Strong Economic Growth Continues To Drive The Hospitals And Clinics Market
6 Jan, 2020
The global hospitals and clinics market, estimated at around $4,050.1 billion in 2019, will grow to $5,381.6 billion in 2022 at an annual growth rate of nearly 10%. The hospitals and clinics market growth is aided by stable economic growth forecasted in many developed and developing countries. The International Monetary Fund (IMF) predicts that the global real GDP growth will be 3.7% over 2019 and 2020, and 3.6% from 2021 to 2023. Recovering commodity prices, after a significant decline in the historic period between 2014 to 2018, are further expected to aid the market growth. Developed economies are also expected to register stable growth during the forecast period to 2022. Additionally, emerging markets are expected to continue to grow slightly faster than the developed markets in the forecast period. For instance, India’s GDP is expected to grow at 7.3%, whereas China is forecasted to register GDP growth of 6.2% in 2019. Stable economic growth is expected to increase disposable incomes, thereby driving the demand for hospitals and outpatient care services.
In the historic period between 2014 to 2018, the global hospitals and clinics market grew from $2,694.1 billion (2014), at an annual rate of more than 8%. Strong economic growth in emerging markets supported this growth in the historic period as well. Emerging markets growth was aided by the increase in disposable incomes, stable political environment, and increase in foreign investments in emerging economies. According to the IMF, China’s GDP grew from $10.5 trillion in 2014 to $14 trillion in 2018. Emerging markets and developing economies together registered a growth of 4.3% in 2015, and this increased to 4.7% in 2018. Strong economic growth boosted the demand for healthcare services and this drove the market during the historic period.
Going forward, access to healthcare services in developing countries is also expected to improve as their economies grow stronger. Effective implementation of health plans is the core reason for the improvement in healthcare access in many developing regions such as India, China and many Latin American countries. Country-specific health reforms which are set to improve healthcare access include China’s urban resident basic medical insurance and new rural cooperative medical insurance schemes, Brazil’s unified health system, and Mexico’s popular health insurance. Historically, the Chinese government accelerated its basic medical insurance system by increasing its individual subsidy from ¥10 to ¥320 in 2014. In 2016, basic medical insurance in China had a coverage of above 95%. Similarly, the Care Act 2014 increased the emphasis on care, wellbeing and integration of public and private health authorities in the UK. Increasing access to healthcare services is a major driver of the hospitals and clinics market.