Middle East medical healthcare costs to increase by 12% in 2025

Total medical costs in Middle Eastern countries are expected to increase by 12% by the end of 2025, marking the third consecutive year of rising costs. That is according to a study from WTW, which canvassed the views of health insurance leaders from around the world.
This rise in costs in the Middle East is one of the largest regional increases globally and is 1.6 percentage points higher than the global average. The respondents to the survey blamed the rise in costs on an increase in the use of health services, higher pharmacy costs, and new medical technologies.
One of the main factors influencing the upward trend in medical rates is an increase in the use of mental health services. A total of 33% of insurers said that they forecast a significant increase in costs related to mental health services over the next three years.
The study shows that MENA region insurers were by far the most likely to expect significant or very significant increases in pharmacy costs over the next three years. Nearly 40% believed those costs would increase by 25% or more, compared to only one in ten insurers globally that believed the same.
“With medical cost increases remaining at double digit levels, employers will need to brace themselves for further big cost increases in the year ahead,” said Steve Clements, senior director at WTW (formerly Willis Towers Watson). “The seemingly never-ending rise in costs poses a constant challenge for employers, who find these increases to be unsustainable for their organizations.”
The focus for employers
With the rise in mental health care needs, employers are feeling pressure to offer benefits related to wellbeing. This is a trend being seen in benefits offerings at companies around the world, with better work-life balance, burnout support, and other types of support becoming more common.
In regions where public healthcare systems are the primary source for services, a higher demand can easily overwhelm these systems. High demand and the limited resources available have led some to seek private medical services.
“While recognizing that some factors influencing costs may be out of their control, employers can hone-in on key initiatives to help control costs while boosting the value of their health benefits,” said Clements.
“These include, but are not limited to, promoting preventive care, evaluating vendor solutions such as telehealth, and continuing to expand wellbeing offerings,” he added.
The health sector in the GCC region is generally growing steadily. For example, the healthcare sector in the UAE is expected to surpass $50 billion by 2029. Yet several previous reports have also sounded the alarm on the rising costs of healthcare, including in Saudi Arabia.