Saudi Arabia: #32 in the World Index of Healthcare Innovation

Introduction

In 2024, Saudi Arabia is ranked 32nd, occupying the final spot in the World Index of Healthcare Innovation. The kingdom stands out in Fiscal Sustainability, securing the 7th position, but as an emerging industrialized nation, it ranks 32nd in Quality, 31st in Science and Technology, and 29th in Choice.

Saudi Arabia is rapidly improving its health care infrastructure and modernizing its health insurance system, in alignment with Crown Prince Mohammed bin Salman Al Saud’s Vision 2030 program, and we believe that the Kingdom is likely to improve its WIHI ranking in the future.

Saudi Arabia emerged from the pandemic with a notably low fatality rate, the second-lowest among the countries indexed, only bettered by the United Arab Emirates. While healthcare coverage in the kingdom is affordable, the historic lack of primary care and inpatient infrastructure contribute to suboptimal health outcomes, evidenced by low life expectancy compared to WIHI peers.

Background

Saudi Arabia’s first public health department was established soon after the foundation of modern Saudi Arabia by King Abdulaziz Al-Saud in 1925. This department laid the groundwork for a growing network of over 2,000 hospitals and health centers designed to address the country’s health care needs.

The health system substantially transformed after the establishment of the Ministry of Health in 1951. This body not only aims to provide free healthcare to all citizens through public health facilities, but also sets public policies and regulates both public and private healthcare providers.  Saudi Arabia now boasts a healthcare workforce of approximately 350,000 professionals.

In 2005, the Cooperative Health Insurance Act (CHI) mandated private health insurance for the 10 million non-Saudi nationals, which was a pivotal development in Saudi healthcare. Subsequently, the act was expanded to cover Saudi nationals employed in the private sector, and it will also soon include Saudi public sector workers, which represent 30 percent of the Saudi labor force.

These moves are aimed at reducing public health expenditure, which is heavily influenced by the fluctuating oil revenues that underpin the national economy. CHI now covers nearly 15 million beneficiaries, including foreign visitors, many of whom are Muslim pilgrims to Mecca.

Until recently, Saudi Arabia’s healthcare development has not kept pace with that of other high-income countries. In 2016, this discrepancy prompted the launch of Vision 2030, a comprehensive initiative to reduce the kingdom’s dependency on oil and modernize its economy. As part of this initiative, Saudi Arabia is enhancing the capacity of its health system and aims to improve health outcomes through innovation and significant investment., Vision 2030 looks to increase private healthcare expenditure from 25 percent to 35 percent of total healthcare spending.

Saudi Arabia employs a dual healthcare system that encompasses both public and private sectors. The public sector, primarily funded by government oil revenues, provides services free of charge to all Saudi citizens and includes over 480 hospitals. Meanwhile, the private sector—which includes over 200 hospitals—is experiencing rapid growth from the aforementioned CHI program, along with increased investments in private healthcare facilities.

The Saudi Ministry of Health plays a crucial role in overseeing and regulating the healthcare services provided across the country, ensuring that both public and private entities adhere to national coverage standards. As part of Vision 2030, a push towards privatization of certain healthcare services to enhance efficiency and reduce the fiscal burden on the state aims to create a more sustainable and diversified economic structure. This strategic shift also includes fostering partnerships with international healthcare providers and investors to introduce cutting-edge medical technology and practices into the Saudi healthcare system.

Dimension Performance

Quality

While Saudi Arabia is working hard to build out its health care infrastructure, it currently ranks at the bottom of WIHI for Quality. Although the country has effectively managed pandemic preparedness, keeping COVID-19 fatality rates impressively low, it continues to grapple with providing high-quality care to its whole population. This has resulted in a high rate of treatable mortality and sluggish GDP growth. Additionally, despite having ample hospital capacity, Saudi Arabia is ranked 26th in healthcare infrastructure, largely due to a critical shortage of doctors and nurses.

Choice

Though Saudi Arabia ranks 29th for Choice, there are bright spots, most notably the Index’s top ranking in affordability of health coverage. Saudi Arabia also features a high degree of choice for providers. Still, the nation’s combination of public- and employer-sponsored coverage limits consumer choice. Even on coverage of essential health services—which include indicators for maternal health, communicable and noncommunicable diseases, and service access—Saudi Arabia ranks last in the Index, though it is rapidly improving.

Science & Technology

For Science and Technology, Saudi Arabia finds itself at the second to bottom of the Index. The kingdom ranks 32nd in medical advances and 29th in scientific discoveries, due to the early stages of its scientific research build-out. Despite these challenges, the country does have a silver lining: it ranks 10th in health digitization. Its residents are highly connected digitally, laying a foundation for potential future enhancements to electronic health records. Looking ahead, Saudi Arabia’s Vision 2030 could significantly boost its research and innovation capabilities. This strategic plan aims to foster competition between public and private sectors and liberalize the economy, creating a more business-friendly environment that could attract foreign investment and elevate the kingdom’s overall ranking in science and technology.

Fiscal Sustainability

Saudi Arabia performs exceptionally well in Fiscal Sustainability, ranking 7th in this dimension. The kingdom boasts a low debt-to-GDP ratio of 42.4 percent. Despite a significant expatriate population, the demographic structure supports a large number of working-age individuals, providing a strong base to support an aging population. However, while public healthcare spending in Saudi Arabia is relatively low (10th), the pace of spending is accelerating (30th). This rapid increase in healthcare expenditure, while warranted in certain respects, poses a risk to the kingdom’s financial stability, particularly if oil revenues were to decrease. As Saudi Arabia enters the ranks of developed nations, it will be well-served to adopt a health reform strategy that incentives patients and consumers to control costs.