Health Holding Company

This summer, a new Cabinet Resolution was issued, establishing the Health Holding Company ("HHC"). It is a significant legal step in formally implementing the transformation plan for the Kingdom's healthcare system.

The plan is for the Ministry of Health's ("MOH") current role, as regulator and provider of public healthcare services, to be bifurcated. The MOH will become the regulator and supervisor of public and private health institutions. All public health services will be transferred to the HHC, in due course. Public health services will be provided by HHC through its subsidiaries, including the Health Clusters (see below for further details), who are tasked with providing integrated healthcare services to beneficiaries in all regions of the Kingdom in accordance with the Kingdom's "modern healthcare model", which will be defined and requirements set by the MOH.

In due course, all staff who are currently involved in providing healthcare services, at all levels, under the MOH will be transferred to the HHC, or to the company’s subsidiaries (such as the Health Clusters that are being formed)

Health Clusters

The HHC will establish health clusters in the form of independent companies to provide public healthcare services. As part of Vision 2030 and the Healthcare Transformation Strategy, all existing MOH/HHC providers will be migrated into Healthcare Clusters, which will amount to approximately 20 - 30 geographically defined, vertically integrated, “Accountable Care Organisations”, serving around 1-2 million people each. These clusters will be established as “corporatized” public bodies, with substantial and defined decision rights. This strategy was drawn widely from the NHS experience in corporatizing public healthcare providers. Healthcare Clusters have already begun issuing tenders and contracts for private companies to provide consulting services to assist the formation, management, and operation of these clusters and their facilities.

The goals of decentralisation and clustering public health service delivery is to increase competition, transparency, and efficiency as Health Clusters compete with each other as well as the private sector for clients and health care professionals.

Under these new models of care, it is anticipated that privatisation initiatives will be accelerated as the clusters will be encouraged to transfer the ownership, management and operations of their facilities to private companies, in due course.

National Health Insurance Center

The Resolution also established the National Health Insurance Center ("NHIC"), which will purchase health services provided by the HHC or its subsidiaries. The NHIC is expected to submit for approval the comprehensive health insurance vision for Saudi citizens in due course. Essentially, we can expect to see a form of universal health coverage emerge in the Kingdom. 

The beneficiaries of the NHIC insurance include Saudis working in the public and private sectors; their family members; as well as children of a Saudi mother from a non-Saudi husband residing in the Kingdom or non-Saudi wife married to a Saudi, and a non-Saudi married to a Saudi woman residing in the Kingdom, in the event their healthcare is not covered by a cooperative health insurance policy (being the private health insurace). The beneficiaries of NHIC healthcare service also include non-Saudi workers in government sectors, if they are not covered by special healthcare systems, programs or services.

The budgetary allocations for the MoH for the provision of healthcare services will be transferred to the NHIC, in accordance with the plan, phases and mechanisms decided by the supervisory committee for the privatization of the health sector.

The larger context

In 2016, Saudi Arabia announced Vision 2030, which is an ambition plan for reform across the Kingdom and seeks to create a more diverse and sustainable economy. The Vision 2030 strategic objectives include a number that are dedicated to healthcare, including targeting the privatisation of 290 hospitals and 2,300 primary health centres by 2030. Through the various Vision 2030 programs, the Kingdom seeks to introduce new strategies to fulfil public health needs through insurance-based financing and increasing private sector participation.

The implementation of this healthcare transformation strategy will take place in successive stages over the coming years. . . watch this space.