Healthcare in Saudi Arabia

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The healthcare system in Saudi Arabia can be classified as a national health care system in which the government provides health care services through a number of government agencies. In the meantime, there is a growing role and increased participation from the private sector in the provision of health care services.

The Ministry of Health (MOH) is the major government agency entrusted with the provision of preventive, curative and rehabilitative health care for the Kingdom’s population. The Ministry provides primary health care (PHC) services through a network of health care centers (comprising 1,925 centers)[1] throughout the kingdom. It also adopts the referral system which provides curative care for all members of society from the level of general practitioners at health centers to advanced technology specialist curative services through a broad base of general and specialist hospitals (220 hospitals)[2]. The MOH is considered the lead Government agency responsible for the management , planning , financing and regulating of the health care sector. The MOH also undertakes the overall supervision and follow-up of health care related activities carried out by the private sector. Therefore, the MOH can be viewed as a national health service (NHS) for the entire population.

There are also three other mini-NHS which finance and deliver primary, secondary and tertiary care to specific enrolled security and armed forces populations : the Ministry of Defense and Aviation (MODA) , the Ministry of Interior (MOI) and the Saudi Arabian National Guard (SANG). In addition to these agencies , there are several autonomous government agencies which are responsible for the delivery and financing of health care services in the KSA. The Ministry of Education provides immediate primary health care to students. The Ministry of Labor and Social Affairs operates institutions for the mentally retarded and custodial homes for orphans. These facilities provide their guests a certain amount of medical care. The General Organization for Social Insurance and General Presidency of Youth Welfare provide health services for certain categories of the population in connection with its management of sport facilities. The Royal Commission for Jubail and Yanbu provides health facilities for employees and residents at the two industrial cities (Jubail and Yanbu). The Saudi Arabian Airlines operates its own health care facilities with the aim of providing health care services to its employees. The Kingdom’s universities provide, through their medical colleges or hospitals, specialist curative services and medical education and training programs, while they also conduct health research in collaboration with other research centers.

The Government also finances and provides care on a referral basis in its major specialized national tertiary care referral hospitals King Faisal Specialist Hospital and Research Center and King Khalid Eye Specialist Hospital. The King Faisal Specialist Hospital and Research Center uses highly advanced technologies and act as a reference hospital for cases that require advanced and specialist treatment , while it also conducts research on health issues in general and those related to the Kingdom in particular. The King Khalid Eye Specialist Hospital is designed to be a large health facility offering high quality specialized services for ophthalmology and eye surgery and medicine as well as being a regional research center in the area of ophthalmology. The hospital also has a cornea bank in which imported corneas are stored.

The Saudi Red Crescent Society undertakes an important and effective role in providing emergency services at the pre-hospital stage, either at the scene of accidents or during the transportation of patients to hospitals. The society also undertakes a unique task by providing such services for pilgrims during Hajj and Umrah at the Holy Places of Mecca and Medina.

Moreover, the private sector provides health services through its health facilities including hospitals, dispensaries, laboratories, pharmacies and physiotherapy centers throughout the kingdom. The following are the major indicators provided by the private sector by the end of the year 2000 :

  • 87 hospitals with 8,485 beds, accounting for about 19 percent of the total number of hospitals beds in the kingdom.
  • 622 dispensaries, 785 clinics, 45 medical laboratories and 11 physiotherapy centers.
  • 273 pharmaceutical stores and 3,208 pharmacies.
  • Increased investments in manufacturing of drugs and medical supplies of medical appliances, and pharmaceuticals, in addition to the operation of some governmental hospitals and maintenance and cleaning in all health facilities.
  • Increased contribution of the private sector in the provision of health care services, where out-patient visits to its facilities increased from 12.1 percent of total out-patient visits in 1994 to 16.1 percent in 1998. In addition, in-patients in the Kingdom’s private hospitals as a percentage of total in-patients rose from 16.6 percent in 1994 to 27.1 percent in 1998.

Contents

[edit] Benefits

Saudis and public sector expats are eligible for a comprehensive package of benefits including, public health, preventive, diagnostic, and curative services and pharmaceuticals with few exclusions and no cost sharing. Most services including state of the art cardio-vascular procedures, organ transplants, and cancer treatments (including bone marrow transplants) are covered. Sponsors/employers are responsible for paying for an extensive package of services for private sector expatriates.

