In line with the government's Vision 2030 and the National Transformation Program (NTP), the Ministry of Health (MoH) is expected to spend close to US$71 billion over five-years ending in 2020. According to U.S.-based consultancy Aon Hewitt, the healthcare sector in KSA is expected to grow at a compound annual growth rate of 12.3 per cent by 2020. There is also a significant rise in population with an increase in those over the age of 60 years, as well as the adoption of mandatory health insurance in the country.
According to a report by Knight Frank, the main goal of the Vision 2030 is to diversify the economy away from hydrocarbons and achieve greater participation of the private sector by encouraging both local and international investments in several key industries such as healthcare. Privatisation of government services is expected to help meet the goals set out in Vision 2030. This is set to increase the private sector's contribution to GDP from 40 per cent to 65 per cent in 2030.
To increase efficiencies and reduce costs, the government in KSA is exploring private sector involvement in the development of the healthcare infrastructure in the Kingdom. By introducing Public-Private Participation (PPP) models for healthcare, the government is working towards unlocking value in the health system and fast-tracking healthcare reform with plans to increase private sector contribution in total healthcare spending to 35 per cent by 2020.
In a review of KSA's 2019 budget and recent economic developments, a report by KPMG highlighted that the healthcare sector holds the third largest share of 15.6 per cent in the budget expenditure of 2019. The budget allocation for the sector has grown by 8 per cent to reach SAR172 billion in 2019, as compared to SAR159 billion in 2018.
Furthermore, research from Knight Frank indicates that to keep pace with population growth, KSA would require an additional 5,000 beds by 2020 and 20,000 beds by 2035, based on the current density of beds. Based on the global average of bed density, KSA faced a gap of 14,000 beds in 2016, and this gap is expected to widen to 40,000 beds by 2035.
According to Export.gov, the KSA market for medical equipment is estimated at just under US$2 billion and is growing annually at roughly 10 per cent. With increasing awareness of health issues and a growing consumption of healthcare services in the country, there is a strong market for medical equipment.
Encouraged by recent regulatory changes, medical device manufacturers, service providers and dealers & distributors are now able to make significant inroads in the KSA market.
The recently introduced Medical Device Interim Regulations has made the Kingdom a regulated market for all types of medical devices and all manufacturers wishing to supply a medical device within KSA require Saudi Food & Drug Authority (SFDA) Market Authorisation.
According to Colliers International, some of the key factors that make KSA’s healthcare market attractive are:
- The Structure – The KSA healthcare structure provides basic healthcare services to all with specialised treatment offered at both private and public hospitals.
- The Population Boom – With the World Bank estimating the KSA population will reach 45.1 million by 2050 (from an estimated 32.6 million in 2018), the demand for healthcare services is expected to grow exponentially.
- The Rise of the Private Sector – As the public sector is gradually transitioning to become more of a regulator, private players are being incentivised to play a larger role in the healthcare sector. Foreign investors can now have 100 per cent ownership in the healthcare sector.
- The Power of PPPs – The government continues to invest in the development of healthcare infrastructure with various medical cities under construction. The private sector is expected to act as operators in the form of PPPs.
- The Budget Increase – The annual increase in budget allocation towards healthcare social services in KSA reflects a strong indication of potential demand as well as the government’s willingness to augment growth and improvement within the sector.
Premier business platform
The Global Health Exhibition and Congress, organised by Informa Markets, will be held from 10-12 September, at the Riyadh International Convention and Exhibition Center, and will put the spotlight on all the exciting developments taking place in the country’s healthcare sector. The exhibition is the ideal meeting place for the global market to gather and do business with the Saudi healthcare sector. The exhibition provides the perfect platform for companies to promote their latest innovations in healthcare products and services to some of the region’s largest institutes and key decision makers.
The upcoming edition of the event will see 180 plus exhibiting companies, 25 exhibiting countries, 9 educational tracks and is expected to welcome over 10,000 attendees ranging from healthcare service providers, product dealers and distributors, key decision makers and government officials. The exhibition will feature three new dedicated zones – Lab, Innovation and Building Healthcare.
The Innovation Zone will be hosting the award-winning Intelligent Health Pavillion, produced by the Intelligent Health Association, to showcase some of the most innovative healthcare technologies, delivering several compelling use cases across collaborating vendors to highlight how multiple technologies can seamlessly interoperate with state-of-the-art medical equipment and co-exist to improve the overall patient care environment.
Complemented by a diverse range of scientific and educational content, Global Health will be hosting a variety of conferences including Continuing Medical Education (CME) conferences for attending healthcare professionals across all three days of the show. The conferences are divided between five clinical conferences and four non-clinical conferences including: Emergency Medicine, Laboratory Management, Patient Experience, Quality Management, Total Radiology, Hospital Build, Biomedical Engineering, Digital Health and Leaders in Healthcare.
For more information visit globalhealthsaudi.com
The upcoming edition of the event will see 180 plus exhibiting companies, 25 exhibiting countries, 9 educational tracks and is expected to welcome over 10,000 attendees
NTP targets for KSA's Ministry of Health for 2020
• Increasing private healthcare expenditure from 25 to 35 per cent of total healthcare expenditure
• Increasing the number of licensed medical facilities from 40 to 100
• Increasing the number of internationally accredited hospitals
• Doubling the number of primary healthcare visits per capita from two to four
• Decreasing the percentage of smoking and obesity incidence by 2 and 1 per cent from baseline respectively
• Doubling the percentage of patients who receive healthcare after critical care and long-term hospitalisation within four weeks from 25 to 50 per cent
• Focusing on improving the quality of preventive and therapeutic healthcare services.
• Increasing focus on digital healthcare innovations
Source: Healthcare in Saudi Arabia Opportunities in the Sector, May 2018, Knight Frank