Overview of Dubai Healthcare Market 2020

2. 2
The Healthcare sector in Dubai is undergoing an
evolution on the back of rapid advancements in
technology, research and development (R&D).
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 (COE) and from
curative care to preventive care.
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.
This 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 (COE) to meet the growing demand
for healthcare services in Dubai.
Dubai’sHealthcareMarket|ThePulseSeries-13thedition
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4. 4
Source: Dubai Statistic Center (DSC); Dubai Health Authority (DHA); Colliers International Analysis 2020
According to latest data by Dubai Statistics Center, the current population of
Dubai at the end of 2019 stands at 3.352 million, compared to 3.192 million
inhabitants at the end of 2018, registering an annual increase of 159,868 or a
growth rate of 5.0%. Between 2010 – 2019 the population of Dubai grew at a
CAGR of 6.5%.
Based on Colliers projections, under Base Case scenario the population is
expected to grow by 5% for 2019-2020; 4% between 2020-2025 and then
increasing by 3% between 2026-2030, reaching to 4.96 million by 2030. In high
case scenario based on historical growth rate of 5% (2018-2019), the
population is expected to reach 5.73 million.
Population Growth (2020-2030)
As presented in the graph below over 70% of the total population of Dubai lies between 25 – 60
years age group and gradually the trends indicate a slowly aging population in the Emirate.
Dubai Population by Gender and Age 2018
Source: Dubai Statistic Center (DSC); Dubai Health Authority (DHA); Colliers International Analysis 2020
0.00
2.00
4.00
6.00
Base Case High Case
3.19 3.19
3.52 3.52
4.28 4.49
4.96
5.73
Million
2018
2020
2025
2030
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5. 5555
Projections are based on the following assumptions:
1. 70% planning occupancy per acute bed
2. Trauma is split into supply by surgical specialty proportions
3. Adjustments for National and Non-national utilisation based on current trends
4. Adjustments of the Average Length of Stay based on current utilisation rates
5. Planned bed supply (861 beds in 2020 and 1,162 beds in 2025 and 2030, as compared to 2018) has been allocated based on
probabilistic assumptions on demand and supply to the various specialties
Source: Dubai Healthcare Investment Guide 2019; Dubai Health Authority (DHA)
Estimated Gaps for Acute Inpatient Beds (2020-2030)
Impact on Demand for Healthcare in Dubai
Based on the current ratio of 1.48 beds / 1,000 population, Dubai will require additional 2,630 beds to
3,770 beds by 2030. However, the current overall occupancy of 54.5% at hospital beds is well below
optimal level of 75%. Based on Colliers estimates, the demand for additional beds by 2030 at 75%
occupancy level will be in the range of 1,100 beds to 2,000 beds. The overall demand of 1,614
additional beds by 2030 as identified by Dubai Health Investment Guide 2019 document falls
within this range.
The focus should be providing beds for those specialties where there is gap and not just general hospital
beds. As highlighted in the Dubai Health Investment Guide 2019, the below exhibit presents the specialty
gap for acute care beds in Dubai by 2030.
Specialty 2020 2025 2030 Specialty 2020 2025 2030
Orthopaedics & Rheumatology 1 96 241 Rheumatology 7 15 29
Respiratory Medicine 108 167 237 Transplantation 3 5 9
Paediatric Medicine 5 89 227 ENT; Head & Neck 16 6 2
Obstetrics 23 90 225 Vascular Surgery 25 15 0
Gastroenterology 10 77 189 Dermatology 6 4 2
Psychiatry 78 108 163 Ophthalmology 15 13 10
Cardiology & Cardiothoracic Surgery 40 55 153 Neurology 51 32 16
General Surgery 27 43 142 Plastic Surgery 35 30 29
Oncology & Haematology 43 67 103 Burns 57 54 52
Renal Medicine 10 41 93 Endocrinology 72 64 55
Paediatric Surgery 3 37 81 Neurosurgery 81 75 69
Urology 7 18 65 General Medicine 208 148 85
Immunology & Infections 16 25 39 Gynaecology 169 135 99
Neonatology & NICU 100 33 33 Total 648 324 1,614
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8. 8
Increasing Incidence of Non-Communicable Diseases NCDs and Rise of Lifestyle Diseases in
the Region
Life-style related diseases have increased in the UAE. The UAE has the highest prevalence of diabetes in the
MENA region, with 16.3%, followed by Saudi Arabia with 15.8% (in the 20-79 age group). In the UAE, almost
90% of deaths are caused by chronic life-style related diseases and injuries. The lifestyle habits / diseases are
also linked to a rise in cancer rates.
