PHSSR Saudi Arabia 2025

Domain 2: Financing Sustainability •The demographic shift towards an aging population places a major burden on the healthcare allocation from the national budget, which is derived predominantly from oil and gas revenues which have seen a decline in recent years. However, health service expenditure as a percentage of GDP has increased steadily since 2018 and, in 2022, was standing at 8.1% •Health care infrastructure has seen heavy government investment In recent years, focusing on underserved regions and, under Vision 2030 , there are plans to invest over USD$65 billion. Further investments should be directed towards closing the gap between urban and rural areas.. •The government is the main source of health system funding (70%). The remainder comes from private insurance contributions (16%) and out-of-pocket (OOP) expenditure (14%). The private health insurance market is expected to grow signi ficantly and account for 2% of GDP by 2030. •The current dual (public and private) service provision and limited coordination between providers have led to excessive costs stemming from the duplication of services for the same case. •The National Centre for Privatisation seeks to enhance the role of the private sector in healthcare delivery. By facilitating greater managerial autonomy for healthcare providers, and moving away from centralised management, this aims to both improve service quality and promote greater efficiency. The programme also seeks to attract local and foreign direct investments. This expanded role for the private sector will see the privatisation of close to 290 hospitals and 2,300 primary health centres, which will continue to deliver services to patients with both public and private insurance coverage. •While primary care services are usually free at the point of access, providers are predominantly reimbursed through a fee-for-service model. Although the government provides subsidies to ensure that services are affordable, fees remain too high for some vulnerable groups. •Although the government provides subsidies to ensure user charges do not pose a financial barrier to access, their coverage is limited and some lower-income groups may struggle to access care as a result. •There is an increasing focus on value-based payment models in Saudi Arabia, with ongoing efforts to implement these models in primary, secondary and tertiary care settings. These models aim to incentivise high-quality, e fficient and accessible patient-centred care, which can lead to better health outcomes and lower costs. However, these remain at a relatively early stage of implementation. Resilience •The government has implemented financial risk-management plans to increase reserves and ensure that additional public funds are available during crises. •Signi ficant additional resources have been allocated to the healthcare sector, including funding for new hospital construction, increasing testing and tracing capacity, and investing in telemedicine and other digital health technologies. •Two institutions – the Health Care Information and Management Systems Society (HIMSS) and the Saudi Centre for Evidence-Based Health Care (SCEBH) have fostered improved healthcare financing practices, while emphasising the importance the national supply chain and the availability essential medicines, diagnostics and technologies to strengthen the country’s self- sufficiency and resilience. •The government’s expenditure decisions during the pandemic enhanced the resilience of the health system. In addition to increasing funding, user fees were temporarily decreased to ensure access to services. At the same time, the transfer of funding away from essential services to support the crisis response was kept to a minimum. 9 Sustainability and Resilience in the Saudi Arabian Health System The Partnership for Health System Sustainability and Resilience