BMI View: The effects of the Arab Spring in 2011 will continue to ensure the Omani government allocates a larger budget to the healthcare sector in the medium term . Post 2013, BMI expects the government to boost the proportion of total expenditure designated to healthcare past the 5% reported for 2012 and 2013. We believe increasing the number of medical staff and hospital beds to fully capitalise on the large number of modern healthcare facilities in Oman will be the government ' s key plan in its 2011-2 0 15 five -year plan.
Public healthcare spending by the Omani Ministry of Health in 2013 is to increase by 9.4% from OMR500mn to OMR547mn, according to the Muscat Daily. The country's hospital bed count and medical staff shortages are currently below the international standard, especially in health centres outside big cities. These will be key drivers to increasing public funds. The Ministry of Health (MoH) stated that its eighth five-year plan for healthcare, 2011-2015, include the construction of seven hospitals, five health complexes and 27 health centres. It also lists the preparation of a feasibility study for a medical city project.
Despite being one of the smallest markets in the GCC, with relatively low health spending per capita, Oman is considered to have one of the strongest healthcare systems in the world. The MoH provides healthcare services at all levels, covering every region in the country. The substantial government investment in the sector, currently estimated by BMI at 82% of the total, has resulted in a robust, modern hospital system and solid primary coverage in urban areas. The MoH attributes much of its success to the long-term development of a health structure with a core policy of providing free medical treatment and medicines to all citizens.
Looking at healthcare data from the Omani Ministry of Health, we note that the Arab Spring of 2011 left a negative impact on the sector, resulting in slower, and in some cases stagnant, growth for various healthcare indicators. Over the 2010-2011 period, the number of health centres increased by 2.1% from 176 to 186, slower than the previous year's growth rate of 2.3%. A growing population and unchanged number of hospitals and hospital beds over the period resulted in a significant drop in the number of hospital beds per 1000 people, falling from 1.5 to 1.3 over the period - calculated at 1.9 in 2000. This is a stark indication that the government needs to increase the capacity of the existing hospitals and healthcare centres in order to accommodate the growing and ageing population.
We believe that in order to placate public unrest and the effects of the 2011 Arab Spring, the government will continue to allocate a greater sum of money to the healthcare sector. BMI notes government expenditure on healthcare was reported to have increased by 74% from OMR38mn (US$1.01bn) to OMR500mn (US$1.32) in 2012, and is expected to increase by 9.4% to OMR547 in 2013, accounting for 5% of total fiscal expenditure. BMI holds a more optimistic outlook for the country's short-term and medium-term healthcare expenditure. Our Healthcare Expenditure Model forecasts government healthcare spending will increase from OMR656mn (US$1.73bn) in 2012 to OMR745mn (US$1.96bn) in 2013, at an annual growth rate of 13.5% in US dollar and local currency terms. We project the government's healthcare contribution to increase from 82.9% to 86.8% of total expenditure by 2017, equating to a market value of OMR1.15bn (US$3.0bn).
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