Saudi Arabia’s Healthcare Sector Dynamics
Rémy LEVASTRE
Executive & Strategic Healthcare Leader | Digital Transformation | PPP | EMEA
This article will cover the Saudi Arabia’s Vision 2030 focus on the Kingdom’s Healthcare sector, its transformation, privatization, and future outlook as it tackles COVID19 and lessons from Riyadh Declaration G20 Summit and Pandemic world congress.
As highlighted in the National Transformation Plan (NTP) and the privatization plan, Saudi Arabia healthcare sector’s key priorities revolve around privatizing government healthcare services, increasing public-private participation (PPP) healthcare delivery models, scaling up medical education, training its local workforce, and boosting the adoption of digital information systems. The Kingdom's Vision 2030 aims to drive the digital transformation of health systems and inspire new collaborations between public and private sectors for improved clinical and financial outcomes. For this, Ministry of Health in Saudi Arabia is undergoing profound change from being a provider/regulator to a regulator. The institutional transformation process will separate service provider functions from the regulatory functions making the Ministry’s role as a regulator rather than as a provider of health-care facilities so it can supervise, monitor and design health policies.
Government’s push for Healthcare Privatization
The need to embark on healthcare transformation stems from lots of factors like rapid increase in healthcare expenditure as healthcare services are free for all Saudis. In a rapidly growing and ageing population, this tends to be a costly and unsustainable model. There is a need to undergo a transformational shift from its status as a cost center to a revenue center in alignment with Vision 2030. Attracting participation of the private healthcare providers will increase the effectiveness of accessibility and reduce the cost while ensuring quality of healthcare delivery. Currently Ministry of Health has 20 clusters providing healthcare services across the KSA and its crucial that they are running in the most cost-effective way to provide the best quality safety and efficiency. The government intends to transfer responsibility for healthcare provision to a network of new companies that compete both against each other and against private sector operators. Under this structure, hospitals and health centres will be detached from the Ministry and made into standalone companies (or groups of companies – “clusters”), competing with each other as regards quality, competence, and productivity.
According to Frost & Sullivan, amongst the priorities of the Saudi Arabia’s Healthcare sector, the major one is enhancing the role of the private sector from the current 25% to 35% for economic diversification. The increasing number of private hospitals will bridge the gap of quality and accessibility of healthcare services in public hospitals which currently is a major issue in a geographically scattered population. Privatization will bring a lot of opportunities for investors, pharmaceuticals, in-vitro diagnostics (IVD) and MedTech manufacturers, healthcare IT vendors, and support services.
To facilitate private sector participation, Saudi Arabia is taking effective regulatory frameworks like @Saudi Arabian General Investment Authority (SAGIA) announced in 2017 that foreign investors can have 100 percent ownership in health and education sectors. Once implemented, this is expected to boost private sector investment in health care. The Private Public Partnership (PPP) draft bill, released in July 2018 for public scrutiny, is also expected to boost private investment in the Kingdom with the concurrent impact on the Saudi economy. It is the beginnings of the legal framework through which the Saudi government can begin to outsource health-care provision. The National Center for Privatization (NCP) was established to regulate privatization in KSA. The NCP is tasked with establishing the frameworks under which privatizations occur.
The Saudi government has stated that its aim is to raise $200 billion (SR750 billion) by 2030 through privatization. New developments being constructed under the Kingdom’s Vision 2030 will also spell out further investment and opportunities in the health-care sector. NEOM, a $500-billion megacity and a key part of the Kingdom’s strategic vision to diversify the economy and attracting tourists from all over the world, will create new markets for many sectors, including health care and biotech that will bring investment into hospitals, clinics, long-term rehabilitation centers, wellness retreats and fitness retreats.
Some major private investments from foreign companies in the KSA healthcare sector are:
- Amanat’s acquisition of a 33.2 percent stake in the Saudi long-term care provider Sukoon International Holding for $47.78 million (SR179.2 million) in 2015.
- Abu Dhabi’s NMC Health also announced in August 2016 that the firm had bought a 70 percent stake in As Salama Hospital in Al Khobar for $28 million (SR105 million).
- NMC Health also invested $4 million (SR15 million) in a 120-bed long-term care facility in Jeddah that has the potential to expand to 220 beds.
- In 2016, Aster DM Healthcare Group from Dubai planned to build or acquire four healthcare facilities in Saudi Arabia within four years.
- In January 2017, Dubai-listed Amanat Holdings acquired a 13.2 percent stake in Saudi-based International Medical Company (IMC) for $97.01 million (SR363.85 million). Amanat said it will assist IMC, which operates a 300-bed multi-disciplinary hospital in Jeddah, with expertise and capital as the Saudi hospital expands operations both within the existing facility and the Western Region over the next five years.
