Saudi Arabia’s health care sector is currently undergoing major restructuring in response to rising demand and costs, driven by population growth and an increased incidence of non-communicable diseases (NCDs). At the same time, like the rest of the world, the Saudi health sector has had to contend with the threat posed by Covid-19 in the first half of 2020, with the authorities taking steps to limit both the health and economic impact of the virus.

Guided by Vision 2030 – the Kingdom’s economic development blueprint – the Ministry of Health (MoH) is enacting wide-reaching changes, reorganising the provision of public care, and opening the sector to increased private investment in an effort to boost efficiency and quality. These endeavours continued apace throughout 2019, with the launch of the country’s first health care sector public-private partnership (PPP). Meanwhile, the pharmaceutical and insurance segments also posted consistent growth, driven by mandatory coverage requirements and greater use of domestically produced generics.

Structure & Oversight

The national health service is owned and operated by the government through the MoH and other public and semi-public entities. Its development is guided by Vision 2030 and a number of supporting strategy documents. The MoH is also the leading provider of health care services in the country, operating 284, or 57%, of Saudi Arabia’s hospitals in 2018. Of the remaining 43%, the private sector accounted for 33%, or 163 hospitals, while the remainder were run by other government bodies such as the Ministry of Defence, the Ministry of Education and the National Guard. These public bodies have regulatory independence from the MoH and maintain their own standards in terms of service provision.

Other relevant regulatory bodies in Saudi Arabia’s health care system include the Council of Cooperative Health Insurance (CCHI), the body tasked with enforcing mandatory health insurance coverage requirements for locals and foreigners who are employed by private companies.

There is a three-tier health care system in Saudi Arabia, divided into primary, secondary and tertiary, corresponding, respectively, to health care centres, general hospitals and specialist hospitals. The primary health care centres, in addition to mobile clinics in remote rural areas, provide preventive, emergency, prenatal and other basic services. If necessary, these primary health care centres can refer patients to hospitals or tertiary specialised facilities located in the Kingdom’s main cities. As of 2018 there were a total of 2390 primary health care centres, 494 hospitals, and various specialist facilities and clinics in the country, according to the MoH. Riyadh, the capital, had the highest number of primary health care centres (447) and hospitals (106) of all regions.

General Indicators

Saudi Arabia has made significant progress in improving health care provision and outcomes since embarking on a series of fiveyear development plans in 1970. At that time, the Kingdom possessed 74 hospitals, with an emphasis on curative solutions, rather than preventive care. Since then, the health care sector has been a major government priority in terms of public investment. Following education and the armed forces, health care received the third-largest share of the 2020 budget, with SR167bn ($44.5bn), or 16.4% of the total. The share of the budget going to health care has increased consistently over the past decade, growing at a compound annual growth rate (CAGR) of approximately 12.1% between 2010 and 2019.

Since 2016 two primary strategy documents have guided health care policy: the National Transformation Programme (NTP), which was set to run to 2020, and the government’s overall development strategy, Vision 2030. Under the NTP, the MoH was expected to spend around SR23bn ($6.1bn) on new initiatives and infrastructure between 2016 and 2020, while increasing the share of private health care expenditure from 25% to 35%. According to the most recent data, the number of hospitals, health care centres and hospital beds rose steadily under the NTP. Between 2014 and 2018 the total number of hospitals increased from 453 to 494, while the number of health centres grew from 2281 to 2390, and the number of hospital beds grew from 67,977 to 75,225, according to the MoH. This saw the number of hospital beds per 10,000 inhabitants rise from 22 to 22.5 over the same period. These figures are set to increase substantially in the short term, with 35 new hospitals being developed in the Kingdom as of late 2019, providing an additional capacity of approximately 8850 beds. In addition, two medical cities with a total of 2350 beds were under construction. While this marks a significant expansion in capacity, a 2018 report by UK-based property consultancy Frank Knight highlighted that the country will require a further 20,000 beds by 2025 and 40,000 by 2035 in order to keep pace with both projected population growth and a higher number of ageing citizens.

Medical Staff

While expanding hospital bed capacity remains a policy priority for the sector, so too does the continued expansion of the number of doctors in the country. According to the latest figures from the MoH, there were a total of 104,775 medical physicians and dentists in the country as of 2018. That same year there were 184,565 nurses, or 5.5 nurses per 1000 inhabitants, whereas the ratio for doctors hovers at around 2.8 per 1000 inhabitants. This places the country’s doctor-to-patient ratio in line with the GCC average and on a par with other countries such as the US (2.6) and the UK (2.9). Nevertheless, according to estimates from property research firm Colliers International, the country will need an additional 30,000 doctors by 2030 to meet rising demand.

