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Contents
About this research 2
Executive summary 3
Conclusions 13
About this
research
Healthcare in Saudi Arabia: Increasing capacity, improving l Sattam Lingawi, consultant physician, Saudi Arabia
quality? is an Economist Intelligence Unit report which
l Musfer Shalawi, executive director, Al Adwani General
discusses the shifting healthcare landscape of Saudi Arabia;
Hospital, Saudi Arabia
the challenge of expanding healthcare capacity in the
kingdom; and measures to improve the quality of healthcare l Hassib Jaber, regional healthcare leader, Deloitte, UAE
services. The findings of this briefing paper are based on desk l Imad Bokhari, MENA transaction advisory services
research and interviews with a range of experts, conducted by healthcare leader, and Andrea Longhi, MENA advisory
The Economist Intelligence Unit. healthcare leader, Ernst & Young, UAE
The research was sponsored by Philips. The Economist l Emad Jahdaly, executive director of business development
Intelligence Unit bears sole responsibility for the content of and project management, International Medical Centre, Saudi
this report. The findings and views expressed in the report do Arabia
not necessarily reflect the views of the sponsor. Christopher l Mahmoud Al Yamany, CEO, King Fahd Medical City, Saudi
Watts was the author of the report, and Aviva Freudmann was Arabia
the editor.
l Mohammed Zamakhshary, assistant deputy minister for
The Economist Intelligence Unit would like to thank the planning and training, Ministry of Health, Saudi Arabia
following experts (listed alphabetically by organisation name) l Sobhi Batterjee, chairman and group president, Saudi
who participated in the interview programme: German Hospitals Group, Saudi Arabia
l Amir A Khaliq, associate professor, Department of Health
Administration and Policy, University of Oklahoma Health
Sciences Centre, US
Executive
summary
Amid population growth and lifestyle changes in Here are the key findings of the research:
Saudi Arabia, demand for essential healthcare
l Rising healthcare demand is placing a burden
services is on the rise. As a consequence, existing
on Saudi Arabia’s finances.
healthcare infrastructure is coming under strain;
Driven by annual total population growth of
at the same time, investments in new healthcare
2.7%1 and the rising incidence of chronic diseases
capacity are placing a growing burden on public
such as diabetes and heart disease, demand
finances. Yet policymakers in Saudi Arabia
for healthcare is rising. This growing demand
recognise that better access to healthcare is
is placing a strain on the kingdom’s existing
critical to ensure the wellbeing of the kingdom’s
healthcare infrastructure, while rising healthcare
people and to safeguard its economic stability.
costs are placing a burden on its finances.
As Saudi Arabia secures adequate healthcare
l Saudi Arabia’s strategic healthcare plan
provision for its people, it must overcome a
recognises the need for reform.
number of significant obstacles. Not least, the
The kingdom plans to develop its tertiary-care
kingdom must increase physical healthcare
hospital infrastructure in particular, in order
capacity across its entire geography, including
to provide sufficient care across each of its
border areas and remote regions, and provide
provinces. Saudi Arabia’s 2013 budget includes
qualified manpower for new facilities.
funds for 19 new hospitals, on top of the 102
Furthermore, policymakers must ensure that
currently being built. Just as significant is that
standards of quality are maintained or improved
the government recognises the current healthcare
across the healthcare sector as it expands.
system is not sustainable.
This paper, based on desk research and on l More can be done to attract private-sector
in-depth interviews with experts including investment in new healthcare capacity.
healthcare professionals, policymakers and As it goes about increasing its healthcare
academics, discusses the challenges of expanding capacity, Saudi Arabia is placing a growing
and improving healthcare in Saudi Arabia. The emphasis on the provision of healthcare services
research examines government plans for the by the private sector. The kingdom offers financial
healthcare system; efforts to expand healthcare incentives to attract private-sector investment in
1
Central Department of
Statistics and Information, capacity in Saudi Arabia; and measures to its healthcare sector, yet more can be done, for
Saudi Arabia, 2013. improve quality in the healthcare sector. example cutting red tape.
l The healthcare sector will continue to make back from financing and delivering healthcare.
heavy use of foreign manpower. Accreditation of healthcare facilities may also
Providing qualified manpower is perhaps the drive improvements in quality.
biggest challenge that Saudi Arabia faces as l A stronger culture of healthcare research and
it expands its healthcare capacity. Despite development can promote innovation.
investment in education and training, demand Another factor that may bolster healthcare
for foreign healthcare workers is likely to remain standards in Saudi Arabia is the promotion of
strong in the coming years. innovation through investment in research
l Close supervision is required to ensure and development, which is currently lagging
quality as healthcare capacity expands. international standards. Awards for excellence
Experts say that greater oversight and regulation in healthcare research may underpin efforts to
is required as the healthcare sector undergoes foster a research and development culture in the
rapid growth – a task on which the Ministry of kingdom.
