Rapid health care market growth anticipated in the Middle East

6 September 2016 – Change is the new normal for the global health care sector, according to Deloitte’s recent report entitled “2016 Global health care sector outlook - Battling costs while improving care”. As providers, payers, governments, and other stakeholders strive to deliver effective, efficient, and equitable care, they do so in an ecosystem that is undergoing a dramatic and fundamental shift in business, clinical, and operating models.

This shift is being fueled by aging and growing populations; the proliferation of chronic diseases; heightened focus on care quality and value; evolving financial and quality regulations; informed and empowered consumers; and innovative treatments and technologies — all of which are leading to rising costs and an increase in spending levels for care provision, infrastructure improvements, and technology innovations.

“It’s expected that the dip in health care spending in the GCC in 2015 is temporary. Spending growth is anticipated to resume in 2016, topping four percent, and rise to over six percent a year in 2017 and 2018,” said Abdelhamid Suboh, partner and Life Sciences and Health Care industry leader at Deloitte Middle East. “Driven by population expansion and rising wealth, growth in Asia and the Middle East markets will be particularly rapid as public and private health care systems develop in some countries; in addition, the trend towards universal health care is likely to be a growth driver in numerous markets. However, the pressure to reduce costs, increase efficiency, and demonstrate value will continue to intensify.”

While most people associate increasing health care costs with negative situations — such as administrative waste, rising insurance premiums, expensive care for chronic diseases — increasing costs can also signal positive developments such as amazing new medical treatments and innovative technologies that may one day cure diseases that were formerly incurable.

The way forward for the global health care sector is clear. Stakeholders must look for ways to decrease costs, given the consensus that the current upward trajectory is unsustainable and several macro issues are framing the cost discussion as shown in the following areas:

Population health – Stakeholders are seeking to address the cost curve with innovative approaches to managing the health of a population and health and social care systems will need to join forces, and the public and private sectors will have to transition financial incentives from the “break-fix” model of care to prevention, predictive maintenance, and outcome optimization.

Chronic and communicable diseases – The proliferation of chronic diseases is having serious repercussions in both developed and emerging countries. Meanwhile, the fight against communicable diseases continues, especially in developing countries. Also, population access to health care clinicians, facilities and treatments varies widely around the globe – from simplistic as infrastructure basics, to complex as issues with cost containment.

Access – Today’s consumers are also more informed, involved in, and financially responsible for their health care decisions and therefore have higher expectations for the services and products they receive.

Government spending – Health care is one of the largest industries in the world. However, challenging economic conditions are making it difficult for governments in many of the world’s regions to devote the necessary financial resources needed to handle expanding health care demands—especially when they are coupled with ever-rising costs.

Drug price controls – Amid the reform-driven shift to outcomes focused, value-based payment and reimbursement systems, numerous countries are instituting reform-driven drug price controls. Drug manufacturers will continue to be pressured to justify the cost of their products42 based on, among other things, the product’s comparative effectiveness against similar offerings.

Waste – Stakeholders are continually trying to identify ways to drive waste out of the system. At the same time, cost pressures, changing staffing models, technology advancements, and consumer preferences are creating a business case for “everywhere care" through alternative care delivery and operational models such as retail clinics, home care, telehealth, and medical tourism. But as their populations and health care needs grow, countries all over the world struggle to match the demand for trained medical professionals.

Medical advancements – Medical innovation comes with a high price tag. Widespread adoption of personalized/precision care, shifting clinical offerings from mass generalization to mass customization, will likely be made possible through public and private investments in offerings that integrate drugs and devices with low-cost diagnostics, disease management programs, and clinical decision support. Personalizing care based on genetics and individuals’ health information also has the potential to generate new therapies that may radically improve outcomes.

Digital connected health – The demand for value and an increasingly competitive environment are prompting health care organizations to find new and more effective ways to improve care delivery including telehealth, mHealth, electronic patient records, wearables, and social media – which are growing rapidly in use and influence and, thus, hold considerable implications for the health care sector.

Data and analytics – As health systems continue to face shrinking margins, tightening budgets, and evolving payment models, the combination of data and analytics is also being touted as a possible missing key to unlock new sources of value.

To view the whole report, go to: http://bit.ly/2cvLtbh

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About Deloitte & Touche (M.E.):

Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is a leading professional services firm established in the Middle East region with uninterrupted presence since 1926.

Deloitte provides audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with more than 3,300 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has also received numerous awards in the last few years which include best employer in the Middle East, best consulting firm, the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW), as well as the best CSR integrated organization.