Shifting sands
The Kingdom of Saudi Arabia is undergoing a sea change in the way it provides healthcare to the country’s 28 million inhabitants, who are being brought into a private insurance system as the state seeks to reduce its role as the sole supplier of health services. Robert Bailey reports on a country undergoing some radical changes
The Kingdom of Saudi Arabia is undergoing a sea change in the way it provides healthcare to the country’s 28 million inhabitants, who are being brought into a private insurance system as the state seeks to reduce its role as the sole supplier of health services. Robert Bailey reports on a country undergoing some radical changes
Until the passing of a new law in 2004, the Kingdom’s health system was entirely funded by the state. However, the Co-operative Health Insurance Act introduced mandatory health insurance for all those working in the private sector, whether Saudi nationals or expatriates. The only exceptions are those employed as domestic help such as drivers, cooks, maids and gardeners. Penalties for non-compliance include fines for companies and a refusal to renew work permits for those without insurance.
Moving Saudi Arabia’s large expatriate community into private insurance is designed to rein in the fast rising costs of providing healthcare to a growing population that is living longer, but there are serious medical challenges to this new approach.
Though there has been a vast decrease in many communicable diseases such as cholera, the country has developed other major health problems, especially diabetes, hypertension, and additional problems related to obesity.
A survey by the Saudi Diabetes and Endocrine Association in 2010 stated that 70 per cent of the Saudi population was alarmingly obese. In 2009, 6.2 per cent of visits to state health centres were related to diabetes conditions. Treatments for diabetes and cardiovascular diseases are expected to triple and quadruple respectively over the next 20 years.
While rising oil revenues have helped the Kingdom to invest heavily in creating a modern physical and social infrastructure, including some of the best-equipped healthcare facilities in the Middle East, such underlying health issues have also become more urgent and increasingly expensive to address.
For visitors, the health indicators, certainly relative to the rest of the Middle East, are generally good
Until the early 1980s, most Saudi hospitals provided only general and emergency medical care. Specialist treatments, especially for complicated procedures, meant patients were routinely sent abroad notably to the US and Europe. Local standards had improved sufficiently for this practice to end in 2006.
The Kingdom has invested more in healthcare than most states in the Middle East. Spending as a proportion of the total national budget has more than doubled since the 1970s. Some three million patients are admitted to the country’s hospitals and 130 million treated as outpatients each year.
There are more than 400 operating hospitals and over 2,000 primary healthcare centres. At present the Kingdom has 2.2 beds per 1,000 people in the population. This ratio compares to 3.4 beds in the US, while the number of physicians per 1,000 people is 1.7 in the Kingdom compared to 2.5 in the US.
The majority of the population now has access to essential drugs. The immunisation rate for children approaches 100 per cent and includes protection against tuberculosis and measles.
Hospitals are generally clean and most of the medical facilities in larger cities have modern equipment with some considered centres of excellence within the region. The extensive King Fahad Medical City in Riyadh is the country’s main tertiary referral centre. Another major medical facility also in the capital is the King Khaled Eye Specialist Hospital.
Expat haven
For visitors, the health indicators, certainly relative to the rest of the Middle East, are generally good. There are no health warnings concerning major Saudi cities. The only caveats concern some malaria risk in Jizan province and in rural areas of Madina, Makkah, Ramya, Bishah, Asir, Najran and Al Bahah. Dengue fever and other insect-borne diseases are also present in the southwest.
The annual Haj pilgrimage after Ramadan has seen outbreaks of swine flu and meningitis. Outside cities and urban areas food-borne and water-borne diseases are also a potential hazard for un-briefed visitors.
All visitors though should have fully comprehensive medical insurance. A good standard of treatment is available in the main cities such as Riyadh, Jeddah and Dhahran, where the leading hospitals are mainly staffed by expatriate doctors and nurses and function according to American protocols.
However, it has to be noted that Saudi Arabia is a vast country and outside the main urban areas healthcare facilities, while much improved, vary considerably in what they can offer.
