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Health and social development are a key sector for the Kingdom of Saudi Arabia’s (KSA) government as it holds 16.4 per cent of the country’s budget expenditure-the third-largest share in 2020. Moreover, the outbreak of COVID-19 has given the necessary impetus to KSA’s ongoing healthcare transformation plan. In an interview with Omnia Health Magazine, Surbhi Gupta, Industry Analyst, Transformational Health Practice, Frost & Sullivan, highlights the main drivers of healthcare in Saudi Arabia and initiatives that will transform healthcare delivery in the country.
Focus on Wellness and Preventive Care: The Saudi Government has rolled out initiatives (e.g., ‘Quality of Life Program 2020’) focusing on fitness and preventive care. KSA is aiming for a 3 per cent reduction in obesity and a 10 per cent decrease in diabetes prevalence by 2030.
The changing demographic profiles: Changing demographics and lifestyle factors have increased the burden of non-communicable disease (NCDs) in KSA, creating the need to provide affordable quality healthcare.
Healthcare consumerism: The rise in incomes and strong demand from the younger, more socially conscious, and aware population creates the need for best-in-class speciality care.
Amid falling oil prices and the sluggish global economy, the ongoing economic diversification through privatisation and localisation efforts by the government of KSA have a strong medium to long term outlook.
KSA’s top priorities in the healthcare sector are enhancing the role of the private sector through privatisation of government healthcare services, increasing public-private participation (PPP) healthcare delivery models, scaling up education and training of the local workforce, and boosting the adoption of digital information systems.
There are various projects initiated by the KSA government to achieve these goals such as mandatory insurance for all Saudi and non-Saudi employees and their families in the private sector, increase private sector’s contribution to healthcare spending from 25 to 35 per cent, increase the percentage of patients with a digital health record from 0 to 70 per cent by 2020 and have allocated US$1.5 billion towards healthcare IT and digital transformation programme.
Some of the biggest initiatives include the increase in private player participation through new healthcare financing models, which is a major driver for investment in healthcare.
Moreover, in 2019, 65 ambulatory centres and 10 mobile clinic projects were completed, in addition to four cardiac catheterisation centres, seven oncology centres, three obesity centres, and five growth disorder centres.
KSA will be one of the fastest-growing digital health markets in the GCC region:
Telehealth adoption is approximately 70 per cent in KSA, and almost 34 per cent of the young physicians in KSA use AI to facilitate diagnoses. The KSA government has allocated ~US$1.5 billion toward healthcare IT and digital transformation programmes. In KSA, the Ministry of Health (MoH) has established an e-Health strategy that will utilise telemedicine to improve the accessibility and quality of care in remote areas where speciality services are not available. COVID-19 have given a boost to the ongoing digital transformation efforts of KSA MoH through the speedy implementation of telemedicine services by healthcare facilities. The MoH is trying to strengthen telemedicine services, making it an excellent investment opportunity.
Focus on wellness and preventive care will catapult investment toward non-hospital settings:
By the end of 2020, at least 5 per cent of healthcare service spending will shift to non-hospital care settings. The Saudi government’s US$46.3 billion budget allocation during 2019 will provide the stimulus for the social determinant of health (SDOH) projects.
Demand for speciality clinics and ambulatory care centre will drive privatisation:
Due to government policies that favour PPP deals, the number of private hospitals in KSA will exceed 120 by the end of 2020. There will be more than 100 ambulatory centres and mobile clinics in KSA by the end of the year. Despite the presence of several general hospitals, there are supply gaps for several speciality areas, spurring governments to harness PPP models to build speciality clinics for gynaecology, oncology, and cosmetology.
KSA will become the branded generics manufacturing hub of the MENA region:
The low level of domestic pharmaceutical drug production (20 to 30 per cent) in the Gulf Cooperation Council (GCC), coupled with the ambition to diversify into non-oil sectors (e.g., bioeconomy) will continue to make the localisation of pharma drug manufacturing a lucrative opportunity in 2020.
KSA healthcare expenditure on diabetes and other lifestyle disorders will increase:
During 2020, KSA will spend 25 to 35 per cent of the total healthcare budget on diabetes, obesity, and cardiovascular diseases. With the push for preventive care screening for managing chronic diseases, the number of PHC visits per capita will double in 2020. Non-communicable diseases accounted for 68 per cent of all deaths in KSA; 17.9 per cent of the Saudi adult population has diabetes, and more than 40 per cent of Saudi citizens are obese, which is a major risk factor for chronic diseases such as diabetes, cardiovascular disorders, cancer, and kidney disease.
The private sector has a larger role to play in filling the demand-supply gap in healthcare infrastructure and services. The increasing number of private hospitals will bridge the gap of quality and accessibility of healthcare services in public hospitals, which is a major concern in healthcare delivery. The increase in investments in enterprise healthcare IT solutions and connected medical devices with AI capabilities that drive efficiencies will play a major role in the shift to a performance-based value system. Thus, there are a plethora of opportunities for investors, pharmaceuticals, in-vitro diagnostics (IVD) and MedTech manufacturers, healthcare IT vendors, and support services.
The key challenges KSA’s healthcare industry faces are lack of skilled healthcare workers, increasing cost of healthcare budget, lack of domestic manufacturing, and lack of speciality services.
However, KSA will continue to hold the lion’s share of the MENA life sciences market. The modernisation of healthcare infrastructure and care delivery innovations will continue to drive the demand.