The transformation of the Saudi economy is expected to bring better services and more insurance coverage for the country’s healthcare sector, which is forecast to reach $27.4 billion by 2020.
The government is expected to encourage a bigger role for private players in health care as part of its renewed diversification push, which on a wider scale promises to emphasise the private sector throughout the economy.
The National Transformation Plan, announced by Saudi deputy crown prince Mohammed bin Salman on April 25, is expected to begin taking effect later this year. He told Bloomberg in an earlier interview that the government is pushing for more health insurance, and that treatment programmes abroad would be replaced by local ones besides encouraging health partners abroad to invest locally.
Further details of the 270 billion Saudi riyal (Dh264.44bn) plan announced this month include boosting investment in the primary care segment, health IT spending and the target to increase private sector contribution to the total healthcare sector spending to 35 per cent in 2020 from the current 25 per cent. That is besides the government push for training programmes for Saudi nurses and support staff to reach 150 per 100,000 population from the current 70.2.
The Saudi Arabian healthcare market is projected to reach $27.4bn in 2020, expanding at a compound annual growth rate of 11 per cent from 2015, according to Dubai-based investment bank Alpen Capital.
Abu Dhabi’s VPS Healthcare, which does not have a presence in Saudi Arabia, is already evaluating opportunities there.
“These are exciting times, the government and private players should come together to give the best care and reduce expense of people travelling abroad for treatment,” said Shamsheer Vayalil, the managing director of VPS Healthcare. “To ensure this the infrastructure required needs the private sector.”
But the Saudi healthcare private sector also needs to evolve since it is traditionally dominated by the public sector hospitals.
“It would be a journey for the private sector, and health care takes some time to mature,” Mr Vayalil observed.
Meanwhile, international insurance companies also expect greater play.
Health insurance is compulsory in Saudi Arabia with a regulation from 1999 to provide it for non-Saudi residents. Citizens and residents in the private sector are also covered by compulsory insurance. Citizens working in the government receive free coverage in governmental healthcare centres and public hospitals. It is this category of consumers that private international health insurance companies expect to tap.
In the competitive Saudi market, companies are developing products for the new clientele.
“We are mainly focusing on creating new products that cater for local government employees and visitors [to the country] who have to have insurance when visiting the kingdom,” said a spokesman for Jeddah-based Bupa Arabia.
Bupa Arabia, which entered the country in 1997 as a joint venture betweenBupaGlobal and Saudi Arabia’s Nazer Group, has about 3 million members. Bupa Global is the international insurance arm of British private healthcare group Bupa.
“By transferring health treatment abroad into domestic programmes, treatment becomes more accessible to the majority of the society,” the Bupa Arabia spokesman said.
Another global insurance company, US-based Cigna, which operates in Saudi Arabia in alliance with Saudi Arabian Insurance Company (Damana), expects to launch products tailored to the needs of the Saudi expat community.
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