Health is likely to focus more sharply as it steps
Following last October’s haj pilgrimage season kingdom’s population (including both Saudi
in Saudi Arabia, the World Health Organisation nationals and foreigners) will reach 35.4m by
(WHO) heaped praise on the kingdom’s 2025, up from around 28.4m today. Amir Khaliq,
healthcare facilities, with one WHO official associate professor at the University of Oklahoma
remarking that “the well-equipped hospitals Health Sciences Centre in the US, expects that
designated to serve haj pilgrims indeed during this timeframe the population group
surpassed many of the world-class hospitals.”2 between the ages of 45 and 64 is likely to be one
Separately, Bloomberg recently placed Saudi of the fastest-growing, increasing demand for
Arabia 29th in a ranking of the efficiency of essential healthcare services.
healthcare systems around the world, based
on life expectancy, healthcare expenditure as Another reason is the ongoing shift of
a proportion of GDP, and healthcare costs per disease patterns from communicable to non-
capita. communicable diseases. For example, lifestyle
changes have led to higher rates of chronic
Despite Saudi Arabia’s healthcare achievements, diseases such as diabetes, cardiovascular disease
the system is under pressure, not least because and cancer, conditions that require lengthy
investment has been lacking. WHO statistics3 and costly treatment. According to WHO data
indicate that Saudi Arabia spent 4% of GDP on on Saudi Arabia, 29.5% of males and 43.5% of
health in 2010, well below the 12.4% average females aged 20 or over are obese, compared with
in the group of high-income countries to which a high-income country average of 21.8% and
it belongs. Saudi Arabia has 9.4 physicians 21.6%, respectively.
2
“KSA hospitals surpass per 10,000 population, far lower than the 27.1
some world-class ones”, average among high-income countries. Similarly,
Arab News, October 19th
there are 22 hospital beds in the kingdom per Government plans for action
2013.
10,000 population, far short of the average of 56 Currently some 60% of healthcare services in
3
World Health Statistics beds among high-income countries. Saudi Arabia are provided directly by the Ministry
2013, World Health of Health; a further 20% are provided by bodies
Organisation, 2013. Pressure on the healthcare system is set to that cater for state employees such as soldiers or
intensify in the years ahead. One reason is the oil workers; and 20% are provided by the private
4
World Population Prospects, demographic shift under way in Saudi Arabia. sector. Mahmoud Al Yamany, the CEO of King
2012 Revision, United
United Nations forecasts4 indicate that the Fahd Medical City, a state facility in the Saudi
Nations, June 2013.
capital Riyadh, observes that public primary care the UAE-based regional healthcare leader at
is evenly spread across the kingdom, the result consulting firm Deloitte. “These projects were
of a focus on expanding primary healthcare initiated just last year.”
facilities in recent years. Yet, Dr Al Yamany points
out, “tertiary care is not very well distributed “In tangible terms, we are building 141
according to regions or population density” hospitals,” says Mohammed Zamakhshary,
owing to resource scarcity. assistant deputy minister for planning and
training at the Saudi Ministry of Health. “And
In April 2009 Saudi Arabia approved a ten-year we are building 1,258 more primary healthcare
strategic healthcare plan covering the period centres, 824 of which are completed and 434
2010-20. Among other things, the plan foresees under construction. Some of those are brand
tertiary and quaternary care in each of the new, additions to expand the capacity of our
kingdom’s regions. As a result, explains Dr Al primary healthcare network; some of them are
Yamany, four medical cities are being built – in replacement of old infrastructure,” he explains.
the north, the south, the east and the west – in “Overall we’re doubling our capacity in the
addition to the existing King Fahd Medical City timespan of four or five years.”
in the central region. “So the overall plan is that
every region will be independent in terms of Besides rolling out healthcare services across
provision of care.” Saudi Arabia’s regions and improving the
quality of care, the kingdom’s ten-year strategic
The kingdom appears not to be losing any time healthcare plan also includes goals to bolster
in putting its plan into practice. According to the workforce, establish the Ministry of Heath’s
Economist Intelligence Unit research, Saudi supervisory role, diversify healthcare funding,
Arabia’s 2013 budget allocated SR86.5bn and encourage the private sector to deliver
(US$23bn) to health and social welfare, a healthcare services. “At the macro level, I think
16% rise from 2012. Of this amount, SR54.4bn the biggest shift is this whole recognition that
(US$14.5bn) was earmarked for healthcare, the current system is not sustainable,” observes
including funding for 19 new hospitals, on top of Dr Khaliq, “not only in terms of capacity and cost,
the 102 already under construction. “There are but in terms of the government’s role in that
more than 5,000 beds coming online, anywhere model.”
from 20 to 50 major hospitals,” says Hassib Jaber,
5
Saudi Arabia policy and
spending: Sub-sector update,
Economist Intelligence
Unit, February 15th 2013.
