https://arab.news/jf67u
KPMG released its latest research paper “The value of one riyal: Understanding healthcare financing in Saudi Arabia,” at this year’s Global Health Exhibition. The report, published on the sidelines of the conference with KPMG’s participation as exhibitor, delves deep into the Kingdom’s healthcare financing structure, providing a detailed analysis of current expenditure patterns, future sustainability challenges, and innovative financial models that could transform the sector.
The report reveals that Saudi Arabia’s healthcare spending has grown significantly, from SR22.8 billion ($6.07 billion) in 2007 to SR79.8 billion in 2021, driven by an aging population, the rise of chronic diseases, and rapid technological advancements.
The report highlights the importance of adopting value-based healthcare as a critical strategy for reducing unnecessary costs and improving patient outcomes. VBHC focuses on tying reimbursements to health outcomes, rather than the volume of services provided. By prioritizing value over quantity, this model encourages efficiency, better care coordination, and a focus on preventive measures that can reduce the long-term burden of chronic diseases such as diabetes and cardiovascular conditions.
Burhaan Khan, partner and head of healthcare at KPMG Professional Services, said: “Our research underscores the urgency of adopting innovative financial models to ensure the long-term sustainability of Saudi Arabia’s healthcare system. With rising healthcare costs, it is critical to shift toward models that prioritize value over volume and emphasize prevention and efficiency. By integrating advanced technologies and fostering public-private partnerships, we can build a resilient healthcare system that meets the evolving needs of the population.”
Another key finding from the report is the significant burden of out-of-pocket healthcare expenses, which account for 14 percent of total healthcare spending in the Kingdom. Of these expenses, 53 percent are directed toward medications, with another 14 percent spent on physician visits. This data points to the need for expanding insurance coverage and managing pharmaceutical costs more effectively to reduce the financial strain on households. KPMG’s findings call for greater efforts to broaden access to affordable healthcare, particularly for lower-income groups and those managing chronic conditions.
In terms of preventive care, the report highlights its enormous potential for cost savings. Every riyal invested in preventive healthcare — such as vaccination programs and health screenings — can yield a fivefold return by preventing the onset of costly chronic diseases.
The report also identifies technological integration, such as telemedicine and digital health solutions, as key tools for improving both efficiency and patient outcomes. These technologies not only improve access to healthcare but also enable more streamlined, data-driven decision-making, allowing healthcare providers to focus resources on the most critical areas.
Dr. Mohamed Fayek, associate director, healthcare at KPMG Professional Services, emphasized the growing importance of public-private partnerships in the healthcare sector, saying: “We forecast that increasing private sector participation could reach 65 percent by 2030. These partnerships are critical to sustaining the infrastructure and resources necessary to meet the Kingdom’s healthcare needs, while also driving economic growth. By collaborating with the private sector, the Saudi government can bring in new innovations, improve service delivery, and create new jobs in the healthcare field by 2030.”