The Ministry of Health of Saudi Arabia Management Report

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Executive Summary

The Saudi healthcare sector has experienced strong growth fueled by government and private investment. The ministry of health’s (MOH) vision and mission are aligned with the country’s desire to provide integrated quality care to all citizens. In this report, the PESTEL tool shows a favorable macro-environment and SWOT analysis of the MOH reveal specific strengths – high budget, strong growth, and skilled workforce – and weaknesses – inadequate local professionals and overdependence on medical imports. Opportunities exist in long-term care (LTC) and pilgrimage health, while private competitors and staff turnover are threats. Using various matrices such as internal environment evaluation, specific objectives and strategies are recommended to drive organizational growth.

The Ministry of Health (MOH) of the Kingdom of Saudi Arabia (KSA) oversees priority public health matters in the country, including comprehensive healthcare, disease control, and dental care services. As a result, it is well funded by the government. The modern MOH was created in 1950 through a royal decree to replace the Public Health Council founded in the 1940s to supervise all hospitals and healthcare personnel in KSA. The important milestones achieved in its history include the decentralization of healthcare to 20 districts and the establishment of the national insurance agency in 2018. It dominates the healthcare market, although private providers’ share of spending – through private-public partnerships (PPPs) – is rising. The key features of this industry include a high number of accredited private hospitals, a shift to digital health, and reliance on imported medical supplies. This report provides an analysis of Saudi’s MOH and recommends strategic choices for achieving organizational objectives.

Vision and Mission Statement

The MOH has the mandate of providing healthcare to all citizens. Its strategic vision is to deliver “best quality integrated and comprehensive healthcare services” through its programs and policies (Ministry of Health, 2020, para. 2). This declaration captures MOH’s priorities but does not indicate the target population. A good vision statement should be simple and specific, reflecting what an organization wants to become (David, 2011). Therefore, an alternative vision would be to provide unparalleled integrated and cost-effective healthcare for all citizens and communities. Its mission statement reads: “the provision of healthcare at all levels, promotion of general health and prevention of diseases, in addition to developing laws and regulations” for the sector (Ministry of Health, 2020, para. 4). It identifies the scope of MOH’s operations and priorities but does not include its values. A suggested mission statement is to arouse hope and promote wellbeing by delivering quality preventive and clinical care to all citizens and regulating healthcare services in KSA.

PESTEL and SWOT Analysis

Table 1: PESTEL Analysis

Political– The political environment in KSA is open and stable
– Political instability in its Middle East neighbors – Yemen
– Government promoting private sector growth through PPPs
– Saudization program – a restriction to investors
Economic– Largest economy by GDP in the Middle East
– Projected population boom (45.1m by 2050) will increase healthcare demand (Alomran, 2019)
– Economic diversification to reduce oil dependence
– Privatization of public hospitals
Social– Consumer acceptance of products/services tailored to Islamic culture
– A multicultural urban market due to expatriates
Technological– Adoption of advanced technology in all sectors
Environmental– Hot summer seasons disrupt operations
– Effects of climate change – erratic weather
Legal– Saudi nationalization scheme – expatriate-local workforce composition
– Stringent licensing/accreditation requirements for healthcare providers

Table 2: SWOT Analysis

HelpfulHarmful
InternalStrengths
  • Budget increase – MOH received SAR172bn in 2019, 8% more than the 2018 allocation
  • Strong growth – a rate of 12.5% annually by 2020 due to high chronic disease prevalence
  • Availability of expatriate healthcare professionals
Weaknesses
  • Inadequate local skilled workforce
  • Dependence on medical imports – drugs
ExternalOpportunities
  • Growing demand for quality healthcare, especially in Riyadh and Jeddah
  • Changing population needs – long-term care
  • Increased demand for specialized care
  • Religious travel – more hospitals are required in holy cities
Threats
  • A high number of private competitors
  • High turnover of professionals to private providers

Competitive Profile Matrix (CPM)

The profile of the major competitors of MOH and their strengths and weaknesses is presented in Table 3 below. Four rating values are used. They include 1 and 2 that represent main and minor weaknesses and 3 and 4 that denote major and insignificant strengths, respectively (David, 2011). From the CPM, the Armed Forces Medical Service is the weakest competitor with an aggregate score of 2.00.

