RIYADH: Saudi Arabia’s private healthcare sector will see strong demand for its services thanks to a growing population and the government’s Vision 2030 program, according to an analysis.
In its latest report, credit rating agency S&P Global said that the Kingdom should add 30,000 more public and private hospital beds between 2023 and 2030 to meet this rising demand.
Strengthening the healthcare sector is one of the crucial goals outlined in Saudi Arabia’s Vision 2030 program, as the Kingdom eyes to provide world-class medical services to its population.
“It’s therefore not surprising that one of the Saudi government’s top priorities is the development of the healthcare sector. As the country accelerates the implementation of its national transformation program, growth opportunities for private healthcare providers are increasing,” said S&P Global.
According to the release, Saudi Arabia’s unique demographic dynamics are expected to play a crucial role in accelerating the growth of the healthcare sector.
The Kingdom’s national transformation program targets a hospital bed density of 2.7 beds per 1,000 people by 2030. Based on estimated population data, this compares with 2.4 in 2023 and is more in line with the global average.
“In particular, more than 70 percent of the population is below the age of 40, indicating an aging population in the medium term. This, coupled with higher life expectancy, should increase the demand for healthcare,” added S&P Global.
The analysis further said that government support will encourage investments, and mandatory insurance will boost demand in the private health sector.
In March 2021, the Saudi Council of Ministers approved the privatization law to encourage investment in the medical division, and many healthcare providers have announced expansion plans since then, the US-based firm said.
In its report, S&P Global also outlined some of the major challenges faced by Saudi Arabia in the private medical sector.
“We expect to see a widening gap in terms of hospital-bed availability between densely populated cities and more remote areas where demographic developments are less favorable,” said the study.
It added: “This means that private healthcare providers’ profitability will vary depending on the regions they serve. Payor profiles also differ across the sector, and so we expect working capital management to remain key in determining cash flow visibility and capital allocation.”
