Privatization of Saudi Healthcare Facilities: Is it a Good Strategy?

A.K. Alhowaish, A.Y. Shinawi
Abstract: This study investigates the general growth pattern of hospitals as a central component of the healthcare delivery system in Saudi Arabia as well as the distribution of private versus public hospitals, beds, physicians, and nurses with respect to the population characteristics of Saudi regions. The results revealed that the redistribution of public hospital care facilities toward periphery and emerging regions is at the expense of population needs in the core regions. The core has the lowest number of beds per 1,000 people and the lowest numbers of physicians and nurses per 10,000 people compared with emerging and periphery regions. In addition, the results revealed that the existing spatial distribution of private hospitals does not ful?ll either the need for healthcare facilities or the form of competitive healthcare markets in Saudi Arabia, despite a government subsidy policy. There is a significant gap between the population and private hospital resource ratios in the emerging and periphery regions, since private hospital construction could not keep up with rapid population growth. The regression analysis suggests that the level of competition is quite different in public versus private hospitals, which form two different geographic markets. Public hospitals tend to be population oriented while private hospitals tend to be market oriented. Regional planners and healthcare policymakers should take into consideration the existence of not only private but also public hospitals alongside population needs within the complex of the Saudi regional system in order to balance the spatial distribution of healthcare facilities and form competitive public?private healthcare markets in Saudi Arabia.
Keywords: Privatization, Public, Private, Hospital resources, Spatial distribution, Needs, Saudi healthcare system, Research Paper, Economics, Saudi Arabia
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