Not surprisingly the authorities have been keen not to add to the state’s medical bill by importing external health problems. Saudi Arabia is home to a huge foreign workforce comprising some 8.8 million people, around one third of the total population. They fill jobs Saudis either cannot or are unwilling to do.
A medical report or physical examination is required to obtain work and residence permits, while a meningococcal vaccination certificate is required for all visitors arriving in Saudi Arabia for the purpose of pilgrimage or for seasonal work.
All travellers arriving to work in the Kingdom must undergo a medical examination and present a medical report confirming that they are free from contagious diseases, including HIV/AIDS. Any worker testing positively for the latter condition is not allowed entry. However, Saudi Arabia has not imposed HIV/AIDS travel restrictions on other categories of travellers.
in spite of the availability of high-quality medical care locally, most clients opt for emergency evacuation cover
The majority of the foreign element travelling to Saudi Arabia consists of Indian, Egyptian, Pakistani and Filipino workers, with sizeable contingents of Jordanians, Syrians, Sudanese and Lebanese. There is also a significant presence of European and North American employees, estimated to be around 250,000 including spouses and families.
While not on the international tourism map as such, the Kingdom also receives millions of visitors each year. These are mainly Muslims undertaking the annual Haj or lesser Umrah pilgrimages to Makkah. For non-Muslims, it’s a difficult country to visit and, other than for short-stay business visits, it can be a lengthy process obtaining an entry visa.
Visitors encountering health problems should have no fears about the standard of care they will receive in the Kingdom. But the fundamentals are changing for Saudi residents. Even with its increasing petro-dollar surpluses Saudi Arabia recognises that rising health care costs necessitate major reforms to the provision of health services.
Regulation is key
Big problems lie ahead in funding an expanding health service and in meeting clinical challenges. Little more than a quarter of doctors in the Kingdom are nationals, while the percentage of Saudi nurses is even smaller; this means the country is largely dependent on foreign recruitment to staff its hospitals and clinics.
The fact that many doctors in the Kingdom are not Saudi nationals can create language problems and a lack of empathy to local cultural norms. Diagnostic and referral practices are not consistent, while consultations tend to be shorter than international averages, a situation exacerbated by the frequent need for an interpreter to be present.
The new legislation has resulted in a surge in Saudi Arabia’s insurance market, which has seen double-digit growth over the last five years, reaching $4.4 billion in gross insurance premiums in 2010. While motor insurance and life policies have developed strongly, the market’s main driver has been health insurance.
There is no shortage of suppliers. The Council of Cooperative Health Insurance, which acts as the Saudi regulatory body, now certifies some 26 insurance firms, six third-party administration companies and more than 2,400 healthcare providers.
In its latest published report, the council records 74-per-cent growth in the health insurance market in 2010 over the previous year. Saudi health minister Abdullah bin Abdul Aziz Al-Rabiah, who also chairs the council, reported that 8.4 million residents in the Kingdom hold health insurance, including 1.87 million Saudis.
Taj Nazer, managing director of Bupa Arabia, told ITIJ: “The regulated health insurance market in Saudi is at a mature stage as the mandatory health insurance on expats and Saudis in the private sector has been completed, moving the market from one million to eight million people insured over the past five years.”
Rapid development of private medical insurance is being accompanied by an increasing involvement of private groups in healthcare provision
Many insurance companies offer international medical insurance plans that are designed specifically for expatriates in Saudi Arabia. They have no hospital restrictions and include emergency evacuation and comprehensive cover for any medical eventuality. In the last year, the government has limited the duration of work permits for expatriate workers in the private sector to one year, which fits nicely in line with the length of many international health insurance plans.
While the quality of care may be good in the country, many people remain wary of the system and would rather pay more to give themselves more choices should they need to make a claim or receive treatment. “Compulsory health insurance for guest workers includes cover for in-patient and out-patient treatment of medical conditions but, for additional peace of mind, many individuals choose to upgrade their policies to include cover for treatment in their home country or outside Saudi Arabia,” according to Karen Teasdale, AXA PPP International’s marketing operations manager.
