NVESTORS SEE OPPORTUNITY IN SAUDI HEALTHCARE

The healthcare sector of Saudi Arabia continues to expand, as international and regional investors find eye-catching opportunities.

NMC Health (NMC),a London-listed international private healthcare operator with presence across 17 countries, and Hassana Investment Company (Hassana), the investment arm of the General Organisation for Social Insurance (GOSI) of Saudi Arabia, signed a memorandum of understanding (MoU) to study the formation of a joint venture to acquire and develop a pan-Saudi Arabia network of world-class healthcare facilities, with a capacity of up to 3,000 beds.

“This MoU targets a total investments value of up to SAR 6 billion over the next five years and to employ up to 10,000 employees, including full- and part- time positions. At inception, the proposed JV will become one of the largest private healthcare operators in Saudi Arabia with a combined capacity of 1,489 beds (664 beds contributed by five NMC facilities and 825 beds by two National Medical Care facilities,” the companies said in October.

Prasanth Manghat, chief executive of NMC, added in the statement: “The Saudi government’s forward-looking and investor-friendly policies make the kingdom one of the most attractive destinations in the region for investment in the healthcare sector.”

Saudi authorities are also looking to collaborate with world-class international health facilities.

In October, the King Faisal Specialist Hospital and Research Centre (KFSH&RC) signed an MoU with Great Ormond Street Hospital for Children in London (GOSH) to build and foster clinical, educational, and research collaboration that enhances the development and delivery of paediatric services in diagnosis and therapy of rare medical conditions.

“This collaboration fits in the context of the strategic plans to build partnerships with the international medical institutions to develop world class research and specialised medical services,” said Dr Rashed Alhamid, assistant chief executive officer for hospital operations at KFSH&RC.

“It will help KFSH&RC to continue achieving its mission of becoming one of the regional and international leading institution in specialised healthcare taking into consideration the main hospital in Riyadh, Jeddah branch and the 300-bed new Meeqat Hospital in Al Madinah Al Munawwarah that was converted, upon the directives of the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud recently, to KFSH&RC as a new branch.”

The two healthcare institutes aim to work closely to boost cardiology, radiology and haematology services. They will also pursue joint education initiatives, such as the GOSH International Fellowship Programme, to train postgraduate medical students from Saudi.

Healthcare companies are drawn to Saudi Arabia as it looks to upgrade its infrastructure. Rising populations, affluent lifestyles and the desire to seek domestic medical assistance, rather than go abroad, are driving expansion of the healthcare sector in the kingdom.

Another key driver is the roll out of the mandatory private health insurance programme. The Ministry of Health has also set out a number of goals in relation to the Saudi Vision 2030.

These include raising private healthcare expenditure from 25% to 35% of total healthcare expenditure, raising the number of licensed medical facilities from 40 to 100, enhancing the number of internationally accredited hospitals, and doubling the number of primary healthcare visits per capita from two to four.

As part of that effort, the National Centre for Privatisation unveiled plans to privatise the health sector in line with the Supervisory Committee’s approved plan to privatise 10 sectors earlier this year.

The Supervisory Committee has established a government-owned holding company and five regional companies to facilitate the transformation and restructuring of the health sector.

The committee has identified nine areas for private sector participation, which include healthcare centres, operating hospitals, medical cities, and radiology clinics, as well as rehabilitative treatment, extended care, home care, laboratories, pharmacies and supplies.

The study also covered the corporatisation of the General Organisation for King Faisal Specialist Hospital and Research Centre to become a commercially operated non-profit company with the objective of upgrading healthcare services provided to patients.

“Privatisation will result in the modernisation and establishment of new health care centres, the enhancement of efficiency and quality, the establishment of a competitive market to provide healthcare services to meet the growing needs in the sector, and the establishment and maintenance of an efficient logistics system serving the sector in the kingdom. It will also provide sustainable employment opportunities for the citizens in strategic sectors,” according to a statement by Saudi Press Agency.