Leading global professional services firm Alvarez & Marsal’s (A&M) UAE Health Sector Pulse for Q1’ 2021 reveals that the COVID-19 pandemic triggered a sprint towards a smarter healthcare ecosystem. The study examines the trends and challenges facing providers, and payers; and looks at significant health care model disruptors, evolving market opportunities, and policy/regulatory developments. It finds that innovation and collaboration are key to future growth.
The report highlights that amidst multiple, simultaneous delivery of services shifts, healthcare companies showed resilience in improving their existing operating models, pursuing digital health solutions, along with provider consolidation, to achieve economies of scale as well as vertical and horizontal expansion.
Karim Benhameurlaine, Managing Director and Head of Healthcare and Life Sciences Middle East with Alvarez & Marsal commented: “The Covid-19 Pandemic has caused and amplified numerous foundational shifts. We see increasing consumer involvement in healthcare decision-making. The rapid adoption of telehealth service digital services, new strategic partnerships, as well as vertical and horizontal integrations, are enabling access to new market segments along with procurement and manpower operational efficiencies.”
Covid-19 is big stimuli to telehealth
The Covid-19 pandemic has accelerated telehealth usage across the UAE, and virtual health services are here to stay. As the UAE telehealth market is expected to grow at a compound annual growth rate (CAGR) of 25% per year from 2020 to an estimated $536.5 million by 2025, telehealth may become the next frontier to cope with public health crises and a key pillar of post-Covid-19 patient care.
Currently, 91% of UAE insurers reported that their policyholders recently used telehealth services, as opposed to 31% pre-pandemic, representing an increase of 60% as a result of the pandemic. Over 50% of expats in the UAE are likely to use telehealth for primary care, 14% more than global averages.
Payers pivot as patient behavior shifts
Post-Covid-19, leading healthcare payers are making investments, building partnerships, and exploring acquisitions that will further expand their business models and contain costs as providers are paving the way for future hybrid care models.
In 2020, the UAE also noted an increase of 8% in insurance premiums, exceeding the inflation rate. Given that Dubai healthcare expenditure is on the rise, and with employers shouldering the burden due to compulsory insurance, regional payers are modifying reimbursement policies to accelerate the shift to value-based reimbursement models.
The road ahead for hospitals
The number of hospitals in the UAE has been steadily growing year on year, at a rate of 6.2% per annum, leading to an increasingly competitive healthcare provider market. Increased market supply has increased healthcare provider market competition, shifting focus to operational agility and revenue diversification.
Dr. Sara Alom Ruiz, Senior Director Healthcare and Life Sciences Middle East with Alvarez & Marsal commented: “There continues to be a shift in-patient demands, as well as an increase in competition and cost pressures. Going forward, organizations looking for opportunities will need to focus on transformation programs that increase operational efficiency, evolve processes to adapt to changes in patient behaviors, and work towards growing alternative revenue streams that enable overall revenue growth.”