The Saudi government must do more to regulate insurance companies and ensure that low priced insurance policy prices don’t lead to the bankruptcy of hospitals, according to Sobhi Batterjee, the chairman of Saudi German Hospital Group.
In an interview with Arabian Business Arabic, Batterjee said that health insurance companies have "become a main player” in the Saudi healthcare sector which sometimes ends up deciding the fate of hospitals and whether they survive or go bankrupt.
According to Batterjee, insurance companies have been pressuring hospitals to lower prices due to their purchasing power.
“Thus, we are witnessing an exit of small players in the healthcare sector,” he said. “Regulators must control this relationship and balance it, since even insurance companies themselves are falling victim to these practices and going bankrupt.
"We demand stability in the work of health insurance companies,” he added. “That could be accomplished by setting an acceptable minimum insurance policy price.”
Regulations, he noted, could potentially come from the kingdom’s Ministry of Health, the Ministry of Commerce and Investment, or its health insurance or monetary authorities.
There are approximately 30 health insurance companies currently competing in the Saudi market, which Batterjee said he believes could damage their own industry and the larger healthcare sector by driving prices down.
While he said that the same conditions are only present “to a lesser extent” in other GCC markets, he said he believes that healthcare sectors across the region will ultimately all face “the same challenges.”
Additionally, he pointed out that Saudi citizens will soon be covered by insurance in hospitals run by the Ministry of Health that are soon to be privatised.
He noted that he believes that the only option for family businesses in the healthcare sector – or other sectors - is to go public to survive.
“I estimate that a family business may last [between] 20 and 40 years maximum, then will vanish,” he said.For all the latest Saudi Arabia news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.