Digital health use and benefits in KSA and UAE – McKinsey

  • November 8, 2023
  • November 8, 2023
  • 8 min read

Throughout the Middle East, consumers are enthusiastically adopting digital services. Smartphone penetration rates in the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) are among the world’s highest, at an estimated 93 percent, with citizens using the devices to access digitized public services.1
We employed a two-step approach to learning how consumers in KSA and UAE think about digital health. First, we conducted a market scan to identify digital-health applications used in the two countries. To identify adoption trends, we analyzed nonunique download numbers from the Google Play store and Apple’s App Store.
To measure consumer sentiment, we then surveyed the preferences of 1,400 users and nonusers of these digital-health apps in various demographics. We ran statistical tests (Chi-squared and Cramér’s V) to determine if there were any significant relationships between respondents’ demographic characteristics and their survey answers. This analysis did not reveal any significant demographic associations.
In this context, KSA and UAE seem well-positioned to reap benefits from digital-healthcare technologies. In 2022, McKinsey surveyed 1,400 consumers in KSA and UAE to better understand their sentiments toward and experiences with digital-health services (see sidebar “Survey methodology”). The survey revealed high levels of interest and awareness in such technologies. Based on our findings, we believe that KSA and UAE could use digital-health solutions to benefit patients and improve outcomes in areas including chronic-disease management, diagnostics, and preventative care. Indeed, with proper management, the combined digital-health market in KSA and UAE could reach $4 billion by 2026 (Exhibit 1).
Four major themes emerged from our consumer sentiment study:
The survey responses reveal potential growth opportunities in the Middle East for companies to provide digital services across the various submarkets to improve people’s health and wellbeing (see sidebar “Seven digital-health submarkets are emerging in KSA and UAE”). KSA and UAE can accelerate the development of digital-healthcare services by focusing on product and value propositions, refining go-to-market approaches, developing new business models, and investing in promising technologies. Overall, the goal should be to improve patient outcomes by developing digital-health capabilities that match consumer needs and preferences. Here is a detailed look at four areas representing major digital-health opportunities for KSA and UAE (see sidebar “Marketsizing methodology”).
To size the digital-health market, we looked at six types of applications: teleconsultation, online pharmacy, home diagnostics, chronic-disease management, wellness and disease prevention, and a catchall “other” category that includes e-booking, medical chatbots, licensing and platform-as-a-service, and marketplace offerings. There may be additional use cases in, for instance, personalized messaging, e-triage, patient support networks, and e-payment integration.
We calculated the market size and forecasts as follows:
Our survey shows that many consumers in KSA and UAE remain unaware of the diverse range of available digital-health technologies. Our field experience tells us there are high costs associated with business-to-consumer (B2C) customer acquisition in digital healthcare. The industry may be able to reduce its customer acquisition costs by focusing on business-to-business-to-consumer (B2B2C) partnerships between digital-health solution developers and healthcare professionals, insurance companies, or employers. The partners can then deliver the developer’s digital-health solutions to their patients, customers, or employees.
For example, a developer of a hypertension-monitoring app could partner with an insurer that can incorporate the app into its complementary healthcare offerings or with a corporation that adds the app to its package of employee benefits. In both cases, the developer obtains preferential access to a group of customers who, in turn, benefit from an easier way to keep tabs on their hypertension risk.
Huma is a British digital-health start-up that offers episodic and chronic digital healthcare. After testing and proving its value proposition, it recently received $200 million to scale up, which it will do with its partners, the governments of the United Kingdom, Germany, and UAE and key pharmaceutical companies.2
Our survey showed that many consumers have tried digital-health options based on recommendations from people they know and trust. Survey respondents also said that value and affordability motivate them to use digital-health services.
These findings indicate the potential for new business models based on innovative pricing options, including bundled subscriptions and behavioral financing.
