Private sector spending seen driving UAE’s healthcare system

The private sector is playing an increasingly important role in the country’s healthcare system.

The United Arab Emirates (UAE) is poised to record solid growth for healthcare expenditure in the five years through 2027 driven by higher spending from the private sector, according to a report by Fitch Solutions.

While the country’s healthcare system is predominantly funded by public means currently, Fitch expects private spending to soon outpace public spending as the government transitions toward a more private-oriented healthcare system. 

It said the UAE will likely see a compound annual growth rate (CAGR) of 7.2% in healthcare expenditure in the next five years until 2027. The private sector is set to lead the growth with a projected CAGR of 8.6%, beating public expenditure which is estimated to rise by 6.9% in the same forecast period.

Fitch said the anticipated increase in healthcare spending was in line with the country’s ongoing efforts to boost its healthcare system and become a leading healthcare provider within the Middle East and North Africa region. Higher investments in the sector is also supported by its growing population and increasing disease burden.

“The government is aiming to boost the role of private healthcare through the promotion of public-private partnerships, and to this end the UAE is already working with a number of global healthcare providers,” the report read.

Ongoing efforts to increase focus on digital health also bodes well for the sector’s long-term growth, said Fitch. 

The Ministry of Health and Prevention is planning to require healthcare providers to offer at least one of these four health services remotely: consulting, medicine prescriptions, patient monitoring or robotic surgeries. UAE has also laid out plans to boost research and innovation in digital healthcare with the help of artificial intelligence.

“We currently hold a high growth outlook for select digital health technologies in the UAE, with digital health continuing to receive strong government support with a number of initiatives being rolled out in recent years to increase its role in healthcare," it said.

On the flip side, the growing demand for healthcare services is expected to put a strain on the healthcare system as the ageing population grows, incidence of chronic diseases rises and medical tourism expands.

Fitch said it is also crucial for the country to boost its healthcare workforce to combat these challenges.