Recent years have seen a profound restructuring of the Saudi health care sector, with major reform plans being rolled out that foresee not only future expansion, but a much more significant role for the private sector. These moves are being made are in response to a number of basic challenges, brought about by both economic and demographic developments.
According to Tawfiq Al Rabiah, the minister of health, these developments mean that some SR250bn ($66.7bn) of investment in the sector will be required up to 2030. This considerable sum will be injected into a system undergoing far-reaching structural change, with increased emphasis on quality of service and the pursuit of alternative funding models to the current public purse. A major initiative to localise both staffing and materials is also under way, and is likely to see increasing investment in training and recruitment of Saudis, and support to domestic pharmaceuticals, medical equipment and supply manufacturers.
This is taking place in tandem with major preventative campaigns to encourage Saudis to take greater care of their health. Sports, recreation, public awareness and outreach are therefore also areas now benefitting from the push in public health priorities.
Economic Impact
While health care reform has long been a target for the government, recent times have seen a new impetus given to the change. Since 2014 global oil and gas prices have fallen, dropping by half between then and the December 2017 level of around $63 a barrel for benchmark Brent crude. With the petroleum sector accounting for some 87% of budget revenues in Saudi Arabia, this price collapse has had a significant impact on the public purse.
Government expenditure is also the main driver of economic growth, with the downturn in state spending due to budget cutbacks – and in spite of budget deficits – also having an impact on the private sector. GDP growth saw a shallow rise from 3.6% in 2014 to 4.1% in 2015, before falling to 1.7% in 2016, according to World Bank figures. As of October 2017, the IMF was projecting 0.1% growth for the year, followed by a slight rebound, to 1.1%, in 2018.
This has highlighted the need for change in many of the ways that the government and private sector do business in the Kingdom, including in health. The importance of finding a new approach was set out in Saudi Arabia’s development plan, Vision 2030, released in April 2016. The strategy has three basic themes: creating a vibrant society, developing a vibrant economy and establishing an ambitious nation, all of which have implications for the health sector. Under the rubric of the first theme, Vision 2030 highlights the need for “Living Healthy, Being Healthy”. Sport is the immediate focus of this tenet, encouraging more athletic lifestyles among citizens, with a stated goal of increasing the ratio of individuals exercising at least once a week from 13% to 40% of the population.
Optimising Resources
Vision 2030 addresses health care directly by highlighting the considerable investments that have been made in the sector over the years, but adds that objectives for the sector must now move to optimising the use of hospitals and clinics, while at the same time boosting preventative and therapeutic health care services.
In addition, the plan suggests modifications to the role of the public sector. This will take the form of a shift towards focusing on the state’s regulatory, supervisory and planning roles in health care, along with promoting primary and preventative care while more closely integrating with social care. Public corporations will take over the role of health care delivery, as preparation for privatisation, while private medical insurance will be further developed. Competition and transparency are the stated goals for health sector reform, with corporatisation transferring responsibility for care provision to a range of public companies, which will compete for clients on the basis of quality. According to Vision 2030, citizens will have more power to choose doctors, hospitals and clinics under this model, promoting efficiency and quality. “Corporatisation of the public sector’s health facilities should be driven by two main targets: increasing efficiency and performance; and prioritising patient services through digitalisation, along the lines of what is now referred to as the fourth industrial revolution,” Dr Haitham Alfalah, CEO of King Saud Medical City, told OBG.
Also under the plan, doctors are to be given better training in the treatment of chronic diseases, which are now seen as growing threats. These include conditions such as heart disease, diabetes and cancer. Overall, the plan aims to increase life expectancy from 74 years to 80 years by 2030, while boosting the Kingdom’s level of social capital considerably.
Private Factor
Corporatisation dovetails with the second theme of Vision 2030, that of creating a more vibrant economy. Indeed, privatisation is seen as a linchpin of this ambition. The strategy sets a goal of increasing the private sector’s contribution to GDP from 40% to 65% by 2030, with both local and foreign investors encouraged to join in this effort. Domestic entities currently operating in areas where the Kingdom has a comparative advantage will garner support from the government in promoting their activities. Health care is seen as one of these areas, with related sectors such as medical equipment and pharmaceuticals also receiving attention (see analysis).