As the kingdom seeks to expand the capacity Council (GCC) and around the world, Saudi Arabia
of its healthcare system, it faces a number of is embracing the private sector. As one of its first
challenges. Among them is funding. In line with steps, it has introduced private health coverage
many other nations in the Gulf Co-operation (see box: Health insurance to bolster the private
sector). In time, it is possible that many, or where for the first time we have said: ‘OK, we will
all, of the kingdom’s state hospitals and other not be in the business of haemodialysis; we will
healthcare facilities will be privatised. get the private sector to come and do this’.”
For now, though, while levels of private-sector Nevertheless, more can be done to attract private
participation in Saudi Arabia are the highest investment in the expansion of Saudi Arabia’s
in the GCC bloc at around 34% of all healthcare healthcare capacity. Sattam Lingawi, a consultant
sector activity, this falls short of the 38% average physician based in Jeddah, believes that current
in high-income countries.6 “We feel that there is healthcare market regulations are rigid. “It’s
not enough private-sector participation in the not external institutes that are shying away from
healthcare industry in the kingdom,” remarks coming,” he says. “Rather, it is us not giving them
Dr Jaber of Deloitte. Indeed, he points out that enough flexibility to enter the market.” Another
private-sector participation appears to be low obstacle is that government financial support is
even among new projects, with the private sector mired in bureaucracy and that private healthcare
accounting for approximately nine publicly providers must cut through red tape in order to
announced projects among the estimated 125 access incentives.
upcoming projects. “The kingdom should be
pushing that harder, [targeting] the balance Addressing manpower challenges
between private and public health,” he concludes. Manpower is the biggest challenge that the Saudi
healthcare system faces as it expands capacity
Government incentives are in place to attract in the coming years, believes Dr Al Yamany:
private investment in expanding Saudi Arabia’s “Healthcare facilities are easy to build, easy
healthcare capacity. One is up to SR200 million to equip, but it is very difficult to staff them,”
of loans at favourable rates for local companies he says. Saudi Arabia’s planned expansion
constructing healthcare infrastructure – a will demand skills in clinical and non-clinical
potentially critical factor in small cities, for functions, with experts saying that the challenge
example, where hospital occupancy rates are will lie mainly on the clinical side, including
often lower than in large urban centres. Imad nurses, doctors and medical technologists such as
Bokhari, MENA transaction advisory services radiologists. Another challenge will lie in staffing
healthcare leader at consulting firm Ernst & border areas and remote regions of the kingdom.
Young, believes the incentive is effective: “In
recent years the Saudi Ministry of Finance has To ease the shortage of manpower, Saudi
started to give smaller loans for smaller medical Arabia has invested in expanding the number
projects,” he says. “This has significantly of undergraduate medical colleges. In addition,
increased private interest in the healthcare sector as Dr Al Yamany describes, some institutions
in the kingdom.” have agreed training partnerships with overseas
institutions: “The Ministry of Health and the
Saudi Arabia is also introducing new models for Ministry of Higher Education, in conjunction
private investment, including public-private with facilities including King Fahd Medical
partnerships (PPPs). The first such PPP deal was City, have managed to put in place training
struck in January 2012, when King Fahd Medical plans, both locally as well as in collaboration
City agreed a deal with a private-sector firm to with international universities and training
establish the Saudi Centre for Particle Therapy institutions, to train the workforces.”
– the country’s first proton therapy centre.
More such deals are on the way, according to Dr Furthermore, in 2005 Saudi Arabia launched
6
World Health Statistics Zamakhshary of the Ministry of Health, who says: the King Abdullah Scholarship Programme to
2013, World Health “We have just signed off a deal for haemodialysis, provide financial support for Saudis in higher
Organisation, 2013.
education overseas; currently the programme efforts to fill certain quotas of jobs with Saudi
covers some 150,000 students. But Dr Lingawi nationals where those jobs need not be carried
argues that educating and training Saudi out by foreigners. Currently, some 38% of a
nationals alone will not be sufficient to staff total workforce of 248,000 in Saudi Arabia’s
the kingdom’s expanding healthcare capacity healthcare sector are Saudi nationals, according
in the short term. “No matter how much you to government data. Private operators seem
recruit Saudis, they are just not enough to fill unflustered by Saudiisation requirements that
the positions that are available in medical care,” may tighten in the future. “Are we going to fulfil
he says. Dr Zamakhshary appears to agree: “We all the sector’s needs with Saudi nationals?” asks
are recruiting more people into the system from Dr Al Yamany. “The obvious answer is no. There
all over the world, because we are not able to will still be a huge demand for expatriates and for
produce all the manpower that we need in such a a lot of expertise from different parts of the world
short time,” he says. to help in running these institutions.”
