The private sector’s role in Saudi Arabia’s health care has increased significantly in recent years, supported by favourable national policies and regulatory reform. The Kingdom is actively encouraging greater private participation to reduce the financial burden on the government and improve health care outcomes. This approach has driven a rise in public-private partnerships (PPPs) across multiple areas of the health sector.
Health Reform
The Health Sector Transformation Programme (HSTP) was developed to implement health care policies aligned with the objectives of the Vision 2030 national development strategy. Vision 2030 explicitly highlights the importance of private sector involvement in the country’s care system, stating: “The private sector is vital in supporting the Kingdom’s efforts to achieve its national health goals, ensuring everyone has access to high-quality health care.”
A major step towards enabling private sector participation came in March 2021, when Saudi Arabia’s Council of Ministers approved the Private Sector Participation Law. The legislation marked a shift away from previous structural resistance to private involvement in the health care system and established a clearer legal framework for PPPs. The Ministry of Health (MoH) has identified eight strategic areas for private sector participation, including primary care, hospital commissioning, medical cities and long-term care. Under current plans, the government aims to privatise approximately 290 hospitals and 2300 primary health centres, which will continue to deliver publicly funded services.
Regulatory modernisation has played a key role in supporting private sector growth. Updates to the Private Health Institutions Law require the compulsory adoption of electronic medical records and introduced stricter penalties for facilities operating without modern digital health infrastructure. The revised framework has also expanded scope for specialist and day-surgery centres, helping to diversify private health care provision. This push towards greater digitalisation supports Vision 2030’s objective of fully integrating the public and private health systems by 2030.
Recent health care reforms also allow for 100% foreign ownership of hospitals, general polyclinics and telemedicine centres, further incentivising international investment in the sector. Private health care institutions are permitted to procure pharmaceuticals and medical devices registered by the Saudi Food and Drug Authority (SFDA) through tenders or by negotiating directly with manufacturers and wholesalers, increasing operational flexibility and efficiency. Despite this progress, regulatory barriers to private sector participation remain, highlighting the need for ongoing regulatory review. Further reforms for pricing mechanisms, quality standards, dispute resolution processes and risk-sharing arrangements could help attract additional private capital to Saudi Arabia’s health sector.
PPPS
Attracting a larger number of private sector partners to Saudi Arabia’s health sector is expected to increase non-government financing while also bringing additional skills and operational expertise to the market. This approach will support the expansion of health care facilities and services without requiring the government to shoulder the full financial burden. In 2019, approximately 30% of health expenditure came from private sources, with 16% from out-of-pocket spending. Domestic private health expenditure per capita has risen steadily, from $138 in 2000 to $347 in 2022.
Nevertheless, the majority health care investment continues to be financed through the national budget. Health spending accounted for around 20% of total public expenditure in 2025, with funding largely derived from oil resources. As the government pursues economic diversification and seeks to reduce dependence on fossil fuels, private sector investment is expected to play an increasingly important role in supporting the long-term expansion of health care services. The development of health care PPPs across the Kingdom can also help accelerate growth in underdeveloped segments for the sector, such as digital health and telehealth. While the HSTP outlines objectives in these areas, private sector participation can provide access to established technologies, operational expertise and delivery models drawn from international experience.
Medical Resources
The government’s Saudiisation programme aims to increase the participation of Saudi nationals in health sector jobs, reducing the reliance on foreign workers. Saudi nationals account for 25% of employment in private sector health care, compared with 59% in government hospitals, according to a 2024 report. This gap reflects the need to further align Saudi graduate training with the requirements of the private sector labour market, a common consideration across GCC countries, many of which depend on skilled expatriate workforces. The ongoing shortage of health care leaders in Saudi Arabia is being addressed through national educational programmes and international partnerships designed to enhance graduate skills. However, a 2020 study estimated that, without policy interventions, the Kingdom could face a shortage of 287,895 Saudi health care workers by 2030.
PPPs can support knowledge and skills transfer. This is particularly important given the skills gap between education and workplace requirements. Expanding domestic training can close the gap between Saudi and foreign medical staff and reduce the need to send health care professionals overseas for training.
Insurance Uptake
Since the introduction of a compulsory employer-based health insurance scheme in 2018, the adoption of private health insurance has risen markedly. Coverage is compulsory for several segments of society, including expatriates, Saudi employees in the private sector and tourists. An increasing number of Saudi nationals are also choosing private insurance to access a broader range of high-quality medical services. The Saudi health insurance market was valued at $6.8bn in 2024 and is expected to grow at a compound annual growth rate of 5.5% between 2025 and 2034, reaching $11.6bn. The expansion is largely driven by the growing popularity of health insurance plans that offer flexibility and are tailored to individual health care needs. Several new insurance providers have entered the market, offering an array of products to suit different consumer segments. Innovations such as no pre-approval health plans and digital insurance options have further supported the increase in uptake.
Project Pipeline
The National Centre for Privatisation (NCP), established in 2017, brings together public and private stakeholders alongside central government decision-makers. The NCP is responsible for encouraging and facilitating PPPs across multiple sectors, including health care. As of March 2025, NCP data reported that more than 200 PPPs were in various stages of development, and a further 300 were under review across several sectors. Recent PPP successes in the health sector include Saudi Arabia’s first PPP hospital, the Al Ansar Hospital project in Al Madinah. This 244-bed facility is being developed and operated by a consortium, including Tamasuk and Alghanim International, in partnership with the MoH.
Saudi Arabia has invested in over 20 PPP health care projects since 2019 and plans to allocate $7bn to PPP health projects by 2030. These projects are expected to attract $2bn in private investment and contribute to the creation of more than 10,000 jobs in health care management, bioinformatics and medical research. They will also support the expansion of artificial intelligence-driven diagnostics and of telemedicine services.
Regional Comparison
Countries across the GCC are encouraging greater private-sector participation in health care for reasons similar to Saudi Arabia. Several countries have launched overarching national development strategies – like Saudi Arabia’s Vision 2030 – focusing on economic diversification away from fossil fuel revenues, as seen in the UAE and Qatar. Meanwhile, several GCC countries also aim to close the skills gap between education and the workplace, developing a highly skilled domestic workforce and ultimately reducing reliance on expatriate labour.
Together, Saudi Arabia and the UAE accounted for 92% of the health care sector transactions in the GCC between 2021 and April 2025. Strong investment in Saudi Arabia’s digital health sector, alongside openness to new health care technologies, is helping to attract higher levels of private investment. The establishment of Saudi Arabia’s HSTP and improvements to health care regulations have fostered an environment more receptive to private sector participation. Over the coming decade, the government aims to establish several new PPPs and significantly expand the private sector’s role in the Kingdom’s health care institutions and administration across the country.
Modernisation and digitalisation targets are expected to attract further private investment, bringing new knowledge and skills to Saudi health care, supporting workforce development and improving preventive care and treatment methods. Saudi Arabia’s digital health and telemedicine sectors are projected to grow as the government collaborates with private-sector players.
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