The healthcare sector in Dubai is undergoing an evolution on the back of rapid advancements in technology and R&D, reveals a new Colliers report. However, healthcare providers and professionals are grappling with several challenges including patients becoming customers and the patient care changing to “fee for quality” rather than “fee for service”.
The demand profile is also changing from provision of more beds at general hospitals to specialised hospitals, daycare surgical centers and Centers of Excellence, and from curative care to preventive care.
The Dubai healthcare market is very competitive, but still offers ample opportunities for both operators and investors. Sustainable growth of the healthcare sector in Dubai will be dependent on embracing, developing and adopting new technologies and innovations whilst delivering data driven, patient-centric and result oriented healthcare.
Key factors driving Dubai’s healthcare market are:
- High population growth rate. The population of Dubai reached 3.35 million at the end of 2019. Based on Colliers projections, the population of Dubai is expected to reach between 4.96 million to 5.73 million by 2030, increasing demand for healthcare services.
- The population of Dubai is predominantly a young and expatriate-based population. Majority of whom are considered Generation X (born between 1965 and 1980) and Generation Y (born between 1981 and 2000). As the current population of the UAE including Dubai ages, there is likely to be a sharp rise in healthcare demand as approximately 80% of a person’s healthcare requirements typically occurs after the age of 40 – /50 years.
- Introduction of compulsory health insurance in Dubai. Since the introduction of compulsory health insurance, there has been a significant increase in demand for healthcare. At the same time, insurance companies are applying vigilant policies to ensure a balance between insurance premium vs. provision of services and highlighting potential misuse of health insurance.
- High returns on healthcare investments. High quality, efficient private hospitals could still achieve 15% - 20% net profit margins after initial stabilisation years
- Heavy reliance on imported medicine and medical equipment. This increases the cost of establishing healthcare facilities. A number of medical equipment suppliers provide medical equipment on long-term leases and even equity investment in order to facilitate healthcare initiatives
- Continued growth of regional medical tourism. The government of Dubai has recently taken several initiatives to establish and promote Dubai as a medical tourism hub.
The report, the 13th in the Pulse series, provides a brief snapshot on the key factors impacting the Dubai healthcare sector’s outlook. From general hospitals to specialised hospitals and from curative care to preventive care, there are a number of opportunities for operators and investors to establish cost effective surgical centers & Centers of Excellence to meet the growing demand for healthcare services in Dubai.