The Kingdom of Saudi-Arabia’s Vision 2030
Establish an Empowering Healthcare System
In April 2016, Saudi Arabia presented its vision for a “vibrant society, a thriving economy and an ambitious nation.” The Kingdom wants its citizens to live longer – from now expected 74 years to 80 years. It wants to “optimize and better utilize hospitals and healthcare centers, and enhance the quality of preventive and therapeutic health care services.” It wants to promote preventive care and reduce infectious diseases, and encourage citizen’s use of primary care. Doctors are to be given better training. The public sector is to focus on planning, regulatory and supervisory duties. Public corporations are to provide healthcare, enhance its quality and compete. Private medical insurance is being developed. Privatization is on the horizon.
The agenda is long and ambitious. This reflects the complexity of the Kingdom‘s current health care challenges. Its healthcare expenditure is rising to more than $B 40 by 2020, with $B 5.5 required for non-communicable diseases while oil revenues have dropped sharply. Hospital beds and doctor quotas still rank below global levels after years of investment. Public healthcare for nationals and the private system for expats operate separately, with little synergies and efficiencies. The Ministry of Health and other government institutions are financing institution, legislator, operator and controller in one.
Corporatization is the “empowerment” cited in Vision 2030 to address systemic and operational issues. The Ministry of Health will limit its role to regulator and supervisor. Hospitals and clinics will be transferred into a network of public companies that compete against each other and against the private sector. While this move might seem mostly conceptual, it actually represents a seismic shift in philosophy. The relinquishing of operational control at the central government level and the streamlining of traditionally abundant services have the potential to send ripple waves across every cog and wheel of healthcare in the biggest market in MENA.
This is where fact ends and speculation begins. The timeline for corporatization is still firming up. The degree of autonomy and the budget process of the future public corporations remain open for now. However, the necessary increases in efficiency and quality would mandate a few likely effects: National health standards, KPIs and value measurements. The possibility of private operators for public facilities. More efficient use of hospital beds and shorter hospital stays. The eventual shift of treatment from hospitals into more primary care settings. Regionalization of healthcare structures into regional hub-and-spoke systems. The possible fragmentation of centralized tenders. Eventually, privatization.
Already, the government has identified more than 30 opportunities for public-private partnerships. It has initiated first public dialogues with providers and suppliers. In the next steps of the reform, the change in governance will need to be broken down into operational decisions. Private providers, life sciences and medical technology companies, academia and service specialists have the opportunity to shape and support the evolution of the Kingdom’s health care system now – by generating data, making treatment more avaulable across the Kingdom, providing higher quality services, developing value-based approaches and market access models, offering expertise, reviewing their growth models and operations and in myriad other ways.
Claudia Palme, Managing Director, 55east Consulting