UAE’s healthcare ecosystem to hit $50 billion by 2029, says Praxis

The UAE's healthcare ecosystem is growing rapidly and is projected to surpass $50 billion by 2029, according to a report from management consultancy firm Praxis Global Alliance.

As with many other sectors in the UAE, the country’s healthcare sector is quite well developed, with both public and private healthcare facilities offering high-quality care. Earlier this year, the Emirati government announced investment of around $150 million aimed at new hospitals and clinics across the country.

Thanks to the gradual increase in healthcare standards, life expectancy has risen to over 78 years, up by 5 years compared with 2010. What’s more, the relatively low care costs mean that Dubai and Abu Dhabi have even landed on the radar of foreigners, with both cities ranking among the top ten medical tourism destinations in the world.

“The UAE healthcare sector is poised for remarkable growth, fueled by market expansion and rapid technological advancements. The UAE healthcare ecosystem in FY24 is $34 billion and is expected to grow at a CAGR of ~8% over the next five years,” said Aryaman Tandon, Managing Partner and Head of Healthcare at Praxis Global Alliance.

But it is not all positive: Another part of the reason for the impressive growth in the healthcare sector is a higher prevalence of non-communicable diseases (NCDs). These diseases account for about 55% of all deaths in the UAE, with cardiovascular diseases alone accounting for 34%, according to the study.

A breakdown of the healthcare ecosystem

Healthcare delivery makes up the largest part of the UAE healthcare ecosystem, equal to 47% of the overall market, split more or less in half between inpatient and outpatient. The national health insurance sector makes up another 20%.

Other major parts of the ecosystem include pharmaceuticals and life sciences, as well as medical devices and supplies, the latter of which is expected to see a healthy CAGR of about 11% up to 2029. The data shows other less significant areas like fitness, wellbeing, and healthtech are also expected to see high rates of growth.

Abu Dhabi, the UAE’s capital but second-most populous city, has the highest concentration of healthcare facilities and beds, followed closely by Dubai. Most of those beds (53%) are in public healthcare facilities, with the rest in private facilities.

In terms of the facilities themselves, the overwhelming majority are actually clinics and health centers, with only 3% being hospitals. But that $150 million in investments announced earlier this year will see another 10 hospitals built.

While the public side of the UAE’s healthcare system comprises the majority of beds, spending in private healthcare is projected to grow at a CAGR of 9.5%, highlighted the report. This is expected to create a slew of opportunities for international companies looking to expand partnerships and investments in the UAE.

Challenges going forward

The UAE’s population is aging rapidly, an issue that will soon begin putting significant additional pressure on the healthcare sector. The total percentage of the population over the age of 60 is expected to reach around 20% by 2050, which is a major increase from just 3% in 2020.

The UAE is demographically incredibly diverse – expatriates form around 90% of the population UAE. That is a remarkable percentage and is unlike almost any other country in the world. These expats are mostly from India, Pakistan, Bangladesh, and other parts of Asia and the MENA region such as Lebanon and Saudi Arabia.

And while this highly-diverse population gives a huge advantage to local genetic research and data-driven health systems, it also means that there could be higher rates of genetic disorders and birth defects down the line, all of which increase the demand on healthcare facilities even more.