Privatisation of the Public Health Sector in Saudi Arabia

Subject: Public Health
Pages: 5
Words: 1395
Reading time:
6 min
Study level: College


Impacts of Privatisation

The findings made in earlier studies conducted in this field indicate that the KSA intends to gradually privatise its public healthcare system. For example, Almalki, Fitzgerald, and Clark (2011) give a detailed analysis of the gradual privatisation opted for by the policy makers in this country. In light of this, many stakeholders have realised the need to evaluate the potential impacts of this program in the society. From the findings made in the current research, it was indicated that 72% of the participants agreed that the intended privatisation has a direct effect on the existing hospital management. The findings support the sentiments held by various stakeholders in the sector. Separately, a study by Ahmed (2013) suggests that primary healthcare will be affected significantly by the envisioned program.

It is important to note that privatisation has a number of benefits and costs associated with it. Policy makers should analyse these negative and positive impacts before initiating such a project. For example, it is important to evaluate the potential impacts on primary healthcare, one of the most important elements of contemporary human society. The study by Almalki et al. (2011) points out that the country’s Ministry of Health was the primary healthcare provider.

However, the institution was channelling very few resources into the project. Give the need to access basic healthcare services, many organisations have shown interest in the way the healthcare sector is managed in KSA. For example, in a report published in 2013, the World Health Organisation indicates that the country is gradually making strides to ensure that many people can access the services (Albreht 2014).

In most countries, healthcare is not prioritised as far as funding is concerned. The reason is the number of pressing development needs calling for the attention of the government. The scenario is especially common in many developing countries. With regards to primary healthcare, 42% of the participants, as depicted in figure 7, are of the opinion that privatisation would improve access to these services. The findings are in line with the arguments made by Clarke and Bidgood (2013), who are of the view that healthcare should be made accessible to people in the society regardless of their social status or economic standing.

The same explains why majority of the participants are optimistic about the intended privatisation. A similar theoretical perspective was discussed by Irvine (2013). In their study, Irvine (2013) explains the Affordable Healthcare Act in the United States of America. Such legislative acts play a significant role in improving the health of the society.

Compulsory Medical Insurance

The provision of healthcare services is supplemented by insurance cover. According to the Health Insurance Act of 1999, all citizens are guaranteed access to insurance cover (Almalki et al. 2011). To this end, the government is expected to put in place measures to ensure that this cover is affordable to all individuals. The prevailing health insurance environment in the country has improved access to high quality medical services among individuals.

However, O’Neill and O’Neill (2014) argue that a number of factors impede this access in spite of the efforts made by the government and other stakeholders. For example, access to public health is affected by the competitive nature of the insurance providers operating in the market. Insurance companies prefer to provide medical cover in cases where the patients get medical services from private hospitals. The entities are not supportive of healthcare provided in public institutions.

It is important to note that the services provided to individuals in private hospitals are often expensive. As a result, the insurance providers reap the benefits of the high premiums charged on the patients. The companies benefit at the expense of the patient. The public healthcare system in KSA provides medical cover to all government employees. According to Almalki et al. (2011), the same has a direct impact on the country’s budgeting processes. The funding of this cover increases government’s expenditure in the healthcare sector.

Privatisation of public healthcare is seen as one of the possible ways meant to make the medical prices competitive. As already indicated in this paper, the KSA government plans to made medical cover accessible to most of its citizens (Roeder & Labrie 2012). Unfortunately, the inefficiencies associated with the public healthcare system, coupled with the high premiums charged by insurance providers, make healthcare an expensive affair for the government.

In spite of this, figure 11 indicates that 55% of the participants used in the current study are of the view that privatisation will impact positively on compulsory insurance. A similar opinion is held by Irvine (2013). Irvine (2013) points out the various benefits of the Affordable Healthcare Act in the United States. It is a fact that the plan put in place by the American administration has its fair share of challenges. However, it is largely beneficial to the citizens. The goodwill demonstrated by the participants who took part in the current study indicates that compulsory health insurance is needed for the attainment of an effective healthcare system.

Striking a Balance between Privatisation and Government Spending in the Health Sector

An ideal healthcare system is characterised by equilibrium between government spending and privatization in the long term. As indicated in the literature review, the German healthcare system is regarded as one of the best in the world. Stiftung (2012) attributes this to the health policies put in place by the country’s federal laws. In light of this, a public health policy is seen as the best way of establishing the balance between government expenditure and privatisation.

Government spending was one of the factors addressed in the current study. The national wealth notwithstanding, the KSA government continues to allocate few funds to the healthcare sector. It is apparent that government expenditure in the country has been described as faulty for many years. Figure 19 indicates three possible strategies that would ensure this balance is realised. In the first strategy, 56% of the participants support the idea of increasing resources to the ministry of health. The second strategy seeks to increase foreign investment in the health sector. To this end, 14% of the participants support the idea that the government should eliminate entry barriers in order to facilitate foreign investment in the industry.

The equilibrium between privatisation and government spending can also be attained through public-private partnerships. According to Roeder and Labrie (2012), access to quality healthcare services is enhanced when the government and private sector engage in joint projects. A similar observation was made in the current study. It was found that 30% of the participants believe public-private partnership initiatives are the answer to the discrepancies between government expenditure and privatization. Considering the public support for privatisation in the country, the first strategy is not applicable. The second and third strategies are preferable as they will ensure that privatisation is achieved while at the same time government spending is minimised.

Theoretical Implications

The main theoretical framework used for the current study highlights the need for organisational reforms. A study carried out by Gollust and Jacobson (2006) found that privatisation is one way of the strategies through which necessary reforms can be achieved in the healthcare sector. In this research, it was found that organisational reforms are required given the felt need for increased foreign direct investment.

Currently, KSA’s Ministry of Health does not allocate as much money as needed to the annual healthcare budget. However, with increased foreign direct investment in this sector, the country will realise one aspect of the theory of organisational reforms. Albreht (2014) supports the view that the improved healthcare network calls for structural changes. The current study is one way of ensuring that organisational reforms are a reality in the country.

Privatisation is also a theoretical concept in healthcare systems. According to Albreht (2014), this concept guarantees satisfaction with the services provided in this sector. In KSA, the quality of healthcare services is not satisfactory. The low quality is attributed to the insufficient funding to the sector. However, based on the findings made in this study, it is apparent that privatisation can be used as a strategy to improve delivery in the public sector. The study provides the rationale for the improvement of other services in the public domain through privatisation. A scenario like public-private partnership allows for joint efforts between the government and individual investors to improve the quality of services delivered.


Ahmed, M 2013, Kingdom of Saudi Arabia: healthcare overview. Web.

Albreht, T 2014, ‘Privatisation processes in health care in Europe: a move in the right direction, a ‘trendy’ option, or a step back’, European Journal of Public Health, vol. 19 no. 5, pp. 448-450.

Almalki, M, Fitzgerald, G & Clark, M 2011, ‘Health care system in Saudi Arabia: an overview’, Eastern Mediterranean Health Journal, vol. 17 no 10, pp. 784-793.

Clarke, E & Bidgood, E 2013, Healthcare systems: Germany. Web.

Gollust, S & Jacobson, P 2006, ‘Privatisation of public services: organisational reform efforts in public education and public health’, Public Health, vol. 96 no. 10, pp. 1733-1739

Irvine, B 2013, Healthcare systems: USA. Web.

O’Neill, J & O’Neill, D 2014, Comparing the U.S. and Canadian health care systems. Web.

Roeder, F & Labrie, Y 2012, Privatisation can bring efficiency gains to public hospitals. Web.

Stiftung, R 2012, Structure of the German health care system. Web.