November 2020

Alpen Capital (ME) Limited announced the publication of its report on the GCC Healthcare Industry for the year 2020. The report provides a comprehensive overview of the GCC healthcare sector and outlines the outlook, recent trends, growth drivers and challenges in the sector. It also profiles some of the prominent healthcare companies in the region.

The GCC healthcare sector is currently undergoing transformation at an unprecedented pace and scale. The ecosystem is not only moving from curative to preventive care but also adopting a value-based and integrated delivery model. Of the total US$ 63.7 billion healthcare spend in 2017, 72.7% (USD 46.3 billion) was financed by the governments, as the sector remains one of the most critical avenues for the region’s long-term economic diversification strategy. Saudi Arabia and the UAE represented around 56.3% and 20.0% respectively, of the region’s healthcare market in 2017.

The pandemic has had a profound impact on the GCC, as the region is not only contending with COVID-19 but also dealing with lowest oil prices in past 17 years. However, the nations were quick in their response to the crisis and exponentially ramped up its testing capacity, exceeding some advanced nations, which led to rapid identification, quick treatment for those affected, and immediate isolation to prevent the spread. The region altogether announced stimulus package of US$ 122.5 bn to support the economy in recovering from the pandemic.

Industry Outlook

COVID-19 has changed the global healthcare landscape within a span of few months. Although the sector has shown more resilience compared to other industries, healthcare systems struggled to cope with the sudden surge in demand for COVID-19 related services which significantly strained their revenue streams. Amid a continued fall in regular care services, demand for virtual care solutions such as telehealth and remote patient monitoring has helped reduce the adversity to an extent. This, in turn, has compelled providers to immediately ramp up investments in digitization to drive future growth. It has also necessitated the need to upgrade existing infrastructure to better prepare for any potential severe outbreaks in the future. Once the crisis abates, the region will be better positioned and the sector is likely to witness a V-shaped recovery as demand for care soars.

Alpen Capital anticipates five investment focus areas for the sector going forward -

• Primary and intensive care
• Integrated healthcare system
• Digital and technological infrastructure including AI, Big data analytics and automation
• Acquisitions and consolidations to achieve efficiencies in specialized care
• PPP models emphasizing on regulatory reforms

To download the report, please click here.