Implementing a Universal Health Insurance System in the Kingdom of Saudi Arabia

Implementing a Universal Health Insurance System in the Kingdom of Saudi Arabia

Many are suggesting the implementation of a national health insurance system for citizens as the solution for the variety of healthcare service challenges in the country. In the turn of the 21st century, the Saudi government enacted a compulsory health insurance law on expatriates to alleviate the demand for services, provided (for free) by governmental healthcare facilities. By 2014, there were around 10 million private sector employees (who are mostly expatriates) covered by the health insurance scheme, which has been regulated by the Council of Cooperative Health Insurance since its inception.

The Saudi Authority for General Statistics and Information estimated total population in 2015 at around 31.5 million lives, which consists of 21.1 million Saudi citizens (67%) and 10.4 million expatriates (33%). Although most of the expatriate population in the Kingdom currently have insurance coverage, the vast majority of the Saudi population lack health insurance, though all have some eligibility for (free of charge) treatment in governmental hospitals. Nevertheless, the compromised accessibility and quality of governmental providers have forced many citizens to seek private healthcare facilities paying out-of-(their-own-) pockets. The failure of the Ministry of Health in significantly expanding its capacity even when it quadrupled its budget (to exceed SAR 100 billion in 2014) is just another indicator of the challenges the government faces in restoring its national healthcare system.

So if the government decides to implement a universal health insurance scheme, and starts enrolling citizens to its new program, what should we expect?

  1. Costs

if we assume that the average citizen could receive a generous health benefits for the cost of SAR 4,000 in insurance premium, the annual cost of insuring 21.1 million Saudi would be around SAR 84.4 billion per year. In comparison, the country currently spends more than SAR 100 billion in global budgets to finance governmental healthcare services.

  1. Incentives

when governmental healthcare providers start generating income from performances (i.e., number of patients seen, procedures performed, or cases being treated) rather than global budgets; as a result:

  • Healthcare providers will evolve around satisfying the demand from insured individuals across specialties and geographic locations.
  • Governmental healthcare providers start to compete on patients by “serving them” instead of “pushing them away”
  • Regulators will need to intervene and control overuse, abuse, and fraud by healthcare providers, who will become greedier in utilizing the insurance implementation “opportunity”.
  1. Implementation

Implementing a universal health insurance system is not the end of healthcare challenges, but a starting point in a long “trial and error” journey to achieve:

  • Accessible health insurance system for the population in the Kingdom.
  • Control of health services/insurance cost inflation, and quality of care


Finally, we shouldn’t be worried about commencing our long journey of building the Saudi health insurance system, because we have more than 50 other countries who have adopted health insurance systems before us, creating national experiments, which could offer many learning points and best-practices for us to adopt.

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