The Impact of Privatizing Health Insurance
on the Utilization of Medical Services
in the Kingdom of Saudi Arabia
Mamdouh Hamza Ahmed and Turki Abdullah AL Amri
Abstract
The objectives of this research are to evaluate the effect of
privatizing health insurance on medical services utilization in the city of Riyadh, The Kingdom of Saudi Arabia
(KSA), and to determine whether the utilization of health
care services’ behaviors differs according to the availability of private health insurance coverage’ compared
with unavailability of private health insurance coverage.
This study employed a self-administered questionnaire to
collect data from privately insured and non-privately
insured individuals in Riyadh, KSA. The questionnaire
was designed to collect data on some variables related to
health services utilization and demographic factors. This
research showed that there are no significant static
differences in the utilization of medical services between
individuals with or without private health insurance
coverage except for nationality. This research concludes
that privatizing health insurance in KSA will not affect the
utilization of medical services in the presence of governmental or public coverage for citizens, i.e., the behaviors
will not differ according to the availability of private
health insurance coverage compared with the unavailability of private health insurance coverage.
Keywords
Health insurance Á Service providers Á Utilization Á
Privatization Á Medical services
1 Introduction
In 2005, health insurance was made compulsory for all
non-Saudi nationals working in the country under the
Cooperative Health Insurance Act No 3 & 4. In 2008, this
act was extended to include Saudi nationals working for the
private sector. Enforcements of this compulsory coverage
include fines for noncompliant companies and a refusal to
renew working permits without health insurance.
The Saudi government has given health care services a
high priority. During the last two decades, health care services have improved in all aspects. The Saudi government
provides all citizens full and free access to all public health
care services. Funding for these health care services is a
central challenge faced by the Ministry of Health (MOH)
(Country cooperation strategy for WHO and Saudi Arabia
2006–2011). Since the total expenditure on public health
services comes from the government and the facilities are
free of charge, this leads to considerable cost pressure on the
government, mainly because of the fast increase in the
number of Saudi nationals, the high price of new technology,
and the growing public awareness about health and disease
among the community (General Authority of Statistics
(GAS) 2008). The census shows that in the mid of 2018 the
population was 33.4 million, out of the 22.7 Saudi nationals
and 10.7 expatriates, where the last official census in 2010
showed that the population was 27.1 million (Walston et al.
2008). This considerable growth increases the demand for
health services, which needs in parallel growing of funding
and financing for medical services to meet this huge demand.
Saudis and public sector expats are eligible for a comprehensive package of benefits including, public health,
preventive, diagnostic, and curative services and pharmaceuticals with few exclusions and no cost-sharing. Most
services including state-of-the-art cardiovascular procedures,
organ transplants, and cancer treatments (including bone
marrow transplants) are covered. Sponsors/employers are
M. H. Ahmed (&) Á T. Abdullah AL Amri (&)
The American University in the Emirates, Dubai, UAE
e-mail: mhahmed@yahoo.com
T. Abdullah AL Amri
e-mail: T-al3mri@hotmail.com
© Springer Nature Switzerland AG 2020
M. Mateev and J. Nightingale (eds.), Sustainable Development and Social Responsibility—Volume 1,
Advances in Science, Technology & Innovation, https://doi.org/10.1007/978-3-030-32922-8_25
255
on the Utilization of Medical Services
in the Kingdom of Saudi Arabia
Mamdouh Hamza Ahmed and Turki Abdullah AL Amri
Abstract
The objectives of this research are to evaluate the effect of
privatizing health insurance on medical services utilization in the city of Riyadh, The Kingdom of Saudi Arabia
(KSA), and to determine whether the utilization of health
care services’ behaviors differs according to the availability of private health insurance coverage’ compared
with unavailability of private health insurance coverage.
This study employed a self-administered questionnaire to
collect data from privately insured and non-privately
insured individuals in Riyadh, KSA. The questionnaire
was designed to collect data on some variables related to
health services utilization and demographic factors. This
research showed that there are no significant static
differences in the utilization of medical services between
individuals with or without private health insurance
coverage except for nationality. This research concludes
that privatizing health insurance in KSA will not affect the
utilization of medical services in the presence of governmental or public coverage for citizens, i.e., the behaviors
will not differ according to the availability of private
health insurance coverage compared with the unavailability of private health insurance coverage.
Keywords
Health insurance Á Service providers Á Utilization Á
Privatization Á Medical services
1 Introduction
In 2005, health insurance was made compulsory for all
non-Saudi nationals working in the country under the
Cooperative Health Insurance Act No 3 & 4. In 2008, this
act was extended to include Saudi nationals working for the
private sector. Enforcements of this compulsory coverage
include fines for noncompliant companies and a refusal to
renew working permits without health insurance.
The Saudi government has given health care services a
high priority. During the last two decades, health care services have improved in all aspects. The Saudi government
provides all citizens full and free access to all public health
care services. Funding for these health care services is a
central challenge faced by the Ministry of Health (MOH)
(Country cooperation strategy for WHO and Saudi Arabia
2006–2011). Since the total expenditure on public health
services comes from the government and the facilities are
free of charge, this leads to considerable cost pressure on the
government, mainly because of the fast increase in the
number of Saudi nationals, the high price of new technology,
and the growing public awareness about health and disease
among the community (General Authority of Statistics
(GAS) 2008). The census shows that in the mid of 2018 the
population was 33.4 million, out of the 22.7 Saudi nationals
and 10.7 expatriates, where the last official census in 2010
showed that the population was 27.1 million (Walston et al.
2008). This considerable growth increases the demand for
health services, which needs in parallel growing of funding
and financing for medical services to meet this huge demand.
Saudis and public sector expats are eligible for a comprehensive package of benefits including, public health,
preventive, diagnostic, and curative services and pharmaceuticals with few exclusions and no cost-sharing. Most
services including state-of-the-art cardiovascular procedures,
organ transplants, and cancer treatments (including bone
marrow transplants) are covered. Sponsors/employers are
M. H. Ahmed (&) Á T. Abdullah AL Amri (&)
The American University in the Emirates, Dubai, UAE
e-mail: mhahmed@yahoo.com
T. Abdullah AL Amri
e-mail: T-al3mri@hotmail.com
© Springer Nature Switzerland AG 2020
M. Mateev and J. Nightingale (eds.), Sustainable Development and Social Responsibility—Volume 1,
Advances in Science, Technology & Innovation, https://doi.org/10.1007/978-3-030-32922-8_25
255