Saudi Arabia launches healthcare privatisation programme

 

Saudi Arabia’s Health Ministry will establish a holding company and five regional companies under plans to privatise the healthcare sector.

Plans will allow full foreign ownership in the health sector so the ministry will become a regulator and not a service provider.

The plans will see 15 hospitals and 100 primary healthcare centres managed under the holdings companies by the end of 2018. These companies will then compete with each other to provide better quality care. Every company will manage a cluster of hospitals and health centres. The kingdom eventually plans to privatize 290 hospitals and 2300 primary health centres by 2030.

Separately, the ministry is working on the first phase of an electronic health programme that will link all primary health centres, pharmacies and public and private hospitals. The first phase includes 107 hospitals. Later phases will reach all 290 hospitals in the country. The kingdom eventually plans to create electronic health files for all patients.

Saudi Arabia's ambitious programme of social and economic renewal, Vision 2030 has healthcare squarely in its sights.

The challenges in healthcare are significant. Taking just one key indicator of health, according to the Saudi Ministry of Health, 25% of Saudis are diabetics. Saudi Arabia has 4 million diabetic patients who require 5.5 million consultations and follow-up visits a year.

The government views healthcare as the sector with the best potential for privatisation and is reported to be studying whether to sell off all public hospitals and pharmacies. The Kingdom faces rising medical expenses related to areas such as accidents, smoking and obesity (which may manifest through diabetes).

Plans will allow foreign investors to own companies fully in the health sector, but the date for implementation remains to be announced. Currently foreign entities can only own hospitals with a minimum bed requirement and cannot own any other healthcare institutions. There is a raft of investment opportunities ranging from diabetic care through to medical cities and primary healthcare centres.

Many of these initiatives will ultimately be procured through a PPP mechanism, in which foreign investors and service providers are likely to play pivotal roles.

Saudi Arabia intends to establish an entity to monitor, inspect and regulate the provision of care services to make sure that national standards are established and achieved. This entity will offer a quality monitoring system to oversee care provision in public and private hospitals, manage PPP outcomes and will be responsible for defining standards, for reporting quality outcomes at the hospital level, accrediting hospital reporting systems, overseeing PPP projects, gathering outcome data, and publishing comparative performance reports.

The state will work towards developing private medical insurance to improve access to medical services and reduce waiting times for appointments with specialists and consultants.

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