Saudi Arabia Healthcare Part One Full

G u l f W r i t e r s & D r e a m d r i v e D i g i t a l

GULF Writers & Dreamdrive Digital

KSA Healthcare Market: Complete Perspective 2014

February, 2014

PO Box 7289 Dubai, United Arab Emirates www.gulf-writers.com E-mail: [email protected]

Bi-annual GCC Healthcare Market Report

http://www.gulf-writers.com/

mailto:[email protected]

Gulf Writers & Dreamdrive Digital


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KSA HEALTHCARE MARKET: COMPLETE PERSPECTIVE 2014



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KSA HEALTHCARE MARKET: COMPLETE PERSPECTIVE 2014

© 2014 by Gulf Writers Management Consultancy

All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of GULF WRITERS, except in the case of brief quotations embodied in reviews and other noncommercial uses permitted by copyright law. For permission requests, write to the company at the address below. The Permissions Coordinator GULF WRITERS PO Box 7289 Dubai, United Arab Emirates Tel/ Fax: +971 4 2802743 Email: [email protected]

mailto:[email protected]



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Contents

CONTENTS ........................................................................................................................................................ III TABLE OF FIGURES .............................................................................................................................................. IV EXECUTIVE SUMMARY .......................................................................................................................................... V

PART ONE: INTRODUCTION ........................................................................................................................... 1 1.0 A LEADER OF GCC HEALTHCARE ...................................................................................................................... 2 2.0 KSA HEALTHCARE: AN INTRODUCTION ............................................................................................................. 3 3.0 KSA DEMOGRAPHIC OVERVIEW ...................................................................................................................... 4 4.0 KSA ECONOMIC OVERVIEW ........................................................................................................................... 8

4.1 KSA Model of Economic Flow and Development .............................................................................. 12 5.0 HEALTHCARE EXPENDITURE .......................................................................................................................... 14

PART TWO: HEALTHCARE STRUCTURES AND SYSTEMS ............................................................................... 18 6.0 HEALTH SECTOR INDICATORS ........................................................................................................................ 19 7.0 STRUCTURE OF HEALTH SERVICES .................................................................................................................. 25 8.0 MASS GATHERING MEDICINE AND HEALTH INSURANCE ..................................................................................... 31

8.1 Health service in Hajj Season ............................................................................................................ 31 8.2 Healthcare Insurance ........................................................................................................................ 31

9.0 HEALTHCARE INFORMATION TECHNOLOGY ...................................................................................................... 34 9.1 Organizational Structure and Systems ............................................................................................. 34 9.2 Project Organization ......................................................................................................................... 36

10.0 HEALTHCARE AND DEVELOPMENT PLANS ...................................................................................................... 40 10.1 The National Development Planning Process ................................................................................. 40 10.2 Eight Development Plan (2005 – 2009) .......................................................................................... 42 10.3 The Ninth Development Plan (2010 – 2014) ................................................................................... 43 10.4 The Economic long term vision 2024 .............................................................................................. 44

PART THREE: CHALLENGES AND OTHER CONCERNS .................................................................................... 48 11.0 CHALLENGES IN KSA HEALTHCARE SYSTEM .................................................................................................... 49

11.1 Diseases and patterns ..................................................................................................................... 49 11.2 Health services distribution and accessibility ................................................................................. 49 11.3 Crisis prevention management ....................................................................................................... 50 11.4 Underutilization of information technology systems ...................................................................... 50 11.5 Privatization of Public Hospitals ..................................................................................................... 50 11.6 Health financing concerns .............................................................................................................. 51 11.7 Conflicting role of the MOH ............................................................................................................ 51 11.8 Workforce issues ............................................................................................................................. 51 11.9 Efficiency of KSA healthcare system ............................................................................................... 52

12.0 OTHER CONCERNS .................................................................................................................................... 53 12.1 Opportunities and key stakeholders ............................................................................................... 53 12.2 The Future of oil supply................................................................................................................... 54 12.3 Other Economic concerns ............................................................................................................... 55

REFERENCES AND BIBLIOGRAPHY ......................................................................................................................... 57 EXHIBITS ......................................................................................................................................................... 59

Exhibit 1 KSA Global Competitiveness Index in Detail............................................................................. 59 Exhibit 2 eHealth/ICT Project Reviewers ................................................................................................. 60

KEY CONTACTS ................................................................................................................................................. 61