[edit] Financing

Public spending on health is financed from the government budget. An estimated 11 percent of the Government budget is devoted to public spending on health. Public spending accounts for 80 percent of all health spending. As some 75 percent of government revenues are from sales of natural resources (and none of the revenues from the rather limited tax instruments are earmarked specially for the health sector), the health sector financing for Saudi nationals and public sector expats is largely based on oil and gas revenues. The basic mechanism for paying public providers is through budget transfers from the Ministry of Finance based on line item allocations for specific expenses categories such as salaries, maintenance, new projects, etc. Managers are generally prohibited from switching funds across line items. There are also strong incentives to spend all allocated funds as unspent funds are generally not retained by the governmental agency.

As indicated above, financing for private sector expats is through an employer mandate requiring employers/sponsors to cover necessary medical expenses for their employees. While private spending on health accounts for estimated 20 percent of all health spending, such spending also includes spending by the Saudi population and expatriate working in the public sector. Moreover, private sector expats often seek free care in public facilities through special permissions. Private sector providers are generally paid on a fee-for-services rendered. Such payments are often based on contracts between the provider and the insurer or employer. Preliminary estimates by the Ministry of Health indicate that some 68 percent of private spending is paid for by employers (who insure either through purchase of private health insurance, direct provision through company owned- facilities, or pay providers directly) and 32 percent is paid out-of-pocket by the patient himself. The following table provides a breakdown of spending on health by both the public sector and the private sector in 1421/1422H (in thousands SR):

Ministry of Health Other Public Sector     Private Sector  Total
13,046,528      10,970,053      5,633,320       29,649,901
44%     37%     19%     100%

[edit] Appropriateness of the current health care system

In order to assess the current systems appropriateness to meet other objectives (descriptive) for a national health care system, it is useful to compare Saudi Arabia’s health care system to other countries in the Gulf, and Middle East and the North Africa Region in terms of demography, health status, delivery system characteristics and health expenditures.

Demographic indicators:

  • Saudi Arabia’s population growth rate and TFR are the highest in the Gulf and among the top three in the middle East North Africa (MENA) region; and
  • Saudi Arabia’s share of population over the age of 65 years is below the regional average.

Health Indicators:

  • Saudi Arabia’s infant mortality ratio (IMR) is the lowest in the MENA region. Saudi Arabia's IMR also is the second lowest in the Middle East (after Kuwait). Relative to other countries of the world that are comparable to Saudi Arabia in terms of income, Saudi Arabia’s IMR is above the trend line.
  • Saudi Arabia’s maternal mortality ratio (MMR) is one of the lowest in the region. Compared to Gulf countries, Saudi Arabia’s MMR is the median; compared to other countries of comparable income level, Saudi Arabia’s MMR is slightly lower.
  • In terms of adult mortality, Saudi Arabia’s probability of death for males and females from the ages of 15 to 60 years is below the MENA regional average for men and for women but among the highest in the Gulf.
  • In terms of life expectancy at birth, Saudi Arabia’s figures are above the regional average and the second highest for the Gulf countries (after Kuwait). Compared to other countries in the world with the same income level, Saudi Arabia’s life expectancy at birth figures are at the global average.
  • Saudi Arabia’s malnutrition indicators are about average for the region but among the poorest in the Gulf : 14 percent of Children under the age of five are underweight ; 20 percent are growth stunted; and 11 percent suffer from wasting or are acutely malnourished.
  • Conversely, over-nutrition is also becoming a serious problem in KSA with an estimated 25 percent obesity prevalence in women and 15 percent in men.

Delivery System Capacity :

  • Saudi Arabia’s physician-to-population ratio is well above the MENA regional average but around the median for the Gulf countries. Its physician-to-population ratio is higher than other countries worldwide that have comparable income levels.
  • Saudi Arabia’s hospital bed-to-population ratio is above the regional average near the average for the Gulf countries. Its hospital bed-to-population ratio is much lower than other countries worldwide that have comparable income levels.

