Who Pays for Digital Healthcare? Breaking the 5P Deadlock

Last week, I wrote that many health systems are still built more for treatment than wellbeing. They respond when people become sick, but often invest far less in helping them stay healthy in the first place.

That raises the next logical question:

If digital healthcare can improve prevention, strengthen chronic disease management, reduce avoidable costs, and extend care beyond hospital walls… Why is adoption still slower than it should be?

The answer is not the technology; it is the incentives.

Digital healthcare today is no longer limited to electronic medical records or hospital IT systems. It now includes remote patient monitoring, chronic disease management platforms, preventive care programs, wellness apps, digital therapeutics, AI-enabled coaching, virtual care pathways, and connected patient ecosystems.

Many of these tools are already technically possible, clinically useful, and commercially available.

Yet adoption still hits the same wall:

Who will pay for it?

That is what I would call the 5P Deadlock — the tension between five stakeholders whose interests are connected, but not always aligned:

• Payor (insurer / payer)

• Provider (hospital / clinic / physician group)

• Policy Maker (government / regulator / authority)

• Patient

• Pioneer (solution providers / innovators)

And that tension is not unique to a particular region or country, it exists globally — including across the GCC.

The Cost of Doing Nothing

Before discussing who should pay, let's ask a different question:

What is the cost of not adopting digital healthcare?

According to World Health Organization, noncommunicable diseases (NCDs) account for 74% of global deaths. Chronic diseases such as diabetes, cardiovascular disease, obesity-related illness, respiratory disease, and mental health conditions now dominate healthcare demand.

In the Middle East and North Africa region, the International Diabetes Federation estimates 85 million adults are living with diabetes, with millions more undiagnosed. The UAE and Saudi Arabia remain among regions with significant diabetes prevalence.

At the same time, Alpen Capital projects GCC healthcare expenditure to reach approximately US$159 billion by 2029.

These costs are not driven only by advanced surgeries or rare diseases. They are increasingly driven by:

• preventable deterioration

• poor lifestyle risk factors

• unmanaged chronic disease

• delayed intervention

• avoidable admissions

• repeated acute episodes

How the Current Loop Works

In many conventional systems, the cycle looks like this:

1. Patient buys insurance (or receives employer-sponsored coverage)

2. Patient uses little care until illness appears

3. Patient visits provider when symptoms worsen

4. Provider treats and bills

5. Payor reviews, limits, or denies portions of claims

6. Administrative burden increases for both sides

7. Patient exits system until next episode

This model is reactive by design. It creates volume around sickness, not value around health. Hence, it leaves limited room for continuous engagement, proactive monitoring, prevention pathways, community health education, digital coaching, and early intervention models.

Why Each Stakeholder Hesitates

1. Patients

Many patients believe:

“If it is healthcare, insurance should pay.”

Yes. This is why insurance premiums are for, why people pay for - so that when they "need", insurance would take care of it. However, the approach here shall not be limited to getting covered when "needed". 

Here is a different perspective. Many of us have paid subscriptions for streaming platforms, premium apps, sports platforms, or lifestyle services. Some grab their morning coffee from coffee shops in a work week. 

Yet, when it comes to paying a considerably small fee for health and wellbeing from the pocket, the ball is laid to "somebody's" hands for paying it. The value of prevention, coaching, wellness monitoring, or digital tools get compared to two medium-sized coffee, where one is seen as an additional cost, other one is already "budgeted" in monthly spendings.

2. Providers

This is the most sensitive stakeholder. 

Many providers support digital tools that improve internal efficiency or revenue capture: EMR / HIMS, AI diagnostics, coding optimization, scheduling tools, robotic surgery equipment, throughput systems, and so on. But they mostly remain cautious about preventive or connected care tools that may reduce (unnecessary) visits, admissions, or high-margin reactive care episodes. The concern is understandable:

“If patients become healthier, will our revenue fall?”

This assumes revenue can only come from treatment volume, and nowadays, that assumption is becoming outdated. 

3. Payors

Insurers may support prevention in principle, but often ask:

• Will ROI be visible this policy year?

• What if the member switches insurer next year?

• Will this increase premiums pressure?

• Is it mandated?

So, although payors stand to benefit from fewer claims and lower acute costs, short-cycle commercial dynamics slow action.

4. Pioneers (Digital Healthcare Solutions and Platforms technology providers)

I see the pioneers as the least hesitant but most affected stakeholder. They build products, invest capital, validate outcomes, and seek commercial returns. They bring continuous innovation, do extensive research and studies with their clinical partners, and work hard to build their platforms. They don't hesitate to invest and build. But they hit to a point where they question sustainability. 

Solution providers cannot absorb the market alone. They are not designed to subsidize adoption indefinitely. At the end, some party shall pay for their products.