Saudi Arabia’s health care sector has historically relied on foreign nationals to meet its workforce demands, with estimates from 2018 indicating that 67% of doctors and dentists in the Kingdom were foreigners. Rates of Saudiisation – the policy of increasing the overall proportion of jobs held by Saudi citizens and reducing reliance on expatriates – among nurses is marginally higher, at 38%. Under the NTP the government has committed to training 4000 local doctors each year to support its Saudiisation objectives. The latest MoH figures from 2018 suggest that these targets were on track to be met. Between 2016 and 2018 the number of Saudi physicians in MoH facilities increased from 39,180 to 45,571, with the share of domestic citizens in the physician workforce rising from 28.8% to 36.7%. This marks an increase of roughly 3196 doctors a year. Meanwhile, the number of Saudi doctors employed in the private sector also increased significantly, with around 1808 Saudi physicians joining the segment each year. The total number of domestic doctors in the private sector rose from 20,681, or 2.5% of the workforce, in 2016 to 24,297, or 8.1%, in 2018.

According to Abdulmohsen Alashry, CEO of NMC Healthcare KSA, the two sectors should work together to enlarge the pool of local physicians. “In terms of human capital development, collaboration and a strong partnership between the private and public sectors is needed to ensure the steady supply of local health practitioners in the long term,” he told OBG.

Disease Burden

In line with the country’s rapid economic development and urbanisation, Saudi nationals have increasingly adopted more sedentary lifestyles. While rising public and private investment has expanded the infrastructure and capacity of Saudi Arabia’s health care, efforts have focused primarily on treatment rather than preventive care.

In a pattern common to other emerging markets and developed economies, these factors have contributed to a rapid rise in NCDs, including diabetes, respiratory illness and cardiovascular disease, which put a strain on the public health care system and push up costs. Chronic diseases now account for around 78% of deaths in Saudi Arabia, with many of these caused by lifestyle choices, according to a 2019 study published by the Saudi Food and Drug Authority (SFDA).

With 17.9% of the country’s adult population living with diabetes and 35.4% of adults considered obese, Saudi Arabia has some of the highest prevalence of lifestyle diseases in the region. Accordingly, the cost burden of diabetes on the health care system is significant and accounts for around 24% of the health budget every year. Tackling diabetes and obesity has therefore become a major government priority. The MoH has set itself the target of reducing obesity by 3% by 2020 and diabetes by 10% by 2030. To achieve this, the MoH launched various initiatives focused on informing the public on preventive health measures. These efforts include the Quality of Life Programme 2020, which aims to enhance quality of life by encouraging active lifestyles via sport, and participate in cultural and entertainment activities. As part of the programme, the MoH hoped to boost student participation in sporting activities by 25% and increase the number of fitness coaches in Saudi Arabia to 4500 by 2020.

As is the case across the rest of the world, the Saudi health sector is contending with the spread of Covid-19 and the resulting pressures it can place on medical systems. However, as of mid-March 2020 the Kingdom had relatively few confirmed cases, with just 274. The country took swift measures to slow the spread of the infectious disease, including temporarily closing its borders to non-nationals, enforcing work-from-home protocols and unveiling a SR50bn ($13.3bn) investment package to offset the economic impact of the virus on the Kingdom’s private businesses.

Public Sector

Saudi Arabia’s public health system is undergoing a complete overhaul as the government looks to restructure the sector. While the system is currently overseen by the MoH, health service provision is being decentralised under a new system being implemented through to 2030, known as the New Models of Care programme. Under this initiative, public health services will be divided into 20-30 regional clusters covering between 1m and 2m people to be managed by local providers, while the MoH will limit its focus to regulation and oversight.

Other features of the New Models of Care programme include the expansion of digital health service platforms. This includes an electronic appointment-booking system called Mawid, which was launched in 2018, and allows patients to book and change medical appointments through a mobile phone app. The system also centralises and automates referrals across the health system by linking them electronically, thereby streamlining operations for the various institutions. During its first year in operation the platform was rolled out to 98% of MoH hospitals and health care centres. As of mid-2019 more than 6.5m users had registered for online health services and around 16m medical appointments had been logged via the platform. This forms part of a longerterm strategy to fully digitise all health care data, and link all public and private facilities.