Health Expenditure :

  • Saudi Arabia’s per capita (GDP) is above the regional average and above the average for the Gulf countries;
  • Saudi Arabia’s public share of total health spending is well above the regional average and at level comparable to the high public share Gulf countries. Its public share of total health spending is well above the average for the countries worldwide that have comparable income levels.
  • Saudi Arabia’s per capita total health spending is above the regional average but below the average per capita spending found in other Gulf countries. The country’s per capita total health spending is slightly below the level found in other countries worldwide that have similar income levels.
  • Saudi Arabia’s per capita public spending is above the regional average, below average for the Gulf, and above the level found in other countries worldwide that have comparable income levels.
  • As a share of GDP, Saudi Arabia’s total health spending is close to the regional average and above the Gulf average, while the public health spending to GDP ratio is above the regional average and near the median for the Gulf.
  • Saudi Arabia’s total health expenditure-to-GDP ratio is slightly below that found for other countries worldwide that have comparable income levels, while the public health expenditure to GDP ratio is above the global average.

In summary, in a comparative international context, Saudi Arabia health outcomes, except for maternal mortality, are average or slightly worse than those in most other countries with a similar income level and compared to the Gulf countries; population growth and fertility are above most of the countries in the region and Gulf; bed and physician to population ratios are above the regional average but above for physicians and well below for hospital beds the ratios found in countries with a similar income level ; and Saudi Arabia’s total health to GDP ratio is slightly below the ratio found in other comparable income countries, but its public health to GDP ratio is above the global average of comparable income countries. Likewise, per capita total health expenditure is below the levels found in countries with similar income levels, while per capita public health spending is above the levels found in other comparable income countries. The public share of total health spending is well above the regional average and the level found in countries with similar incomes.

[edit] Proposed health reforms and their content

In recent years, there have been many proposals to improve the performance of the current health care system in the kingdom. The following are some of the major health care reforms that have been enacted recently into new laws:

[edit] Sectoral coordination

With the multitude of health service providers in the current Saudi health care system, there is a need to formulate a long-term overall management perspective to coordinate and integrate the provision of health services by the various agencies to ensure the optimal utilization of available resources as well as high performance efficiency and quality.

Towards this end the new Saudi Health System law (based on Royal decree number (M/11) and dated 23/3/1423H) established a national Health Services Council for the coordination of health services to be entrusted with the following tasks :

  • Coordinating and integrating all health system elements in the kingdom including the private sector;
  • Ensuring optimal utilization of health facilities and available resources in the Kingdom;
  • Selecting adequate alternatives for the operation of hospitals and financing health care services.
  • Developing specific criteria for the establishment of new health facilities;
  • Ensuring regional balance regarding health care services;
  • Selecting adequate alternatives in the field of health insurance.
  • Conducting studies and research in the domain of health services at the national level.
  • Coordinating with educational and training institutions to meet the need for Saudi workers in the health fields.

[edit] Health manpower

The majority are South Asian origin and are grossly underpaid.The steady growth in health services in recent years raises the demand for labor in the health sector, which can not be easily met by Saudi nationals due to relatively small number of Saudi graduates from the medical educational and training institutions. Therefore, greater absorptive capacity is needed in the colleges of medicine, pharmacy, applied sciences and nursing, along with the opening of new colleges for these specializations.

Furthermore, it is also necessary to increase the number of health colleges supervised by the Ministry of Health, with the aim of training assistant technicians in various support specializations, and to upgrade the existing health institutes to become health science colleges with additional absorptive capacity. An expansion of scholarship program is also needed , while the private sector must be encouraged to establish health colleges for training assistant technicians in the health care fields under MOH supervision.

To meet the challenge imposed by the shortage of qualified health personnel, the Labor Force Council in Saudi Arabia adopted on 1/12/1423H a strategy for the development of labor force in the health sector containing short and long term goals to be achieved through the following policies:

  1. Encourage the private sector to invest in the establishment of medical schools and health colleges;
  2. Increase capacity level in established health colleges and institutes;
  3. Increase opportunities for scholarships in health specialties;
  4. Encourage hospitals to establish their own training centers;
  5. Establish more teaching/training hospitals;
  6. Use non-conventional educational systems.
  7. Enlarge the base of medical postgraduate studies; and
  8. Strengthen the role of the Saudi council for Health Specialties.