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Table of Figures Figure 1. GCC countries Healthcare Sector Growth Rate (2010-2015) .............................................................. 2 Figure 2. GCC Healthcare Indicators 2011 ......................................................................................................... 3 Figure 3. Population of KSA (millions) ................................................................................................................ 5 Figure 4. Population of KSA: Vision 2025 and IMF estimates ............................................................................ 5 Figure 5. Structure of KSA Population 2013 (thousands) ................................................................................... 6 Figure 6. KSA Age-Gender Population 2013 ...................................................................................................... 7 Figure 7. KSA relative Gender Inequality Index (2012) ...................................................................................... 7 Figure 8. KSA HDI Trends based on consistent time series data 2012 ............................................................... 8 Figure 9. KSA GDP(PPP) and GDP (PPP) per capita 1990 - 2013 ......................................................................... 9 Figure 10. KSA GDP(PPP) and GDP (PPP) per capita 1990 – 2013 (US&KSA) ................................................... 10 Figure 11. GDP (PPP) comparison (Current US$ billions) ................................................................................. 10 Figure 12. non-oil private GDP as percentage of non-oil GDP ......................................................................... 11 Figure 13. Public and Private Sector Employment by Nationality (%) ............................................................. 11 Figure 14. KSA Model of Economic Flow .......................................................................................................... 12 Figure 15. Stage of KSA Economic Development – Global Competitiveness Index (2014) .............................. 13 Figure 16. Most Problematic areas for doing business in KSA (2014) .............................................................. 14 Figure 17. GCC Population and Healthcare Expenditure as percentage of GCC (2014) ................................... 15 Figure 18. Percentage of GDP spent on healthcare (2011) .............................................................................. 15 Figure 19. Expenditure Ratios (2011) ............................................................................................................... 16 Figure 20. Comparative per capita Expenditure on Healthcare (2011 – US$) ................................................. 16 Figure 21. KSA Healthcare Expenditure as a percentage of GDP ..................................................................... 17 Figure 22. International Comparative analysis per 1000 persons (2010/2011) ............................................... 19 Figure 23. Distribution of years of life lost by causes (2008) ........................................................................... 20 Figure 24. Distribution of causes of deaths in children under-5 (2010) ........................................................... 20 Figure 25. KSA Under-5 Mortality Rate ............................................................................................................ 21 Figure 26. Utilization of health services ........................................................................................................... 21 Figure 27. Adult Risk Factors (2008/2009) ....................................................................................................... 22 Figure 28. Hospitals and Hospital Beds in KSA (2013) ...................................................................................... 23 Figure 29. KSA Average Hospital bed capacity (2013) and MOH Hospital by Specialty (2009) ........................ 24 Figure 30. Inpatient/Outpatients Analysis (2010) ............................................................................................ 24 Figure 31. Four Tier Healthcare system ........................................................................................................... 26 Figure 32. Saudi Healthcare System ................................................................................................................. 27 Figure 33. Present (2010) and Future (2019) ................................................................................................... 28 Figure 34. MoH 10-year strategic plan objectives and rollout ......................................................................... 29 Figure 35. Medical Specialization according to the MoH 10 Year Plan (2019) ................................................ 29 Figure 36. Organizational Structure of the MOH ............................................................................................. 30 Figure 37. Health Insurance Scheme Implementation ..................................................................................... 32 Figure 38. Insurance Market Share and Insurance Premiums Growth in billions (USD) .................................. 33 Figure 39. Organizational Structure of the MOH ............................................................................................. 34 Figure 40. Solution Availability, Adoption & Usage Model (e-Health Project Approach) ................................ 35 Figure 41. eHealth Strategic Framework.......................................................................................................... 37 Figure 42. eHealth Strategic Framework.......................................................................................................... 38 Figure 43. eHealth Integrated Roadmap* ........................................................................................................ 39 Figure 44. NDP Focus Areas ............................................................................................................................. 41 Figure 45. Actual spending per developmental category ................................................................................ 41 Figure 46. Financial requirements of development sectors ............................................................................ 43 Figure 47. Financial requirements of Health Sectors ....................................................................................... 44 Figure 48. GDP and GDP per capita growth and projections ........................................................................... 46 Figure 49. Development of national workforce structure by level of education ............................................. 47 Figure 50. Distribution of Saudi Health Personnel in Healthcare service delivery (2009) ............................... 52



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Executive Summary

PART ONE: INTRODUCTION KSA is leading GCC Healthcare at an expansion rate of 12.3%; an 11.4% CAGR is estimated for the entire region to 2015. The sector is highly prioritized by the government with substantial

measures in place for national health development. KSA healthcare system falls among one of the most efficiently and effectively managed according to WHO and other recent rankings. Demographically, the country’s population is growing at 2.1%. At 28.3 million in 2012 the population is estimated to reach 30.9 million by 2015, exceeding the current 60% of the total GCC population. The portion of expatriates among the population is also expected to increase from 7.5 million (2010) to 8.1 in 2015 despite Saudization programs to reduce economic dependence on expatriates. A large belt of middle-aged population between 30 to 34 years

exists. KSA was ranked 145 with a GII value of 0.682 in 2012 and HDI has increased sturdily over the years to a value of 0.782 (57 out of 178 countries). Economic wise, the country highly powered by its natural oil reserves and its contribution to a GDP (PPP); A sturdy 4.2% average

growth is projected to 2018. Oil sector contribution to GDP is poised at 20% with the government making considerable attempt to reduce the impact on economic progress. KSA contributes over 63% of GCC healthcare expenditure with 3.6% contribution of GDP.

