Privatization, Corporatization, and Public-Private Partnership in the Kingdom of Saudi Arabia

Abstract

There are different governmental reasons and technologies for seeking public-private partnerships throughout the developed countries. Significant motives have been to improve efficiency and risk distribution in comparison to traditional financing techniques and to lessen budget and borrowing limits. In this study, the movement toward privatization enhancing the efficiency of MoH’s hospitals has been assessed using Data Envelopment Analysis (DEA) from 1979 to 2020. Moreover, the efficiencies of the individual hospital were estimated through the DEA model, which includes: scale efficiency (SE), pure technical efficiency (PTE), and overall technical efficiency (OTE). In addition, factor affecting such efficiencies was analyzed through Tobit regression. The VRS results suggest that the numbers of hospitals benefiting from the complete corporatized phase are greater than those benefiting from the last phase (and vice versa in the case of DRS). The variance between inefficient hospitals in the less corporatized phase (2000-2020) was more prominent than in the fully corporatized phase (1988-1999). In conclusion, fully corporatized hospitals (on average) achieve relatively better overall efficiency. It is recommended that additional corporatization might be stimulated by a standardized set of performance measures, which cover both the quality criteria and economic efficiency measurements from a healthcare perspective.

Key aspects of the Saudi healthcare system reform and the potential impact on the main stakeholders: A qualitative study

“…Recently, four government ministries have either finalized or are in the process of finalizing agreements with specialized companies to offer medical insurance to their employees. 49 , 50 This move aligns with the objectives of Vision 2030 to enhance healthcare quality and promote competition among healthcare providers. By allowing foreigners to own or manage healthcare institutions, the Saudi government is attracting foreign investment and expertise, thereby supporting the goals of Vision 2030 for increased competition and a more efficient healthcare system.…”

“…By allowing foreigners to own or manage healthcare institutions, the Saudi government is attracting foreign investment and expertise, thereby supporting the goals of Vision 2030 for increased competition and a more efficient healthcare system. 8 , 49 In this study, the participants expressed that government reforms favor commercial insurance companies, as the privatization of different sectors and the requirement for semi-governmental sectors to insure their employees will expand the expected coverage. One participant stated, “We're moving more citizens into the private health insurance system by forcing employers to insure their employees.…”

“…Competition was identified as a factor that may influence prices, with higher competition potentially leading to higher prices. 49 One participant stated that “as competition goes higher, the prices go higher, too” (1–7M) but that competition provides better deals. Some participants noted that competition can lead to better prices and quality of services.…”