As the Kingdom’s healthcare industry transition is underway, our leadership in Saudi Arabia is executing plans and protocols to create a world-class system in line with Vision 2030. Alongside this, the healthcare sector has been working towards the new directive implementing guidelines and policies for national, private and new international market entrants to adhere to.
Past operational insight and policy knowledge is critical for moving forward to ensure successful entry.
Understanding the context of Saudi Arabia’s healthcare development will enable new entrants to navigate the industry efficiently and innovate locally. In recent years, significant efforts have been made to diversify revenue sources and transform different sectors, including healthcare. With that, the Kingdom is gradually incentivising international and private operators to improve local knowledge, expertise, and healthcare quality standards.
The concept and business of health insurance in Saudi Arabia started in 2007 and was a milestone that enabled the development of the private healthcare sector within the Kingdom. Today around 18 per cent* of healthcare services are provided by the private sector, while 60 per cent* is still offered by the nation’s foremost provider, the Ministry of Health (MOH).
Naturally, MOH-run healthcare services have continued to remain the norm as KSA’s government mandates health coverage for nationals and residents alike. Up until recently, it was the only provider in the country. Additionally, the MOH has built a system that clearly focuses on providing for its population, which has shown to work as time passed.
However, as with any evolving and growing nation, the drive toward privatised, customisable health services has grown from within. This is in part due to:
- Prevention vs. treating systematic approach
- Current generation’s increased buying power combined with high education levels and experience with other leading global healthcare markets
Both of which are in accordance with Saudi Arabia’s forward plans. The nation’s private healthcare sector is growing at an exponential rate. KSA’s health insurance market reached a value of US$6.5 billion in 2021 and is expected to reach US$9.4 billion by 2027.**
The main factors driving growth that new and international entrants should look to address and consider as opportunities for market entrance include:
Increasing and older population — over 32 million people live in KSA, which allows for:
- Preventative care such as vaccinations, wellness, and education programmes are not only becoming the norm but are warranted.
- Customised clinical care to meet personalised needs as the population lives longer.
Pilgrims for Umrah – up to 30 million per year by 2030: Many visitors from other countries will have private insurance; therefore, partner networks are required to offer care as and when needed for this annual population influx.
Partnerships: Clinical care and pharmaceutical firms: Collaborations between local providers (public or private) or local firms and leading international healthcare entities (providers or pharmaceutical companies) to offer superior care and corresponding medical regimens. For example: Johns Hopkins Aramco Healthcare. The Government’s vision to move toward a value-based healthcare system is supported.
In addition to the framework and patient-focused healthcare-specific considerations, other areas new entrants need to evaluate include:
- Alignment with MOH: The government entity is taking proactive steps towards a supervisor and regulatory role instead of a provider. The new holding company will take over healthcare services previously provided and managed by MOH and focus on providing medical services and care via imminent health clusters.
- Healthcare Systems and insurance plans focused on continuity of care and lessening financial burden: Consider accessibility, affordability, and quality of services from a public system and offer solutions. Primary, secondary, and tertiary healthcare provider referral networks to allow for insurance coverage within the network.
- Novel healthcare services
- Telemedicine: Proliferated during the COVID-19 pandemic and continues today as a regulated activity.
- Home healthcare: Ranging from nursing care, physical, occupational, or speech therapy, nutrition support, transportation services, or even palliative care, is increasing as the healthcare system evolves.
Building a sustainable and competitive value-based healthcare environment is needed. Our visionary leadership understands this need and, as such, has made changes to healthcare policy but has also encouraged and welcomed new and foreign entrants and partners.
The result? Improving the efficiency of the healthcare sector ranging from clinical care to nurturing private-public partnerships and increasing the use of information technology and digitalisation.
