‘Big opportunity’ for UAE hospital consolidation, NMC chief says

• UAE spends 5% of GDP on health
• Costs rising across the board
• Consolidation for economies of scale

UAE hospitals are under intensifying strain as operational costs outstrip regulated prices, accelerating consolidation across the sector, a senior healthcare executive said.

David Hadley, chief executive of NMC Healthcare, said the survival of hospitals is increasingly under threat as profit margins shrink amid higher costs for equipment, medical devices and pharmaceuticals. Consolidation is an important factor in facing these issues, he said.

Medical insurance tariffs in the UAE set the baseline for how much healthcare providers are reimbursed for services delivered to insured patients. These tariffs have remained relatively stagnant despite rising operational costs, leading to tighter margins for providers. Providers such as NMC are having to adapt by optimising delivery, investing in digital solutions or considering consolidation, the company has said.

If the increased cost of running operations is not passed on to customers and patients, “more and more hospitals will be challenged to be able to survive”, Hadley added. 

Unlike other industries that have benefited from rapid technological disruption and efficiency gains, healthcare delivery has remained relatively insulated from innovation, leaving operators exposed to inflationary pressure, Hadley said.

At the same time, while healthcare costs for patients have increased in the UAE, with projections of a further surge in the coming years, Hadley said the additional revenue fails to offset higher operational expenses that are butting up against existing insurance tariffs.

“Healthcare providers need to manage cost” as best as possible, he said. “One of the ways of doing that is to consolidate, to create synergies and to unlock economies of scale.”

Healthcare spending in the UAE is rising from a relatively low base. Costs stand at about 5 percent of GDP per capita, below global averages of 10 to 20 percent, according to Hadley. 

NMC

That gap is narrowing as increased demand for advanced treatments, specialist drugs and long-term care is driven by an ageing population and changing patient behaviour.

Hadley said that in the past, expatriates living in the UAE would go to their home country if they needed significant healthcare, but “they are now staying here as the services are now available”.

Healthcare costs for patients across the Middle East are projected to rise 12 percent this year, consultancy WTW reported, adding further pressure on insurers, governments and providers to manage affordability while maintaining service quality.

While healthcare spending is often viewed as a “grudge purchase” – something essential rather than what an individual wants to buy – Hadley said the sector’s stability is essential for broader economic resilience, a dynamic that is increasingly pushing operators toward scale.

This is a worldwide trend, Hadley said: “First and foremost, healthcare across the globe is consolidating. You’re seeing it in all countries, in all industries, but in healthcare, specifically on the provider side, you’re seeing more and more consolidation pressures.”

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He said the UAE, with more than 160 public and private hospitals and over 5,000 clinics and healthcare centres, is ripe for consolidation: “If I look at the UAE, there is a big opportunity for more consolidation, I believe.”

Deal activity has been accelerating. Mubadala-backed M42 has been expanding through healthcare technology acquisitions, while IHC-backed Pure Health has been acting as a consolidator across diagnostics, hospitals and procurement.

In October 2025, Al Mal Capital REIT, linked to Dubai Investments, acquired the NMC Royal Hospital asset in Dubai Investments Park for about AED1.4 billion ($381 million), marking the real estate trust’s first move into healthcare infrastructure.

“Healthcare may be a grudge purchase,” said Hadley, “but we need to maintain the health of the economy and providers that provide the service to the economy and the people within.”