Joint research conducted by Mashreq, one of the leading financial institutions in the UAE, and Frost & Sullivan, a growth strategy consulting and research firm, reveals that Gulf Cooperation Council (GCC) healthcare service providers are poised for significant investments in digital health to kick-start the recovery of the industry post COVID-19.
The research report, titled GCC Healthcare: A Glance into the Future, found that revenue in the GCC healthcare industry will contract only modestly this year due to the pandemic. In 2019, revenue across the sector (including Pharma, Medtech, hospitals etc.) totaled $38.45 billion, with the expectation that it is likely to be almost flat for 2020 between $36.8 billion and between $37.9 billion as large declines in the medical imaging equipment market and medical technologies market are offset by growth in Pharma and Digital Health investments.
However, the report found that the pandemic has catalyzed GCC healthcare service providers to ramp up investments in digitization and telehealth, in an effort to drive future growth and improve operational efficiencies post COVID-19. Annual investment in digital infrastructure is expected to increase by anywhere between $500m to $1.2b, an increase of 10% to 20% in the next two years, compared to previous estimates of 3% to 4%. And by Q4 2020, virtual visit volumes are set to increase by four times.
In addition, the pandemic is also expected to drive implementation of lean management systems and Knowledge Process Outsourcing (KPO) across the healthcare sector in order to maximize
cost efficiencies for providers, helping them offset immediate revenue challenges and be prepared for any future cash and liquidity issues.
Karim Amer, SVP, Head of Healthcare and Education, Mashreq, said: ”GCC countries have been successful in managing the spread of COVID-19 and overcoming issues quickly. The pandemic has brought negative growth to the global economy, and while healthcare has not been entirely immune, it is expected to show more resilience in relation to most industries, with accelerated growth in several subsectors such as Long-Term Care, Post-Acute Care and Telehealth. As the region”s healthcare industry embarks on a process of recovery, digital health will emerge to prominence. It will be the fastest to transform and regain growth, catalyzing fundamental change throughout the entire industry. Demand for digital healthcare has already increased significantly and we expect it to rise further across many areas including Remote Patient Monitoring, virtual care, robotic automation and artificial intelligence. In many ways then, the COVID-19 crisis marks a turning point for the healthcare sector globally as well as within the GCC, providing it with an opportunity to revamp its roadmap for the future.”
During the COVID-19 crisis, the biggest challenges have been dealing with supply chain disruption and optimizing cash flow management for healthcare providers. The unforeseen surge in demand for drugs, test kits and personal protection equipment has accelerated the need for domestic manufacturing. The report estimates that by 2021, there will be an increase in the number of domestic manufacturers. And by 2025, at least 30% of the medical devices and between 30% and 40% of pharmaceutical products consumed in the region will be manufactured locally.
”As the region continues to deal with the COVID-19 pandemic and overcome the burden being put on the healthcare sector, we are seeing healthcare investments realign to overcome shortcomings and support growth. The foundations are being laid for a more efficient industry where the whole healthcare delivery system will be reinvented. The opportunities ahead are abundant,” Amer added.
Mashreq is uniquely positioned to add value and support its existing and potential clients in the healthcare space. The bank”s sector specialization enables it to function as an integral part of the healthcare ecosystem and offer holistic solutions, not confined to balance sheet support and traditional lending. For example, healthcare has been witnessing sizeable M&A activity and
consolidation over the past few years which is expected to further accelerate, and Mashreq is capitalizing on its extensive healthcare network to introduce and facilitate such opportunities. Another area where the bank has been collaborating and supporting its clients closely in light of the recently lifted movement restrictions in the UAE, is with regard to the digitization of payment transactions, which most businesses within healthcare and other sectors are now looking at as an immediate necessity rather than a medium term objective.
- Saudi tourism sector logs 121% surge; fastest in G20
- A global benchmark for food and healthcare logistics in the...
- How UAE’s construction sector is back to business
- Saudi Arabia needs 20,000 extra hospital beds by 2030 amid...
- Radisson plans 25 new properties with 5,000 keys in Mideast
- See the blog
- Success Stories