PART TWO: HEALTHCARE STRUCTURES AND SYSTEMS Comparative data from 2011 shows that KSA lays below world average in terms of Health Sector Indicators. Nurses and mid-wives and physicians per 1000 stood at 2.1 and 0.94 respectively; however hospital beds and other facilities are on the higher side. Contraceptive usage and tuberculosis treatments fell below regional average but births per 1000 and immunization levels are almost at 100%; far higher that regional average. Major adult risk factors include raised

blood glucose, raised blood pressure and obesity popular among men and women. The healthcare system basically consists of the MoH and quasi-government institutions that are together managed by the government, and private institutions managed by private investors. Quasi government institutions have highest bed capacity per medical facility and the MoH holds 60% of total hospitals numbering 250 as at the close of 2013. Health systems include the Health Services, MoH and the General Commission for Food and Medicines. The 4-tier healthcare

system in the making principally classifies facilities into healthcare centres, local hospitals,

general hospitals and central hospitals, interconnecting them to a central medical city in the form of a pyramid and well organize format. Controlled from the MoH Central through the regional Director of Health Affairs to Deputy Hospital and Deputy Primary Health Affairs, measures are instituted to enhance the effectiveness of mass gathering medicine in periods of Hajj performance and the enrolment of a national health insurance scheme. Healthcare IT systems have been in focus since the eighth development plan and are firmly established for take-off; establishing immense growth prospects in the area of healthcare IT. The ninth

development plan, MoH ten year strategic plan, KSA Vision 2024 and other strategic plans firmly outline projected expansion in various aspects of healthcare development. PART THREE: CHALLENGES AND OTHER CONCERNS Major Challenges encountered by the government and the health system include changing diseases patterns, unequal health service distribution and accessibility, inadequate crisis

prevention management and underutilization of eHealth systems. Other critical issues include the uncertainty of processes of privatization of public hospitals, health financing concerns,

overpowering role of the MoH, in addition to other workforce issues. Key areas of prospective development include areas of Healthcare IT, medical cities projects, increased demand for healthcare practitioners and human resources, private sector medical equipment and infrastructure prospecting, and finally a highly attractive pharmaceutical industry. The future is associated with high levels of uncertainty as KSA major oil consumers like USA and China aspire

to cut oil imports and export themselves. The government of KSA plans stabilize projections by budgeting below the actual market price of its major export, creating room for large amounts of surplus. Other economic step-ups are critical if a more sustainable economy is to be created for the future generations of the country.



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PART ONE: INTRODUCTION

A LEADER OF GCC HEALTHCARE AN INTRODUCTION TO KSA HEALTHCARE KSA DEMOGRAPHIC OVERVIEW

KSA ECONOMIC OVERVIEW KSA MODEL OF ECONOMIC FLOW AND DEVELOPMENT

HEALTHCARE SYSTEMS AND EXPENDITURE



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1.0 A Leader of GCC Healthcare

A look at the GCC Healthcare Market discloses the Kingdom of Saudi Arabia (KSA) in a leadership position with regards to financing and healthcare expenditure. KSA commits close to 3.6% of annual GDP to healthcare financing. GDP commitment to healthcare in comparison to

other developed countries is comparably low but expected to increase in oncoming years. Additionally, the healthcare market is experiencing an expansion at a rate of 12.3% (2010-1015). External resource contribution to healthcare financing remains zero and 70% of health financing emanates from the government sector; essentially, propelled into public health expenditure. Private health expenditure hovered between 1.1% and 1.4% of GDP for the past five years but this is expected to increase considering attempts by the government to privatize public hospitals and increase private sector participation in the healthcare market in addition to

other market changing reforms is the expansion of the healthcare insurance scheme. Regionally, a cumulative average growth rate (CAGR) of about 11.4% is projected for the

healthcare market for the period of 2010 to 2015. KSA (12.3%) is closely followed by the United Arab Emirates (UAE), which has begun to draw much attention in the Gulf at an impressive rate of 12.1%. Kuwait (9.5%), Oman (9.3%) and Qatar (8.4%) follow in that order with Bahrain in a last place with about 5.9% CAGR. The role played by oil reserves and other economic factors in

growth of the GCC market as a whole is recommendable. A close examination reveal predominant indicators like population, population growth rate, GDP and GDP growth rate, standard of living, increasing health issues primarily emanating from changing lifestyles, rate of immigration, events and mass gathering medicine in addition to other significant issues and concerns.

