Saudi health care booms as state scrambles to close gap

RIYADH/DUBAI: Stock market listings planned by two of Saudi Arabias biggest private hospital operators point to a boom in its health care industry, as political pressures prompt the government to pour huge sums into the underdeveloped sector.

Many areas of Saudi consumption, including the retail industry, housing and travel, have ballooned in the past decade because of oil-fueled growth in national income. But health care has lagged, partly because of government inefficiency and bureaucracy.

Now the mediocre quality of state-run health care has become a political liability for the government, especially in the wake of the 2011 uprisings elsewhere in the Arab world, which underlined the risks of social discontent. Many Saudis complain about overcrowded hospitals and shortages of medications.

So the government has embarked on a drive to reform the sector, building hundreds of hospitals, providing interest-free loans to private companies and changing health insurance rules.

This could make Saudi Arabia the worlds fastest-growing major health care market over the next few years, helping to diversify the economy beyond oil and providing a bonanza to foreign companies selling medicines, equipment and services.

It is a case of chronic underinvestment and reactive over-expenditure, said Mohammad Kamal, an analyst at financial firm Arqaam Capital in Dubai.

The standard of Saudi Arabian health care provision has long contrasted with its wealth. The kingdom, which the IMF ranked 30th in the world by GDP per capita for 2012, has 2.2 hospital beds per 1,000 residents, according to Arqaam, lower than the global average of 3 and far below the average of 5.5 in developed countries.

Local newspapers routinely report complaints about issues such as overcrowding with some patients receiving intravenous drips in hospital corridors and poor hygiene and maintenance, resulting in pest infestations and infections.

Abdul-Karim al-Thobeiti, a Saudi engineer working in the public sector, said he would never set foot in a state-run hospital because they were either fully booked or poorly maintained.

If you want to make an appointment to see a doctor you have to wait for months, unless you have some connection or know someone who can pull a few strings, Thobeiti said.

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Saudi health care booms as state scrambles to close gap

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