This sentiment is also observed by Bupa International medical director Dr Sneh Khemka, who says that in spite of the availability of high-quality medical care locally, most clients opt for emergency evacuation cover.
The bourgeoning international private medical insurance market has seen a number of partnerships develop between Saudi insurers and major international groups. Last September, AXA selected Riyadh-based Wasilah Insurance Agency to be its new business partner in Saudi Arabia.
Saudi Enaya Cooperative Insurance Company was launched last year. A listed company on the Saudi stock market (Tadawul), Enaya is offering private medical insurance on a group or individual basis, in a joint venture with Munich Re/Munich Health.
According to Saudi Enaya’s CEO Gianin Zogg, “Health insurance, including both compulsory and non-compulsory lines, is the biggest line of insurance business in Saudi Arabia, accounting for more than half of the total gross premiums. It is also the second fastest growing line of business, realising a growth rate of around 20 per cent.”
In a relatively short period of time, the industry has acquired considerable depth with six third party administrators providing claims management services and in some cases actuarial analysis. One of these TPAs, Saudi Nextcare, which became part of the Allianz Group last year, administers a portfolio of more than US$400 million a year for more than 60 insurance companies and self-funded clients. A 24/7 call and claims centre is operated from Dubai employing more than 100 staff.
Rapid development of private medical insurance is being accompanied by an increasing involvement of private groups in healthcare provision. This process is encouraged by the government, which recognises that 100 per cent state provision will not be sustainable in the long term given other demands on national finances.
As a result, the government has identified healthcare as one of the key sectors targeted in its wide-ranging privatisation programme. The government has concluded that the only way to ensure that Saudi nationals’ health needs will be met without adversely affecting economic progress is to increase private sector participation in the health care system.
Pipeline problems
It is not all plain sailing though. In April this year, an official report issued by the Health Insurance Council stated that 556 complaints had been lodged over the previous year against insurance companies, employers and service providers. More than 70 per cent were against insurance companies over disputes concerning the provision of treatment to insured individuals.
In February, the Saudi Ministry of Health ordered the temporary closure of the privately run Tadawi General Hospital in Dammam for reportedly delivering poor quality healthcare.
Of the 140 private hospitals in the Kingdom, not more than a dozen would be ranked on international standards, observes AXA PPP International’s partner at AXA Insurance Gulf, based in Dubai. However, there are some excellent facilities in the Kingdom that he says have ‘an acceptable level of understanding with insurers’.
The Kingdom has a well-regulated system. Under the Council for Co-operative Health Insurance rules, invoices have to be submitted within 60 days and paid within a similar period.
In any claim, the paperwork trail is important, with claimants needing to retain itemised bills for treatments, original receipts and copies of prescriptions. Medical care providers designated by insurers can bill directly, sometimes with pre-authorisation.
“As far as regulation is concerned, no law is perfect but Saudi Arabia has started from a sound foundation and has evolved into a mature market and is ahead of several others in the region,” said the AXA PPP representative.
The relationship between private healthcare providers and insurers is businesslike. Mutasim Alireza, managing director of Magrabi Hospitals and Centres, says that health insurance reform has increased demand for services in private hospitals but that margins have been squeezed. Dr Mamoun Al-Najar, chief executive of the Saudi German Hospital in Jeddah, also says that insurers and pharmaceutical companies continue to push for better terms.
The relationship between private healthcare providers and insurers is businesslike
AXA’s man in Dubai says there are pre-agreed price lists for treatments and procedures, which are usually discussed every year or two. Engaging with Saudi healthcare providers he describes as ‘a cat and mouse game between the strong and weak’.
However, the state remains the principal driver of healthcare provision at least for most Saudi nationals. The Ministry of Health is the main government agency responsible for provision of preventative, curative and rehabilitative healthcare for the kingdom’s population.