With the annual growth of 11.4% for the entire region, the market is projected to reach $43.9 billion by 2015 straight from $25.6 billion in 2010 to an amount of USD 60 billion by 2025. Demand for hospital beds and healthcare services are also projected to increase alongside expansion with an estimated 40,000 additional hospital beds by 2020. The private sector is gradually moving into a leading role and beginning to gain grounds in health financing in all the countries in the region as they are more efficiently and productively managed; moreover, they

Figure 1. GCC countries Healthcare Sector Growth Rate (2010-2015)

Source: Gulf Writers



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lift the weight off the shoulders of the government and create a more sustainable economic

environment. KSA Healthcare basically represents GCC healthcare with more than double the resources of all

the other countries in the region combined with regards to numbers of hospitals and beds. The country alone accounts for close to 10 times that of some indicators of UAE which is next on the table as illustrated in Figure 2 below.

Reports show a tremendous difference between KSA figures and that of the other countries in the GCC with regards to many other indicators as well. However, despite leading numbers, per 1000 population indicators are very low due to relatively high population and population growth rate. The strong desire of the governments of KSA and UAE to raise healthcare to international

standards, create a medical hub for medical tourism, in addition to other efforts to enhance the sector, strongly propels growth in the market.

2.0 KSA Healthcare: An Introduction The healthcare sector of KSA remains one of the areas highly prioritized by the government.

This is evident in the level of resource dedication in the eighth and ninth National Development Plans (NDP). A tenth NDP is expected before the end of 2014 for the period of 2015 to 2019. ORYZ Saudi Arabia predicts substantial resource allocation to the healthcare sector in the tenth NDP taking a close look at the health service targets for the KSA Vision 2025 and the healthcare targets it has set to reach in comparison with the current state of affairs, given that there are only two more National Plans to be issued before the achievement of the Vision 2025 targets. With the NDPs discussed later in this report, a clearer view of the sector reveals the firm arm of

the government behind the greatly increased and improved market. The government applies due efforts to provide its people with state of the arts healthcare service and facilities. Fundamentally, the government has wholly nurtured the health sector into one of the largest

and most prominent on the globe with no other country coming close to such an expansion rate over such a short period as experienced in KSA over the last decade.

Last produced in 2000, the World Health Organization (WHO) ranking of effectiveness of world healthcare systems placed that of KSA as 26th among 190 healthcare systems over the world. KSA came before other healthcare systems like Australia (32), Canada (30), New Zealand (41). It as well came before United Arab Emirates (27), Qatar (44) and Kuwait (45) who are close pals in the GCC Region. This system of ranking is no more produced by the WHO due to the complexity of systems and indicators with varied weights across various regions. Essentially, it remains difficult to compare two or more healthcare system on the same grounds due to

Figure 2. GCC Healthcare Indicators 2011


Country

Govt Private Govt Private Govt Private

Saudi Arabia 282 125 44,099 11,833 2,037 2,308

UAE 32 58 6,627 2,549 243 2,057

Kuwait 30 15 5,149 653 97 98

Qatar 5 4 2,464 394 30 177

Oman 55 5 5,430 189 217 817

Bahrain 10 13 1,702 384 24 N/A

Hospital Beds Clinics



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differences in fundamental indicators and extremely wide variety of indicators coming with

different weights in individual countries. The report produced in 2000 by the WHO on how to improve performance of health systems was not a complete representation of the comparative effectiveness as agreed by the WHO. Health expenditure is a typical measure of efficiency;

however, room exist in many regions for the achievement of efficiency without necessarily increasing health expenditure. It may be concluded that some countries are doing better than others given limited amount of resources. The point of view that KSA must have been ranked high as a result of considerable investment in the sector at the time may be controversial given that the United States invests more than 17% into healthcare and yet was ranked lower than KSA. In more recent reports, attempts have been made to rank healthcare effectiveness based on factors and indicators pertaining to health expenditure, average years of schooling, alongside

other demographic indicators as was used by the WHO (2000). The profile of healthcare of any region cannot be comprehended without a good view of key demographic, health expenditure, government plans and policies, sustainable economic indicators, risk factors and much other trend analysis. Pertaining to demographics, KSA has a population of about 30.254 million (IMF, 2014) and

records an annual growth rate of 2.2%; an average over the past 5 years. KSA experienced the highest in the region at 6.4% in the late 80s with fertility rate at 7.5 births per woman, to 3.8% in the 90s with fertility at 5.8 births per woman, and 1.9% growth with 2.74 births per woman recorded specifically in 2011. Future population projections estimate high rates in areas of population growth and births per woman. A closer look at economic conditions of KSA discloses Gross Domestic Product at purchasing power parity (GDP PPP) per capita hovering around US$22,328 since 1985 with around the same figure recorded in 2012 according to WHO records.

