What did we learn at Arab Health?
Four days of enjoyable mayhem milling around 3,000+ stands with 50,000+ attendees taught us a few things about the GCC health care market.
Vision 2030, the grand Saudi plan which includes handing large parts of the the public healthcare sector to for-profit is definitely a thing. A thing which is about six years behind schedule – but a thing nonetheless! Legal problems which meant foreigners had no legal standing have been fixed with arbitration courts and property rights. And the first big contracts have been awarded for imaging and hospital construction and management. Expect a US$1 billion lab contract to follow, plus around 20 hospital PPPs of various types within two years.
But the for-profit sector is unlikely to be handed everything – the Minister of Defence and (Saudi Arabian public petroleum and natural gas company) Aramco, who together hold 10-15% of the country’s health care assets, may object. Nor will the for-profit sector want small remote 50-bed hospitals in regions where foreign nurses won’t go, or to invest a fortune on the shells of various Saudi medical city vanity projects. And the government is well advised and well aware of the failings and limits of the for-profit sector.
Elsewhere investors are sniffing around Egypt, currently an economic basket case with a currency which has halved its value against the dollar in less than a year. With 80m people including a wealthy elite of 3-4m, a lot of industry and appalling healthcare, it has huge potential.
But investors are less enamoured of the UAE, despite flashy projects such as Dubai Healthcare City – a free economic zone with tax incentives for foreign investors which, according to its spokespeople, has 10 hospitals already fully operational – and big new government initiatives to move to a data-driven value-based model of health care. The country has huge excess bed capacity, a surplus of physicians (it is one of the few places where doctors pay has not gone through the roof) and has already been consolidated by NMC, Mediclinic, Aster DM and VPS. After the boom of the last decade initiated by Abu Dhabi and then Dubai introducing mandatory insurance for expat workers, investors appear to be betting that the big opportunities have now mostly dried up.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
