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Healthcare Sector Privatization Move in Saudi Arabia Impact on Individuals With Non-Communicable Diseases and Quality of Care


The expansion of the healthcare industry through privatization is a critical component of Saudi Arabia’s Vision 2030. This study investigates how the privatization of the healthcare industry in Saudi Arabia has impacted the healthcare quality and patients with non-communicable diseases. The public health care system is still essential to achieving general gains in the well-being of all segments of Saudi Arabia’s inhabitants. Nevertheless, that nation has seen an increase in the privatization of the healthcare industry (Almalki et al., 2022). The government must improve the community health care system to guarantee everyone has access to high-quality, affordable healthcare, especially those with non-communicable diseases. The financial burden on households brought on by chronic non-communicable diseases (NCDs) prevents patients from accessing care, negatively affecting their health. The study will also look into the percentage of OOP spending among Saudi Arabian household members diagnosed with chronic NCDs. Families with a working head of household, with more members, a higher SES level, health coverage and a residence in an urban area incurred much greater OOP. OOP expenditure is still a significant burden for households with chronic NCDs, with some inequalities considering the privatization of hospitals. In order to reduce OOP costs for NCD households, the research provides crucial information for decision-making.

Background and Rationale

Privatization is the transfer of ownership of an organization from the government to either the private for-nonprofit or private for-profit sectors entirely or partially. Healthcare privatization is a process in which non-governmental entities participate more and more in healthcare delivery through financial and managerial services. The state reduces or eliminates its longstanding involvement in the administration and service of the healthcare system. The provision of medical services by private practitioners, the contracting-out of load-shedding and health care administration, and, which involves shifting of the responsibility to families, people, or outside entities like medical coverage providers, are just a few examples of the different privatization procedures (Alkhamis et al., 2021). The many ways that the private, for-profit industry subsumes the public one in delivering merchandise and services are referred to as privatization. A centralized, underdeveloped, and disjointed health care system was eventually created by the Saudi government’s health policies, which were used to finance, administer, and provide public health care services. Therefore, it was believed that privatizing health care would improve its effectiveness, standard, and level of general satisfaction while enabling the government to carry out its constitutional duties.

Non-communicable diseases (NCDs), often chronic illnesses, are rising in emerging economies due to socio-economic development, rapid urbanization, and epidemiological changes. The Saudi Arabian community has a high prevalence of Non-communicable diseases. The burden of NCDs, which causes considerable death and morbidity, is a public health concern for most nations. In the Kingdom, NCDs are responsible for 83,100 deaths annually, or 73 percent of all fatalities. Chronic illnesses increase the risk of early death and harm the financial security of individuals, families, and society. The financial burden on households brought on by chronic non-communicable diseases (NCDs) prevents patients from accessing care, negatively affecting their health. Therefore, the privatization of the healthcare industry in Saudi Arabia has increased the money people with NCDs and household members have to pay out of pocket (OOP) to acquire healthcare treatments.

In Saudi Arabia, a sizeable portion of healthcare spending comprises out-of-pocket (OOP) expenses. The World Health Organization (WHO) reports that OOP expenditures made up 14.4 percent of Saudi Arabia’s overall health spending in 2018 (Murphy et al., 2020). This percentage probably understates the actual OOP cost incurred by those who have chronic NCDs. Furthermore, many of the nation’s semi-public and public health providers might not meet patients’ requirements at all times, causing people to seek medical care outside the public system and pay the total price. Thus, the privatization of the Saudi Arabian healthcare system has enhanced the quality of care. Although the private sector offers a wide range of services, ordinary people cannot afford them (Al-Hanawi et al., 2019). Most people choose private hospitals since governmental hospitals provide discounted and other complementary services of poor quality.

 Research Question

What effects has Saudi Arabia’s effort to privatize the healthcare industry had on those who suffer from non-communicable diseases and the quality of care?

Literature Review

Numerous research has demonstrated how NCDs affect OOP health spending in various nations. For instance, families in Vietnam with NCD patients had 3.2 and 2.3 times higher odds of experiencing catastrophic medical costs and poverty, respectively. According to unbiased research, the underprivileged CVD families and patients in China, Tanzania, and India are the most severely harmed by the country’s excessive healthcare expenditures. According to Al-Kuwaiti and Al Muhanna (2020), households with Non-communicable diseases are statistically more likely than non-NCD households to experience catastrophic costs in low- and middle-income nations. Average individuals with stroke and heart disease had the most significant rates of catastrophic expenditures in India, Tanzania, and China. The countries with the most crucial spending were Vietnam, Iran, Nigeria, and those with epilepsy and cancer.

