A central plank of the plan is the long overdue transformation of the country’s healthcare sector. Despite its wealth, Saudi Arabia’s healthcare system requires improvement. Life expectancy is 75 years; in most western European countries it is over 80. The Kingdom’s infant mortality rate is double that of most western countries, a worrying figure given the government’s enormous resources.
The Kingdom’s numerous healthcare challenges include rapid population growth and rising prevalence of chronic diseases, in particular obesity and diabetes. Overcrowding in public hospitals and a poor ratio of physicians and nurses to patients place infrastructure under great stress. A heavy reliance on foreign labour brings high staff churn and greater instability.
If the government accomplishes effective reform of the healthcare system it will stimulate economic growth by making the population more productive – countries with weak health and education conditions find it harder to achieve sustained growth.
The WHO has estimated that a 10% improvement in life expectancy at birth translates to a rise in economic growth of 0.3-0.4% a year.
Tackling diseases of later life also makes economic sense. US studies show a 1% reduction of cancer deaths brings $500bn of societal value, through improved quality of life and greater economic productivity due to longer life expectancy.
To embrace its future, the Kingdom must harness the power of new technology and private sector efficiencies in the pursuit of good health.
This renewed interest in healthcare within the National Transformation Plan is a welcome recognition of its potential to help unlock economic growth.
So far, the details look promising. A far greater role for the private sector as a government partner will help to build healthcare capacity, improve primary and secondary care, reduce waiting times and improve overall quality and safety.
The Kingdom wants regional neighbours and international partners to invest more in healthcare facilities and capacity. The digitisation of medical records and introduction of more information technology solutions should also increase the productivity of healthcare providers.
These are all solid reform ideas that will help modernise Saudi healthcare and help patients.
A wealthy country like Saudi Arabia should also be promoting access to innovative medicines to achieve its healthcare goals. Research by Columbia University economist Frank Lichtenberg shows new medicines accounted for 73% of increases in life expectancy in the US between 2000 and 2009.
Counterintuitively, the use of new medicines can limit overall healthcare costs, by keeping people out of hospital and preventing surgery. Prof Lichtenberg has calculated that new medicines typically save six times their cost, mostly through reduced hospital and physician office-visit expenditures.
The inability of the drug regulator, the Saudi Food and Drug Authority, to approve new medicines in a timely manner has always affected the healthcare sector. It can take 18 months for a new medicine to get the Saudi rubber stamp, even though a new medicine may be already approved by international regulators as safe and effective.
The Kingdom stands out as one of the region’s slowest to approve drugs; only Egypt takes longer, at five years. Neighbouring Bahrain takes just three months.
This bureaucratic inertia is denying thousands of Saudi patients access to newer medicines that could cure or manage their symptoms. For cancer patients, these delays could be fatal.
Late last year, Saudi FDA officials announced that they would adopt a system that bases new drug approvals on decisions already made by EU or US regulators. The reform due to come into force this month, is good news and will decrease review times by more than 90%.
In what looks like a sensible outbreak of reform in the Middle East, Jordan and Egypt are considering doing the same thing.
While no substitute for the health reforms in the 2030 plan, simple regulatory reforms like this will help patients get faster access to medicines with barely a Riyal spent. In fact, the policy could end up saving money by keeping more people out of hospital.
As it looks beyond an oil economy, the Kingdom is facing health pressures from all sides: an ageing population, growing rates of obesity and chronic disease, and a cash crunch as public budgets shrink. To embrace its future, the Kingdom must harness the power of new technology and private sector efficiencies in the pursuit of good health. It has certainly made a good start.
Philip Stevens is director of Geneva Network, a U.K.-based research organization focusing on international trade and health issues