- Pfizer opened a $50 million (SR187.52 million) manufacturing facility in January 2017 in King Abdullah Economic City
2020 Hajj – The most unique and toughest challenge for Saudi Arabia’s Healthcare System
Hajj is a major Public health management for Ministry of Health KSA. Around 5 million pilgrims visit Saudi Arabia every year, which provides a major challenge in providing health services and containing infectious diseases arising from such a large mass gathering. Emphasis on digital health in Saudi Arabia has played a fundamental role in supporting health emergency management by strengthening existing response mechanisms, in its efforts to tackle COVID19 pandemic and also recently in Hajj without any corona virus cases.
Pilgrims were electronically tagged with bracelets designed to monitor and record their health status and track individuals quarantined upon their return home. The Saudi Health Minister, Dr Tawfiq Al-Rabiah in a Global Digital Health Summit in Riyadh said: “Digital tools, along with the implementation of exceptional health and safety measures, have assisted us successfully navigating one of the largest gatherings in the world under extraordinary circumstances.”
It needs to be noted that Saudi Arabia has prior experience of tackling MERS virus in 2012 which is why unlike other countries, the Kingdom’s healthcare was well stocked with inventories of PPE with a clear roadmap of pandemic response strategy.
Saudi Arabia’s Healthcare sector Innovations & COVID19 response at a glance
Saudi’s Ministry of Health has been pursuing a digital-first strategy, pre, during and post-COVID. Investments in Digital health made in 2019 – including the launch of apps such as Mawid (centralised appointment system), Sehha (e-consultation application) and Wasfaty (centralised e-prescription software) had given the Saudi Ministry of Health a head start in its pandemic response. Below are the Digital first initiatives by Saudi health sector.
- The central appointment system (Mawid), which is an app that enables patients to book, cancel or reschedule their appointments at primary health care centers, as well as managing their referral appointments. 51 million appointments have been made using the application, serving over 12 million patients.
- A virtual medical consultation app (Sehha) with an AI component that offers face-to-face interactions with medical professionals and can be used abroad by Saudi citizens and residents free of cost.
- A dedicated app (Tatamman) for individuals in isolation facilities, which provides direct and continuous contact with the patients to provide them with up-to-date health care information as well and ensuring their compliance with health regulations.
- @The University of Oxford and @King Abdul Aziz University (KAU) to establish Artificial Intelligence (AI) center for health care in Saudi Arabia. It will bring together senior AI research specialists to provide innovative and creative solutions and treatments for rare, metabolic, and cardiac diseases and supported by specialists from areas including biochemistry, medicine, pharmacology, epidemiology, IT, bioinformatics, and data science.
According to PWC AI impact report for Middle East, the region will benefit from 2% of the total global benefits of AI in 2030 which is equivalent to US$320 billion and 11% of total GDP. Public sector, including health and education contributes to $59 billion and its AI contribution is 18.6% to the Middle East GDP by industry.
- There are dedicated apps for health care practitioners to share medical information, and to prescribe medications to patients remotely with no physical interaction, thus minimizing the possibility of infection.
- Virtual clinics and tele-ICUs to provide healthcare practitioners with direct access to patients remotely. This has allowed for seamless communications with residents and nurses to consult virtually.
- Tele-rounds and remote consultations e through robotics, which safeguards healthcare professionals by minimizing physicians to COVID-19 patients contact.
- Tele-radiology to cover COVID-19 designated hospitals. These initiatives prove that digital health has and will continue to be the most effective tool in which we can ensure rapid response and delivery of efficient, safe and effective care.
Riyadh Declaration G20 Summit Healthcare Saudi Arabia
Saudi Arabia’s @Riyadh Global Digital Health Summit at the forefront of laying out the framework to dealing with future global pandemics. The seven key priorities included adopting Health Intelligence, interoperable digital technology, AI, effective communication, Data governance, Data quality & Innovation in the healthcare sector.
The recommendations of the Summit underscore the importance of data driven protocols, effective communications, confront misinformation, global data reporting standards, prioritizing digital health policies, capacity building of people on digital health, ethics and privacy, comprehensive health programs and health surveillance systems.
References:
Privatization & digitalization determine the KSA Healthcare Market (frost.com)
Why are telehealth companies treating healthcare like the gig economy? | TechCrunch
Saudi Arabia's Vision 2030: Opportunities for public private collaborations | Healthcare IT News
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9moExcellent insight Rémy LEVASTRE.
Ceo of a Management Consulting firm | Public Speaker| Our Flagship event Global B2B Conference | Brand Architect | Solution Provider | Business Process Enthusiast |Join Corporality Club
2yRémy, thanks for sharing!
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2yAmazing!