Iran and Azerbaijan arise as lucrative healthcare markets
By Mia Burns
Iran and Azerbaijan are blooming locations for healthcare investors, according to Frost & Sullivan analysts. Although young, Azerbaijan is presenting itself as an attractive ground for healthcare investors. Continuous government reforms coupled with the shortage of medical expertise, equipment, and personnel are driving the transformation in the country’s healthcare market. The government has increased its healthcare budget more than 10 times in the past decade and built or remodeled more than 500 healthcare facilities. As for Iran, the healthcare industry within the nation is headed for a bright future. Iran is ranked 15th among Middle Eastern and African countries regarding long-term investment potential. The huge youth population cohort combined with the healthcare industry’s room for improvement, promise growth in the private sector, and investments in the pharmaceutical, healthcare facilities, and medical devices market.
“Being oil-rich provides income that Azerbaijan did not have before, which we can see from the amount of money that the government started setting apart for the healthcare after the oil income and before,” says Frost & Sullivan Healthcare Research Analyst Uldouz Berenjforoush. “Azerbaijan has been developing its oil sector by building various centers to address, for example oncology, ophthalmology as well as Thalassemia.”
With a growing population of more than nine million averaging 30 years of age, Azerbaijan’s future healthcare system will depend on an organized and well-established public health sector. Currently, Azerbaijan’s healthcare expenditure remains small when compared to its gross domestic product. This means higher out of pocket payments for patients. In 2007, 62 percent of fees were out of pocket payments. To alleviate this burden, the state is aiming for universal welfare as well as other reforms aimed at improved healthcare infrastructure and financing freedom to hospitals and healthcare providers. More than $225 million was spent for nine state healthcare programs and total healthcare spending was $612 million in 2010. In 2013, this figure is expected to rise to $760 million.
“Since Azerbaijan is a new and untouched market, the advantage is that whoever goes there now will be the first to develop the private healthcare market,” Berenjforoush told Med Ad News Daily. “Also, Azeris as well are now getting more income, so they demand better healthcare service than the public ones. There are very few private hospitals and the public has little to no trust on the public hospitals, so the private ones are becoming more and more popular.”
The biggest issue for Azerbaijan’s healthcare industry is the lack of human capital, that is, not enough doctors and nurses with up-to-date expertise. However, the government is now promoting programs that encourage the youth to enter medical careers. By sponsoring their education abroad in Turkey, Europe and the United States, a new wave of well-trained doctors is getting ready for work.
To address the shortage of well-trained healthcare personnel in Azerbaijan, some options include opening up training facilities to train doctors, nurses, and personnel, or bring in outside expertise to work in private hospitals or clinics, according to Berenjforoush. “Right now, we see Azerbaijan funding the education of students abroad, especially in medicine by giving scholarships,” she says. “Most of the students go to Turkey and Europe as well as the U.S. So by opening up training facilities in Azerbaijan itself, and having a foreign name on it, would capture the interest of many.”
Iran’s healthcare industry was worth $26.44 billion in 2011 and increased to $28.13 billion in 2012. Currently, healthcare out-of-pocket expenditure is at 55 percent, which is very high compared to neighboring countries. Cardiovascular diseases account for 45 percent of deaths, while 18 percent are a result of road accidents, which also account for high disabilities and injuries numbers, especially among the younger population. The third main cause of death is cancer (14 percent, particularly lung cancer, is expected to increase to 18 percent by 2030), followed by neonatal and respiratory diseases (6 percent). Diabetes, osteoporosis, and nutritional and psychological disorders are also on the rise. Drug addiction problems affect 3 to 5 percent of the population, with a strong correlation to HIV/AIDS cases. The need for a better medical system and products to address Iran’s healthcare issues would therefore favor investments in the country.
“More government participation in the healthcare would require less out-of-pocket,” Berenjforoush told Med Ad News Daily. “That’s something Iran's government has been trying to implement with the reforms.”
