Saudi Arabia Healthcare Vision 2030: Promises and opportunities galore

Foreign private healthcare providers investing in Saudi Arabia

  1. Renal healthcare providers such as DaVita are expected to expand dialysis clinics in the Saudi Arabia
  2. Dubai based private healthcare group (Aster DM) looking to build either 4 new hospitals or acquire existing facilities based in Riyadh and Jeddah regions for the next 4 years
  3. UAE based largest private healthcare provider NMC is planning to build 220-bedded hospital in Jeddah along with acquisition plans in areas which includes intensive care management, cancer and diabetes treatment

In 2016, the Royal Family of Saudi Arabia decided to privatize 5% of Aramco (the world’s largest oil production company). The decision came in the wake of strong fiscal pressure felt by the country due to the drop in crude oil prices in 2015. This led to a detailed introspection of its over-dependency on oil as well as internal financial measures such as low taxes, heavy subsidies and over-spending on public hospitals.

Move towards privatizing public sector: To reduce its current dependency on oil revenue, the Kingdom of Saudi Arabia last year unveiled ‘Vision 2030’. The vision seeks development of sectors such as education and healthcare, currently provided by the public sector. In Saudi Arabia, the overall private sector currently contributes less than 40% to the country’s GDP. Hence, the government is prioritizing reduction of public expenditure while privatizing certain public services. Particularly in healthcare, the Ministry of Health is planning to privatize around 300 state-owned hospitals and 2,260 health centres by 2030.

National Transformation Program (NTP) 2020 for healthcare: The program is Saudi Vision 2030’s first implementation program in healthcare. While strengthening private healthcare sector, the program aims at increasing budgets for primary healthcare setting, developing health IT and supporting digitalization of hospitals along with training of healthcare staff.

The highlights from NTP program for healthcare are as follows:

  • Increasing private sector share of spending in healthcare: The program has the target to increase private healthcare spending to 35% from current 25% by 2020. This is likely to have a positive impact on revenue generated by the private sector by 25% from USD 80Mn in 2016 to USD 1Bn by 2020.
  • Digitalisation of hospitals: Another vital part of the plan incorporates digitalization of health records for at least 70% of Saudi citizens by 2020. Medical device companies including GE have been partnering with hospitals to create state-of-the-art digital environments within hospitals. The partnership between King Faisal Specialist Hospital (KFSH) and GE focuses on establishing the hospital as ‘Digital Hospital’ while utilizing IT infrastructure and development of education programs.
  • Increase training and development programs: With an aim to almost double the number of Saudi physicians enrolled in training programs (from 2,200 to 4,000 by 2020), the NTP is looking to improve healthcare education and training. Currently, the healthcare workforce in the country is dominated by expatriate workers. The increased education and training needs are likely to be addressed by world renowned institutions and public-private partnerships.
  • Mandatory health insurance: Through the Saudi Vision 2030, the Kingdom aims to restrict outward flow of patients to other countries. Saudi Arabia has been able to achieve 100% health insurance for all employees in the private sector by mid-2017 (35% total medical coverage recorded in 2015). This move is likely to improve access to services and reduce waiting times for appointments with specialists and consultants. Less than 40% of the appointments are currently being received within 4 weeks in specialized medical disciplines. The NTP targets to convert these statistics to 70% by 2020.

Opportunities ahead: All the above plans have led to an increase in the country’s 2017 budget for Health and Social Development ($32 million) by 15% to enable construction and equipping of health facilities. As of date, around 40 new hospitals with a total of 9,100 hospital beds are under-construction, along with expansion plans for the existing medical cities.

However, the Saudi government also wishes to relieve its budgetary pressures, and is actively seeking local and foreign investors to invest in healthcare projects. This ambitious plan is likely to attract international medical devices, hospital chains, investment firms, and even construction giants who will be able to cater to the healthcare needs of the country.



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