THE GCC – OPPORTUNITIES IN HEALTH FUNDING AND

THE GCC – OPPORTUNITIES
IN HEALTH FUNDING AND
MEDICAL TOURISM
6th Arab German Health Forum 2013
2
Demographic Changes and Future
Population Trends
GCC Population has grown considerably over the
past 5 years
3
Population, GCC (2008-2013)
Population (Million)
42.0
• 
The GCC population
expanded at CAGR of
2.2% to 41.6 million
during 2008-2013.
• 
The expatriates make up
to 49% of the region’s
population.
• 
UAE has the highest
expatriate population
and Saudi Arabia has
the lowest.
40.0
40.0
39.1
39.0
38.0
40.8
CAGR:2.2%
41.0
41.6
38.2
37.4
37.0
36.0
35.0
2008
2009
2010
Source: International Database- Census bureau
120%
2011
2012
2013
Years
Percentage of National and Expatriates, GCC,2009
Population
100%
62%
51%
75%
60%
Nationals
75%
Expatriates
40%
38%
75%
70%
61%
20%
25%
30%
39%
80%
49%
25%
25%
0%
Bahrain
Kuwait
Source: Frost & Sullivan 2012,report
Oman
Qatar Saudi Arabia
Countries
UAE
GCC
GCC Population is expected to rise to over
50 mn in 2025
4
Population Projections,GCC,2010-2025
Population (millions)
60.0
50.0
40.0
39.1
45.4
43.2
41.6
46.9
50.2
• 
By 2025, the population
in GCC will reach 50
million. The vast majority
will be under the age of
25.
• 
Growth in GCC is largely
due to increasing number
of expatriates in the
region’s developing
economies.
• 
GCC is expected to be a
major importer of foreign
labor in future as well.
30.0
20.0
10.0
0.0
2010
2013
2015
2018
2020
2025
Years
Source: International Database-Census bureau
Population Projections by Country,GCC,2010,2015 and 2025
Population(million)
2010
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
2015
2025
31.9
27.8
25.7
1.2 1.3 1.6
Bahrain
2.5 2.8 3.2
3.0 3.3 4.0
1.7 2.2 2.6
Kuwait
Oman
Qatar
Source: International Database- Census bureau
Country
7.1
5.0 5.8
Saudi Arabia United Arab
Emirates
Overall population is set to rise, the +65
population is set to grow significantly
5
Population Projection, GCC (2010-2050)
70.00
Population (millions)
60.00
50.00
40.00
43.1
46.9
50.2
53.1
55.1
58.0
60.1
61.9 12.9
65+ age
mn
46.5 mn
39.1
65+
15-64 age
30.00
15-64
0-14
20.00
11.1 mn
10.00
0-14 age
0.00
2010
2015
2020
Source: International Database- Census bureau
2025
2030
2035
2040
2045
2050
Years
• 
Population growth in GCC is heavily driven by immigration trends in the region.
• 
In addition, improvement in life expectancy over past quarter of a century have lead to
the expansion of over 65 age group segment.
• 
The elderly population in the region is expected to grow leading to increase demand in
healthcare in future
6
Health Indicators, Spending and Risk
Factors in the GCC – A snapshot
GCC – Health Indicators and Risk Factors
NCD’s a % of total for cause of mortality
66%
83%
71%
69%
76%
79%
69%
72%
79%
71%
33%
33%
42%
33%
33%
34%
29%
37%
% Overweight out of total population
71%
56%
% Obesity out of total population
33%
21%
% at risk from raised blood pressure
28%
35%
WHO: Non communicable diseases country profiles 2011
Overweight Prevalence – A global
snapshot
8
GCC –
ranges
from
51-60% to
over 71%
Rising Prevalence of Diabetes in the GCC, a
leading risk factor for CVD
9
Comparative Prevalence of Diabetes (2011, MENA Region)
Projected burden of cardiology – 2006 vs
2025 (est.)
44%
Others
Cardiovascular disease
12%
Infectious diseases
11%
12%
Maternal and perinatal
conditions
Source: IDF 2011
7%
8%
Genitourinary diseases
6%
7%
0%
2025
▪  5 of the 6 GCC countries in the top 10 countries in the world in terms of %
prevalence of Diabetes (2011 Diabetes Atlas).
▪  Lifestyle disease such as diabetes, Hypertension, Heart diseases accounts to
50% of deaths in Gulf region.
Source: McKinsey & Co. Research