[edit] Financing health care

Demand for health care services increases as a result of steady population growth on the one hand, and the increasing awareness of citizens and the changing pattern of diseases on the other hand. This increase in demand requires additional finance to expand available health facilities and to maintain general health standards in the Kingdom by upgrading the overall health care services. Several measures are needed to ensure that financial resources are available to meet this growing demand for health care.

To achieve this goal, two major reforms have been proposed in this area. The first is the application of a cooperative health insurance system. The recently enacted health insurance law requires employers/sponsors to purchase private (cooperative) health insurance for their expatriate employees and their dependents. A council led by the Minister of Health is responsible for implementing the new law. The Minister’s Council is developing the key implementation regulations and decrees concerning premiums, certification criteria for insurers, participation standards for medical care providers, payment methods, the institutional arrangements for regulation of this private insurance industry, and the transition steps for coverage for all expats (e.g., starting with large firms ( 500 employees or more). In a conceptual health policy sense, the new law simply changes the employer mandate from one of the required coverage of all needed employee medical expenses to an employer mandate requiring purchase of cooperative health insurance to cover such expenses. The new law has a provision indicating that the Government must evaluate the cooperative health insurance system after three years in order to develop a formal health insurance system for all the Kingdom’s inhabitants as a second phase of this reform.

This change will have profound implications for the current national health care system in terms of the establishment of a large private/cooperative health insurance industry, higher health care utilization and expenditures for expats as a result of more formalized insurance coverage, reduced public subsidies for private sector expatriates in public facilities, the need for an effective insurance regulatory structure, the need to develop accreditation standards for hospitals, physicians, and insurers, the need to modify the accounting system in public facilities to bill private insurers, the need to adopt standardized coding and provider payment methods, etc.

The second major reform is the encouragement of the private sector to undertake a greater role in financing and construction and management of health facilities, along with better coordination and integration between government agencies providing health care services with the aim of ensuring optimal utilization of available resources. Toward this end, the Seventh Development Plan (1420/21-1424/25H 2000-2004AD) ensures steady private sector growth in health care services through greater participation in financing the establishment of health facilities and increased investment in the manufacturing of medicines, pharmaceuticals and medical equipment. Recently, and as apart of the Government privatization policy, two Royal decrees (number (60) dated 1/4/1418H and number (219) dated 6/9/1423H) outlined the Saudi privatization strategy and public sector’s activities subjected to privatization which include the establishment and management of health facilities.

In view of the earlier-mentioned reforms, we could identify some additional needed reforms that are still missing.

The first is the reconsideration of the function of the Ministry of Health. The traditional role of the Ministry of Health continues to date despite of the sweeping reforms highlighted above. Therefore, a logical step would be to re-formulate the function of the Ministry of Health and the public health sector, which should focus on the following aspects :

  1. Develop and supervise enforcement of regulations and control rules.
  2. Continue to provide public health services that can only be assumed by the government such as public health and primary health care services.
  3. Ensure that the poor and some disadvantaged categories have continued access to adequate health care services.
  4. Establish and supervise the implementation of strategies and general plans.
  5. Ensure that financial resources are available to provide universal health service in order to pool population health risks.

Secondly, the Saudi Government’s practical move towards application of the cooperative health insurance is indeed praiseworthy. The system is targeted to all non-Saudi residents in the Kingdom and may later be extended to Saudi citizens. However, to keep abreast with the likely changes, as indicated earlier, the health service finance and service provider payment mechanisms must undergo radical conceptual changes examples of which include:

  1. Payer-provider split, in which a service financier (Ministry of Health, insurance companies, and individuals) does not double as a service provider, through owned and centrally run hospitals.
  2. Adequate payment methods should be chosen, and the Government’s focus would be to ensure that financial resources are available for universal access to health services. This should be targeted as a primary objective for the state’s health system with an aim to pool population high risks, particularly for vulnerable segments of the population.
  3. The method applied in expanding these financial resources can greatly impact service accessibility, costs, quality and long-run financial sustainability of the system. Among the modern techniques in this respect, which could be adopted for payment to hospitals, clinics and physicians are : global budget, capitation, and DRG’s which refers to payment diagnostic related groups.

