Fewer outbound patients from Saudi Arabia?

 

The COVID-19 pandemic has highlighted the large gap in Saudi Arabia between available healthcare facilities and the potential needs of a rapidly growing population. 

In 2017, the Saudi Arabian General Investment Authority provided for 100% ownership to foreign investors in healthcare. In 2020, the government re-promised to privatise 295 state hospitals.

Investors have been responsive since the projected profitability in the sector is high. There has been a spate of new projects and partnerships in recent months associated with hospitals run by the Ministry of Health, other government hospitals and private operators. Diabetes treatment and extended care also see higher investor interest.

According to Colliers International, the expected investment in the Saudi healthcare sector up to 2030, largely from the private sector, will be between US$16.2 billion and US$26.3 billion.

Colliers is working with Saudi investors to bring in two international operators to set up a 200-bed tertiary care hospital and a rehabilitation hospital.

Saudi Arabia has one of the highest prevalence of lifestyle diseases in the world, with 18.5% of the population over 20 suffering from diabetes, 35% from obesity and 23% suffer from hypertension.

Daycare surgical centres and cosmetic and wellness clinics offer higher returns than tertiary care hospitals or rehabilitation, but the volumes are higher in the latter. Wellness, cosmetic and medical tourism are gaining popularity.

International investors need to have a very strong local hospital group operating partner and a good location, with a clear clinical service mix and targeting of customer segments.

There is significant demand in Saudi Arabia for extended care (LTC, rehab and home care), urgent care, wellness, mother and childcare, and primary care.

One of the key challenges to entry is the high funding requirement, and investors, both local and foreign, often struggle to secure the necessary finance without alternative cash flows. Foreign investors have preferred to form joint ventures with established local businesses with experience in healthcare.

It is thought very few medical tourists now go to Saudi Arabia, but up to 10,000 go overseas for treatment. But with local private healthcare booming, these figures are historic. In the future there is likely to be fewer outbound Saudi medical tourists and more inbound ones.

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