Health insurance models vary from country to country. As highlighted in our first series of articles on international health markets, governments often dictate the role of private and public health insurance within any country. Milliman has produced a new series of blogs focused on the medical underwriting and risk adjustment practices of eight countries: Australia, Ghana, Ireland, New Zealand, Saudi Arabia, South Africa, Spain, and United Arab Emirates. This is the seventh article in our series.
Background to healthcare in the Middle East
The Middle East is going through rapid health reform with the transformation of a historical publicly funded health system into a hybrid public-private insurance model. The governments in these countries are facilitating the development of the provider community through the legislation of compulsory health insurance coverage, thus shifting the onus of the development of healthcare from the public sector to a public-private partnership, with the help of the private provider community and insurance industry.
Though no more than 10% of the population of any one Gulf Cooperation Council (GCC) country is currently covered by insurance, this is expected to change quickly. Workers covered under these plans can choose care at either public or private institutions, a system that has the benefit of ensuring that public providers must learn to generate claims in order to be reimbursed by the government. Once private health insurance takes hold, patient volumes for private providers will rapidly increase, as patients are allowed to pursue reimbursed care at private institutions.
Depending on the country, the health insurance opportunity could either be to enter as a stand-alone private player, or to form a joint venture with the government to establish and manage a national insurer.
The healthcare network within the Kingdom of Saudi Arabia compares well with its counterparts in the West, and its health systems have been ranked in the top 30 in recent World Health Reports from the World Health Organization. Moreover, Saudi Arabia has been ranked as the largest among 17 healthcare markets across the Middle East and Africa, establishing it as one of the most valuable healthcare markets in the region.
Health services in the Kingdom are delivered through both the public (approximately 80%) and private (approximately 20%) sectors.
Public healthcare system
The provision of free healthcare is enshrined in the constitution of Saudi Arabia. Free healthcare is provided to all nationals and expatriates working in the public sector and to all pilgrim visitors (two million to three million pilgrims, or more, visit the Kingdom every year from all over the world). These services are delivered through the Ministry of Health (MOH) and other government agencies.
The healthcare system has two tiers. The first is a network of primary healthcare centers and clinics that provide preventive, prenatal, emergency, and basic services. These are supplemented by mobile clinics that visit remote rural areas dispensing vaccines and performing basic medical services. The second tier comprises the hospitals and specialized treatment facilities that are located in major urban areas throughout the country so as to be accessible to all.
Funding the free public healthcare services is an ever increasing challenge faced by the government, driven in particular by the rapid growth in population, the high price of new technology, and the growing awareness about health and disease among the community. Many large employers are already purchasing group medical expenses insurance for both their Saudi and expatriate staff, in order to avoid discontent among the Saudi staff members when only expatriate staff have access to private treatment.