This strategy feeds into the basic aim of diversification within the Kingdom’s economy. Under its third theme, Vision 2030 sets out a further objective of increasing non-oil government revenue from SR163bn ($43.5bn) to SR1trn ($266.6bn) over the period of the plan, which would entail a major shift in emphasis away from hydrocarbons and towards developing other, services such as health care.
Shorter-Term Planning
Vision 2030 breaks down into a series of shorter-term plans. The first of these, the National Transformation Programme (NTP), sets goals up to 2020. In this too, health care is a major pillar. The NTP sets out a series of key performance indicators (KPIs) for each government department and agency; a move that has been widely welcomed both inside and outside the country, with enforcement of these goals being closely monitored by the government and other implementing agencies.
For the Ministry of Health (MoH) – the principle government agency in the sector – the KPIs are ambitious. The private sector’s contribution to health care is targeted to rise from 25% to 35% by 2020, with the number of licensed medical facilities set to jump from 40 to 100. At the same time, the NTP aims to dramatically increase the Saudiisation of health services, with the number of qualified nationals in the nursing and support staff fields expected to more than double from 70.2 per 100,000 inhabitants to 150, while the number of resident Saudi physicians enrolled on training programmes will rise from 2200 to 4000.
Other goals include the introduction of unified digital medical records, with the proportion of citizens possessing these expected to go from zero to 70% by 2020. In the same year, all health care facilities will be required to deliver comprehensive performance and quality measure reports, in contrast to 10% that did so in 2016. The World Health Organisation emergency preparedness assessment score for Riyadh, Jeddah and the Eastern Province is targeted to average four or five points, with the current level under assessment.
Changing Care
Operational expenditure for every new patient admission is to remain the same, at SR33,000 ($8800); however, service delivery time is to be radically improved. The proportion of patients who receive emergency or urgent care through to the point of medical decision within four hours of admission is to rise from 40% to 75%. The percentage of those receiving a specialised medical appointment within four weeks will increase from under 40% to 70%, while the proportion of patients receiving follow-up care within four weeks after critical care and long-term hospitalisation is targeted to grow from 25% to 50%.
Other objectives include raising the number of primary health care visits per capita from two to four per year, and increasing the percentage of hospitals that meet the US median for patient safety culture from 10% to 50%. Two areas of concern are highlighted for extra attention, with targets for a 2% reduction in the incidence of smoking-related diseases and a 1% decline in the incidence of obesity-related diseases.
Several other ministries and agencies have also been set KPIs with health care implications. The Ministry of Commerce and Industry (MoCI), for example, has been set the goal of developing six attractive and financially viable pharmaceuticals subsectors. Another agency with a raft of health-related KPIs is the Saudi Food and Drug Authority. The agency is tasked with establishing a track-and-trace electronic system, a halal certification centre, a centre for the standardisation of medical products and equipment, and a unified electronic system for its operations, as well as streamlining the procurement process for chemicals and lab equipment, and implementing a range of awareness campaigns.
Structures & Systems
The Saudi health care system has undoubtedly made great strides in recent years. It traces its history back to 1925, when the first public health department for the country was established in Makkah. This was followed by the establishment of the first school of nursing in 1926, with a school of health and emergencies opening in 1927.
At that point, however, traditional medicine was most commonly practised in the Kingdom, with 25 years passing before the MoH was founded. However, in 1970 a series of five-year plans commenced, aiming to develop the Kingdom as a whole, and with health care as one of the main target areas. The system remained entirely public at this stage.
In 1970 Saudi Arabia possessed some 74 hospitals, with an emphasis throughout the system on curative solutions, rather than preventative care. Disease control programmes were also run to combat malaria, tuberculosis (TB), leprosy, schistosomiasis and leishmaniasis, a disease spread by sand fly bites. These campaigns were vertically organised and established a network of health offices across the Kingdom which managed periodic outbreaks of these diseases.