Without aligned buyers, many innovations stall.

5. Policy Makers

Governments and regulators usually understand the long-term value of healthier populations. But unless digital prevention is embedded into:

• reimbursement models

• quality frameworks

• incentives

• licensing pathways

• mandatory standards

…the market often remains fragmented and optional.

So, Who Actually Benefits?

Ironically, if digital healthcare is implemented correctly:

Patients benefit by staying healthier, doing fewer hospital visits, feeling safer and more under medical observation and intervention as needed. Preventive and education healthcare tools and platforms improve their wellbeing, makes them less sick - more healthy.

Payors benefit with lower claims burden, reduced number (and cost) of avoidable admissions, stronger chronic disease control hence less reimbursements, and achieving a lower long-term cost trend.

Policy Makers (regulators, governments) benefit by creating healthier communities, reduced national burden of disease, stronger productivity, and staying aligned with the global digital transformation agendas.

Pioneers benefit by larger markets, faster adoption, increasing scale of innovation.

Providers can also benefit. But only if they redesign the model. 

And this is where the conversation must evolve.

How Providers Turn “Loss” Into Gain

Preventive care should not (only) be seen as revenue cannibalization. It will for sure affect the revenue, reduce it. But it's not a problem without a solution. Digital healthcare transformation, especially in terms of patient-facing tools should be seen as revenue transformation. There is a need for a shift in thought cycles, healthcare delivery systems, and bringing in new revenue models on the table - I had discussed about this in the previous edition of this newsletter.

Providers can adopt subscription based care models where there could be monthly/annual programs for chronic disease management (especially for NCDs), hyper-tension and cardiac health follow-up programs, women's health & pregnancy care programs, wellness and wellbeing memberships, elderly monitoring and assistance programs, and similar services can bring new revenue, help compensating the lost part due to reduced number of visits.

Who will pay for it?

Patients

By keeping such subscription fees at affordable rates, they will surely find patients who are willing to pay to stay healthier. It's not only the governments who are trying to build healthcare systems transformed more into healthier living rather than reactive treatment responses. Community members also now have increased level of consciousness, and they also know that staying healthy has more value than falling sick and getting treatment.

Payors

The cost of sick care and episodic approach is much higher than the cost of implementing and offering preventive-care and monitoring digital healthcare tools to the community members. They can achieve enriching their policy benefits by still sustaining the current premiums. They can also develop additional value options either by add-ons or introducing new policy types and offer it to their members at a certain fee.

The shift in the payors side is at a higher pace. Here are some examples.

Bupa Arabia's partnership with Oura and covering it in their schedule of benefits have publicly positioned Bupa beyond conventional reimbursement and increasingly toward health management, prevention, and member engagement. Their broader strategy emphasizes helping members live healthier lives, not only processing claims.

Daman started promoting wellness engagement programs, member activity initiatives, and corporate health & wellness awards encouraging prevention and healthier lifestyles. The equation is simple; healthier members = lower claims trend + stronger retention + better brand value.

These examples and encouraging movements will increase. We will see more of such shifts across the region soon.

Employer Health Partnerships

Employers are not a direct stakeholder in the healthcare system, but they represent a significant part of the insurance policy buyers, especially here in the GCC. Their success is directly aligned with the productivity of their employees. Productivity requires employees being healthy in the first place. Keeping employees healthy means sustaining the productivity and preserving the quality of work.

There are examples of employers implementing employee wellness and wellbeing programs and including health screening, digital coaching, RPM for chronic staff members, mental wellbeing programs and keeping track of their utilization via executive health dashboards. And in most cases, they achieve this with partnerships with healthcare providers, insurance providers, creating B2B revenue streams.

What Must Change Now

To break the 5P deadlock, digital healthcare cannot remain a side initiative. It must become part of core system design. That means:

For Governments / Regulators

• incentivize prevention

• mandate digital pathways where appropriate

• embed value-based KPIs and transform into value-based healthcare delivery - as we see here in the GCC

• enable reimbursement for remote care and monitoring

For Payors

• cover evidence-based digital programs

• reward prevention outcomes

• co-design shared savings models

For Providers

• innovate commercially

• build membership and continuity models

• move from transaction mindset to relationship mindset

For Patients

• see health spending as investment, not expense

For Pioneers

• prove ROI clearly and speak the language of each stakeholder

Closing thoughts

The market asks:

“Who will pay for digital healthcare?”

But perhaps the more urgent question is:

Who will pay if we don’t?

Because unmanaged chronic disease, avoidable deterioration, rising claims, overloaded hospitals, and reactive care are already costing all of us. The world is slowly but steadily moving from treating sickness to protecting wellbeing.

That shift is inevitable.

The only question is whether stakeholders will adapt early — or pay more later.