The Saudi Ministry of Health believes that removing or lowering financial barriers makes healthcare more accessible. Nevertheless, there is little information in the literature about the amounts of OOP expenditure amongst Saudi Arabian families with Non-communicable diseases considering the privatization of hospitals. The financial toll these conditions have on people, families, and society must be understood by policymakers and decision-makers. One research examined the connection between earnings, health coverage, and OOP spending.


Despite evidence from several nations indicating insured households experience lower OOP expenditure, research findings demonstrate that OOP spending is higher for families with health insurance. Maybe a rigorous analysis of the relationship reveals that health insurance is not financially sufficient to reduce OOP costs. It could be misleading to discount the importance of health coverage purely built on this thought. Improved access to treatment and higher consumption of healthcare services by families with insurance may help to explain some of the high levels of OOP spending (Rahman, 2020). It might be due to adverse selection, which states that families decide which coverage to acquire depending on their risk assessment. As a result, families with chronic Non-communicable diseases are frequently more inclined to obtain insurance and utilize more medical services. Additionally, moral hazards—incentives for overusing services—are present for insured households with generous policies.

Numerous financial changes have been implemented in Saudi Arabia as part of the Health Sector Transformation Program to meet the demands of the population. Health Assurance and Purchasing (PHAP) is one of the programs to initiate changes in Saudi Arabia’s healthcare system. The program will act as a single-payer national health coverage system to ensure that all citizens and legal residents have access to hospitals recently taken over by the MOH and other government providers offering cost-effective care. Prioritizing the stimulation of financial risk protection methods by reducing OOP spending should be its top priority, but it must be thoroughly prepared before execution. Vulnerable populations, such as those with Non-communicable diseases, would be exempted from the price of various services and prescriptions, comprising lower copayments and subsidies for essential pharmaceuticals (Nair, 2019).


The research findings show that since the privatization of hospitals in Saudi Arabia, households have spent significantly more money than previously to care for family members established with NCDs, most particularly diabetes and hypertension. The price of the services and treatment may be responsible for most of these out-of-pocket costs. Researchers were able to uncover data that may assist cut OOP expenditures for families with chronic NCDs by examining the variables that affect out-of-pocket expenses. A contributing cause to the high percentage of OOP expenses is the privatization of hospitals in the nation.


Alkhamis, A., Ali Miraj, S.S., Al Qumaizi, K.I. and Alaiban, K., 2021. Privatization of Healthcare in Saudi Arabia: Opportunities and Challenges. Handbook of Healthcare in the Arab World, pp.1865-1907.

Almalki, Z. S., Alahmari, A. K., Alqahtani, N., Alzarea, A. I., Alshehri, A. M., Alruwaybiah, A. M., … & Ahmed, N. J. (2022). Households’ Direct Economic Burden Associated with Chronic Non-Communicable Diseases in Saudi Arabia. International Journal of Environmental Research and Public Health19(15), 9736.

Al-Hanawi, M. K., Khan, S. A., & Al-Borie, H. M. (2019). A critical review of healthcare human resource development in Saudi Arabia: emerging challenges and opportunities. Public health reviews40(1), 1-16.

Al Kuwaiti, A., & Al Muhanna, F. A. (2020). Challenges of privatizing academic medical centers in Saudi Arabia and appropriate strategies for implementation. International Journal of Health Governance.

Murphy, A., Palafox, B., Walli-Attaei, M., Powell-Jackson, T., Rangarajan, S., Alhabib, K. F., … & McKee, M. (2020). The household economic burden of non-communicable diseases in 18 countries. BMJ global health5(2), e002040.

Nair, K. S. (2019). Role of Health Economics Research in Implementing Saudi Arabia’s Health Sector Transformation Strategy Under Vision-2030. Journal of Economics and Sustainable Development10(18), 92–99.

Rahman, R., (2020). The privatization of the health care system in Saudi Arabia. Health services insights13, p.1178632920934497.


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