The next big development came in 1980, with a ministerial decree amalgamating dispensaries, health offices and maternal and child health centres into one administrative unit with a preventive health care (PHC) mandate. The health offices were also upgraded to the classification of health centres.
The MoH continued to be the Kingdom’s main health care provider over the following decades. Indeed, its role is enshrined in the Basic Law of Saudi Arabia – the country’s constitution-like charter – which states in its Article 31 that, “the state shall protect public health and provide health care to every citizen”.
The ministry is divided into 20 geographical directorates and a number of specialist departments, with its current structure, an interim layout, approved by the minister of health in May 2017. The most recent available MoH figures, for 2015, show a ratio of 13.1 MoH hospital beds per 10,000 people, up from 12.3 in 2012. There is significant regional variation, with the highest regional rate in Al Jouf, with 38 beds per 10,000 people, up from 28.7 three years before, and the lowest rate in Jeddah, with 7.4 beds per 10,000 people. The MoH operated 274 hospitals in 2015, up from 270 hospitals the year before and 259 in 2012.
Budget Breakdown
The ministry’s budget has been increasing in recent times, with the 2015 total reaching SR62.3bn ($16.6bn), up from the allocation of SR35bn ($9.3bn) five years before. However, as a proportion of state spending, the rate has been relatively flat. In 2010 financial appropriations for the MoH stood at 6.5% of the government’s overall expenditure, rising to 7.2% in 2015.
In addition to hospitals, the MoH also runs a nationwide network of primary health care centres, which serves as the first point of contact for the public, with each centre having a defined catchment area and population. The primary health care centres provide a wide range of promotional, preventive, curative and rehabilitative services, and are closely tied to the hospitals and the tertiary sector.
A group of primary health care centres and specialist clinics typically forms a catchment for a secondary sector hospital, with certain services, such as those for pregnant women, shared between the two levels of institution. There were some 2282 primary health care centres in operation in 2015, with the highest concentration in the Riyadh area, which had 407, and the lowest in Qurayyat, with 15. In addition, the MoH manages a series of specialist health centres. These include a forensic medicine centre in each of the 20 directorates, along with 53 anti-smoking clinics, 35 dental clinics, 146 dialysis centres, 21 diabetes centres, four oncology centres and nine cardiology centres.
In 2009 a 10-year, strategic health sector development plan was drawn up, aimed in part at expanding the degree of tertiary and quaternary care in the Kingdom. As a result, four medical cities were commissioned to be distributed around the country – one each in the north, south, east and west – along with the King Fahd Medical City, already in existence in the centre of the Kingdom. The plan also rolled out a major new programme of hospital and PHC centre construction across the country.
Sharing The Burden
The MoH is not the sole provider of state health care provision. Other hospitals are tied to university medical departments and medical colleges, which provide extra coverage. In addition, the Saudi security services provide health services for those in the armed forces. Some government, or government-linked agencies and organisations, also provide their own services. One example is the oil and gas giant Saudi Aramco, which has its own medical facilities. In addition to these “other governmental services”, the market also includes private providers.
The current breakdown in provision is roughly 60% MoH, 20% other governmental and semi-governmental institutions, and 20% private sector. Since 2013 all hospitals, public and private, must be registered with the Central Board for Accreditation of Healthcare Institutions. Further integration of the sector is provided by the Saudi Health Council, which brings together the various providers and stakeholders to ensure continued coordination of health care efforts.
Accident and emergency (A&E) services are provided by the MoH’s hospitals, which also manage ambulance services, as do the Kingdom’s other governmental hospitals. In addition, the Saudi Red Crescent Society offers complimentary first aid services, as well as ambulance transportation where needed.
The annual Hajj, or Muslim pilgrimage to Makkah, poses particular A&E challenges for the Kingdom’s health services, as millions of pilgrims from within Saudi Arabia and around the world journey to the holy city. During the period of the Hajj the MoH redeploys many health workers to Makkah, Medina and arrival points, such as King Abdulaziz International Airport. The ministry also coordinates with foreign health services, which are increasingly sending their own medics with delegations of pilgrims to provide for their care.