With a bundled subscription model, consumers typically pay a monthly recurring fee instead of making a one-time purchase. Subscription models are associated with high customer retention. For example, the UK-based global telemedicine and health AI company Babylon Health, which uses a subscription pricing model, had a three-month user retention rate of 95 percent in 2020. This helped the company achieve a fourfold increase in annual revenue from 2020 to 2021.3
Behavioral financing involves setting fees based on consumers’ behavior, as measured by smartwatches and other wearable devices. For example, a wearable device could be offered for an initial one-time fee, followed by a monthly subscription that could be lowered or waived based on how many miles users walk or calories they burn. Such incentives could also be offered in partnership with gyms, providers of healthy meals, retailers of home fitness equipment, and other health-related businesses.
Vitality, a health insurance company based in South Africa, uses this behavioral financing strategy. Vitality members pay a small up-front fee to receive an Apple Watch on a 24-month financing plan. The monthly fee can be waived if the consumer earns a set number of activity points per month. In one study, this subscription-based incentive resulted in almost 34 percent more tracked activity a month.4
In our survey, consumers indicated that they want engaging solutions. Digital-health developers in KSA and UAE can make their tools more engaging by deploying gamification techniques. Sidekick Health, a digital-therapeutics leader based in Iceland, has found success by collaborating with gaming companies to dramatically improve retention and engagement and strengthen the clinical impact of its digital tools for consumers with chronic diseases. Sidekick users can rise through various achievement levels and gain points based on certain healthy-behavior tasks such as taking medications, drinking enough water, increasing activity, and making healthy food choices. One randomized trial showed the retention rate on Sidekick to be 80 percent after four months and 75 percent after six.5
Consumers also want digital-health apps that are convenient. One element of convenience is making sure apps can be integrated with devices or other apps a patient already uses. Apple’s Health app, for example, allows users in the United States to share their secure health data on metrics including heart rate, exercise, sleep time, and lab results directly with their doctor or with another user, such as a spouse or exercise buddy.6
New digital-health businesses could have a positive impact where there’s strong consumer demand and inadequate supply. One such area is digital therapeutics, which uses evidence-based interventions to treat or manage a disease or condition by accompanying or replacing existing treatment protocols. Widespread chronic diseases such as diabetes and hypertension cause severe suffering, deprive patients of years of healthy life, and place a heavy burden on healthcare systems. By incorporating digital-therapeutics solutions into patient care, for example to monitor blood sugar levels and administer insulin, KSA and UAE could benefit patients and alleviate some of the pressure on healthcare providers.
The digital-therapeutics market in KSA and UAE has far from reached its full potential. Current usage levels for apps are quite low, likely because few solutions have reached the market, there is limited awareness of those that have, and it is unclear how digital-therapeutic services will be reimbursed. Our research shows that digital-therapeutics apps represent less than 1 percent of digital-health downloads in KSA and UAE.
Several apps operating in other countries demonstrate the potential opportunities for digital-therapeutics services in KSA and UAE:
What was underrecognized prior to the COVID-19 pandemic has now been increasing in relevance. Digital-health solutions have been on the rise in the Middle East, especially in markets with high digital penetration among the population like in KSA and UAE. It is also attracting new entrants as consumer awareness and acceptance of digital-health solutions continue to increase. These entrants include a mix of investors, digital-health start-ups, e-commerce companies, retail conglomerates, pharma companies, health system providers, payers, and even telecommunications companies. As they continue assessing how to scale further and enhance adoption to boost digital-health value and impact on lives, start-ups and other solution developers can address the four areas we highlight and potentially grow as unicorns. New pricing models, B2B2C go-to-market strategies, and gamification methods collectively hold the potential to push down customer acquisition costs and accelerate the growth of the digital-health sector in KSA and UAE.
Mahdi AlBasri, MD, is a consultant in McKinsey’s Dubai office, where Panco Georgiev, MD, is a senior partner; Hani Elwan, MD, is a consultant in the Riyadh office; and Ali Ustun is a partner in the Doha office.

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