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Sat 13 Jul 2013 11:02 AM

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Saudi healthcare 'needs more private investment'

Deloitte experts identify Saudi provinces that are most undersupplied amid growing demand

Saudi healthcare 'needs more private investment'

Private sector contributions and investments are increasingly needed to respond to a growing healthcare demand in Saudi Arabia, according to Deloitte.

Deloitte healthcare experts also identified Saudi provinces that are most undersupplied in terms of beds and facilities and consequently offer attractive opportunities for additional private sector investments.

Deloitte said it currently finds that private contributions to mega projects and new hospitals remains relatively low, with only nine private healthcare projects announced publicly out of an estimated 125 upcoming projects.

"We find that the healthcare sector across the Middle East is evolving to meet growing demand, and Saudi Arabia is leading the way. The Saudi government is heavily subsidising the healthcare sector which will yield considerable results," said Dr Hassib Jaber, regional healthcare consulting leader at Deloitte in the Middle East.

"With healthcare expenditures per capita in Saudi Arabia expected to grow at annual rates of 6.9 percent to 2016, to reach SR4,000, the need for private sector investment becomes all the more apparent."

A Deloitte report also said the Jazan region was significantly below the national Saudi Arabia average in terms of physicians per 1,000 population, indicating insufficient provision of primary healthcare services by the private sector.

Deloitte added that for private hospital beds per 1,000 population, the Northern border, Jazan and Al Jouf regions were significantly below the country average.

Experts said private sector contribution in the primary and secondary healthcare markets is heavily concentrated in three main provinces - Riyadh, Makkah and the Eastern regions - which make up approximately 66 percent of the population.

The increasing demand for quality healthcare and the rising expenditures associated with it should provide many opportunities for increased private sector investments, the report added.

Deloitte experts predict that the private healthcare industry in Saudi Arabia will move from its current "emerging" stage - where private sector contribution is increasing although it remains quite small as compared to public sector contribution - to an "evolving" stage - where private sector contribution will overtake the same share of the public sector and where there will be growing interest in secondary and tertiary healthcare provision.

Jaber said: "The move from an emerging stage to an evolving one comes with many challenges, namely the shortage of healthcare professionals, with private and public sector competing to retain talented resources.

"Further challenges include a shortage of Saudi health professionals leading to the hiring of expatriates, and the difficulty in creating a supporting legal, operational, and financial environment to encourage public-private partnerships".

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