Qatar healthcare market expansion opportunities

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KFH Research latest report says the Qatar healthcare sector is expected to boom with the rapid increase in population due to large-scale projects announced and the 2022 FIFA World Cup.

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Qatar’s economy has been performing well which translates positively towards the healthcare sector. As a result of urbanisation and rising disposable income among the majority of the GCC population, residents have adopted a sedentary lifestyle and an aversion to exercise.

Added to that, is the consumption of processed foods, which leads to increased chronic disease (such as diabetes, coronary problems and other obesity-related illnesses) previously uncommon to the region. For example, in recent years the rate of diabetes-related illnesses has witnessed an unprecedented increase in the GCC which is expected to increase from 1.5 million cases in 2000 to 4.5 million by 2030.

Further, Qatar’s population has more than doubled in the past decade, from approximately 700,000 in 2004 to almost 1.84 million in 2012. The rapid increase in the population over the last few years is attributed to the strong performance of the economy, which has resulted in a large number of projects coming online, thereby leading to the influx of professionals, service workers and contracting sector staff.

According to the IMF, the current large-scale construction projects, as well as Qatar winning to right to host the 2022 FIFA World Cup, the population is estimated to reach approximately over 2.2 million by 2016, and over 3 million by 2020. This rapid increase in population will result in higher demand for health and health-care related products and services moving forward.

Key Healthcare Indicators

Comparing the healthcare indicators of Qatar to other GCC markets and developed countries such as the U.S., the UK and Germany, the local market demonstrates a shortage of resources. The shortage is prevalent across all GCC countries; however, undersupply in Qatar is further intensified as the market is represented by the lowest number of beds per population even within the GCC.

Healthcare expenditure meanwhile represents 1.9 percent of GDP. Given the lower population base and high GDP, Qatar currently has the highest per capita healthcare expenditure in GCC at USD 1,715. With the bed ratio per 1,000 population in Qatar falling within the lowest range compared to both the GCC and developed countries, the market offers scope of more hospitals in the country.

On the other hand, analysis of bed capacity at hospitals in Qatar shows that there are currently 12 hospitals in Qatar, with a capacity of over 2,200 hospital beds, both within the public and private sectors. The public sector dominates the market, representing 8 hospitals, and 80% of total hospital beds, with an average of 275 beds per hospital. The private sector meanwhile accounts for 4 hospitals, but given the limited bed capacity, is represented by only 20 percent of total hospital beds in Qatar, with an average of 148 beds per hospital.

Overall, the average bed capacity per hospital across the public and private sectors stands at 223 beds. Hospital beds in Qatar’s public sector witnessed a CAGR of 5 percent since 2006, while the private sector witnessed 8 percent during the same period. Private hospitals continue to represent a minor stake in the market. Although there are only 4 private hospitals in the country, there are more than 200 private individual clinics and polyclinics in the market. These clinics are however small in size and offer limited facilities. Plans are underway for 31 further facilities (including 9 secondary and tertiary facilities) between 2013 and 2021.

Budget Allocations

Qatar’s public healthcare budget witnessed a rapid increase during 2012. The approved budget for financial year 2012/2013 was 47 percent higher than that of the previous year. Average healthcare spending in GCC is 3 percent of GDP per annum. Despite increased budget allocations, healthcare spending in Qatar (1.9% of GDP), continues to remain behind GCC and many developed markets.

Healthcare spending in Qatar is only one-fourth in markets such as UK (9.3% GDP) and USA (17.9%).

Conclusion and Outlook

The demand for healthcare facilities in Qatar is expected to increase given that Qatar has one of the fastest growing populations, with high life expectancy at birth and low infant mortality rates. Non-communicable diseases (NCDs), also known as lifestyle diseases, are also increasing in Qatar as a result of increasing prosperity and socio-economic transformations. On the back of a growing population and high income levels, Qatar’s healthcare market offers opportunity for expansion. At present the healthcare market is dominated by the government sector (Hamad Medical Corporation) and there is a supply gap for good quality tertiary healthcare facilities in the private sector.

KFH Research expects the demand for health services in Qatar to increase gradually, especially relating to chronic diseases, such as diabetes, with larger volume increases in outpatient settings. Moreover, it is also expected that there will be aggressive growth in inpatient services relating to both maternity and childcare, and diabetes. Overall, Qatar’s healthcare market in the longer term looks positive, according to the report.

Photo: Daveynin/Flickr

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