The country is ranked 57 out of 186 in terms of Human Development Index (HDI) with an HDI value of 0.770. Other statistical connotations are addressed in the demographics and economic sections of this report, elaborating on key features applicable to the healthcare market of the country. The Ministry of Health (MoH) is seen in the middle of affairs, creating conflicting roles as an arbitrator and the financier or supplier of medical services. Healthcare is free of charge to all

citizens and government spends about 7.0% total spending on healthcare. A 74% Saudization is set to be achieved by 2024 but this is far from reach; KSA lacks local healthcare practitioners.

Private sector enhancement programs have been put in place; primary, secondary and tertiary healthcare sectors are altogether given high priority in the four tier health system in the making. Other challenging issues have to do with the methodology and pace of financial recourses application; changes in the pattern of diseases; excessive demand resulting from free service

delivery; non-existence of a national crisis management legislation and system; inaccessible facilities and rural regions given its large regional country coverage; nonexistence of national and centralized health information system leading to duplication of information; and the underutilization of installed healthcare information technologies among others.

3.0 KSA Demographic Overview Population estimates

The total population of Saudi Arabia as at 2010 was 27.3 million; this is estimated to reach 30.9 million by 2015, 32.7 by 2020 and 36.7 by 2025. Annual population growth rate reached about 6.4% per annum in the 1980s; however, a growth rate of 1.9% was recorded for 2012. Fertility rate reduced from 7.3 births per woman in the early 1980s to about 2.7 in 2011 and still remains the highest recorded in the Gulf Region; higher than the global average of 2.4 births

per woman. Percentage of population who are female reduced from 43.7 in 2009 to 42.9 in 2012. Currently, Locals make about 68.9% of the total population. A closer view at the population levels of KSA is illustrated in Figure 3.



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Population estimates for the Vision 2025 long term strategy and other KSA plans prior to 2008 were highly underestimated. Moreover, non-Saudi Nationals were expected to reduce at an

annual growth rate of -1.38 between 2004 and 2025 as illustrated in Figure 4a but current trends show otherwise. Actual population estimations by the International Monetary Fund (IMF) and recent projections by other agencies are illustrated in Figure 4b.

Contrary to the national projections in Vision 2025 published in 2004, an increase in non-Saudi Nationals is anticipated. The government is keen on making this less probable as it intensifies its

Figure 3. Population of KSA (millions)

Source: World Economic Outlook (2014)

Figure 4. Population of KSA: Vision 2025 and IMF estimates

a b

Source: KSA Vision 2025 (2004) & World Economic Outlook (2014)



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human resource development attempts and has begun replacing influential positions formally

occupied by non-Saudis with Saudi Nationals; these programs are channelled through Saudization Plans. There is increased spending in relation to actual projections as long term plans are reviewed every five years together with new development plans; about 19% increased

government spending was observed from 2012 to 2013. It is anticipated that the government would have to stretch its financing in the last two development plans (2015–2025) towards the achievement of actual Vision 2025 targets given population and demographics expansion rate. Recent attempts were made by the government to reduce spending after a warning from the IMF. This placed the government’s budget at $228 billion in 2014, a supposedly controlled 4.3% increase in spending from 2013 compared to a 19% increase from the previous year. There are speculations as to the authenticity of this budget as the government usually overspends

budgeted expenditure and yet experiences surpluses due to favourable oil prices and the heavy presence on the world oil market; these are further discussed in the economic overview section of this report. Back to the demographics, about 82% of the total population are living in urban areas with good access to electricity, water and sanitation; over 98% of the population have access to portable

drinking water implying basic social amenities are well taken care of in the country. Given its large area, the government is faced with the challenge of equitable distribution of key healthcare services across the region.

Population Structure and Gender Inequality Index

The population of Saudi Arabia has a fairly large middle belts with many of them falling between the ages of 15 to 45; between generation X and generation Y. There is a sharp decline in

population up the ladder beyond the ages of 49 years. Saudi Arabia Life expectancy at birth is poised at 78 years, placing the future of the healthcare market in an advantageous position with a big belt of aging population. Female as a percentage of total population stood at 43.7% in 2009, 43.5% in 2010, 43.3% in 2011, and 42.9% in 2012; about 57% of the population constitute males. Age-gender population are presented in Figure 6.

Majority of males belong to the age category of 30 to 34 years. KSA recorded a Gender Inequality Index (GII) of 0.682, ranking it 145 out of 148 countries according to the 2012 index.

KSA GII may be compared to that of Iraq and Syrian Arab Republic who were ranked lower at 120 and 118 respectively; KSA records one of the most extreme levels of gender inequality.

