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Saudi Arabia Healthcare in 2022: An industry overview

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Saudi Arabia seeks to transition to a manufacturer of high-value medical products offering financial incentives.

As one of the most important sectors contributing to Saudi Arabia’s future-forward economy, the Kingdom has made significant strides in improving its healthcare infrastructure and developing the sector to achieve privatisation of services provision and public-private partnerships (PPPs), an elevation in the quality of care, the application of virtual healthcare platforms and the enhancement of the health service through essential supply chain reform.

The demand for healthcare in KSA has continued to rise, and this has been witnessed by the increasing healthcare budget and healthcare investment made over the past 10 years. KSA accounts for 60 per cent of the Gulf Cooperation Council (GCC) countries’ healthcare expenditure, and the sector remains a top priority for the KSA Government, according to Trade.gov. In 2022, it will spend US$36.8 billion on healthcare and social development – 14.4 per cent of its 2022 budget.

According to a report published by Mashreq and Frost & Sullivan, KSA plans to invest US$66.67 billion in healthcare infrastructure and boost private sector participation from the current 40 per cent to 65 per cent by 2030, targeting the privatisation of 290 hospitals and 2,300 primary health centres.

With life expectancy in KSA projected to increase from 76.4 to 81.8 years by 2050, and the Kingdom’s population expected to grow from 34.3 million in 2019 to 39.4 million by 2030, increased investment in infrastructure and innovation is expected to drive strong growth in the Kingdom’s healthcare sector.

Building resilience through healthcare investments

Priority investment areas for the KSA Ministry of Health (MOH) include:

  • Launching Health Clusters across the Kingdom
  • Increasing the number of internationally accredited hospitals
  • Doubling the number of primary healthcare visits per capita from two to four
  • Decreasing the rates of smoking and obesity
  • Improving the quality of preventive and therapeutic healthcare services
  • Expanding digital healthcare innovation
     

Leading healthcare sub-sectors in Saudi Arabia

According to Trade.gov, the following sub-sectors of the KSA healthcare market present the best opportunities for investment:

Dental services: The dental care service sector is anticipated to grow thanks to increased dental care spending, growing penetration by insurance coverage, and an increase in the per capita income.

Digital health: KSA is expected to be one of the fastest-growing digital health markets in the GCC, with the government allocating US$1.5 billion for healthcare IT and digital transformation programmes.

Health insurance: This sector’s key growth drivers include an increase in the insured population, medical insurance requirement to renew residency for expats, for all Saudis working in the private sector, and for tourists’ visa applications.

Medical devices: Medical equipment has an estimated value of US$2 billion and is growing at a CAGR of 10 per cent. KSA seeks to transition from a manufacturer of low-value commodities to a manufacturer of high-value medical products offering financial incentives to encourage local manufacturing.

Pharma and biosciences: The transition to an increasingly privatised and comprehensive healthcare system will drive demand for patented and generic medicine.

Under Vision 2030, the Kingdom is prioritising local production, technology transfer, conducting clinical trials locally, and training the local labour force.

Speciality clinics and ambulatory care centres: It is also expected that the government will use public-private partnership (PPP) models to build capacity in speciality areas. The government’s focus on wellness and preventive care will drive investment toward non-hospital settings.

Saudi Vision 2030 and the health sector transformation programme

Launched in 2022, the newly established Health Sector Transformation Programme, part of the Kingdom’s Vision 2030, aims to ensure the continued development of healthcare services in the Kingdom by restructuring the health sector to be a comprehensive, effective and integrated health system that is based on the health of the individual and society.

The programme depends on the principle of value-based care, which ensures transparency and financial sustainability by promoting public health and preventing diseases and applying the new model of care related to disease prevention.

It also aims to improve access to health services through optimal coverage and a comprehensive and equitable geographical distribution, expanding the provision of e-health services and digital solutions, and improving the quality of health services.

The programme has made commitments that by 2025, 88 per cent of the population will be covered by inclusive health services, and the unified digital medical records system will cover 100 per cent of the population.

Better outcomes in today’s digitalised healthcare environment

IoT and 5G are transforming the healthcare sector in KSA, enabling monitoring of patients in remote areas and critical early interventions, therefore serving healthcare providers to improve their efficiency and reduce costs.

There are several other trends to watch out for in the medical environment, including virtual hospitals, wearables and telehealth. At the same time, 5G will enable new and improved use cases, such as augmented reality surgery, robotic-assisted surgery, connected ambulances, after-surgery care and remote patient monitoring.

The virtual hospital SEHA is linked to more than 130 hospitals around the Kingdom, using the latest treatment technologies, expanding the employment and investment of medical robots to save time and effort and relieving the hardships of travel and transportation and for critical cases that require specialised, accurate and quick consultations while facilitating the provision of health services at home.

Plan a resilient health workforce in Saudi Arabia

With a health system in transition and prepared for changing priorities, the KSA government plans to build a more resilient workforce with less reliance on foreign health workers. According to Lin, T.K., Bruckner, T.A., Alghaith, T. et al., it is estimated that KSA will require between 1.64 and 3.05 physicians and nurses per 1,000 population to provide health services in 2030.

Overall, the total supply of physicians and nurses (including both Saudi and foreign) will grow from 270,198 in 2020 to 399,354 in 2030 (for physicians: from 92,642 to 138,635, respectively; for nurses: from 177,556 to 260,719, respectively).

Increase hospital capacity to meet changing demands

Meanwhile, research from Knight Frank indicates that to keep pace with population growth, KSA will require an additional 20,000 beds by 2035, based on the current density of beds. Based on the global average of bed density, the Kingdom faced a gap of 14,000 beds in 2016, and this gap is expected to widen to 40,000 beds by 2035.

With the life expectancy of both males and females on the increase, Colliers International expects this to create demand for long-term care (LTC) facilities, focusing on geriatric-related care, rehabilitation and home healthcare services.

Based on current international benchmarks of four to six beds per 1,000 population above 65 years, Colliers estimates that KSA needs between 6,400 to 9,600 beds dedicated for LTC. This is expected to reach 41,200 to 61,800 LTC beds by 2050.

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