Restructuring Saudi Healthcare Sector a Boost for the Industry

By Jad Bitar, Partner and Managing Director at The Boston Consulting Group Middle East and Dr Mark Khayat, Project Leader at The Boston Consulting Group Middle East.

There are multiple ways to address healthcare challenges and improve the industry as a whole including encouraging private sector participation and investment.

According to the World Health Organization, Saudi Arabia’s public health sector is ‘overwhelmingly financed, operated and monitored by the Ministry of Health’ (MOH). With a growing, ageing and sickening Saudi population the sector faces several challenges. The existing model cannot meet the future healthcare needs of the Saudi population and is not sustainable operationally and financially. However, there are multiple solutions that the Saudi government can take now to ensure a more effective and more resilient healthcare system.

Saudi Arabia Healthcare Challenges

The healthcare challenges faced by Saudi Arabia are many and include an overall system not geared towards quality, a primary care system lacking capacity, which leaves tertiary care flooded with patients as well as a system hungry for resources. Moreover, Saudi Arabia is ranked by The Lancet (a UK medical journal) as the third most obese country in the world. In fact, the prevalence of people with sedentary lifestyles and obesity is estimated to be north of 80%, which in turn drives some of the highest rates of diabetes globally.

In addition to medical challenges, the healthcare industry is also faced with operational challenges that stifle it. According to the Open Journal of Emergency Medicine, the mean waiting time in a Saudi emergency room, for example, was around 3 hours, with a quarter having to wait for more than four hours. In addition, a key challenge faced by the Saudi health system include fragmentation of the provision of care, which leads to a silo approach to delivering healthcare services, rather than a more effective integrated continuum of care. Furthermore, current data sources do not give a complete picture of outcomes and costs. These challenges are further exacerbated by an education system that fail to graduate enough quality healthcare professionals to meet the health needs of the Saudi population.

Looking to Saudi Arabia Vision 2030

The three pillars of Saudi Arabia's Vision 2030 – A Vibrant Society, A Thriving Economy, An Ambitious Nation – should shape the evolution of Saudi healthcare by defining the type of healthcare system needed in the future. It is critical to start with the care necessary to support a growing and ageing population, diversifying the economy and leveraging the non-profit sector to complement the healthcare sector. The healthcare sector plans to add around 100,000 Saudis jobs in the health sector by 2030. This is in line with Vision 2030 economic diversification strategy offering Saudis value adding jobs. In addition to economic diversification, Vision 2030 offers additional pathways for improving the healthcare sector including offering the necessary healthcare services to support a thriving Saudi society and encouraging public and private partnerships especially around healthcare provision to improve accessibility and quality.

Addressing the Challenges

The three pillars, as set forth by the Saudi Vision 2030, offer a number of specific initiatives that can be undertaken to enhance the accessibility and quality of care. These include the promotion of preventative care, the integration of health and social care, ensuring transparency among providers and the development of sustainable funding mechanism. Specific objectives of such initiatives include the reduction of wait times and infectious diseases, addressing chronic diseases and offering better training for doctors.

Following an assessment of the sector, The Boston Consulting Group (BCG) recommends a four-point agenda to address the challenges in the healthcare industry in an effective and sustainable manner.

  1. Restructuring the governance of the sector: While the MOH in Saudi Arabia is responsible for the majority of healthcare funding in the Kingdom, a restructuring of the sector can open the doors for vast improvement. As such, BCG recommends a consolidation of the sector's governance to enable the MOH to be the main regulator of the sector, establish a separate funding mechanism and split the delivery of care from the funding and the regulation. This is something the MoH is eagerly pursuing under the Corporatisation agenda.
  1. Organising the delivery of care to enhance capability and outcomes: Health and wellbeing are at the centre of the Saudi Arabia Vision 2030. As such, organising the delivery of care along specific populations in an integrated manner, establishing transparency among providers and rewarding value rather than activities will limit duplication between various providers including MoH, private, government and other sectors, and will lead to improvement of outcomes for the population and further the sustainability of the sector. 
  1. Encouraging the private sector: The healthcare sector in Saudi Arabia presents severe oversupplied areas as well as underserved ones. It is important to incentivise the private sector to invest in underserved areas and to drive innovation. Saudi Arabia has the opportunity to leapfrog other systems by avoiding mistakes that other countries have done. It is the role of the government to encourage the private sector to play a bigger role in healthcare by developing and delivering innovative models of care. The private sector should be incentivised to drive improved health outcomes for the population by encouraging promotion and prevention as well as development and adoption of technologies that improve efficiency and outcomes while reducing the system's dependence on large numbers of scarce expertise.
  1. Develop local capabilities: According to the MoH, 38% of Saudi Arabia’s healthcare workforce consists of Saudi nationals. Of these, 23.1% are physicians, while 32.3% are nurses. BCG recommends that Saudi Arabia invests in policies to encourage Saudis to take up healthcare professions and encourage the recruitment of Saudi healthcare professionals. Moreover, the government should ensure the entire cycle is streamlined and red tape minimised. This should start with the coordination of efforts to promote healthcare professions to the Saudi youth, the allocation of scholarships to future needs, the management of residency programs, encouraging caregivers to facilities that need them and streamlining the licensing process.

Creating a comprehensive division of responsibility in the healthcare industry in Saudi Arabia will take the pressure off MoH, who has been solely responsible for regulating, funding and operating a large part of the sector. MoH cannot be expected to deliver the overall improvements in the sector on its own. It is critical to enable the MoH to focus solely on regulation and monitoring while allowing other entities to deliver the provision of care in an integrated manner to serve the population in a more effective and efficient manner.