The healthcare system in the Kingdom of Saudi Arabia (as it is officially known) is one of the main sectors of focus in the government’s plan to further expand and diversify the country’s economy. As such, it represents a large and expanding market with a yearly budget allocation that is continuously increasing and has more than doubled in the last few years.
Another factor that has, and will continue to drive growth in the next few years is the fact that Saudi Arabia has one of the largest and fastest growing populations in the Gulf Cooperation Council (GCC). The expanding population coupled with increases in disposable income, rising life expectancies and increasing incidence rates of chronic diseases will all contribute to a rise in demand for healthcare services.
The healthcare system in Saudi Arabia is made up of three main parts: The Ministry of Health (public sector), Semi-public organizations and the private sector.
In the public sector, the MOH owns and operates over half of KSA’s hospitals, providing primary, secondary and specialized care services. Measures are being taken to make MOH hospitals available exclusively to Saudi Nationals with some exceptions that allow expats to access specialized services or basic care hospitals in rural areas where private facilities are not available. The expat population which is mostly concentrated in Riyadh and Jeddah are therefore increasingly using private healthcare facilities.
Semi-public and other government organizations like The National Guard, the Ministry of Defense and Aviation and the Royal Commission have their own healthcare facilities that are free to all of their employees.
The private sector is playing an increasingly significant role in terms of healthcare investment and infrastructure. Traditionally, private care facilities have dominated outpatient services in KSA, however, the increased restrictions placed on MOH facilities, have prompted an increase in the usage of private facilities for inpatient care as well (e.g. expats).
In recent years, KSA has made some significant strides in improving several healthcare indicators like life expectancy and infant mortality. On the other hand non-communicable or chronic diseases are among the major causes of death for the elderly population in Saudi Arabia, moreover there are high incidence rates of conditions like diabetes, obesity and cardiovascular diseases.
One of the main challenges in KSA’s healthcare system is that the current supply of care facilities is limited in relation to the population’s needs and this issue will continue to become more serious as years go by and the population continues to expand. Aware of the seriousness of the issue, the local authorities have allocated much of the healthcare budget to expanding infrastructure and the construction of several health cities that will aid in meeting demand.
Initiatives have also been put in place to encourage the private sector to invest and in so doing, aid in the expansion efforts in healthcare. This has risen the number of public/private partnerships (PPP) in KSA and will continue to do so in the next few years.
Healthcare expenditures in KSA represented about 4.5 percent of the country’s GDP in 2014. This amount is expected to increase slightly to 4.6 by the end of 2015.
About, 70 percent of KSA’s healthcare expenditures are funded through public sources while the latter 40 percent stems from private sources.
Public spending is quite high in KSA relative to more developed countries which tend to average in the low to mid-sixties in terms of government expenditure as a percent of total health spending. On the other hand, when one examines per capita health expenditure which was at about € 920 in 2014, it comes out to a significantly lower figure than the per capita healthcare spending of more developed nations, which goes as high as € 2401.
Of the total government spending budget this year, about 18.6 percent has been allocated for healthcare. This comes out to a healthcare budget of about € 38.8 bln for 2015. Healthcare budget allocation has increased by about 48 percent compared to 2014.
Plans for the 2015 healthcare budget include:
- The construction of 27 new hospitals and healthcare facilities
- The continuation of another 117 unfinished hospital projects
- Eight medical cities
- 16 new sports clubs
- 5 new centers for special needs children
- Funding of new and existing social welfare and poverty programs
Efforts are also being made by the KSA MoH to encourage the presence and participation of the private sector in healthcare, including the expansion of health insurance, low interest loans for the construction of private hospitals and the active promotion of public/private partnerships.
Out-of-pocket spending accounts for about 55 percent of all private expenditure and private pre-paid insurance plans account for about 23 percent.
Some of the more prevalent incidence increases have been observed in diseases like diabetes, obesity, cardiovascular diseases and oncological conditions, which can be quite costly to treat. Non-communicable or chronic illness accounts for about 78 percent of all deaths in KSA. Factors driving the growth in these conditions include: Urbanization, lifestyle changes, unhealthy eating habits (i.e. fast food), sedentary life styles and excessive tobacco use.
Cardiovascular diseases are the leading cause of death in KSA at 46 percent. Risk factors like high blood pressure, high blood sugar and high obesity rates contribute to the high prevalence rates. KSA ranks high in diabetes prevalence relative to both the global and regional averages with over 20 percent of the general population suffering from type 2 diabetes. Diabetes also accounts for about 5 percent of the deaths in KSA. The prevalence of obesity is also quite high at about 36 percent of the population. Furthermore, 44 percent of women, 26 percent of men and about 18 percent of the children in KSA suffer from obesity.
Cancer prevalence rates are also quite high, accounting for about 10 percent of all deaths in KSA.
Birth defects are also a prevalent issue in KSA due to the common practice of consanguineous marriage (i.e. about 50% of all marriages). About 7.2 percent of the deaths in children under 5 years of age are due to genetic anomalies.
Other conditions that merit mention are the ones affecting women, whose health status tends to be affected by the country’s cultural norms (e.g. cultural expectations for high fertility rates leading to low bone density in elderly women, early teenage marriage affecting maternal mortality rates etc.).
Like most countries in the GCC, KSA is currently going through an era of both epidemiological and demographic changes that are resulting increased incidence levels of chronic illness and higher demands for quality healthcare services.
Aware of the changing population needs, the government is making great strides in the advancement, expansion and modernization of their healthcare system. The combination of these dynamics make KSA’s healthcare system one of the most attractive and opportunity filled industries in the Middle East.
For further quantitative information on the Saudi Arabian healthcare system and the macroeconomic climate, please look into our Business intelligence platform or order the TforG Deep Dive report for KSA containing volumes of 620 surgical procedures in 13 specialisms.
Want to understand how TforG can help you understand the local healthcare system?
Leave your details here and we will contact you on the same day to discuss how TforG can help you.