Figure 5. Structure of KSA Population 2013 (thousands)

Source: World Bank Data Bank (2013)



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Contrary to previous measurement formats, the new format for measuring the GII shows depicts

signs of loss in human development due to inequalities between male and female achievements in the three main dimensions; reproductive health, empowerment, and economic activity. Reproductive health takes into consideration maternal mortality and adolescent fertility rate;

empowerment considers share of parliamentary seats held by each gender and attainment of secondary and higher education by each gender; and finally, economic activity is determined by the labour market participation rate for each gender (see Figure 7).

Figure 6. KSA Age-Gender Population 2013

Source: World Bank DataBank (2013)

Figure 7. KSA relative Gender Inequality Index (2012)

Source: WHO (2013)

GII

value

GII

Rank

Maternal

mortality

ratio

Adolesce

nt fertility

rate

Female

seats in

parliame

nt (%)

Female Male Female Male

Saudi Arabia 0.682 145 24 22.1 0.1 50.3 57.9 17.7 74.1

Syrian Arab

Republic0.551 118 70 36.5 12 27.4 38.2 13.1 71.6

Iraq 0.557 120 63 85.9 25.2 22 42.7 14.5 69.3

Arab States 0.555 — 176 39.2 13 31.8 44.7 22.8 74.1

High HDI 0.376 — 47 45.9 18.5 62.9 65.2 46.8 75.3

Population with at

least secondary

education (%)

Labour force

participation rate

(%)



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Human Development Index

The Human Development Report values and ranks Human Development Index (HDI) for 187 countries and other UN-recognized territories. It may be inappropriate to compare former

reports to current reports and rankings due to fundamental changes in data and methods for calculating the index and rankings. The new HDI estimations permit the assessment of progress in a country based on three main criteria of human development which are:

1. A long and healthy life 2. Access to knowledge 3. A decent standard of living

Among 187 countries, KSA placed 57 with HDI value of 0.782. This rating is considered as part of the high development category. KSA HDI increased from 0.575 to 0.782 at an annual rate of

1% from 1980-2012. A closer look at the KSA HDI shows that life expectancy increased by 11.9%, average years of schooling also increased by 3.6 years, whilst expected years of

schooling increased by 8.3 years over the period. The GNI per capita reduced 34% between the years of 1980 and 2012 as per WHO estimations; it reached $21,955 in 1985 and reports $22,616 in 2012 from $21,812 recorded in 2011 according to WHO sources and estimates. However actual growths in GDP (PPP) per capita according to IMF projections are much higher (see Figure 9). Figure 8 above illustrates KSA HDI trends based on consistent time series data.

4.0 KSA Economic Overview KSA is one of the wealthiest countries in the world in terms of GDP (PPP) per capita rankings of

the richest countries on the globe. The country is ranked 28th according to 2013 projections by the IMF. Many countries have maintained their ranks with a sturdy increase in GDP (PPP) per capita (IMF projections, 2013); however, KSA has moved ahead of countries like Bahamas, New

Zealand, Spain, Bahrain, Slovenia, Equatorial Guinea, Greece, Italy and other countries by springing from $25,938.31 in 2009 to $32,469.34 in 2013. These countries were ranked higher than KSA prior to 2009 but a 25.2% increase in per capita over the 5 year period placed KSA ahead of its counterparts.

Figure 8. KSA HDI Trends based on consistent time series data 2012

Source: WHO (2013)

Life expectancy

at birth

Expected years of

schooling

Mean years of

schooling

GNI per capita

(2005 PPP$)HDI value

1980 62.2 6 4.2 34,014 0.575

1985 65.9 7.3 4.8 21,955 0.61

1990 68.6 8.7 5.5 20,617 0.653

1995 70.2 10.1 6 19,789 0.685

2000 71.3 11.5 6.6 20,369 0.717

2005 72.5 12.8 7.2 20,780 0.748

2010 73.7 14.3 7.8 20,858 0.777

2011 73.9 14.3 7.8 21,812 0.78

2012 74.1 14.3 7.8 22,616 0.782



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KSA recorded a reduced growth during the world economic crisis as opposed to other developed countries (Figure 10). Future growth projections are positioned at an average of 4.29% over the next five years. KSA contributes 1% of the Global GDP; an economy powered by its mass oil reserves making it the highest oil producing country. 2013 GDP (PPP) in comparison to the US,

UK, France Japan, Spain, and other countries in the GCC and Arabs region is illustrated in

Figure 11. KSA is one of the richest countries with room for growth and expansion. The country presents a platform for significant investment absorption. Oil and non-oil share of GDP indicates that about 20% of GDP emanates from oil alone. Figure 12 presents quite a sizeable portion of GDP contribution from oil among the GCC countries.

