Healthcare Trends in the Region

Prospects of Healthcare in the Middle East

16 March 2009 Strictly Private and Confidential

Healthcare Advisory Services

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© 2009 PricewaterhouseCoopers UAE. All rights reserved. “PricewaterhouseCoopers” refers to

PricewaterhouseCoopers UAE or, as the context requires, the PricewaterhouseCoopers global network, or other
member firms of the network, each of which is a separate and independent legal entity.

Healthcare Trends in the Region • Prospects of Healthcare in the Middle East

1
What is happening in Healthcare regionally

Substantial
government investment
in regulating
Introduction of healthcare
Significant increase
compulsory in “disorders of
health insurance affluence”

Current
developments

Growing Growing
participation of awareness of
private sector “wellness” concept

Focus on
pharmaceuticals
and medical
products

Healthcare Trends in the Region • Prospects of Healthcare in the Middle East

2
Daman in Abu Dhabi signed up 1.3 million people – demand for
pharmaceutical products increased by 30-40% in the first six months

Saudi Arabia - health Kuwait

insurance constitutes about 32 - no announcement
per cent of Saudi Arabia's as yet
insurance market and its
volume exceeds 2.7 billion Bahrain
riyals - medical insurance
for expatriates. will
be mandatory by
2009
UAE – Abu Dhabi
mandatory in Abu Dhabi for
expats. 650,000 enrolled – roll- Qatar
out to additional 400,000 - employer funded
Screening programme for insurance law
Nationals started May 08. pending approval
Oman
UAE - Dubai - no announcement
Dubai announced that the as yet
health authority would setup
and manage a Health Benefits
Contribution (HBC) fund. The
fund will then be used to pay
hospitals and clinics for the
cost of health care for all
expatriates living in the
emirate.

Healthcare Trends in the Region • Prospects of Healthcare in the Middle East

3
There is growing participation from the private sector

PRIVATE VS PUBLIC

Nursing
and
Clinical
Services
Delivery
The “Doctors”
Building
Hospital
Estates Support Medical Pharmacy Pathology Management
Catering I.T.
Maintenance Services Equipment
Infrastructure Clinical Services

“Serviced Infrastructure” Discrete PPPs Occasionally Public

private
Annual budget 20% 80%

Healthcare Trends in the Region • Prospects of Healthcare in the Middle East

4
Top healthcare issues in 2009

 The economic downturn will have an impact on healthcare providers

 Decrease in elective surgery, diagnostic and ambulatory surgery
 Healthcare organizations may need to find new sources of capital
 Increasing concerns with shortage of locally based clinical resources
 Increased focus on prevention and wellness
 Shift towards ambulatory care
 Increased strategic alliances
 Vertical integration across the healthcare value chain – retail, supply chain,
distribution and manufacturing
 Shift towards pay for performance

Healthcare Trends in the Region • Prospects of Healthcare in the Middle East

5
Why is healthcare an interesting opportunity for PE in the region

 Strong historic growth (c.10%p.a.) and forecast to continue growing at a

similar rate, driven by:
 Low comparative spend per head vs. Western markets, US c. 10x UAE
 Increasing heath problems in the region requiring government attention
 Less exposed to the current downturn and trend analysis show margins are
generally more stable through cycles
 Highly fragmented market with strong potential for consolidation
 Inefficiencies within the system and high potential for improvement using
global models
 We are constantly seeing healthcare, top of PE investment firm’s agenda.
However number of poor assets out there, price expectations are still high
and not enough assets to go round given PE demand

Healthcare Trends in the Region • Prospects of Healthcare in the Middle East

6
Threats to Long-Term Business Growth

To what extent do you believe the following is a threat to your organization's

long-term business growth prospects?

Lack of available and trained reso urces 65%

Increased competition in your sector 65%
Currency vo latility 58%
Inflatio n 58%
Lack of corporate governance policies 55%
Glo bal terro rism 55%
Increased co st o f capital 50%
Increased do mestic social unrest 48%
Unexpected change o f political refo rm plans 48%
Sto ck market vo latility 33%
Oil price increases 30%

0% 10% 20% 30% 40% 50% 60% 70%

Source: Arab Intelligence Business Report – PwC 2008

Healthcare Trends in the Region • Prospects of Healthcare in the Middle East

View of the Public and Private sector

To what extent do you believe the following is a threat to your organization's

long-term business growth prospects?

Quality 18 60 20

A vailability 23 60 18

0 20 40 % 60 80 100
P ublic P rivate B o th the same

Source: Arab Intelligence Business Report – PwC 2008

Healthcare Trends in the Region • Prospects of Healthcare in the Middle East

Raising Standards of Healthcare Provision

To what extent do you agree that, in order to raise standards of health provision
in your country, it is critical to do the following?

A ttract talented do cto rs to the regio n 70 13 8 3 8

Ensure practitio ners are qualified and maintain

68 25 333
clinical standards

A ttract talented nurses to the regio n 63 20 8 3 8

Impo se assessment standards o n healthcare

55 33 8 5
facilities
Implement the use o f techno lo gy advancements in
48 35 10 5 3
the area o f patient care

Develo p systems o f healthcare institutio n's

45 38 13 33
transparency with respect to disclo sing statistics

0 20 40 % 60 80 100
A gree stro ngly A gree slightly Neither / No r Disagree slightly Disagree stro ngly

Source: Arab Intelligence Business Report – PwC 2008

Healthcare Trends in the Region • Prospects of Healthcare in the Middle East

Contact Details

Contact details for our team are provided below:

Fiona Nicholas Sally Jeffery Fida Ghantous

Partner
Healthcare Advisory Services
Telephone: +971 4 3043108
Mobile: +971 504521375
Email: fiona.nicholas@ae.pwc.com
Partner
Healthcare Advisory Services
Telephone: +971 4 3043154
Mobile: +971 502524907
Email: sally.jeffery@ae.pwc.com
Senior Manager
Healthcare Advisory Services
Telephone: +971 4 3043315
Mobile: +971 506403774
Email: fida.ghantous@ae.pwc.com

To know more about regional and global Healthcare trends please visit our website:
www.pwc.com/me
www.pwc.com/healthcare

For details on our healthcare advisory practice, please download our capability statement.
www.pwc.com/extweb/industry.nsf/docid/3692165ff2a12e408525710800762aea

Healthcare Trends in the Region • Prospects of Healthcare in the Middle East