Table 3: Competitive Profile Matrix

Armed Forces Medical ServiceSaudi Aramco Oil CompanyThe National Guard
Critical success factorsWeightRatingScoreRatingScoreRatingScore
Advertising0.2010.2020.4020.40
Product quality0.1030.3040.4020.20
Price competitiveness0.1020.2020.2030.30
Management0.1020.2020.2040.40
Financial position0.1530.4530.4520.30
Customer loyalty0.1020.2010.1030.30
Global expansion0.0510.0540.2040.20
Market share0.1010.1030.3030.30
E-commerce0.1010.1040.4020.20
Total1.002.002.652.60

External Factor Evaluation (EFE)

EFE evaluates the key factors identified through the macro-environment analysis. They include opportunities and threats to the organization (David, 2011). The EFE matrix relevant to MOH is presented in Table 4 below. The total weighted score of 2.75 is above the average value of 2.5. Thus, the healthcare sector is performing well, capitalizing on opportunities and evading threats.

Table 4: EFE Matrix for MOH

Key external factorsWeightRatingWeighted score
Opportunities
– Growing demand for quality care0.1030.30
– Projected growth in long-term care0.2540.20
– Increasing demand for specialized care0.1530.45
– Religious travel to holy cities0.1540.60
Threats
– Increasing private competition0.2541.00
– High workforce turnover to private hospitals0.1020.20
Total1.002.75

Internal Factor Evaluation (IFE) Matrix

The IFE tool quantifies the internal environment factors relevant to an entity. These factors are the strengths and weaknesses identified through SWOT analysis. The IFE matrix for MOH is presented in Table 5 below. The average weighted score of 2.50 implies that MOH’s strengths are a strategic advantage.

Table 5: IFE Matrix for MOH

Key internal factorsWeightRatingWeighted score
Strengths
– High budgetary/resource allocation0.2030.60
– Strong sector growth0.2020.40
– Expatriate healthcare professionals0.2540.20
Weaknesses
– Inadequate local medical personnel0.2541.00
– Dependence on imported drugs0.1030.30
Total1.002.50

Recommendations

Recommended Long-term Objectives

MOH has unique strengths that drive its performance. Opportunities in the long-term care segment exist due to a projected 9.5% increase in the number of people aged over 65 by 2035 and a high prevalence of obesity (Alomran, 2019). Therefore, MOH should align itself to meet future health needs of the citizens. The recommended strategic objectives include:

  1. To expand bed space to 20,000 by 2025 across KSA public hospitals with a particular focus on long-term care (LTC) facilities and nursing homes;
  2. Increase primary care clinics and diagnostic centers by 10% by 2022 to meet the demand for medical services by the increasing population;
  3. To hire 10% more trained local personnel, including nurses and dentists, by 2022 to drive MOH’s mission.

Recommended Strategies

Two strategies can be generated from the SWOT analysis: investing in workforce training and development (partnership with medical schools) and forming strategic alliances with medical device manufacturers and pharmaceutical firms. These actions will address MOH’s current weaknesses and prepare it for future growth in the sector. The recommended strategies based on the BCG matrix are hospital consolidation at each district to provide economies of scale in quality and LTC care and PPPs to expand primary care clinics to community settings. Based on the IFE matrix three alignment strategies are recommended. They include joint ventures with specialists and hiring skilled expatriate doctors.

Anticipated Issues

MOH has opened new facilities across KSA to meet the rising demand for healthcare in KSA. A management issue foreseen is a decline in quality care due to limited skilled workforce and turnover. Devolving personnel planning to the districts is recommended to enhance staff efficiency and satisfaction. MOH being a public not-for-profit entity, may not invest much in marketing. Ranking hospitals based on quality metrics is recommended to promote high-performing hospitals. A potential finance/accounting issue relates to disbursements to hospitals. Allowing facilities to procure medical supplies based on individual needs is recommended. MOH’s dependence on imported medical supplies may stifle R&D efforts. Strategic alliances with pharmaceutical firms in research will help address this issue. CIS issues may include unauthorized access to patient information and cyber-attacks. Adopting tighter securing controls is recommended to resolve these problems.

Recommended Procedures

  1. Strategy review – examining the bases of the strategic choices (MOH’s internal and external position);
  2. Evaluation – it will involve a comparison of expected and achieved results against the set objectives (bed capacity, facilities, and trained personnel yearly) to inform corrective actions;
  3. Control – regular audits of MOH facilities.

Reference List

Alomran, M 2019, ‘Implementation of strategic management practices in the healthcare sector in Saudi Arabia’, International Journal of Business and Administrative Studies, (5)3, pp. 131-144.

David, FR 2011, Strategic management: concepts and cases. 13th edn. Pearson Education, Upper Saddle River, NJ.

Ministry of Health 2020, About the ministry, Web.

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