Thirdly, reform rules and regulations should not be developed in the absence of relevant data and statistics. Currently, important health information is lacking including health economics information related to national health accounts; necessary data for decision making such as information of burden of disease; morbidity and mortality by income class, demographic characteristics, and geography; household health spending; utilization information for the non-MOH systems and private sector; unit cost information; information on quality of care and consumer satisfaction; and insurance coverage. Therefore, all sectors involved in the provision of health services should take part in establishing and sustaining the necessary health information system to support the following activities:

  1. Promote evidence based policy-making;
  2. Assure efficiency in the delivery system by developing need based facilities and a human resources master plan for the country;
  3. Modify current planning assumptions on the basis of this plan;
  4. Promote efficient resource allocation by combining/coordinating the multiple public delivery systems and the private sector based on this plan;
  5. Assure quality by developing accreditation and other quality standards for facilities and manpower;
  6. Promote an efficient private insurance industry by implementing an effective insurance regulatory structure.

Finally, there is a need to improve the pharmaceutical sector through the development of a national drug policy and related sector reform. Currently, medicines account for between 25-40 percent of health-related expenditure. There are also clear indications that drug abuse has reached considerable proportions. As a result system reform efforts must target this sector to achieve the following objectives :

  1. The development of a comprehensive list of essential medicines;
  2. Encourage the use of substitute or generic medicines;
  3. Offer more training to physicians on logical use of medicines;
  4. Develop medicine-pricing system.
  5. Develop methods whereby future needs of medicines could be projected;
  6. Coordinate medicine procurement between the multiple providers in the public and private sectors; and
  7. Effective systems for storage and distribution.

The KSA system faces some serious challenges in moving to achieve the proposed health care reforms specified above. They include the following principal problems :

  1. There is a lack of data for decision-making, and policy-making is not coordinated among the multiple public agencies which finance and deliver health care.
  2. Based on current and future socio-economic trends, the Government, which currently accounts for 80 percent of all health spending, can no longer afford free lifetime coverage for the Saudi population and heavy subsidization of expatriate health costs (especially the burden of providing healthcare yearly to a million pilgrims during the pilgrimage). Even under its current expenditure levels, if the KSA had transitioned to the age/sex structure of the U.S., it would currently be spending in excess of 8 percent of its GDP on health.
  3. The benefit incidence of the public system could be improved by equalizing benefits among the multiple public systems.
  4. The Kingdom’s performance could be enhanced in a number of important public health areas including nutrition, smoking, injury/accident control, reproductive health, and prevention.
  5. The implementation of the new expatriate insurance system is posing a major challenge due to the lack of an effective insurance regulatory structure and a very limited cooperative insurance industry.
  6. There are serious inefficiencies in the service delivery system including:
    1. a focus on curative as opposed to preventive care;
    2. a 65 percent hospital occupancy rate which, if perpetuated into the future, would result in 9,000 additional needed beds in 2020.
    3. lack of coordination among public systems and with the private sector;
    4. lack of planning resulting in duplication and lack of effective integration among the primary, secondary, and tertiary care systems;
    5. centralization of authority limiting managers from responding to local conditions;
    6. absence of modern incentive-based medical care provider payment systems.
  7. There is little use of state-of-the -art quality of care systems, and there are access concerns in some areas.
  8. Pharmaceutical sector reform is needed along a number of spectrums including use of generics, consumer and provider education, etc.
  9. Saudization of the health labor force poses both a security and economic challenge. The health labor force accounts for some 2 percent of all employment in the country.