Some experts express concern that the speed of healthcare accreditation body. Considered
healthcare capacity expansion in Saudi Arabia by some experts to be the gold standard in
may compromise the quality of healthcare healthcare accreditation, its growing adoption
services. There are some warning signs: in June- in the kingdom is contributing towards
July 2013 the Ministry of Health shut down 33 improvements in structures and processes at
private healthcare facilities across the kingdom healthcare institutions and, in turn, helping
following a series of violations of healthcare to positively influence healthcare outcomes.
standards, including breaches of recruitment “The government might want to take the same
regulations, selling medicines without a approach and apply that throughout the country,
prescription, using expired licences, and not just for private-sector facilities, but also
practising without a licence. “I don’t believe that, public-sector facilities,” says Dr Khaliq.
in the past, there has been enough government
involvement and oversight,” says Dr Khaliq. Indeed, late in 2013 Saudi Arabia ordered that
all hospitals be accredited by the Central Board
In time, monitoring and supervision of the for Accreditation of Healthcare Institutions, an
healthcare sector is set to become sharper as accreditation body for the kingdom’s hospitals
the Ministry of Health increasingly hands over and ambulatory facilities. Musfer Shalawi,
responsibility for financing healthcare and for executive director of the Al Adwani General
providing healthcare services to the private Hospital in Taif, in the country’s south-west
sector, as foreseen in its ten-year strategic plan. Mecca province, is strongly in favour of the move.
As Dr Khaliq explains: “The role of the Ministry of “I think we need to have more transparency; the
Health might become, or ought to become, more market cannot operate without transparency,”
of oversight and regulation and monitoring, both he says. “And patients – who are now more
in terms of quality of care and at the same time consumers than patients – cannot choose
with an eye on the cost of healthcare.” without transparency.”
In seeking to boost quality, one tool that To drive quality in healthcare, certification and
policymakers have at their disposal is training must be improved in order to keep
accreditation. Many hospitals in Saudi Arabia healthcare professionals up to date with the
have sought accreditation from the Joint latest technologies and approaches. “First and
Commission International, an international foremost, we, the tertiary-care institutions,
Saudi Arabia can focus on more sharply, in his excellence in research or in aspects of healthcare
view, is “scholarly activity and promotion of delivery itself. He points to the Malcolm Baldrige
research and education”. In turn, he says, this National Quality Awards in the US, which
has the potential to attract overseas researchers have promoted competition among research
interested not only in funding, but in “working in institutions there, enabling recognition as
a research environment with colleagues who are centres of excellence in their respective fields.
cutting-edge researchers themselves”. “The same kind of mechanisms in Saudi Arabia
can go a long way in encouraging people to do
Dr Khaliq sees scope for the Saudi government research and publish and excel in their field,” he
to establish national awards that recognise concludes.
Conclusions
Strong population growth and shifting disease patterns are l Despite the training and education of Saudi nationals,
placing an increasingly heavy burden on the healthcare system foreign manpower will continue to support the Saudi
of Saudi Arabia. In response, policymakers are seeking to healthcare market for some years to come. Government
expand the kingdom’s healthcare capacity and improve its policies that discourage expatriates may lead to instability in
quality. As part of ambitious plans to reform the healthcare the delivery of healthcare services.
sector, Saudi Arabia is looking to the private sector to provide
l Priority must be given to sharpening the supervisory role of
financing and to deliver services.
the Ministry of Health to ensure quality as the ministry hands
On the basis of desk research and in-depth interviews with responsibility for financing and delivering healthcare services
healthcare professionals, policymakers and other experts to the private sector.
carried out for this briefing paper, it is possible to draw a l Innovation has the potential to bolster the Saudi healthcare
number of conclusions. These include the following: sector. There is scope to foster innovation in healthcare by
l To attract overseas private investment in healthcare capacity promoting research and development in the kingdom, and by
expansion, policymakers must ease access to the Saudi recognising excellence in research.
healthcare market by cutting red tape. Extending financial
incentives to foreign firms may also benefit foreign investment
in capacity expansion.
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