Introduction
Health Insurance (HI) helps people minimize their out-of-pocket (OOP) medical expenses. In 1999, the Council of Cooperative Health was established in the Kingdom of Saudi Arabia for the private sector, aiming to reduce government health expenditure (Hazazi, 2023). The compound annual growth rate (CAGR) of HI in the country is projected at 5.6%, driven by population growth and job diversification (Saudi Arabia, 2023). Moreover, the country attracts a large number of expatriates from across the world who need the HI services.
Beneficial Outcomes of the Health Insurance Initiative
One opportunity HI presents is the ever-expanding foreign workforce not covered by the Ministry of Health (MOH). Notably, 75% of private-sector employees are non-citizens (Al-Hanawi et al., 2020). The insurance companies can enter into a memorandum of understanding to provide medical coverage to all workers at a subsidized fee.
In addition, some wealthy citizens may be unwilling to seek public treatment due to long waiting times and limited resources. The current population has more awareness and needs comprehensive coverage (Saudi Arabia, 2023). Therefore, they are potential private insurance clients who can help them minimize their OOP expenditures. Many people can get employment in the industry. Furthermore, firms can establish partnerships with specific hospitals to streamline processes and enhance their value chains.
Future challenges include optimizing claims, managing competition, and controlling healthcare costs. One concern about the current system is the sustainability of the fee (Hazazi, 2023). There is an influx of chronic illnesses, such as cancer, most of which are difficult to treat and manage. As a result, some compensation can be too expensive, especially when many people are falling ill simultaneously. The other challenge is that, with rising demand for wellness services, more entrants will intensify competition in the business. In addition, the government controls most healthcare services and may enact legislation that complicates market entry.
HI can financially impact the country by disbursing funds for disease prevention and treatment. Notably, the MOH finances all public health organizations to ensure free treatment to all government workers and citizens (Hazazi, 2023). The initiative to promote insurance will support the ministry and ensure funds are saved for other development projects.
The services can be improved for individuals with lower socio-economic status. Moreover, once the finances are pulled together, the burden on individuals caring for chronically ill patients will be reduced. As a result, the country’s overall economy will improve, and people will receive quality care, making them more vital to the workforce and enhancing cash flow.
The HI will result in innovative practices and sustainable plans for the healthcare industry. It is likely to increase the use of digital platforms, the adoption of proactive measures, and the implementation of comprehensive, responsive, and personalized plans (Saudi Arabia, 2023). For example, insurance will increase the use of electronic technology for payment and remote communication with customers. Moreover, to avoid costly claims from chronically ill patients, organizations can organize frequent workshops to educate clients about positive lifestyle changes.
Moreover, there is evidence that insurance increases health-seeking behavior among clients, leading to early diagnosis and treatment (Al-Hanawi et al., 2021). Historical data for each client is saved and shared with doctors to aid in the preparation of customized treatment plans. As a result, there is a better patient experience, quick recovery, and improved quality of life.
Conclusion
In conclusion, HI in Saudi Arabia will increase over the coming years due to increased healthcare demand. The large number of private-sector expatriates and wealthy government employees presents an opportunity to expand their services. However, some challenges may make it difficult to penetrate and thrive in the market. Firms that can streamline their services and partner with the service providers are the ones that will grow. The HI will eventually increase government revenue and support the delivery of government services.
References
Al-Hanawi, M. K., Mwale, M. L., & Kamninga, T. M. (2020). The effects of health insurance on health-seeking behaviour: Evidence from the Kingdom of Saudi Arabia. Risk Management and Healthcare Policy, 13(1), 595-607.
Al-Hanawi, M. K., Mwale, M. L., & Qattan, A. M. (2021). Health insurance and out-of-pocket expenditure on health and medicine: Heterogeneities along income. Frontiers in Pharmacology, 12(1), 1-13.
Hazazi, A. (2023). Reform of the health insurance funding model to improve the care of noncommunicable diseases patients in Saudi Arabia. Population Medicine, 5(2), 1-12.
Saudi Arabia health insurance market positioned for steady growth with a projected CAGR of 5.6% by 2030. (2023). MarkWideResearch.