Health insurance in Saudi Arabia: funding options to manage the risk of government healthcare spending

Abstract

The Saudi Ministry of Health’s budgets demonstrated a sharp continuous increase in the period from 2006 to 2015, putting high burdens on the government at a time when the economy suffered slow growth as a result of the plummet in oil prices. This research was conducted to provide a solution for the Saudi government to ensure the sustainability of the Saudi public healthcare sector. This research started by investigating the major causes of the sharp increases in the Ministry of Health budgets, then explored the possible funding options existing in other economies to find the most suitable options that meet the Saudi context. Afterwards, this research investigated the attitudes of Saudi residents towards paying for their healthcare services, and the most preferred method to pay through. Finally, this research estimated the maximum value that people in Saudi Arabia are willing to pay for their healthcare services. This research collected data from the Saudi Ministry of Health books, the Saudi Central Bank, the Saudi General Authority for Statistics, and reports from the Saudi Ministry of Finance. Also this research collected survey data from a subset of the population of Saudi Arabia from different areas, and at different times. This research found that the weak strategy used by the Saudi Ministry of Health for estimating the necessary budgets was the main reason for the continuous increase in the Ministry of Health budgets. Moreover, it was found that Taxation, Medical Savings Accounts, and Private Health Insurance are the most suitable funding options according to the Saudi setting and needs. When people’s decision to participate was investigated, the majority were willing to take part, and it was found that nationality, the possession of Private Health Insurance and the eligibility to healthcare influenced people’s decisions. Moreover, it was found that the majority prefer to pay via Private Health Insurance or Medical Savings Accounts, and it was found that gender, health status, education, and the available access to healthcare affected people’s preferences. Finally, when people’s maximum willingness to pay was examined, it was found that the majority are willing to pay 2.7% on average from their total income, and it was found that gender, nationality, employment, education, chronic diseases, age, marital status, having Private Health Insurance, and the access to healthcare services influenced people’s willingness to pay. This research suggests that the population of Saudi Arabia participate in funding their own healthcare services through either Private Health Insurance or Medical Savings Accounts at percentages which meet their willingness to pay.