KPMG recently released its research paper, “The Value of One Riyal: Understanding Healthcare Financing in Saudi Arabia,” at the Global Health Exhibition. This report offers an in-depth analysis of the Kingdom’s healthcare financing framework, examining current spending patterns, future sustainability challenges, and proposing innovative financial models to enhance the sector.
The findings reveal a significant increase in healthcare expenditure, which rose from SR22.8 billion ($6.07 billion) in 2007 to SR79.8 billion in 2021. This surge is driven by factors such as an aging population, a rise in chronic diseases, and rapid technological advancements.
A key recommendation from the report is the adoption of value-based healthcare (VBHC), aimed at reducing unnecessary costs while improving patient outcomes. VBHC emphasizes linking reimbursements to health outcomes rather than the volume of services provided. By prioritizing value over volume, this model promotes efficiency, enhances care coordination, and encourages preventive measures to alleviate the long-term impacts of chronic diseases like diabetes and cardiovascular conditions.
Burhaan Khan, partner and head of healthcare at KPMG Professional Services, stressed the urgent need for innovative financial models to ensure the sustainability of Saudi Arabia’s healthcare system. He stated, “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.”
The report also highlights the burden of out-of-pocket healthcare expenses, which constitute 14 percent of total spending. Among these costs, 53 percent is for medications and 14 percent for physician visits. This underscores the need to expand insurance coverage and manage pharmaceutical costs effectively.
Technological integration, including telemedicine and digital health solutions, is essential for improving efficiency and patient outcomes. Dr. Mohamed Fayek from KPMG noted the importance of public-private partnerships, forecasting that private sector participation could reach 65 percent by 2030, driving economic growth and enhancing service delivery.