24%
7%
10%
Digestive diseases
▪  Diabetes prevalence is over 25% of the GCC population.
52%
20%
2006
40%
60%
Per Capita Total Expenditure on Health in the region is
reasonable but lower than OECD Avg.
However, the healthcare spending is significantly higher than rest of Middle East
where the current spending is grossly inadequate to meet healthcare demand in a
number of the countries
Source: Global Health Expenditure Database, WHO 2012 and OECD Health Data 2012
A large portion of the health spending in the GCC is
financed by the Government
Efforts are being made by many Gulf States to shift the burden of spending from the
Government and OOP to health insurance
Source: Global Health Expenditure Database, WHO 2012 and OECD Health Data 2012
There has been an Increase in spending on
Healthcare(per capita) since 2005
12
Health expenditure($)
1400
Average per capita expenditure on Health,GCC,
2005-2010
•  During 2005-2010,per
capita health spending in
GCC has grown in
tandem with rise in
income.
CAGR:8.7%(2005-2010)
1200
1000
800
600
400
200
0
2005
2006
2007
Source: World bank
2008
2009
•  The growth is quite
significant in UAE
compared to other GCC
countries.
2010
Years
Per capita expenditure($)
Per capita Health expenditure by Country, GCC
2,500
2,000
1,500
1,000
2005
500
2010
0
Oman
Saudi
Arabia
Bahrain
Country
Source: World bank, IDB-census bureau
Kuwait
Qatar
United
Arab
Emirates
Health Spending in the GCC – Future trends
•  The healthcare services market in GCC expanded at a CAGR of 18.8% since
2004 and reached around USD23.1 billion in 2009.
•  It is projected to grow at an annual rate of 11.4% to USD43.9 billion by 2015
from an estimated USD25.6 billion in 2010
•  Some experts estimate spending to grow to USD 60 billion in 2025 with growth in
inpatient and outpatient market due to increased disease prevalence coupled with
rising healthcare cost/inflation
13
Source: Alpen Capital GCC Healthcare Report 2011, Mc Kinsey & Co. GCC Healthcare Outlook
Health Market Growth in the GCC
Saudi Arabia and the UAE are the largest markets together accounting for 75% of
health spending in 2015 and are expected to be the fastest growing markets in
GCC over 2010–15 growing at over 12%
Country-wise healthcare market within GCC (%)
Source: Alpen Capital GCC Healthcare Report 2011
14
Country-wise healthcare market growth over 2010-15
15
Overview of Future Health Investments in
the GCC
Upcoming Healthcare Projects in GCC
16
Some of
Country
the major
is not an exhaustive
Project projects in the region (this
Status
Value list)
Kuwait
Jaber Al Ahmed Al Sabah
hospital
Construction
$1057 m
Razi Hospital
Construction
$ 1200 m
Sidra Medical & research
Design
$ 2300 m
Oman
Medical City Oman
Concept Stage
$1000m
Saudi Arabia
10 Specialized hospitals in Saudi
Arabia
Concept Stage
$1,350m
Prince Nayef Specialization
Medical city
Concept Stage
$1,000m
King Abdullah Medical City
Design
$1,200m
New Hospital for Sheikh Khalifa
Medical City
Design
$2,000m
Cleveland Clinic in Al Maryah
Island
Construction
$1,300m
UAE
Source : Frost& Sullivan Report 2012, Alpen GCC Healthcare Report 2011,
Contructionweekonline.com
Upcoming Healthcare Projects in Dubai
17
Project
No. of Beds
Public
Al Jalila Pediatric Hospital
200
Al Makhtoum Trauma Hospital
400
Private
University Hospital (DHCC)
Al Jord Orthopedic Specialty Hospital
400
53
Suliman Al Habib Hospital expansion
200
Aster(DM Healthcare) Dubai
300
The City Hospital expansion (Oncology)
200
Lifeline – Umm Hurrair Hospital
94
Al Zahra Hospital
200
Source : Dubai Health Authority/ DHCC
18
Financial Challenges in the GCC Health
System
Financial challenges facing the region
 
