According to the World Health Organization (WHO), Kuwait is considered a high-income country with one of the most advanced healthcare infrastructures in the region. However, with projected future healthcare requirements expect to grow significantly in the face of a rapidly growing population (estimated to have reached be 4.2 million in January 2017 – a growth of almost 5% Y.O.Y), combined with budget deficits, and a small insurance-based population, the private sector is expected to increase their share of the spending burden as the country works hard to upgrade, enhance and expand their healthcare infrastructure over the coming years.

The Ministry of Health’s (MoH) budget for healthcare spending has doubled in the past five years reaching close to KD 2 billion (US$6.6 billion) in 2016, with the public sector contributing 80% of the healthcare spending and operating 15 general and specialised hospitals, on the top of the primary care network of polyclinic.

“The healthcare sector in Kuwait will likely face a rapid growth over the next five years due to the huge investment in the country’s healthcare infrastructure,” says Osama Abdelrazek, Key Account Manager, Upper Gulf Region from QuintilesIMS, a leading integrated information and technology-enabled healthcare service provider worldwide .

“Based on our analysis, the government’s healthcare expenditure percentage has remained relatively stable from 2010-2016, at around 7% of the total government expenditure, and increasing in value following the total spending and GDP,” Abdelrazek adds.

Public Sector: Leading The Way

According to a 2016 Kuwait Healthcare Market Report by QuintilesIMS and Kuwait Life Sciences Company, there are currently more than 20 large governmental healthcare projects in the pipeline worth KD 3.5billion KD (US$12 billion) adding 11,200 hospitals beds. As the country accelerates its healthcare development strategy as part of the Kuwait Vision 2035, the MoH is also moving forward with expansion projects for eight existing hospitals adding 4,600 beds, 150 operating rooms, and 500 outpatient clinics.

Key new public sector hospitals include the 600-bed New Kuwait University Medical Center, 500-bed New Medical City for Retirees, 500-bed New Police Hospital, 350-bed New Kuwait Oil Company Hospital and two new hospitals by the Ministry of Public Work with a combined 1,500 beds. These are in addition to Jaber Hospital with 1,200 beds located in the South Surra area, the New Physical Medicine and Rehabilitation Hospital project located in Al Andalus area with 500 beds, and the Al Sabah South Hospital that has been allocated 81,000 square meters of land with a capacity for 7,000 beds.

Also, the construction of the full-service general secondary-care hospital - the 1,115-bed New Al Jahra Hospital - with the infrastructure to accommodate tertiary-care capabilities, will be carried out with fast-track execution method in a period of approximately two years.

The MoH is also moving forward with the development, construction and expansion projects planned in Al Sabah (731 beds), Amiri (415 beds), Farwaniya (955 beds), Al Adan (638 beds), Infectious Disease (224 beds) and Ibn Sina (427 beds) hospitals as well as the 618-bed Kuwait Center for Cancer Control and the KD 31.4 million (US$103 Million) Al Razi Hospital with 540 beds. Due for completion during 2017 -2020, these projects will lead to the doubling of hospitals beds’ capacity.

Kuwait Health Assurance Company (KHAC) has a budget of KD 230 million (US$765 million) to build a number of hospitals for non-national citizens (expatriates) as one of the leading Public-Private Partnership (PPP) projects in Kuwait. The project involves building three 250-bed hospitals, 10 primary care clinics, and one day-surgery centre.

“The KHAC Hospital for Expatriates specifically targets the country’s expatriate population as it is a growing market, although Kuwaiti citizens will also be able to enroll in utilising the hospital facilities,” says Abdelrazek.

He also points out that Kuwait has recently upgraded their road ambulance fleets by adding 54 digital and online-enabled ambulances that are linked directly to emergency departments and other ambulances through the Internet. “Also, air ambulance aviation and scooter ambulances were recently initiated in Kuwait to reach the international standards in emergency services,” he adds.
The Private Sector: Stepping Up

The QuintilesIMS report suggests that the private sector is becoming the main player in the medical sector development. Although the government offers free healthcare services, patients are willing to pay a premium for private treatment in order to reduce waiting times and treatment schedules. In certain fields, such as obstetrics and gynecology, local patients pay a premium for high-end services offered by private hospitals.