Figure 9. KSA GDP(PPP) and GDP (PPP) per capita 1990 - 2013 a. GDP (PPP) per capita

b. GDP (PPP) in billions USD

Source: World Bank DataBank (2013)



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Figure 10. KSA GDP(PPP) and GDP (PPP) per capita 1990 – 2013 (US&KSA)


Figure 11. GDP (PPP) comparison (Current US$ billions)




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Manufacturing accounts for merely 9% of total GDP across the region with extreme dependence on oil revenue in countries like KSA, Qatar and Kuwait. Bahrain is less dependent on oil due to

its small reserves substituting its GDP with 92% non-oil sector. Currently, KSA obtains about 21% of its GDP from oil exploration. The share of non-oil in the entire region GDP has moved from 54% in 1990 to about 72 in 2010. A non-oil private sector GDP as a percentage of non-oil GDP shows a highly active non-oil private sector above 80% in non-oil GDP of UAE and Bahrain.

Private sector contributes about 70% of non-oil GDP in KSA. The KSA private sector continues to expand rapidly over recent periods following considerable attempts by the government to promote the sector. The main problem with the private sector as with the other countries in the GCC is that, it is mainly made up of expatriates. There is extreme dependence on expats for economic development in the entire region (Figure 12).

Figure 12. non-oil private GDP as percentage of non-oil GDP


Figure 13. Public and Private Sector Employment by Nationality (%)

a. Public Sector b. Private Sector




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4.1 KSA Model of Economic Flow and Development

The flow of resources in KSA economy is presented in Figure 13. Drawn from the above discussion, GDP is driven by 2 main pillars of economic development; oil and non-oil sectors. Foreign Direct Investment (FDI) plays a very important role in the growth potential and stability of the KSA economy; quite a sizeable portion of healthcare expenditure is made up of pharmaceuticals and almost all of these drugs are imported from foreign countries in the form of FDIs. FDI is motivated by four critical elements; GDP, GDP growth rate, Privatization and,

Import and Export rates. A positive relationship exists between GDP and GDP growth rate but the inverse is true for privatization and balance of payments; an economy highly sensitive to trade. This essentially emanates from the fact that the non-oil sector of KSA has failed to attract as much FDI as attracted by the oil sector. To create a more self-reliant and sustainable economy certain adjustment need to be made by redirecting FDI into import substitute and export promoting sectors.

Figure 14. KSA Model of Economic Flow


Value Added by the Oil Sector Value Added by Non-Oil Sector

Gross Domestic Product

Payment Abroad Net Domestic

Production Income from

Abroad

Gross National Product

Salaries and Wages after

payments abroad Profits after Payment Abroad

National Income

Savings Consumption

Expenditure

Financial Investment Productive

Investment Consumer Demand

Total Domestic Demand

Total Domestic Supply

Imports Non-Exported Domestic Output



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Necessary Conditions for Growth

According to the Global Competitive Index (GCI) 2013-2014, KSA is ranked 20th with a Score of 5.1, among 148 countries. A reduction in rank from 17th in 2011-2012 and 18th in 2012-2013 is

observed. Described as being in a transition from factor driven to efficiency driven economy, KSA is ranked 14 in terms of basic requirements or factor driven economy, 27th in terms of efficiency driven economy, and 29th in terms of innovation and sophistication driven economy. Health and primary education falls under basic requirements and is ranked 53rd out of 148 countries. Comparable to other countries that are also in the transition to efficiency driven economy KSA show a much higher performance (Figure 15).

There is the need to improve higher level education and training (ranked 48; score 4.7) as well as labour market efficiency (ranked 70; score 4.3). Other areas which need attention include technology readiness (ranked 41; score 4.6), health and primary education, financial market

development and business sophistication. Despite high ranking in macroeconomic environment (ranked 4; score 6.7), some problems continue to impede the smooth flow of doing business in Saudi Arabia. Details and scores used for the Global Competitive Index (2013-2014) are presented in Exhibit 1.0.

Figure 15. Stage of KSA Economic Development – Global Competitiveness Index (2014)

Source: World Economic Forum (2013)



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Most problematic factors for doing business

Restrictive labour regulations are the main hindrance to investors who would want to do or find business in KSA. Other countries in the GCC also experience such restrictive labour regulations,

unrestricted labour sector, and lack of application of minimum wage policies leading to influx of unskilled expatriates. Other qualified expatriates tend to work far below their statutory wage requirements. The second challenge is the inadequacy of educated workforce, followed by inefficient government bureaucracy, lack of access to financing, poor work ethics in national labour force, and high tax rates. Other minor problems include the insufficient capacity to innovate, corruption, tax regulations, inadequate supply of infrastructure and inflation. Aside these problems, the government is quite consistent and stable in policy application. Crime and

theft is on the minimum; also general public health remain in good condition.