Increase “pre-payments” through health insurance, levies and/ or taxes
 
Reduce government burden on health expenditure
 
Reduce Out-of-Pocket expenditure by increasing health insurance
coverage
 
Complexity projecting future health spending, which requires;
 
Current expenditure on hospitalization, doctor visits, pharma.
 
Demographic factors: population structure
 
Health factors: burden of diseases
 
Economic and social factors: income, new technologies
 
Public policy factors: health promotion, health regulation
Health Insurance can play a role in promoting investments &
reducing the prevalence of lifestyle diseases
Insurance industry can design and implement innovative health coverage packages that
have varied benefits and have a specific focus on prevention
Benefits of future Health
Insurance packages
  Primary prevention –They include immunization, smoking
cessation, regular physical activity, good nutrition etc.
  Secondary prevention - It includes Pap smears, blood
pressure check-ups, mammograms, and other forms of
screening.
  Tertiary prevention - Tertiary prevention may include both
drug treatments and actions like physical activity and
good nutrition that can help control heart disease and
hypertension.
GCC Employers are likely to adopt health insurance schemes that are aimed at reducing cost. Specific
Programs focusing on wellness & prevention could be an innovative approach e.g Weight loss or smoking
cessation.
Booz & Co’s GCC’s Insurance Mandate
Medical Tourism – Overview and
Opportunities
Industry Drivers: Factors that have lead to the rise of
Medical tourism
Government policy - Around 50 countries have now identified medical tourism as a strategic national industry. In Asia, one impetus
came from the Asian crisis of 1997, when some countries seized on medical tourism as a way to increase foreign currency earnings.
Developments in information technology - The Internet has enabled patients to research options beyond national borders, and has
expanded international marketing opportunities. It has also broken down cultural barriers.
Lower air fares -The advent of budget airlines and a drop in airline fares have made foreign travel-and therefore medical tourismmore affordable.
Trade liberalization - The General Agreement on Trade in Services, agreed by the World Trade Organization (WTO) in 1996,
paved the way for trade in medical and other services.
Increasing foreign investment - The relaxation of restrictions on foreign ownership in many emerging-market economies has
channeled FDI into provision of healthcare services, leading to improvements in quality and efficiency.
Internationalization of the medical workforce - As healthcare systems have expanded, developed countries have recruited more
immigrant healthcare workers. This has given medical staff valuable international experience, and has allowed Western patients to
become familiar with dealing with foreign medical staff.
Internationalization of medical training and accreditation - The vast majority of IMGs in the US trained in developing countries,
which originally led to concern over standards. This prompted some harmonization of medical training, which, combined with the
spread of English as an international language, has made medical skills more portable.
The rise of facilitator firms - Thousands of agencies now offer medical tourism services to healthcare travelers, such as arranging
accommodation and acting as a mediator with the hospitals. These agencies also act as a channel for governments and hospitals to
promote medical services.
 
