During the United Arab Emirate’s economic boom, Abu Dhabi and Dubai sought to bring the best of everything to their country — including healthcare. With open checkbooks, both the government and private investors sought to make the UAE a regional medical hub. While the development of the healthcare sector has left it with a strong infrastructure, problems continue to confront the industry; the same deep pockets which allowed the country to develop world-class medical centers also resulted in lifestyles that sent the obesity rate (and its associated diseases) skyrocketing, and while the global financial crisis which devastated some of the UAE’s economic sectors was not quite as severe to healthcare, the industry has felt a bit of a pinch.
The UAE’s state news agency reported in December that the budget for state spending on healthcare was set for over $750 million, but the individual governments of each emirate — most notably Abu Dhabi and Dubai — supplemented this budget with additional funds. Today, according to the government, there are 40 hospitals, 115 primary care centers and thousands of private medical clinics in the UAE.
According to the World Health Organization’s (WHO) 2010 World Health Statistics report, there has been a definite trend toward private healthcare in the UAE. Private expenditure as a percentage of total spending on healthcare rose from 23.4 percent to 29.5 percent between the surveyed period of 2000 to 2007. Per capita expenditure on healthcare (taking purchasing power parity into account) stood at $982 in 2007 according to the report, while government spending per capita was $693. This represented 8.9 percent of total spending by the Emirati government, according to the WHO.
While UAE citizens have a relatively high life expectancy of over 78 years, disease is taking its toll on the general population. Today, cardiovascular disease is the single largest killer in the country, accounting for more than 25 percent of the total deaths of Emirati citizens, according to statistics released by the government in 2010. Some non-governmental estimates place the ratio as high as 40 percent. It is also estimated that one in four Emiratis has diabetes. A December 2010 report released by UnitedHealth Group says that this number could rise to more than one third of the UAE’s national and expatriate population by 2020 if changes are not made and could cost over $8.5 billion.
Such diseases can be attributed to inactive lifestyles coupled with bad eating habits. Obesity — which is a contributing factor to both diabetes and cardiovascular disease — has been on the rise across the UAE, currently edging toward 70 percent of the national population.
The UAE’s Ministry of Health has begun efforts to educate the general population about the dangers of these diseases and has invited international health experts to conferences to discuss the problems. In 2006 the Abu Dhabi investment firm Mubadala Development brought the Imperial College London Diabetes Center to the UAE to further attempt to contain the disease. With such high rates of cardiovascular disease, diabetes and obesity, more money and efforts will be needed to put the lives of UAE citizens and residents on a healthy track.
In recent years, the UAE was successful in attracting prominent foreign medical centers, such as the Cleveland Clinic, Johns Hopkins and the Minneapolis-based Mayo Clinic. But the aggressive expansion of the sector was not immune from the overall hit the country was dealt by the economic crisis.
In January 2010, the Mayo Clinic — part of Dubai’s $5.3 billion Dubai Healthcare City project — closed up shop. With strains on capital coming in to private healthcare initiatives and population growth lower than it had been, projects such as the Mayo Clinic’s Dubai outpost seemed to no longer be feasible.
Despite still having many brand name medical centers in their home country, many Emiratis still prefer heading abroad for specialized treatment. A December report by the Indian news agency PTI said that patients from the UAE spend $2 billion annually seeking medical care abroad — an amount that could benefit the UAE’s economy if such patients could be swayed to undergo treatment at home.
While medical treatment in the UAE is largely cheaper than it is in, say, North America or Europe, by regional standards it is still quite expensive as lower medical bills are a short flight away in countries like Jordan, Egypt and Lebanon, which deter patients from seeking treatment locally. Given the proliferation of top-notch medical treatment centers in the UAE and its central geographic location, the country could also further promote itself as a medical tourism destination and turn a better profit.
Road to recovery
Despite some cutbacks — such as the closure of the Mayo Clinic — UK Trade & Investment anticipates the UAE’s healthcare industry to boom in the coming years and rise to a total value of $15 billion by 2015. In December 2010, the Dubai Healthcare Authority announced plans to implement $1 billion worth of healthcare projects over the coming year.
But healthcare spending across the rest of the GCC region remains high and it could be difficult for the UAE to compete with some of its neighbors that were not as adversely affected by the global financial crisis and continue to have excess money to spend.
Saudi Arabia alone anticipates completing 100 new hospitals by 2015, and there are currently $10 billion worth of healthcare projects either planned or underway across the region, as of late 2010. In a 2010 report, Alphen Capital estimated that the Gulf countries will require more than 25,000 additional hospital beds by 2020 to keep up with growing demands and populations.
For the healthcare sector to expand as much as was planned during the height of the UAE’s economic boom, the expatriate population of the country will need to continue to rise — a factor contingent on the yet to be fully reclaimed economic stability and success of the country. With healthcare infrastructure already largely developed, the question now remains as to whether the sector will be able to maintain or push past the status quo.