5.0 Healthcare Expenditure

Comparison of KSA GDP contribution to healthcare, healthcare expenditure per capita, and other healthcare financing exponential with other countries help comprehend figures in much better. A look at the relationship between population and healthcare exponentials of countries in the GCC

region show that KSA holds about 60% of the total population and healthcare financing respectively. Based on population and GDP projections for 2014 and percentage of GDP contribution to health expenditure for 2011, Figure 17 outlines GCC countries and their

respective percentage of GCC population and GCC healthcare expenditure. KSA holds 60% of GCC population and about 63% of total GCC healthcare expenditure. At the close of at the third quarter of 2012, KSA controlled close to 75% of healthcare in the GCC that year with a budget of US$ 13.5 billion which excluded another amount of US$ 4.3 billion for the large healthcare cities projects initiated across the country. An amount of US$18 billion was invested into healthcare by the government for 2012 alone; adding private healthcare and other healthcare

Figure 16. Most Problematic areas for doing business in KSA (2014)

Source: World Economic Forum (2013)



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financing totals a healthcare budget of 21.3 billion for the 2012/2013 period. With a GDP of US$

984 billion and still galloping, more investment is expected in the health sector.

Figure 17. GCC Population and Healthcare Expenditure as percentage of GCC (2014)


Figure 18. Percentage of GDP spent on healthcare (2011)




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A much broader comparison of healthcare as a percentage of GDP is illustrated in Figure 18.

KSA percentage of GDP contribution to healthcare falls behind several countries like Australia, Japan, UK, Germany, France and the United States. Government healthcare expenditure as a percentage of total healthcare expenditure was at 68.93% and formed 6.84% of total

government spending. More recent individual government spending is outlined further below.

Figure 19. Expenditure Ratios (2011)


Figure 20. Comparative per capita Expenditure on Healthcare (2011 – US$)


% of total health expenditure % of government expenditure

Australia 68.51 16.76

Bahrain 71.03 9.16

Canada 70.41 18.34

Germany 75.85 18.52

Kuwait 82.17 5.91

Qatar 78.61 5.81

Saudi Arabia 68.93 6.84

UK 82.70 15.87

United States 45.94 19.80

UAE 74.39 8.81

Japan 80.01 18.18

Government Healthcare Expenditure



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Healthcare per capita comparisons among these countries are further illustrated in Figure 20.

Healthcare expenditure per capita for KSA stood at $757.72 in 2011 compared to that of the United States at $8,607.88. The government of Saudi Arabia contributes 68% of healthcare expenditure as that of the United States contributes 46% of healthcare expenditure. Healthcare

expenditure as a percentage of GDP hovers between 3-4.5% as shown in Figure 21.

Figure 21. KSA Healthcare Expenditure as a percentage of GDP




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PART TWO: HEALTHCARE

STRUCTURES AND SYSTEMS

HEALTH SECTOR INDICATORS STRUCTURE OF HEALTH SERVICES

MASS GATHERING MEDICINE AND HEALTH INSURANCE HEALTHCARE INFORMATION TECHNOLOGY HEALTHCARE AND DEVELOPMENT PLANS



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6.0 Health Sector Indicators International comparative data pertaining to 2010/2011 show that physicians, nurses and hospital beds per 1000 population lies below world average. KSA recorded 2.1 nurses and midwives per 1000 population in 2010 which falls far below that of UAE, and all the other

countries recorded in the GCC region. Physicians per 1000 population also fell below regional and world average. However, hospital beds per 1000 population are relatively higher than all the other counterparts in the GCC region and falls within world average. Data predicts a shortage in human resources in the healthcare sector but adequate healthcare facilities in KSA. Distribution of years of life lost by causes is outlined in Figure 23 based on 2008 data. Communicable diseases as causes of death recorded in KSA were 20% which fell below regional

average of 55%. Percentage of causes by non-communicable diseases on the other hand was 55% compared to a regional average of 31%. Injuries caused 25% of deaths compared to 14% in the region. KSA falls within the WHO Eastern Mediterranean Region. Concerning death of

children under-5 years, the major cause of death is premature births at 30% of total deaths of children under-5. Congenital anomalies are the next major cause of death of children under 5, causing 23% of all recorded deaths in 2010. Other Causes of deaths of children include injuries, birth asphyxia, pneumonia, diarrhoea, neonatal sepsis, HIV/AIDS, Malaria, measles and other

diseases. Figure 22 presents a distribution of causes of death in children under-5, deaths per 1000 live births recorded from 1990 to 2011.

Figure 22. International Comparative analysis per 1000 persons (2010/2011)


Saudi Arabia Healthcare Part One Full

Healthcare

Transcript of Saudi Arabia Healthcare Part One Full