Rising Healthcare Costs in the UAE

The UAE has seen tremendous development in recent years, with the largely oil driven economies of the region doing better than many in weathering the challenging financial climate of recent years. Indeed, the UAE saw its economy grow 4.3 percent in 2011 due in great part to the prices of oil, although certainly helped along non-oil sectors such as the tourism industry.

However, as many developing and developed countries alike have come to realize, increasing access to modern technology, food and conveniences often brings with it increases in certain diseases and healthcare expenditure in tow. Preventable diseases such as type-II diabetes, heart disease and certain types of cancer that are often referred to as lifestyle diseases often play a large part in rapidly growing the amount spent on healthcare both governments and individual citizens seeking care.

The UAE has felt such a pinch quite acutely in recent years, with their expenditures on healthcare rising to approximately US$1,200 per person per year, bringing them into the top 20 countries in the world for money spent on healthcare per capita. While this may be seen as good news for healthcare providers and the pharmaceutical industry, the growing costs and the underlying health problems causing the rapid rise in health spending have serious implications both for the quality of life of the citizenry as well as the financial wellbeing of the countries as they try to ensure access to quality services.

Much of the growing healthcare budget is due to the rapid rise in lifestyle diseases in the UAE and the Gulf region in general. Indeed, 19.2 percent of residents in the UAE have diabetes making it the country with the highest prevalence of the disease in the Gulf region. In 2010, providing treatment for diabetes alone cost the UAE US$5.5 billion annually, comprising 14 percent of healthcare spending in the Emirates.

While healthcare expenditures as a per capita amount rising dramatically, it still only comprises approximately 3 percent of the UAE’s GDP. While this is expected to rise to close to 3.5 percent of GDP 2015, it still does not come close to the United States, which spent enough on healthcare to equate to upwards of 17 percent of their GDP. However, much like the rest of the Gulf Cooperation Council (GCC) Region, the healthcare system in the UAE is largely subsidized the government, in fact over 70 percent of healthcare spending in the GCC region comes from public sector funding.