Over the next five years, rising demand for healthcare services in Qatar is expected to outpace the rest of its Gulf neighbors, a new industry report has found.

The 2014 GCC Healthcare Report, published by Alpen Capital, a leading investment bank in the Gulf and Asia, forecasts that Qatar will see a 14.4 percent growth rate in terms of rising costs and demand for services from 2013 to 2018. Outpatient and inpatient markets are expected to account for 79 percent and 21 percent of the market, respectively.

Alpen based its projections in part on health indicators from different GCC ministries, relying on the latest available numbers from 2011. It also used inflation and GDP estimates of the countries taken from the International Monetary Fund, and population estimates from the UN Conference on Trade and Development (UNCTAD).

However, actual population figures have already quickly surpassed the report’s forecasted projections (there are 2.2 million people in Qatar, far more than the 1.6 million assumed for 2014), suggesting that demand for healthcare is growing even faster than expected.

Across the region, healthcare consumption amounted to $41.6 billion in 2011.

Even though Saudi Arabia is projected to hold the largest GCC market, Qatar has the highest healthcare spending per capita among its peers. The UAE comes second after Qatar in terms of market growth, recording 13.1 percent and around $11.7 billion spent on health care in 2011.

Key factors

According to the report, the biggest factors contributing to Qatar’s expanding healthcare market are the rising population and the billions of dollars the government plans to spend on new hospitals and other healthcare services over the next several years.

In addition to population growth, lifestyle factors also play a role, the report said. It continued:

“With improvement in living standards and healthcare awareness in GCC, prevalence of communicable diseases is expected to decline. However, lifestyle-related diseases such as diabetes and obesity are likely to increase due to growth in per capita income and a sedentary lifestyle.”

Additionally, the rollout of a national insurance plan in Qatar is expected to increase demand for services, as more people will be able to afford treatment.

The country’s new health insurance plan was approved last year by former Emir Sheikh Hamad Bin Khalifa Al Thani. Under that scheme, all Qatar residents must be insured by 2015. Locals’ coverage will be paid for by the government, and expats’ premiums would be paid for by their employers.

The first phase of the plan was rolled out in July 2013, covering certain services for Qatari women 12 years and older. The second phase, which involves insuring the entire Qatari population, is slated to take effect at the end of this month, under the renamed Seha (health) scheme.

But providers appear to be struggling to accommodate the insured patients. Last week, Dr. Faleh Mohamed Hussain Ali, acting CEO of the National Health Insurance Company (NHIC), told Doha News that many private and public entities simply weren’t prepared:

“We told them from the beginning that our base of customers is going to be the entire nation. So I think they didn’t actually do their homework properly and they were not ready to actually realize how much pressure is going to be there in the system.”

Challenges

Like the rest of the region, the report points out that Qatar struggles to accommodate residents in need of healthcare.

For example, Qatar lags behind in terms of hospital beds relative to its population (12 beds per 10,000 people in 2011, compared to 25 in 2006).

But at the same time, the availability of physicians rose from 24 per 10,000 people in 2002 to 28 by 2011, the highest in the GCC.

Key challenges include:

• Establishing a uniform standard of care.

There is currently no national link between Qatar’s hospitals and clinics. This lack of integration leads to an uneven quality of care and makes it hard to keep records or assess healthcare providers by one standard of metrics.

Qatar is working to tackle this by mandating that all hospitals and primary healthcare centers adhere to the Health Service Performance Agreement (HSPA) from April 1, 2014, with a grace period of one year.

• Dealing with high costs associated with medical tourism.

Overseas treatments for Qataris cost the government some $329.6 million (QR1.2bn) in 2011 – more than double what it spent two years before that. The vast majority of these cases involved elective surgeries, as opposed to emergency care. And some 70 percent of the costs were for flights and accommodation, both for the patient and their accompanying family members.

According to Alpen’s report, GCC residents prefer to seek treatment abroad due to a lack of confidence in the medical care available and the long waiting lists. However, just this week, Qatar’s Emir ratified Cabinet decision No 24 of 2014, setting the allowances paid to the patients and their associates or escorts during their treatment abroad.

The Supreme Council of Health did not respond to requests for comments on the new cap, but confirmed that no limit had previously existed.

• Dependence on foreign medical professionals.

A 2014 McKinsey & Company study found that some 69 percent of doctors and 91 percent of nurses in Qatar are recruited from abroad. Many of these expats view their jobs as temporary, leading to a shifting skill base in the country’s healthcare sector.

The report advocated encouraging more locals to train as doctors, nurses and other healthcare specialists by offering better salaries, more flexible hours and investments in professional training and development.

Thoughts?