Saudi Arabia embarks on privatizing public health sector, as per Vision 2030

The state, which currently provides nearly 80% of health care, is now trying to encourage private investment in the sector. The average life expectancy in the Kingdom has increased from 66 to 74 years in the last three decades, warranting better, greater and more sophisticated health care system.

BE2C2 Report, Irshad Salim — Saudi Arabia’s public health sector privatization plan as per Vision 2030 is expected to open up vast areas for the private sector — with both local and foreign participation leading to greater financial investment and a wider technology-transfer base in its health care system.

It will also increase the quality of free treatment for citizens, a strategic direction of the state which offers service to 20 million citizens at 200 hospitals (it currently provides nearly 80% of health care), and hundreds of health centers across the Kingdom, says a report issued by Al-Sharqiya Chamber of Commerce and Industry on the privatization project.

”The project of transforming the health sector from activity based on state expenditure and administration into the private sector activity will lead to more investments in the infrastructure required by this historic transformation in the sector,” the report said.

Insurance companies will be the biggest beneficiaries of the privatization project, with a huge boom in the volume of specialized health insurance policies for millions of citizens and expat residents. Insurance companies’ income is expected to cross the $13.33 billion (SR 50 billion) mark by 2020, according to the study.

Private medical insurance is also being developed to improve access to medical services and to reduce waiting time for doctor appointments. The government meanwhile will continue to hold the legislative, regulatory and supervisory roles.

The report added that the project combined the government’s ambition to raise the share of the private sector in the national economy from 25 percent to 35 percent in line with the requirements of Vision 2030 on the one hand, and its commitment to guarantee free treatment for citizens as a strategic direction of the government.

According to the study, the Kingdom’s hospitals have a capacity of about 65,000 beds which is expected to reach 115,000 beds by 2020. It means 50,000 more beds at the rate of 12,500 beds per year to meet domestic demand, at an estimated cost of $100 billion (SR 375 billion) in 2020.

The report projected that the privatization project would result in the establishment of a holding company with 20 to 30 subsidiary companies spreading over all provinces to monitor the running and administration of 276 hospitals and 2,300 health centers which would be separated from the Ministry of Health and managed by the private sector.

Saudi Arabia’s quest for health and happiness

The Kingdom of Saudi Arabia is perhaps best known for its oil-rich economy. Few know that there are myriad other natural treasures courting its reservoirs deep down in the heart of the earth. Gold, phosphate, uranium, and scores of other valuable minerals are all sitting there with aplomb. However, there is another resource that the country considers its real wealth – its people. The average life expectancy in the Kingdom has increased from 66 to 74 years in the last three decades, warranting better, greater and more sophisticated health care system.

Its people are the reason why the country is investing heavily in providing them with the best of healthcare and quality of life. ‘Vision 2030’, the roadmap for economic and developmental action in the Kingdom of Saudi Arabia, is built around three themes: a vibrant society, a thriving economy and an ambitious nation. A vibrant society wherein people, among other parameters, enjoy a good life in a beautiful environment, are protected by caring families and are supported by an empowering social and health care system.

Saudi Arabia’s Ministry of Health has chalked out 15 strategic objectives in its National Transformation Programme to achieve this end. Acting on the strategic objective of improving public health services with a focus on obesity and smoking, Saudi Arabia recently imposed ‘sin tax’ on cigarettes, high-sugar energy drinks and other soft drinks. The move, led to a double-fold increase in the prices of these commodities, and was lauded worldwide, report BusinessWire.

The country’s strong economic performance over the years has propelled rapid expansion of health, education and social services infrastructure, courtesy the efficient channelization of investments in these key development indicators. Currently, Saudi Arabia ranks an impressive 38 on the UNDP human development index, spending 3.5% of its GDP on health. According to the World Health Organization (WHO), Saudi Arabia’s spending on health and social affairs has increased by 26% since 2010 and has made remarkable strides in the achievement of Millennium Development Goals (MDG) targets. Programmes related to immunization, maternal and child health, vaccine-preventable diseases and eradication of poliomyelitis have been remarkably successful. Doctors are also being trained to improve treatment for chronic diseases such as heart disease, diabetes and cancer that threaten the nation’s health.

The state, which currently provides nearly 80% of health care, is now trying to encourage private investment in the sector. The responsibility for providing health care is being transferred to a network of public corporations that compete both against each other and against the private sector. Corporatization, the government believes, will promote transparency among providers thereby enhancing the capability, efficiency and productivity of care and treatment and increase the options available to its citizens. Private medical insurance is also being developed to improve access to medical services and to reduce waiting time for doctor appointments. The government meanwhile will continue to hold the legislative, regulatory and supervisory roles.

Saudi Commission for Tourism & National Heritage (SCTH) has also developed specifications, standards and procedures for the health and wellness tourism programs in hospitals, medical centers and health resorts. Along with partners in the public and private sectors, special products and services are being devised to attract tourists to the segment.

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