Impact on Demand for Healthcare in Dubai
This rise in chronic diseases not only creates the demand for clinical laboratory services required in the diagnosis
of these diseases (e.g. Endoscopy, Laparoscopy, Cancer Screening etc.) but concurrently increases the demand
for Centers of Excellence for specialised treatments.
Medical Tourism
One of the key focus areas of Dubai Health Authority’s strategy is to promote the development of medical tourism
in Dubai and position Dubai as a global health tourism destination. Dubai Health Experience (DXH) was launched
by HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the
Executive Council, as a continuation of “Dubai, a Global Destination for Medical Tourism”. Based on the latest
data available from DHA, over 337,000 health tourists were welcomed in Dubai in 2018, generating around AED
1.2 billion in healthcare revenues. DHA’s objective is to attract over 500,000 health tourists by 2021.
Impact on Demand for Healthcare in Dubai
The most common treatments sought out by health tourists pertain to orthopedics, sports medicine, fertility,
dermatology and skin care and dentistry. Nearly all these treatments are either performed in daycare surgical
set-up or in specialised centers.
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9. 9999
2020|TheChangingProfileofHealthcareDemandinDubai
FocusonCentreofExcellence&DaycareSurgicalCenters
According to the Audit Commission of the Department of Healthcare in England and Wales study, the
average daycare cost (in England and Wales) was £698, compared to average elective inpatient cost of
£3,375.
Another study by the same Commission shows that daycare surgeries as percentage of total surgeries for
both elective and nonelective surgeries has increased from 7% in 1974 to 35% in 2015. In 2013/14, 78% of
total elective surgeries were daycare which is expected to increase to 87% by 2023/24.
A study conducted by Colliers Healthcare team in Dubai early 2019 identified over 40% of total surgeries
are day surgeries. Interviews with healthcare operators indicate that over 60% of total surgeries can be
performed under daycare structure, thus offering tremendous opportunities for improvement. Moving
towards daycare surgeries will not only reduce capital cost due to requirement of fewer hospital beds but
will also be cost efficient for insurance and employers.
Various studies have revealed that Ambulatory/Day Care surgeries are driven by the young and middle-
aged population and the demand for these services starts at the age of 10 – 15 years (in case of ENT and
Urology) and peaks around 45-50 years, depending on the specialty. Particularly, for a day care surgery
center, the age group of 10 to 65 years forms the most significant clientele however there is no limitation
criteria in terms of a patient’s age. The rationale for this is that below 10 years, the frequency of surgical
procedures is relatively low while above 65 years, patients would prefer to visit a hospital with backup
critical care facilities as the risk of complications is higher.
Analysing the distribution of operations by specialty in Dubai in the private sector, minor surgeries comprise
a large part of the total surgeries in the following specialties - Oral and Maxillofacial, General and
Cardiothoracic Surgery, Urology, Gastroenterology, Ophthalmology, Pediatrics Surgery and
Vascular Surgery. The continual growth of the insurance market will also add impetus to preference for
daycare treatment.
In conclusion, the demand profile for healthcare services is changing from provision of more beds at general
hospitals to specialised hospitals, daycare surgery centers and COE and from curative care to preventive
care. This offers numerous opportunities for operators and investors to set-up cost efficient daycare surgical
center and (COE) to cater to the growing demand for specialized healthcare services in Dubai.

10. FOR MORE INFORMATION
Mansoor Ahmed
Director (MENA Region)
Development Solutions | Healthcare |
Education | PPP
Mobile: +971 55 899 6091
mansoor.ahmed@colliers.com
Ian Albert
Regional Director | Valuation & Advisory
Main +971 4 453 7400
ian.albert@colliers.com