Hospital Capacity
MoH figures for 2015 show some 11,449 beds in the other government segments. The largest providers within this group at that time were the Armed Forces Hospitals, with 4772 beds, and National Guard Health, with 2067 beds. The main university hospitals were King Khaled University Hospital, Riyadh, with 704 beds; King Fahd University Hospital, in Khobar, Dammam, with 550 beds; and King Abdulaziz University Hospital in Jeddah, with 438 beds.
The figures show that in 2015 there were a total of 145 private hospitals in the Kingdom, with the highest concentration in Riyadh with 36, followed by Jeddah, with 33. Four health directorates did not have any private hospitals – Qurayyat, Al Jouf, Bishah and the Northern Directorate. The private sector accounted for a total of 16,648 beds in 2015, along with 7815 pharmacies, 104 laboratories, 77 private clinics, 1000 specialised polyclinics and 1670 general polyclinics.
MoH data shows that the size of the private sector has been increasing. The total number of private hospitals in the country stood at 130 in 2011, with a combined bed capacity – in institutions of all kinds – of 13,298. Private polyclinics also jumped in number, from 1987 in 2011 to the current total of 2670. The years ahead could very well see these figures increase still further, as the health sector moves into much more widespread use of privatised services.
“The country needs more efficient delivery of services. Therefore, the private sector should be given the leading role in designing and managing patient care whenever possible when it comes to regulations and the overall structure of the health care sector,” Mohannad Al Saab, director of Business Development at Dallah Health, told OBG.
Demographic Changes
The expansion of health services has been driven in part by major demographic developments, as well as economic growth. In 1960 the population of the Kingdom was just 4m, rising to 5.8m by 1970, then 9.9m in 1980 and 16.4m in 1990. As of 2017 the General Authority for Statistics figures put the population at 32.6m. This broke down into 20.4m Saudi and 12.2m non-Saudi residents, or a 62:38 ratio of nationals to foreigners. Outward migration is thus a factor that can be expected to affect health care expenditure and pharmaceuticals market growth.
Around half the population is also under the age of 40, meaning that future demand for health services in an ageing population will likely expand considerably. In addition, advances in health care have meant an increasing life expectancy, creating further demand for services. As recently as 1980, the infant mortality rate was 70 per 1000 live births, with this falling to seven per 1000 by 2015. Meanwhile, life expectancy has risen from 46 years in 1960 to around 73 for males and 76 for females in 2014, both of which are higher than the global average life expectancy of 71.4 years.
Geographic Challenges
Covering some 2.1m sq km, or an area roughly the size of Western Europe, the authorities have a large area to administer. The Kingdom’s geography includes also some highly inhospitable regions, with large areas of desert as well as difficult, mountainous terrain. Both landscapes make for sparsely populated regions, dotted with isolated communities. Serving these areas entails overcoming difficult transport and infrastructure challenges for the Kingdom’s health care providers. At the same time, economic and political developments have led the majority of the population to concentrate in a few urban areas. Broadly, these are the capital region of Riyadh, the Red Sea port of Jeddah, the eastern oil-and-gas-based clusters of Dhahran and Dammam, and a few medium-sized cities in the south and north.
This pattern poses some unique challenges for health care authorities, which are working to ensure universal coverage and equal access to quality facilities. In 2015 the MoH’s 20 health directorates covered population bases that stretched from 7.9m people in Riyadh to 136,472 in Qurayyat, while some areas also had non-Saudi majorities, such as Jeddah, which was home to 2.18m foreigners and 2.15m Saudis that year. This can pose particular challenges for local services, with language, for example, potentially problematic.
As in many countries, the demographic distribution is mirrored by an economic one, with many Saudis and non-Saudis preferring to live in the major urban centres. This could potentially lead to an over-concentration of health care professionals in those areas, depleting the workforce in rural, less wealthy districts.
The MoH has, however, attempted to ensure that all regions get coverage, with 2015 figures showing that the number of physicians per 100 hospital beds reached a high of 109.4 in Qunfudah – a district on the Red Sea coast halfway between Jeddah and the border with Yemen – while Riyadh had a ratio of 73.3 physicians per 100 beds and Jeddah itself 78.8.