 “Currently, 12 private hospitals are providing medical services in the country with 1,038 beds, and an additional 1,800 beds will be added to this as a number of private hospitals will open over the next few years,” Abdelrazek says.

Some of these new hospitals and expansion projects include the new branch of the Al Seef Hospital in the Slamiya area, the extension of the Dar Al Shifa Hospital and Tiba Hospital, and the new Royal Hayat Hospital, as well as new primary care - and polyclinics.

The MoH, in cooperation of the Gulf Group for Health Insurance (GGHI), has also launched a new KD 100 million (US$342 million) project called “Private Health Insurance For Kuwaiti Retirees” for the treatment of 117,000 retired peoples.

“Based on our findings, this experience is not new to the country’s private sector hospitals as the GGHI has already implemented a project for the Kuwait Oil Company (KOC) and thus covered the health insurance of 50,000 people,” Abdelrazek explains.

“Further, our research shows that the MoH is also currently working on completing the necessary procedures for obtaining health insurance for the KHAC Hospital for Expatriates in collaboration with the company that won the tender for the construction of the hospital.”

A Favourable Investment Climate

The Kuwait Healthcare Authority is expected to increase the investment into the private sector to improve the overall healthcare quality in the country. According to Adbelrazek, the private sector is estimated to grow by 15-20% during coming years, adding an estimated 1,800 beds in the next few years. The new PPP Law of 2014 will encourage investors to invest in the private market.

“Our research has shown that the Kuwaiti government has realised that the healthcare system will never be fully privitised and has formed a privatisation law for any organisation wishing to invest in the private healthcare sector,” he explains. “Any private healthcare investment must follow a specific framework as 50% will be offered to the public (a public joint stock holding company listed on the Kuwait Stock Exchange (KSE), 26% will be offered to a private partner (with strong preference given to publicly-listed Kuwaiti companies), and 19% will be owned by Kuwait Investment Authority (KIA) and 5% will be owned by Public Institute for Social Security (PIFSS).”

The new PPP Law provides that projects already signed under the old law can continue under the existing regime; however, there is no interim legal framework for PPP projects that are already in the procurement stage but not yet signed. The procurement of PPP projects where the procurement process has already commenced, but has not been concluded, should, therefore, recommence and secure the approval of the PPP Higher Committee. This may result in the redrafting and rerelease of some procurement developed under the old regime documentation.

Planning for the Future

“According to our analysis, we have identified that the Kuwaiti government has decided to provide better oversight to the budget planning by reforming the finance model toward strengthening the capital investment prioritisation and growth of each sector,” says Abdelrazek.

The Kuwait health Assurance Company (KHAC), the first private health management company in the country, is planning to refinance the healthcare costs of the expatriate population and private health insurance for Kuwaiti retirees to address the financial needs of the healthcare of national population. In addition, the new PPP Law will facilitate the investment process of the Kuwaiti PPPs by providing the foundation for more investor friendly landscape and new regulations to resolve some of the challenges that arise. 

Meanwhile, the Kuwait Authority for Partnership Projects (KAPP) has replaced the Partnership Technical Bureau (PTB) to have greater autonomy and authority than its predecessor as the main body responsible for implementation of PPP projects and it will be supervised by the Kuwait Ministry of Finance (MoF) and overseen by the PPP higher committee.
In conclusion, Abdelrazek believes there continues to be a strong need to create an independent healthcare regulatory authority to lead the policy development, licensing, quality assurance and the overseas healthcare functions in Kuwait.

“The Kuwait Health Authority will help guide the Kuwaiti healthcare system away from segregation of care, as currently there are seven government entities involved in building, contracting and operating hospitals in Kuwait,” he says. “The integration of new laws and regulations, especially regarding the participation of the private sector, will lay the foundation for a more investor-friendly and streamlined healthcare landscape in Kuwait.”