Jadwa expects Saudi private sector to play greater role in healthcare sector

Saudi Arabia’s healthcare sector needs a great deal of investment in the coming decade and beyond, expecting increasingly larger input from the private sector, Jadwa Investment said in a new report.

Fostering a partnership between the private and public sectors will enable higher levels of inward investment and foreign direct investment.

Higher levels of investment and growth in the healthcare sector are likely to see more employment opportunities for citizens. However, this will be contingent on the provision of suitably qualified personnel, the report added.

The Kingdom currently has 504 hospitals (a third of which are private), providing almost 80,000 beds (a quarter of which are private), approximately around 2.2 beds per 1,000 people.

"We estimate that the Kingdom will need a minimum of 16,000 additional beds by 2030, only to maintain the 2.2 beds/1,000 ratio. Alternatively, if the Kingdom wants to attain the OECD’s current average, an additional 130,000 beds will be needed," said Jadwa Investment. As more and more Saudis seek out employment in the private sector (labor force participation rose from 40% in Q2 2017 to 49% in Q2 2021), the consultancy not only expected the number of health insurance policies to increase along with the quality and breadth of coverage.

A number of government entities are in the process of developing private health insurance coverage for their employees, which is likely to push up the number of health insurance policies and demand on private sector healthcare services.

A change in the current healthcare structure by separating the role of regulator, financer and service provider (all three of which are currently carried out by the Ministry of Health) would raise the level of governance, transparency and quality of services. Therefore, a transition to such a system would need to attract significant amounts of investment, Jadwa noted.

The consultancy expected a cumulative investment gap of about SAR 132 billion by 2030 under such a system, which would have to be filled by local private sources or foreign direct investment.