Iran’s Healthcare Market on the Rise - Frost & Sullivan
Azerbaijan Rises as the New Player in the Healthcare Industry
Iran and Azerbaijan are blooming locations for healthcare investors, according to Frost & Sullivan analysts. Although young, Azerbaijan is presenting itself as an attractive ground for healthcare investors. Continuous government reforms coupled with the shortage of medical expertise, equipment, and personnel are driving the transformation in the country’s healthcare market. The government has increased its healthcare budget more than 10 times in the past decade and built or remodeled more than 500 healthcare facilities. As for Iran, the healthcare industry within the nation is headed for a bright future. Iran is ranked 15th among Middle Eastern and African countries regarding long-term investment potential. The huge youth population cohort combined with the healthcare industry’s room for improvement, promise growth in the private sector, and investments in the pharmaceutical, healthcare facilities, and medical devices market.
“Being oil-rich provides income that Azerbaijan did not have before, which we can see from the amount of money that the government started setting apart for the healthcare after the oil income and before,” says Frost & Sullivan Healthcare Research Analyst Uldouz Berenjforoush. “Azerbaijan has been developing its oil sector by building various centers to address, for example oncology, ophthalmology as well as Thalassemia.”
With a growing population of more than nine million averaging 30 years of age, Azerbaijan’s future healthcare system will depend on an organized and well-established public health sector. Currently, Azerbaijan’s healthcare expenditure remains small when compared to its gross domestic product. This means higher out of pocket payments for patients. In 2007, 62 percent of fees were out of pocket payments. To alleviate this burden, the state is aiming for universal welfare as well as other reforms aimed at improved healthcare infrastructure and financing freedom to hospitals and healthcare providers. More than $225 million was spent for nine state healthcare programs and total healthcare spending was $612 million in 2010. In 2013, this figure is expected to rise to $760 million.
“Since Azerbaijan is a new and untouched market, the advantage is that whoever goes there now will be the first to develop the private healthcare market,” Berenjforoush told Med Ad News Daily. “Also, Azeris as well are now getting more income, so they demand better healthcare service than the public ones. There are very few private hospitals and the public has little to no trust on the public hospitals, so the private ones are becoming more and more popular.”
The biggest issue for Azerbaijan’s healthcare industry is the lack of human capital, that is, not enough doctors and nurses with up-to-date expertise. However, the government is now promoting programs that encourage the youth to enter medical careers. By sponsoring their education abroad in Turkey, Europe and the United States, a new wave of well-trained doctors is getting ready for work.
To address the shortage of well-trained healthcare personnel in Azerbaijan, some options include opening up training facilities to train doctors, nurses, and personnel, or bring in outside expertise to work in private hospitals or clinics, according to Berenjforoush. “Right now, we see Azerbaijan funding the education of students abroad, especially in medicine by giving scholarships,” she says. “Most of the students go to Turkey and Europe as well as the U.S. So by opening up training facilities in Azerbaijan itself, and having a foreign name on it, would capture the interest of many.”
Iran’s healthcare industry was worth $26.44 billion in 2011 and increased to $28.13 billion in 2012. Currently, healthcare out-of-pocket expenditure is at 55 percent, which is very high compared to neighboring countries. Cardiovascular diseases account for 45 percent of deaths, while 18 percent are a result of road accidents, which also account for high disabilities and injuries numbers, especially among the younger population. The third main cause of death is cancer (14 percent, particularly lung cancer, is expected to increase to 18 percent by 2030), followed by neonatal and respiratory diseases (6 percent). Diabetes, osteoporosis, and nutritional and psychological disorders are also on the rise. Drug addiction problems affect 3 to 5 percent of the population, with a strong correlation to HIV/AIDS cases. The need for a better medical system and products to address Iran’s healthcare issues would therefore favor investments in the country.
“More government participation in the healthcare would require less out-of-pocket,” Berenjforoush told Med Ad News Daily. “That’s something Iran's government has been trying to implement with the reforms.”
Iran’s Healthcare Market on the Rise - Frost & Sullivan
Azerbaijan Rises as the New Player in the Healthcare Industry
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