The ratios for nurses per 100 physicians ranged from 391.7 in Qurayyat to a low of 188 in Qunfudah, despite its high ratio of doctors to beds. Ratios for Riyadh and Jeddah were 238.4 and 223.7, respectively.
Personnel
Figures from the Saudi Arabian General Investment Authority (SAGIA) show 90,000 licensed physicians working in the Kingdom in 2016, along with 180,000 nurses and 106,000 allied health personnel.
Many non-Saudis also work in the health services. Of the 7652 physicians employed in the Riyadh health directorate in 2015, for example, some 5264 were non-Saudis. Expatriate physicians also outnumbered nationals in all the directorates except Jeddah and Eastern Province. Saudis remain a majority among nurses, however, with the overall figure for the Kingdom being 57,358 Saudis to 38,021 non-Saudis, while among allied health personnel, there were 51,553 Saudis and 3527 non-Saudis, and among pharmacists, the ratio was 2923 Saudis to 261 non-Saudis. Currently, the Kingdom’s pharmacies must be Saudi owned, although they may employ foreigners.
Changing this balance is one of the main aims of the NTP and Vision 2030. Saudiisation aims to boost the number of qualified nationals in the nursing and support staff fields from 70.2 per 100,000 inhabitants to 150 by 2020, while the number of resident Saudi physicians enrolled on training programmes will rise from 2200 to 4000. Hiring Saudi women is also a priority. “Increasingly, we are hiring qualified and enthusiastic Saudi women to higher ranking roles in health care,” Dr Fouziyah Al Jarallah, general manager of Al-Inma Medical Services, told OBG. “This also indicates the government’s intention of helping woman to play a greater role in both the economy and public life.” Given the current high levels of foreign staffing, these are challenging KPIs, with an evident need across the Kingdom for major investment in the training and retaining of Saudi staff, particularly in the field of physicians.
Indeed, for health care planners and investors, these numbers paint a picture of increasing stress on resources. With the Saudi population increasing, and as life expectancies grow and a culture which favours large families persists, demand for health services will grow with it. The population is expected to reach 39.7m by 2030. As more Saudis pass into older age, too, the growth in demand will not be steady, but may see an exponential leap. The number of citizens over the age of 50 in 2015 was 4.1m; this is expected to jump to 12.5m by 2030. Dealing with this will require more funding, especially at a time when the government is seeking to roll back public expenditure and its involvement in health care provision, should open up a much greater role for the private sector.
Patterns Of Disease
Earlier in its history, the Saudi health system had to deal with a range of communicable diseases, such as malaria and TB. Major immunisation campaigns have helped eradicate these from most areas, with the incidence of polio, for example, down to zero per 100,000 people in 2015, while pulmonary TB was at 7.95 per 100,000 and extra-pulmonary TB to 2.7. Immunisation coverage for the hexa vaccine, which covers diphtheria, pertussis, tetanus, hepatitis B and polio, stood at 98.3% that year, as did coverage by the oral polio vaccine. The bigger health challenge facing the country today is non-communicable diseases (NCDs), which have become much more prevalent. This is a pattern observable in many wealthy economies, with the Kingdom’s per capita GDP of $54,078 in 2016 placing it well within that category.
As a result, recent years have seen a strong rise in NCDs such as diabetes, cardiovascular illnesses, cancer and respiratory illnesses, many of them smoking-related. Other common concerns include obesity, with the prevalence of this standing at one in three adults and one in four children in 2015, or some 5m people. This figure is expected to continue growing to 8m by 2030. This shifting pattern of disease also poses challenges for health service planners, as such conditions often demanding more extensive and expensive care. They also require ongoing promotion to encourage behavioural shifts among the population, with public awareness and prevention campaigns playing a major role in the eradication of lifestyle-related diseases.
Budgeting For Change
The changing disease profile, alongside the demands presented by the growing and ageing population and recent economic constraints, have placed increasing pressure on public health service funding. Health care provision has long been free-of-charge to nationals, with the additional benefit that if the necessary treatment is not available in the Kingdom, the state will instead bear all the costs of transferring the patient to another country where the treatment can be obtained.