Private Sector

If Saudi Arabia’s efforts to expand capacity, improve care and upgrade efficiency are to be sustainable, a significant portion of the country’s health care burden must be shifted to the private sector. The government has therefore set itself the target of increasing private sector expenditure on health care as a share of total health spend from 25% in 2016 to 35% by the end of 2020. These objectives form part of a set of longer-term privatisation targets outlined under Vision 2030. As part of this strategy, the MoH plans to privatise 290 hospitals and 2300 primary health care centres by 2030.

To achieve these objectives, the government has undertaken various regulatory and legal reforms. In March 2019 the Council of Ministers approved amendments to the Private Health Institutions Law to allow foreign investors to own, operate, and manage hospitals and health centres in the Kingdom through PPPs and build-operate-transfer (BOT) models. Previously, PPPs were largely restricted to the utilities sector.

With the MoH divesting health care provisioning responsibilities and opening the sector to privatisation, the private health segment is set to experience a rapid increase in activity and investment. By creating a vibrant and competitive private sector, Vision 2030’s goal is to increase the efficiency of health care services and provide citizens with greater choice in terms of provision. “Given the current shortage in long-term care facilities, the private sector can definitely help improve access to health care by enhancing quality and controlling costs, as well as building new assets throughout the country,” Sarry Al Buraik, president and CEO of Riyadh-based private medical services company Green Crescent Health Services, told OBG.

Under the Private Health Institutions Law, the MoH is prioritising PPP and BOT contracts to expand the number of facilities. In April 2019 the MoH, in cooperation with the National Centre for Privatisation, announced the country’s first PPP in the sector, calling for proposals to upgrade radiology and medical imaging services at seven hospitals in Riyadh.

Joint ventures (JVs) are also an increasingly popular way of financing investment in Saudi Arabia’s private health care sector. For example, in May 2019 UAEbased health care company NMC Health finalised a JV agreement with the Saudi state-owned General Organisation for Social Insurance that includes up to SR6bn ($1.6bn) of investment in health care in the Kingdom over a five-year period. The JV will acquire and develop facilities with a capacity of up to 3000 beds and employ as many as 10,000 workers.

Initial public offerings (IPOs) are another financing method being utilised by private health care providers. In January 2020 Dr Sulaiman Al Habib Medical Group – one of Saudi Arabia’s largest private health care companies – announced plans to launch an IPO for around 15% of its share capital for $700m. The move comes as the company looks to expand its portfolio, which currently comprises seven health care facilities and two pharmacies which it owns, along with another seven health care centres and two medical solutions businesses that it operates and manages.

Medical Technology

Promoting innovation in digital health is another key part of Vision 2030. While the MoH has already started rolling out its own digital technology solutions for patients – such as appointment-booking platforms and unified digital patient records – it is also looking to accelerate the digital transformation of its business operations in order to boost efficiency. In December 2019, for example, the MoH signed a memorandum of understanding with Chinese tech giant Huawei to introduce emerging digital technologies to the sector. Huawei has been working across the GCC to create digital ecosystems for governments, utilising technologies such as artificial intelligence (AI), the internet of things, 5G and cloud networking, among others.

Some of the facilities under the purview of the MoH have already undertaken digital transformation initiatives of their own. King Faisal Specialist Hospital and Research Centre (KFSH&RC), a tertiary care facility in Riyadh with 1800 hospital beds and 13,000 staff, is a notable example in this regard. In 2017 KFSH&RC was facing data latency challenges due to delays in data input in its electronic patient records, which was slowing response times to patient needs. To address this issue, the facility created a smart room in one of its wards with fully integrated digital patient records and linked bedside medical devices and other service tools to the room. Communication between medical teams improved, as did care and patient satisfaction, with the average length of stay decreasing from 33 to 30 days. In recognition of the success of this initiative, KFSH&RC was awarded the Davies Award of Excellence by the US-based non-profit Healthcare Information and Management Systems Society in January 2020.

In November 2019 Nala – a Saudi health care tech start-up – announced the launch of the first Arabic-language AI platform which allows users to obtain accurate medical diagnosis within seconds. A number of Saudi doctors helped develop the platform, which is currently available through a mobile app. Between February 2019 and November 2019 the platform registered approximately 50,000 new users. To further develop the platform and expand its reach, Nala raised $1m in financing from Dubai-based Al Araby Investment. “Digitalisation within the health care sector will play an important role moving forwards,” Tarek Al Kasabi, chairman of the board at Saudi health care services and pharmaceuticals provider Dallah Health Company, told OBG. “For instance, AI is set to change the way we diagnose patients and improve accuracy across the board. These technologies can ensure that health care reaches rural and more remote areas outside of the main urban centres.”