Source: Healthcare Special report - EIU 2011)
Drivers demand for Outbound Medical Tourism from GCC
Medical tourism provides an
opportunity to reduce costs
for blue collared workers and
those without insurance
coverage.
People with health insurance
opting to travel abroad for
quality or value as they pay
out of pocket for elective
surgery and
“pre-existing conditions”
Very often, patients tend to
travel for better quality of
care which can be offered in a
more mature and evolved
health system such as Germany,
France, UK
Patients travelling to centers
of excellence for critical care.
Singapore and Germany
attract a lot of Gulf patients
for Oncology
Drivers of
demand for
outbound tourism
Growing incidence of lifestyle
diseases like CVD, Cancer,
Diabetes is encouraging
health and wellness
procedures abroad
Lack of availability of certain
health and wellness treatments
encourage the outbound travel
for e.g. fertility, sports
medicine, cosmetics
The reasons behind a decision to travel for healthcare
The factors that could affect each patient’s choice of location are:
Expertise of the doctors or surgeons involved, and the quality of aftercare;
Ease of travel, including the possibility of combining treatment with a holiday;
Familiarity with the country, the language and the healthcare system;
Risks for the patient, which range from quality concerns in the healthcare system to general risks,
such as terrorism;
Cost, both for the treatment and for the stay.
The perceived value from treatment abroad considering the quality of health system in the home
country and malpractice by clinicians.
The waiting time for the procedure in the home country compared with the location they consider for
medical travel.
The availability of after care services post surgery
The availability of information on quality and experience of surgeons and on the costs
Source: Healthcare Special report - EIU 2011 and DHA Overseas Treatment Survey 2012
Perceptual Mapping of leading
destinations in Medical Tourism
Developing a brand on the
strength of its tourism and
hospitality sector. Focus on
elective procedures
Costa Rica is very successful with US
patients seeking elective
procedures. India for cardiac and
orthopedic globally
Jordan
Korea
Canada
Singapore
US
Switzerland
UK
Germany
France
Belgium
Dubai
Greece
Malaysia
Turkey
Spain
Thailand
Costa Rica
India
Poland
Tourism
Focus
Bulgaria
Romania
South Africa
Hungary
Czech Rep.
Value
Focus
Hungary and Czech Republic – growing popular,
good quality care with 30-50% cheaper prices
than UK, Germany for cosmetic, dental, fertility,
spas. Tourists from Austria, Germany, Russia, UK
A well developed medical tourism offering focusing on certain
specialties and treatments. Although expensive, Germany is
respected for high quality care and its technological edge and
innovation in clinical services
Clinical
Quality
Focus All destinations for medical tourism are positioned to compete based on either the clinical quality and the strength
of their health system or on the strength of their tourism brand and infrastructure
Factors limiting the growth of outbound medical
tourism in the GCC
Considerable investments in
public and private sectors
are being made to expand
services and keep patients at
home.
Bad experiences and poor
word of mouth at some
destinations lead to a
spillover effect, limiting
medical tourism growth
At times patients have faced
difficulties in getting follow
up treatment which is difficult
to co-ordinate for some
procedures at the home
country.
Limiting factors for
outbound tourism
from GCC
Patients face difficulty in
getting follow-up treatment in
their home country after
receiving medical
treatment abroad
Most medical tourism
destinations are developing
countries with limited
legislation on malpractices in
case of errors or
complications
Lack of transparency on costs,
volumes and other information
on clinical practitioners in some
countries as well as cultural and
language barriers.
Germany, UK, US, India and Thailand are leading
destinations for GCC medical tourists
•  Providers seeking and receiving accreditation from organizations such as JCI in
order to alleviate concerns about quality of care. Hospitals are also getting
accredited as certified medical tourism facilities from MTA and Temos.
•  Reputed medical institutions and providers collaborating with institutions abroad to
create brand recognition for organizations and for the destination.
•  State health providers, ministries of health and big companies have recently
launched plans that reimburse treatment costs in foreign locations, alleviating
concerns about follow up care and coverage once back at home
•  Destinations like Thailand, US, India and Germany are providing concierge services
and a cultural environment.
•  Destinations such as Turkey, Korea, Jordan & Malaysia are growing in popularity.
…appears to be having an effect on patient sentiment
Multiple surveys of patients’ experiences at facilities abroad suggest that most feel
satisfied with the quality of care and would encourage friends and relatives to travel
abroad for medical care
Germany has an 87% satisfaction based on a recently concluded survey with 90% of
patients who’ve sought treatment in Germany would recommend it to friends & family.
Thank You
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