Key takeaways from ‘Saudi Health Transformation – The Real Opportunity’
On Wednesday HBI hosted a webinar on the huge opportunities for health care services providers and investors in Saudi Arabia, as the country privatises large swathes of its health care system as part of its Vision 2030 plan to reform and diversify its economy. What were the key takeaways?
The session began with a presentation by Vivek Shukla, executive director – commercial at state-owned UAE health care conglomerate Pure Health, who has advised foreign and local investors on PPP projects in the region.
There are especially big opportunities on the outpatient clinic side, especially to develop day surgery centres and long term care facilities, since the country doesn’t have anywhere near enough of these. Other interesting outpatient sub sectors include fertility – an area which isn’t as taboo as it once was – mental health, aesthetics, primary care centres and dentistry. The dental market is seeing a big growth in demand, reaching $2bn revenue in 2022. There are also major opportunities on the digital health side, especially given Saudi Arabia is one of the only countries in the world where teleconsultations are reimbursed by insurers.
On the question of why Saudi Arabia is seen by many as an attractive place to invest in, Shukla highlighted robust demand, support from the government, and the fact that the country is still in the early stages of its evolution: “It might sound like it’s too early to go in, but I think that’s where the biggest opportunity is.”
Sandeep Sinha, head of healthcare and life sciences strategic consulting MEA at multinational real estate services group JLL, added that over the last five to six years a lot of planning has gone into the government’s big PPP projects outlined in its Vision 2030 plan, and that all of these projects are now at the implementation stage.
The third speaker on the panel, Fatih Gul, CEO at Dr. Soliman Fakeeh Hospital in Jeddah, highlighted the transformative changes to the regulatory regime that has happened over the past few years, saying: “Before it was not investment friendly. It took a long time to understand how the system worked, but now it is much better.” This was a theme which came up a lot at the HBI 2023 session on investing in MENA. Dr Soliman Fakeeh Hospital is part of Saudi Arabia’s fourth largest hospital group – the Fakeeh Care Group. The Fakeeh Care Group has recently won a number of the Vision 2030 PPP projects, including emergency care in Jeddah and acute services in Neom (a futuristic new city which construction has started on).
Despite regulatory reform having made investment into the sector a lot easier than five years ago, there are still some restrictions which could be viewed as challenges. Perhaps the most notable one is the ‘Saudization’ policy, which requires a certain percentage of employees (usually 50%) to be Saudi nationals for companies above a certain size. However, Gul was very clear that he sees this as a positive rather than a barrier.
He said: “As a hospital CEO my job is to manage and operate local operations. I prefer to have more locals working for me, because it helps with engagement with patients. Patients want to see people like them, speaking their native language. I see this as very important for health care. In many cases we don’t need to go abroad to hire because there are a lot of very highly qualified people in Saudi Arabia. Education initiatives have helped with this. As an employer I don’t see Saudization as a challenge – but an opportunity.”
Shukla added that, for international groups looking to go into the market on the opco side, he would recommend partnering with a local partner who knows how things are done in the country, “and being flexible and adaptable, because things are changing very fast – changing for the good!”
HBI members can access a recording of the session here (please make sure you are logged in to access).
We would welcome your thoughts on this story. Email your views to Martin De Benito Gellner or call 0207 183 3779.
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