The introduction of mandatory insurance regulations has driven strong growth in the health insurance market in recent years (see Insurance chapter). The CCHI began implementing mandatory unified health insurance in July 2016. The first phase of the scheme – which ended in 2017 – made it compulsory for private sector companies to provide insurance for their Saudi employees and dependants. The second phase, which was fully rolled out by July 2018, made it mandatory for these companies to also provide insurance for expatriate employees and their dependants. Following this, in September 2019 the CCHI announced that tourists must purchase a health insurance policy provided by the government when submitting their visa application for any visits to the Kingdom.

According to the latest data from the Saudi Arabian Monetary Authority, the country’s central bank, as of December 2018 there were 27 insurance companies operating in the Kingdom. The total number of insured people stood at around 10.8m, including 1m Saudi employees along with over 1.8m of their dependants, as well as 6m expatriate employees and 1.9m of their dependants. An additional 2m people were expected to be insured by the end of 2019 as the CCHI enforced full compliance across the private sector.

Health insurance gross written premium reached SR19.9bn ($5.3bn) in 2018, a 5.4% increase on the previous year. Health care constitutes the largest insurance segment, representing 57% of total premium. The health segment also bucked the downward trend in the wider insurance market, which declined by 4% in 2018, and is expected to grow further as new regulations – such as compulsory insurance for foreign visitors – come into full effect.


The Saudi pharmaceuticals market is one of the largest in the Middle East and is forecast to reach $9bn in value by the end of 2020, having grown at a CAGR of 10% since 2016, according to government figures. By 2023 its value is expected to reach approximately $10.7bn, with a forecast CAGR of 6.1%. This growth is linked to increasing demand for medication to treat the rising prevalence of lifestyle-related NCDs such as diabetes. High spending power and traditional consumer preferences for foreign brands have meant that most pharmaceuticals are imported, but this is gradually changing. Relative to other countries in the region, Saudi Arabia also has a large, well-developed domestic pharmaceuticals industry, with many companies producing generics.

As of 2019 local manufacturing accounted for around 20% of pharmaceuticals in the market, but the government is aiming to double this by the end of 2020. To achieve this objective, the government has implemented a price-protection strategy for locally produced pharmaceuticals, exempting them from price cuts enforced by the MoH. Since the passing of the Law of Pharmaceutical Establishments and Preparations in 2004, the SFDA has regulated the pricing of medicines in the market, implementing regular price cuts to drugs in high demand and exempting companies that manufacture generics locally from price cuts. “It is quite a competitive market here in Saudi Arabia, with many local players as well as multinational companies that have located their production here,” Horia Vilcu, business development director at domestic pharmaceuticals manufacturer Jamjoom Pharma, told OBG.

Currently, there are 27 local manufacturing companies in Saudi, including Al Jazeera Pharmaceutical Industries, AJA Pharma, Saudi Arabian Japanese Pharmaceutical Company, Saudi Pharmaceutical Industries, Tabuk Pharmaceuticals and Jamjoom Pharma, among others. These domestic firms also face competitive pressures from international players.

“The transformation of the health care sector under Vision 2030 presents a challenge to local, private sector pharmaceutical manufacturers,” Mohammad Al Badr, general manager and managing director of Saudi Chemical, the parent company of AJA Pharma, told OBG. “This is because large, international pharmaceuticals organisations have more leverage and influence than local firms.” Rather than trying to compete with international companies – which have large research and development budgets for the creation of new drugs – many local manufacturers focus solely on the country’s expansing generics market. “In 2019 demand for pharmaceuticals increased by around 4-5%, driven by an uptick in antibiotics and a 15% increase in demand for diabetes medicine,” Vilcu told OBG. “This looks set to continue given the high prevalence of diabetes in Saudi Arabia.”


Although Saudi Arabia faces a number of challenges in terms of increasing capacity to meet rising demand and a higher incidence of NCDs, as well as the more recent threat posed by Covid-19, the outlook for the sector remains positive. The government’s efforts to restructure the public sector through decentralisation and digitalisation initiatives are increasing efficiency and reducing costs.

Meanwhile, ongoing privatisation and efforts to create a more competitive health care environment are improving care and attracting significant investment. The shift towards PPP and BOT contracts is expected to support private sector activity in the decade to come, while the burgeoning health start-up ecosystem is set to contribute to a greater level of digitalisation.