The 2018 budget allocated SR147bn ($39.2bn) to health and social development. This is up SR17bn ($4.5bn) from the SR120bn ($32bn) allocated in 2017, and a sizeable increase on the 2016 figure of SR101.7bn ($27.1bn), when the economic crisis forced a health budget cut of some 35%, down from SR160bn ($42.7bn) in 2015. Yet in general, health spending has been increasing annually for many years: spending showed an 11% compound annual growth rate (CAGR) in the period between 2010 and 2016.
Much of the 2018 budget will go into the continued funding of current infrastructure projects. Some 36 hospitals are being built or upgraded across the Kingdom at present, along with the construction of two new medical cities. The hospitals will add 8950 more beds, while the medical cities will comprise 2350 beds. During the 2016-18 period, the number of hospitals established will stand at 25, which amounts to 58% of the total planned number for the 2016-20 period, MEDICAL CITIES: One of the ongoing projects is the 1350-bed King Faisal Medical City at Abha, in the southern province of Asir, which is due to be fully operational by 2021. Among MoH and various other governmental projects are the $6.7bn King Abdullah bin Abdulaziz Security Forces Medical Complexes, consisting of two medical cities, one in Riyadh and one in Jeddah, that constitute the largest medical project in the MENA region. Additionally under way are the $1.2bn King Abdullah Medical City in Makkah, which will contain three hospitals and 10 medical centres; the $1.2bn King Khaled Medical City in Dammam; the Prince Mohammed bin Abdulaziz Medical City, which aims to serve the northern provinces; a 550-bed medical city at Al Jouf and an expansion of the King Fahad Medical City in Riyadh. At Jeddah, the medical park segment of the Prince Sultan Cultural Centre is under construction, and will include a 900-bed hospital to be constructed as part of a mixed-use project.
Insuring The Future
How to fund this level of expansion in the longer term has been at the forefront of Saudi planning for some time. One change made to help relieve some of the cost was the introduction of a rolling programme of mandatory health insurance. This began in 1999, with the issuance of the Cooperative Health Insurance Act, which had as its aim the eventual coverage of the entire Saudi and non-Saudi population. Overseen by the Council of Cooperative Health Insurance (CCHI), the first step was to make it compulsory for expatriates working in the Kingdom and their families residing there to obtain private health insurance from a CCHI-approved company. As of January 2016 this requirement was extended to non-Saudis visiting the Kingdom as well, although the mandate does not apply to those visiting to undertake the Hajj or Umrah, or diplomatic staff.
The scheme has now been rolled out to include all Saudi nationals working in the private sector and their families. This expansion began in July 2016, initially affecting companies with more than 100 employees, with further phases reducing the size of the businesses included in the scheme, until all private sector companies had been covered by mid-2017. In April 2017 the CCHI announced that it was rolling out the final phase of the unified health care plan, with companies employing less than 25 workers now expected to provide health coverage to their workers.
This concluding phase has now assured that all private sector employees in the Kingdom have full health coverage. According to the Ministry of Labour, some 1.6m Saudis work in the private sector, which, when their families are included, could raise the number who are covered by these policies to around 6m. In addition, the MoH has begun cutting back on payments for overseas treatment. The provision of more services domestically, it is hoped, should reduce the number of patients going abroad for medical care, which currently totals some 20,000 people.
“Our current health care system covers the basics, but more work is needed in further developing specialties,” Malek Al Moosa, CEO of privately owned Almoosa Specialist Hospital told OBG. “There is a lot of demand for high-quality care with good service for the patient and their family, as many patients are still forced to travel abroad for treatment.”
A more radical off-loading of health services to the private sector is also being undertaken, with the NTP targeting private investment in the sector to rise from 25% of the total to 35% by 2020. The signs are good that the private sector is already rising to the challenge, with a range of major investments now under way in service provision, as well as in the pharmaceuticals and medical equipment subsectors (see analysis).
