Featured in the Middle East Insurance Review
SVEN-OLAF VATHJE, PHD,
FEBRUARY 11, 2021
The year 2020 will go down in history books as the year when it finally happened — the forceful arrival of digital health solutions in everyday healthcare.
For decades, healthcare provider systems around the world had been investing where they always had in brick-and-mortar assets ..
- for more or less shiny facilities,
- in physical physician-patient interactions in dedicated environments,
- and into more doctors and more nurses to tackle the ever-increasing need for care.
The Middle East was no exception from this pattern.
Driven by rapidly growing populations, an early prevalence of chronic diseases, and an open mind for medical innovations, governments, and the private sector have both been pouring significant funds into the health sector to essentially finance “more of the same” care.
… governments, and the private sector have both been pouring significant funds into the health sector to essentially finance “more of the same” care.
As a result, total health spending in GCC countries is structurally rising between 8 percent and 10 percent annually, which is well above GDP growth rates.
Despite significant wastage in GCC health systems, OW Estimates that up to 20 percent to 35 percent of total health spending is either inefficient, inappropriate or unnecessary care — the fundamental model of physical care delivery has rarely been challenged.
… up to 20 percent to 35 percent of total health spending is either inefficient, inappropriate or unnecessary care — the fundamental model of physical care delivery has rarely been challenged.
A turning point for telemedicine
It took the COVID-19 pandemic to spark the disruption of health systems in the Middle East.
One of the cornerstones of traditional care delivery, the physical contact between physician and patient was affected by infectious risks.
For a brief period of time, utilization numbers dropped significantly.
At the initial peak of COVID-19, some GCC health systems saw inpatient stays in hospitals drop by up to 40 percent (compared to 2019) and outpatient hospital visits by up to 50 percent.
It took the COVID-19 pandemic to spark the disruption of health systems in the Middle East.
Primary care saw a similar reduction in visits.
In subsequent months, numbers have reverted quickly to more normal levels.
Inpatient stays and outpatient visits are almost back to pre-pandemic levels for many providers, reflecting rapidly established new safety protocols (creating trust in patients) and pent-up demand that cannot further be delayed.
The rapid recovery of primary care demand is a different story.
Providers adapted to a new normal and started moving their patients into telemedicine channels.
Initially, telemedicine was more of the self-made version, using impromptu phone and video-calling for patient interactions.
Many providers subsequently adopted tailored telemedicine platform products.
Payers supported the shift to telemedicine as a new entry point into healthcare with their own versions of telemedicine applications.
Often, these telemedicine applications had been under development pre-pandemic and were now being rolled out swiftly to an increasingly interested membership.
Penetration numbers with telemedicine are impressive: In the Middle East, several government systems reported adoption rates of up to 10 percent to 15 percent for telemedicine visits in primary care.
In the early days of COVID-19, a large public health system in the GCC even saw a rapid increase in telehealth visits of up to 30 percent of total visits.
While this is not yet a new standard of care, it indicates that patient adoption of telemedicine is not an insurmountable barrier in the region.
With the right solutions in place, there is a clear opportunity to digitalize care delivery.
As some initial evidence from select US health systems shows, ultimately up to 60 percent of primary care visits may be replaced by telehealth interactions.
With the right solutions in place, there is a clear opportunity to digitalize care delivery.
Emerging trends within the digital health landscape
The significance of the quick adoption of digital health solutions in the Middle East cannot be underestimated.
Most industry experts would have expected the currently observed adoption rates a decade later.
Interestingly, adoption rates are high across all patient segments, including at-risk patients.
There are several reasons to believe digital health is about to stay:
Implications for health insurers
The COVID-19 pandemic is shaking up GCC health insurers’ business significantly.
In the short term, higher claims cost from COVID-19-related patient care and prevention (such as PCR tests, vaccines) could be partially offset by a somewhat lower overall health system utilization.
The implications from increased member usage of digital health are currently overlaid by the broader pandemic noise.
What will we see when the dust settles?
Will digital health substitute or complement traditional healthcare models?
In the mid-term, health insurers can expect a number of implications from digital health:
The road ahead
In the Middle East, both healthcare providers and insurers have invested significantly into their digital infrastructure in recent years.
The pandemic-accelerated consumer interest in digital health is proving those investments right: providers and payers have been better prepared for the pandemic than they would have been some years ago.
The next few years will form a transitional period in which digital health capabilities need to be further built while maintaining traditional brick-and-mortar formats — a financially challenging stretch.
As digital health gains further momentum, a stream of growth opportunities for GCC health insurers will open up.
The next few years will form a transitional period in which digital health capabilities need to be further built while maintaining traditional brick-and-mortar formats — a financially challenging stretch.
Originally published at https://health.oliverwyman.com.
Featured in the Middle East Insurance Review
SVEN-OLAF VATHJE, PHD,
FEBRUARY 11, 2021