An efficient, effective, and sustainable Saudi health system would embody: an effective policy-making structure, policies to maximize population health status, equitable and efficient financing, cost-effective health spending, a cost-effective service delivery system, and an appropriate public-private mix of services. Such a system could be achieved using the following strategies:

In developing an effective policy-making structure the system should contain:

  • a single health policy-making body for all public programs (e.g., starting the operation of the recently created Health Services Council);
  • policy planning office composed of a multi-disciplinary staff of physicians, public health specialists, demographers, sociologists, actuaries, economists, statisticians, and lawyers;
  • a national health information system that includes development and maintenance of standardized coding and reporting systems; and
  •  ?an institutionalized set of data for decision-making including burden of illness information, national health accounts (NHA),household expenditure information, availability and utilization information on both public and private facilities, etc.

In maximizing health outcomes the following health policies should be in place:

  • an effective National Public Health Strategy focusing on primary care, reproductive health, prevention, AIDS, substance abuse/tobacco, accident control, nutrition and non-communicable diseases (NCD’s);
  • multi-sector policies dealing with the ‘nutrition transition’ in which over nutrition is becoming a more serious problem than malnutrition;
  • culturally appropriate reproductive health policies;
  • coverage under the insurance system(s) of personal health services which yield the largest reductions in disease burden per Saudi Riyal spent; and,
  • effective national and local Information, Education and Communication (IEC) policies that promote prevention and individual responsibility for health.

In assuring equitable and efficient financing arrangements, the system should have:

  • a single health insurance fund/system for universal coverage of all Saudi nationals;
  • a standard package of covered benefits (personal health services) established on the basis of cost-effectiveness, criteria and national affordability;
  • diversified financing through government revenues, user charges, employment-based/household premiums, and special earmarked taxes (e.g., taxes on cigarettes, taxes on private health insurance premiums, taxes on automobile insurance premiums, etc.);
  • availability of public and/or private supplementary insurance to cover services and amenities not included in the publicly-mandated standard benefit package;
  • funding from the Government budget of basic MOH and other appropriate Government public health activities and national health functions including surveillance, IEC, research, training, etc.;
  • an effective private/cooperative health insurance regulatory structure; and,
  • an equitable and efficient private/cooperative health insurance system for expatriates regulated through effective premium controls, community rating, guaranteed issue and renewal, effective adjudication systems, etc. (Should this prove not to be feasible, the Government should require employers/expats to pay premiums for coverage through the Government system and/or create a single health insurance system for both the Saudi and expatriate populations.)

In assuring cost -effectiveness of health spending, the system should:

  • promote allocation efficiency by prioritizing health services covered through public health programs and in both public and private standard benefit packages;
  • separate financing from provision and have money follow patients;
  • utilize effective management information systems (MIS) in facilities;
  • utilize incentive-based provider payment systems that apply to all public and private third-party payers that promote technical efficiency in service delivery;
  • implement across the board cost controls embodying global expenditure limits indexed to expected economic growth; and,
  • contain access and quality monitoring systems.

In assuring cost-effectiveness of service delivery, the system should:

  • have one merged public delivery system (except for specialized security needs);
  • base all public and private human resource, equipment, and physical infrastructure decisions on a needs-based master plan for the country, such plan to include standards for personnel and equipment as well as facility configurations;
  • utilize Continuous Quality Improvement (CQI)-based quality assurance systems which include licensure and accreditation standards for facilities and medical personnel, treatment protocols, integrated care pathways, etc.;
  • embody innovative service delivery practice arrangements such as ambulatory surgery, sub-acute care, home care, long-term care;
  • have effective referral guidelines;
  • have a National Drug Policy; and,
  • base medical education and training strategies on the master plan, cost-effectiveness criteria, and Saudisation goals.

In assuring an appropriate public-private mix of services, the system should:

  • be composed of a mix of autonomous and corporate public and private facilities;
  • require “certificates of need” for private investment decisions;
  • assure that private facilities receive reimbursements from the public payer(s) for public patients treated and public sector facilities receive reimbursements for expats treated through the cooperative insurance system; and,
  • if needed, have carefully targeted (not open-ended) public subsidies to promote appropriate private health infrastructure sector development.

[edit] References

  1. ^ Health Indicators, 2006. Ministry of Health, Department of Statistics, http://www.moh.gov.sa/statistics/S1427/Chapter%201.pdf
  2. ^ Health Indicators, 2006. Ministry of Health, Department of Statistics, http://www.moh.gov.sa/statistics/S1427/Chapter%201.pdf
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