Recently, Omnia Health Insights hosted a webinar titled ‘Top predictions for GCC healthcare in 2021’, which was moderated by Reenita Das, Senior Vice President and Partner, Frost & Sullivan, where she discussed the outlook for 2021 and made some key predictions for the GCC region.
She highlighted some of the big issues that the region, specifically the Kingdom of Saudi Arabia (KSA), is expected to face in 2021 and some of the big growth opportunities for the next five years. The webinar also featured a panel discussion with Ali Zhairati, Head of Marketing, Sales Operations and Communication, Siemens Helthineers and Dr. Osama Ahmed, MD, CEO, TachyHealth.
Reenita started the discussion by saying: “2021 will be a year where we are going to make a massive transition from physical to digital. 2020 was one of the most dreadful years in our history and had one of the biggest impacts in terms of healthcare.”
She shared that COVID-19 resulted in several major trends. We saw the rise of chronic diseases all across the world. Therefore, in 2021, there will be a tremendous focus on wellness and prevention to curb chronic diseases. The other big trend is more private sector participation. In fact, private sector participation is set to increase by almost 30 to 50 per cent. The next trend will be in insurance-based healthcare financing and the insurance system, resulting in growth opportunities, especially in virtual health.
Localisation of manufacturing and localisation of the workforce is another big area of growth. For the region, it is expected that 30 per cent of medical devices and 40 per cent of pharmaceutical products will be manufactured locally by 2025. Local manufacturing is set to increase from 2 per cent to almost 30 per cent in the next four years.
Moreover, digitalisation by way of home to hospital is where the infrastructure is going to be built. Today, 50 per cent of hospitals in the UAE and KSA use some level of digital solutions and IoT based access. Also, it has been observed that 80 per cent of doctors are using tablets, smartphones and medical applications.
“Recently, we conducted a study among consumers and found that 80 per cent are open to using electronic forms of communication for health and information,” said Das. “As a long-term strategy, the region definitely needs to focus on expanding and increasing that technical workforce whether it’s nurses or radiologists or laboratory technicians.”
One of the big revenue predictions for the region is that the market is expected to cross US$30 billion in 2021.
She said: “KSA is going to drive a large part of the spending by about 60 per cent. The second-largest market is the UAE at around 25 per cent, followed by Kuwait and the other regions. In KSA, the two big priorities will be infrastructure and digital transformation. We’re also looking at a lot more private investment coming in. In fact, almost 95 hospitals and 2,200 healthcare centres are expected to be privatised by 2030. There is a lot of innovation happening in the private space as well as in the start-up space that we’re going to see develop and escalate over the next eight years. The UAE leads the pack in terms of digitisation in healthcare,” she emphasised.
However, the Kuwaiti government, in comparison still lags behind economic development and digitisation. There’s a tremendous need to increase their capacity in terms of healthcare facilities and delivery, she added.
Key predictions
The first big prediction that Das made was that the KSA is most likely to face a shortfall of around 35,000 beds for extended care, where the capital, Riyadh, will account for 20 per cent of the shortfall, which is high compared to other parts of similar developed countries. Extended care services in other parts of the world offer savings of around 33 per cent compared to creating care in the hospital itself. A study within the region also found that 4.7 per cent of general hospital beds are being utilised for extended care patients.
“If we had a very sophisticated extended care infrastructure in the Kingdom, we would see US$2.5 billion saved if service delivery was set up. So, what does this mean? First of all, we really need to focus on building the extended care framework from hospital to home. There are a lot of opportunities for the private sector and international rehabilitation service providers to be able to come in and do that,” she explained.
The second big growth area is in virtual care solutions such as telehealth, remote monitoring and connected medical devices that patients can come home with from the hospital, especially when taking care of cardiac, chronic obstructive pulmonary disease (COPD), and respiratory disease issues.
The third big implication for the region is the lack of staff to cater for additional demand and extended care settings. Therefore, staffing agencies need to be employed and workers must be hired from other parts of the world to come in and take care of the deficit.
“I believe that this is an area that the KSA will need to focus on for the next eight years as they build infrastructure,” she said.
Another prediction Das made was that there is going to be a huge increase in virtual care and telehealth partnerships, and international players will drive some of this in the future. Public-private partnership projects will increase the quality and adoption of telehealth services in the region. Recent primary research done by Frost & Sullivan sized the market at US$1.7 million, growing at a CAGR of roughly 24 per cent. This highlights the potential for further growth in terms of market size and adoption of telehealth services.
