Privatization of healthcare means that the government contracts private companies to provide healthcare services instead of providing them itself. Privatizing healthcare does not necessarily save government funds and can lead to worse patient health outcomes. Furthermore, the two popular Public-Private Participation (PPP) models in the healthcare sector are the Build-Operate-Transfer (BOT) and the Design, Build, Finance, Operate and Maintain (DBFOM) model. The difference is that under BOT, the private sector entity constructs and operates the facility for a certain period before handing it back to the government. Conversely, under DBFOM, the private sector entity constructs and finances the project and operates and maintains it for an extended time. Privatization has negatively affected the healthcare system, while BOT and DTFOM models can positively influence healthcare growth and investment in the Kingdom of Saudi Arabia (KSA).
Privatization has led to increased spending on healthcare in KSA. For example, the government-owned healthcare provider, National Health Insurance Company (NHIC), became privatized (Christensen & Pilling, 2018). As a result, private insurers entered the market and began offering health insurance plans. This increased healthcare spending as people shifted from using NHIC-provided coverage to private insurance plans. Another example is the privatization of hospitals. Due to the fact that the government allowed for the establishment of private hospitals, there was an increase in the number of hospitals (Christensen & Pilling, 2018). As a result, an increase in healthcare spending was experienced since most private hospitals were mainly funded by owners who also wanted to make big profits, thus ending up overcharging patients.
Moreover, privatization has contributed to a decline in government investment in the Kingdom of Saudi Arabia. For example, since the 1990s, there has been a rapid expansion of private hospitals and clinics (Kisuule & Howell, 2018). This shift from the public provision of health services has resulted in increased costs for citizens, who now must pay out-of-pocket for care. The quality of care in the private sector is often lower than in the public sector, and there are long wait times for surgeries and other treatments in the private sector (Kisuule & Howell, 2018). Additionally, providers in the private sector often lack essential medical supplies and equipment. As a result of these shortcomings, many Saudis have turned to seek medical treatment outside of KSA, costing the government billions of dollars each year.
BOT, as the PPP model, is an important tool that can be used to encourage private-sector investment and growth in the healthcare sector in the Kingdom of Saudi Arabia. In particular, the BOT model can be used to attract foreign investors who may be interested in participating in Saudi Arabia’s healthcare market. Additionally, the BOT model can help to improve the quality of healthcare services in Saudi Arabia by encouraging innovation and competition among service providers (Al-Hanawi et al., 2020). By partnering with the private sector to operate and maintain healthcare facilities, the government can create an environment conducive to greater innovation, efficiency, and quality of care. In addition, this type of partnership can stimulate economic activity and create new jobs in the healthcare sector.
In addition, the DBFOM model can positively impact healthcare investment and growth in the Kingdom of Saudi Arabia. PPP is a contractual agreement between the public and private sectors in which the public sector contracts with the private sector to provide specific services or facilities (Alkhamis et al., 2018). The private sector typically brings financing, expertise, and resources to the table, while the public sector provides land or infrastructure and regulates the project. There are many benefits to using a DBFOM model for delivering healthcare services, including increased efficiency, improved quality of care, and reduced costs.
In conclusion, privatization has negatively impacted healthcare services in the Kingdom of Saudi Arabia. Privatization has led to increased healthcare costs since most private hospitals are privately funded and are much interested in making a profit, thus charging highly as compared to public hospitals, which the government funds. Additionally, BOT and DBFOM are the two Public-Private Participation (PPP) models for healthcare that positively impact healthcare investment and growth in KSA.
References
Al-Hanawi, M. K., Almubark, S., Qattan, A. M., Cenkier, A., & Kosycarz, E. A. (2020). Barriers to the implementation of public-private partnerships in the healthcare sector in the Kingdom of Saudi Arabia. Plos One, 15(6), e0233802. Web.
Alkhamis, A., Ali Miraj, S. S., Al Qumaizi, K. I., & Alaiban, K. (2021). Privatization of healthcare in Saudi Arabia: Opportunities and challenges. Handbook of Healthcare in the Arab World, 1865-1907. Web.
Christensen, K., & Pilling, D. (Eds.). (2018). The Routledge handbook of social care work around the world (1st ed.). Routledge.
Kisuule, F., & Howell, E. (2018). Hospital medicine beyond the United States. International Journal of General Medicine, 11, 65-71. Web.