of 6.6 per cent from an estimated $76.1 billion in 2017. Expanding population, high prevalence of Non-Communicable Diseases (NCDs), rising cost of treatment and increasing penetration of health insurance are the factors auguring growth.
Given the ageing population and an expected increase in the frequency of visits to clinics for treatment and preventive care, the outpatient market size in the region is predicted to grow at an annualised average rate of 7.4 per cent to $32.0 billion between 2017 and 2022.
The inpatient market is anticipated to increase at a CAGR of 6.9 per cent to $45.4 billion. Current Health Expenditure on ‘Others’ is expected to grow at a compounded annual average rate of 5.2 per cent during the forecast period. Growing size of population, and rising cost of medicine and ancillary services will be the forces driving the spending on other healthcare services.
Between 2017 and 2022, country wise CHE is anticipated to expand at annual average growth rates between 2.6 per cent to 9.6 per cent. The growth range is wide due to country-specific projections of population, cost of healthcare and other factors. The UAE and Oman are likely to witness growth rates of above 9 per cent, in anticipation of a fast-growing population, implementation of mandatory health insurance and above regional average medical inflation rates. Saudi Arabia, which is the region’s largest market, is expected to see a 6.1 per cent growth in CHE.
In view of the anticipated rise in number of patients, the region is expected to require 12,358 new hospital beds by 2022. This translates into an estimated annual average growth of 2.2 per cent from 2017 to reach a collective bed capacity of 118,295. The high incidence of chronic cases has led to an increase in demand for beds, particularly in specialised areas of care.
Although the general hospitals are not running at optimal capacity, the need for beds is rising due to limited availability of specialty hospitals, long-term care centres and rehabilitation centres, among others.
By Staff Writer, 29 MARCH, 2018
© Oman Daily Observer 2018