“I think the biggest question that everyone asks in telehealth is who’s going to pay for the service, and insurance companies really need to iron out some of their regulations,” she stressed. “Several changes have been made to telehealth regulation globally. I think, in the future, KSA needs to focus on some of the changes as well as on bringing in more international telehealth vendors, which will foster partnership with government bodies and hospital chains.”
Another key prediction made during the webinar revolved around diabetes. According to Das, the economic burden of diabetes in the Kingdom will cross US$10 billion, which is equivalent to 45 per cent of the budget that has been allocated to the Ministry of Health in 2021. Spending on diabetes, obesity, and cardiovascular is forecast to grow from US$2 to US$3 billion by 2025, growing at around 6 per cent CAGR. Recent research has highlighted that about half the patients have Type 2 diabetes and die from cardiovascular causes as a result of this.
Therefore, the Kingdom is trying to reduce diabetes prevalence by about 10 per cent by 2030. “It is a tall order, but it also requires a lot of support from different kinds of companies,” she added. “I think the opportunities are, firstly, for medical technology companies, whether it’s diagnostic companies or med-tech companies, to focus on creating services, which are going to be based on a platform strategy.
“For instance, we are looking at chronic disease management platforms to create partnerships with government and private providers. We’re also looking at a lot of work coming in from biopharmaceutical companies because they are providing the drugs to patients with diabetes. There is also the whole aspect of wellness and preventative care services, which involves self-management tools, weight control, weight management, healthy eating, and a lot of work that needs to be done to change the psychology of consumers in terms of food behaviour and lifestyle.”
Growth Opportunities
KSA’s vision 2030 has transformed the public healthcare delivery system and the country has about 20 to 30 healthcare clusters that have been created to serve the needs of the population. The first thing that these clusters need to be thinking about is real-world evidence about the value of their solutions, products and technologies and what it does in terms of increasing outcomes and reducing cost.
In this regard, one of the major growth opportunities in the region, highlighted by Das, is the whole aspect of the accountable care organisation (ACO) structure and the opportunities it can bring to the market.
The other area where there’s a lot of potential is in managed equipment services, in terms of imaging, and risk-based contracts, whereby medical technology companies can enter into contracts with hospitals, which will help to reduce the strain on budgets. Vendors can play an essential role in improving care coordination, building a framework for precision health and bringing the right product to the right person at the right time to the right channel, and managing that effectively.
Another big growth opportunity is in the field of Radiology. Across the world huge development is happening in the area in terms of building standalone radiology labs that can take care of populations within the community. As part of the transformation programme, the KSA government is building radiology labs across Riyadh and other areas and is working towards providing staff, nurses and technicians who can work for the local community. There is also increasing adoption of artificial intelligence (AI), which can help radiologists make decisions faster. Other opportunities in the space include building new business models in terms of staffing, whether it’s technicians, radiologists, and support staff, as well as building private diagnostic centres using a PPP model, which will help to escalate and give access to radiology services to the Kingdom.
There is also a growing need today to strengthen clinical laboratory infrastructure. Frost & Sullivan’s research found that most laboratories in the Kingdom are suffering delays in terms of getting laboratory results by almost two days. There is also a 30 per cent sample rejection rate, so the tests have to be redone. Often, the tests are also not accurate. So, there’s a high volume of send out samples that are happening, which reduces almost US$55 million. Moreover, almost 40 per cent of primary healthcare centres don’t have clinical laboratories, which means patients have to go to other centres to get tests done.
Das shared: “I think there’s a huge demand to create laboratories where you can do in vitro diagnostic testing, offer same-day test results, and provide resources to struggling hospitals, especially as a result of COVID-19. There are a lot of opportunities that I see happening in this space and many companies have started working to increase the availability of testing by almost 50 per cent over the next few years.”
“In my opinion, the future of care would evolve to a platform strategy that would connect all aspects of health and wellness from hospital to the home across the continuum of care. COVID-19 has accelerated the need for an integrated care strategy, where getting care to the right person at the right time, has become the North Star. So, an all-in-one platform is crucial for us to make progress,” she concluded.
This article appears in the latest issue of Omnia Health Magazine. Read the full issue online today, covering femtech, AI, IoT and much more.