The health-care sector is one of the largest in the region in terms of expenditures, size, activity and potential. Annual spending on health care is estimated at $18 billion, 76% by the Saudi government. The government has allocated $16.3 billion for the healthcare sector in the 2010 budget. The funds will be used to finance 92 new hospitals with 17,150 beds and additional Primary Healthcare Centers (PHC) and to renovate an additional 22 hospitals.
With an annual population growth rate of 2.5% to 3%, Saudi Arabia would require an additional capacity of around 47,000 beds for a total population of over 37 million by 2020, driven by an ageing and increasingly wealthy population seeking more specialist healthcare treatments. Demand for hospital beds and a health care service is increasing by 4.6% annually. At the very least, 11 new hospitals (average 200 beds per hospital) need to be built per year to keep pace with population growth. Hospital beds are likely to grow from 53,519 to 70,000; demand for physicians is expected to rise from 40,000 to 54,000 - and the number of hospitals will likely rise from 387 to 502.
The high budgetary allocation valued at $16.3 billion for healthcare sector and new health projects, expansion and growth of existing hospitals and clinics, privatization, compulsory healthcare insurance, the aging population, and greater material wealth along with an upsurge in lifestyle diseases and favorable government policies all combine altogether to b oost the demand for healthcare services and, thus create the environment for purchases of new medical equipment and increased investments in these sectors.
The following sectors and sub-sectors provide an excellent potential for U.S. companies: Patient beds; Monitoring equipment; Hospital disposables; Operating-theater instruments; Oxygen generators and related components; Rehabilitation equipment and accessories; Diagnostic equipment and components; Electro-medical equipment; M edical X-ray equipment; O ptical microscopes and related components; D ental or veterinary devices; Therapeutic appliances; Orthopedic appliances; A rtificial body parts; G lucometers and blood-pressure devices; M edical laboratory equipment.
Affluence has also affected lifestyle of Saudis bringing with it diseases such as obesity, diabetes and coronary diseases. A large and growing population of smokers — compounded by desert climatic conditions — has led to a rise of pulmonary and breathing diseases, as well as lung and throat cancers. Other major diseases of concern include breast cancer and kidney diseases.
• 50 % of the Saudi population above the age of 45 is diabetic and $1.1 billion is spent annually on the treatment of diabetes;
• 22 % of the population are regular smokers (a major cause of respiratory diseases);
• high prevalence of hepatitis C and B (around 30% of the population is afflicted);
• heart diseases are increasing at an average 5.3% annually and expected to consume up to 24% of total health-care expenditures;
• over 11,000 Saudis a year experience some form of kidney failure, and 40 % of these are in urgent need of kidney transplantation.
The Saudi private sector was the largest contributor to growth in the number of hospital beds over the past 10 years, in line with the government restructuring strategy, which will convert government hospitals into private entities in the form of a public-private partnership to maximize system efficiencies and raise the overall standard of care.
In addition to the Ministry of Health’s annual requirement for equipment and instruments, the Arabian Gulf countries also present excellent opportunities for U.S. companies to participate in a six-country annual bid for various items, including: Medicines; Vaccines; Chemicals; Insecticides; Radiopharmaceuticals; Renal dialysis equipment and supplies; Dental supplies; Laboratory instruments and disposables; Orthopedic and spinal rehabilitation equipment, and; Cardiovascular treatment and rehabilitation equipment.
The above tenders are offered annually and the Secretariat General of the six-nation Health Ministries will usually communicate directly with foreign vendors.
To cope with an increasing number of healthcare providers and patients, the MOH is envisaging the establishment of a national electronic records system for healthcare, which will create enormous opportunities for health systems integrators and specialists in this field.
A major regulatory development was enacted to allow foreign companies to invest in 150-bed Saudi hospitals, which may open the door for American companies to gain a toehold in the market, and take advantage of opportunities and growth prospects in this sector.