Providers
Indeed, there are already several health care providers listed on the Saudi Stock Exchange (Tadawul). These include Mouwasat, which owns four hospitals and manages a 120-bed hospital in Medina, in addition to two dispensaries; Dallah Health, which runs a 448-bed hospital in Riyadh, with Dallah also one of the main investors in Anfas Medical Care (AMC); National Medical Care Company (NMCC), which has two hospitals in the capital – the 124-bed National and the 340-bed Riyadh CARE; Al Hammadi, which runs the 300-bed hospital of the same name in Riyadh; and Saudi German Hospital, owned by the Middle East Healthcare Company, which operates four multi-speciality tertiary-level hospitals across the Kingdom. Other private hospitals include the 250-bed Almoosa Specialist Hospital in the Eastern Region, which works in partnership with Aramco, as well as the MoH and the Al Ahsa Chamber of Commerce and Industry.
In terms of hospital building, the Clemenceau Medical Centre in Riyadh is a good example of private sector investment. Affiliated with Johns Hopkins Medicine International, the hospital will have 180 beds and offer both acute treatments and intermediate care. AMC, meanwhile, is currently rolling out a $1.3bn hospital and medical cities programme, with the first set to be a 27,000-sq-metre facility in Riyadh, which is due to be completed in the third quarter of 2018. Operation of this facility will be managed by the US-based Houston Methodist Global Health Care (HMG) and powered by GE Healthcare. “In Saudi Arabia the private sector has a major opportunity to develop long-term care facilities that decrease the burden posed by chronic patients on intensive care units (ICUs). In some facilities up to 30% of ICU patients are chronic,” AMC’s founder and CEO, Dr Mamdouh Albaqumi, told OBG.
Models Of Care
While the exact details of the privatisation plan were still being worked on in mid-2017, the overall objective is that the MoH will eventually be concerned only with sector policy and regulation. Given that 60% of all facilities are currently MoH run, that means a major shift is anticipated, with public-private partnerships (PPPs) the likely model. Corporatisation is a significant part of the change, too, with the expected structure to be one in which holding companies run a cluster of hospitals.
A private sector participation model was recently presented by SAGIA, under which clinical laboratories, long-term care and rehabilitation services, home care, pharmacies, as well as some 30 hospitals and one medical city would be opened up to PPPs. At present, however, exact models are still being formulated, along with their relevant legislative and legal frameworks. Nonetheless, with the NTP and Vision 2030 deadlines coming ever closer, such schemes will need to be adopted sooner, rather than later.
At the same time, financing private health care projects has been made easier by a package of incentives. These include soft loans with assistance from the Ministry of Finance; low utility costs and property rentals; preferential prices for companies engaged in infrastructure development; and assistance in paying the salaries of Saudi employees from the Human Resources Development Fund. A number of sector-specific incentives are also under discussion.
Two other areas under examination are digitisation and human resources. The MoH’s national e-health strategy, for example, is based on the premise that patient-centred models of care focused on prevention and wellness can be more easily facilitated by the use of new smart technologies. Such models can vary from remote consultations to access to electronic health records and apps that monitor heart rates and other vital signs. Mobilising Saudis themselves to take better care is also behind sports and cultural programmes.
Saudiisation
When it comes to human capital, Saudiisation targets hold their own challenges, while health care personnel recruitment continues to be an issue globally. Therefore, training and education are also potential areas for private sector investment. One example is the recent memorandum of understanding between NMCC and HMG in which the latter will provide educational, training and consultancy services to the former. To a certain extent, a change in mindset may also be necessary to encourage more Saudis to consider medical careers, health care professions often seen as less rewarding than public sector jobs. As the economy shifts away from a model in which the government is the primary provider, however, this view will become increasingly unsustainable.
Outlook
The future is likely to be one of major expansion of private sector involvement in health services, coupled with continued major public sector investment. The privatisation strategy and its legislative and legal framework is also likely to take on a more substantial form, although already the opportunities for investors are significant. Meanwhile, localisation in service provision, pharmaceuticals (see analysis) and medical equipment will also provide opportunities, in addition to challenges. The targets set may be challenging, but already clear progress is under way.
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