Alvarez & Marsal's first edition of the UAE health sector pulse highlights how COVID-19 has accelerated the disruption of traditional care models

• Pandemic resulted in improved digital infrastructure; 60% increase in adoption of telehealth services as compared to pre-Covid era
• Number of hospitals in the UAE have increased by 6.2% per annum over the last decade 

Dubai: – 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.

Karim Benhameurlaine, Managing Director and Head of Healthcare and Life Sciences Middle East with Alvarez & Marsal’s Strategy and Performance Improvement, and Dr. Sara Alom Ruiz, Senior Director Healthcare and Life Sciences Middle East with Alvarez & Marsal Strategy and Performance Improvement group in Dubai, co-authored the report. They highlight 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.

Mr. Benhameurlaine 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. While regulatory authorities have greatly supported the UAE’s digital transformation, the current dynamics are challenging other stakeholders across the region to innovate and collaborate.”

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 percent per year from 2020 to an estimated* US$536.5 million (AED19.7 billion) 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 percent of UAE insurers reported that their policyholders recently used telehealth services, as opposed to 31 percent pre-pandemic, representing an increase of 60 percent as a result of the pandemic. Over 50 percent of expats in the UAE are likely to use telehealth for primary care, 14 percent 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 percent 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 percent 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. Alom commented: “The pandemic has had a multifaceted impact on healthcare providers. 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 alterative revenue streams that enable overall revenue growth.” 

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*Source: DOH, DHA, Markets and Markets, Aetna, A&M Analysis

About Alvarez & Marsal

Companies, investors and government entities around the world turn to Alvarez & Marsal (A&M) for leadership, action and results. Privately held since its founding in 1983, A&M is a leading global professional services firm that provides advisory, business performance improvement and turnaround management services. When conventional approaches are not enough to create transformation and drive change, clients seek our deep expertise and ability to deliver practical solutions to their unique problems.

With over 5,400 people across four continents, we deliver tangible results for corporates, boards, private equity firms, law firms and government agencies facing complex challenges. Our senior leaders, and their teams, leverage A&M’s restructuring heritage to help companies act decisively, catapult growth and accelerate results. We are experienced operators, world-class consultants, former regulators and industry authorities with a shared commitment to telling clients what’s really needed for turning change into a strategic business asset, managing risk and unlocking value at every stage of growth.

To learn more, visit: www.AlvarezandMarsal.com  

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© Press Release 2021