2021-07-15 KIM Tae-Min, Riyadh, Saudi Arabia
– Saudi Digital Healthcare Takes a Step Further with VISION 2030 and COVID-1919 –
– A health care project that is being promoted in earnest around the smart city –
One of the industries that received the most attention in 2020 would be the healthcare* industry. In fact, as COVID-1919 spread, interest and investment in the healthcare sector were focused, and according to Aon Hewitt, an American management consulting firm, Saudi Arabia’s healthcare sector is expected to grow at an average annual rate of 2020% starting in 12.3 (FIT).
Note*: In a broad sense, it encompasses the treatment, prevention, and health management processes of diseases and refers to the overall health management system (Naver Knowledge Encyclopedia).
In fact, Saudi Arabia has been promoting the development of the health and healthcare industry as part of VISION 2020 since before the COVID-1919 pandemic in 2030. In particular, the Ministry of Health is making all-out efforts to develop the healthcare industry by utilizing the National Transformation Plan (NTP 2020) as detailed in the following objectives (FIT).
<Main Goals of the 2020 National Transformation Plan for Health>
1. Increase in private sector investment in health care budget
2. Expansion of medical facilities more than twice
3. International accreditation of Saudi general hospitals
4. Reduction of smoking and obesity-related patients among all patients
5. Improving disease prevention and rehabilitation services
6. Promotion of digital medical industry development
7. Promoting computerization of patient information
Source: 2020 National Reform Program (NTP), KOTRA Riyadh Trade Center
According to the Saudi Ministry of Finance (MOF)’s 2020 budget report, actual spending on health and social development in Saudi Arabia accounted for 17.7% of the total. This is a 446% increase (USD 14 billion) from the originally allocated budget (USD 507 billion), and it is estimated that additional costs were spent due to the variable of responding to COVID-1919.
Saudi Government Fiscal Expenditure by Sector in 2020
(Unit: SAR Saudi Riyal*, %)
Note*: local currency (US$ 1=SAR 3.744)
Source: Ministry of Finance
Healthcare Market Employment Sector
According to Arab News, a local Saudi media outlet, as of 2020, general doctors of Saudi nationality account for 33.0% of the total, and nurses (40.2%), dentists (40.4%), and pharmacists (24.6%) also have a low proportion of medical personnel. . As such, it is still dependent on the inflow of external medical infrastructure, but the ratio is gradually increasing as the Saudization (localization) policy implemented in 2018 encourages employment of its own citizens.
Source: Arab News
Saudi domestic hospitals and clinics
In 2020, the total number of hospitals reported in Saudi Arabia was 504, an increase of 1.2% compared to the same period last year. Of these, 337 or more are public hospitals, and 287 public hospitals directly managed by the Ministry of Health accounted for the majority. There were 167 private hospitals, accounting for 33.1%. As such, it can be seen that the healthcare industry in Saudi Arabia is still being promoted by the government.
Saudi Medical Institution Statistics for 2019-2020
(Unit: number of hospitals, %)
Source: Ministry of Health
Saudi Arabia revitalizes the 4th industrial revolution and healthcare industry
As the era of the 4th Industrial Revolution arrives, new products and services that combine technologies are emerging in many industries. As this trend overlaps with COVID-1919, the healthcare industry is also digitalizing existing services at a very fast pace. Saudi Arabia is also promoting the development of a digital healthcare industry based on VISION 2030, and is promoting digitalization in eight sectors based on the key words of non-face-to-face, monitoring, and artificial intelligence through convergence with various IT technologies.
1. Medical guidance system
2. Bio-monitoring devices and wearables
3. Non-face-to-face phone treatment
4. Home Medical Robot
5. Artificial Intelligence (AI)
6. Patient information sharing network
7. Non-face-to-face real-time biosignal monitoring
8. Bio-signal monitor
Types of Sectors Digitalizing Saudi Healthcare Industry
Source: Global Health Saudi
Furthermore, to effectively respond to COVID-1919, the Ministry of Health has launched a number of mobile healthcare applications. The most representative apps are Sehhaty and Tawakkalna, which have become essential apps for people living in Saudi Arabia as they connect all key COVID-1919-related activities such as PCR test booking, vaccination booking, and immunity status check.
Source: Sehatty, Tawakkalna
Saudi Medical Device and Drug Market Status
The Saudi medical device market is worth $2020 billion in 20 and is a promising market with an average annual growth rate of 10% (FIT). This is because, while consumer demand is increasing, the items that can be produced locally are limited to basic and general items. GE Healthcare, Mindray, Siemens, Phillips, Hitachi, etc. are leading the market, and local procurement for these high-performance devices is difficult to grow in the short term, so dependence on imports is expected to continue for the time being (Zawya).
The Saudi pharmaceutical market has seen massive investment since the COVID-1919 incident. The sovereign wealth fund (PIF) purchased a $2020 million stake in Pfizer in May 5 (Argaam), and in June 7850, Saudi pharmaceutical company Tabuk and Moderna signed an agreement for future vaccine supply and distribution (BusinessWire). In Korea, Celltrion is accelerating the use of its COVID-2021 antibody treatment, Rekirona, in the Middle East (Chosun Biz).
PPP (Public-Private Partnership) in the healthcare industry
In 2017, the Saudi Investment Agency (SAGIA) announced that 100% foreign investment in the health care sector is possible (Arab News) for growth of the Saudi health care sector and to create investment in the private sector. Since then, Saudi Arabia has been promoting health care projects in the form of PPPs, encouraging foreign investment inflows. In the case of a private independent project, since the risk of large-scale infrastructure projects is high, synergy can be created in that the government and the private sector can work together to share the risk with participating organizations.
The smart city, NEOM, is a typical example of such a project. It is also considering attracting medical tourists by focusing on disease prevention and well-being rather than simple treatment or treatment.
implication
As mentioned earlier, Saudi Arabia is a typical import market that still relies on imports for most of its industries due to its weak industrial base. Healthcare is also an industry that has had a significant tendency to do so, but it is striving to become self-reliant based on VISION 2030 and COVID-1919. The biggest advantage of this change is that it provides an opportunity to enter a new market by promoting the construction of factories and industrial complexes, rather than simply importing products and services.
According to Nurse B, who works at a local hospital, she senses that the proportion of domestic medical personnel is increasing compared to the past, but the overall demand for medical personnel is still high, so the possibility of medical advancement is high. In addition, as digital technologies such as non-face-to-face patient guidance systems and patient monitoring are also increasing within hospitals, it is predicted that changes in overall healthcare will be as radical as they are now.
Although Korea's traditional health industry such as pharmaceuticals and medical devices has a gap with global leaders despite its rapid growth, it has strengths in the health care sector. In management fields such as well-being and obesity management, it has achieved rapid growth based on high interest, and the number of countries seeking medical tourism or learning Korean technology is increasing. In this way, if the fields such as personal health, body shape management, bariatric surgery, and cosmetic surgery are localized according to local characteristics, opportunities will be discovered. In particular, fields such as health care, body shape management, and obesity management are judged to be open markets in that they can be conducted non-face-to-face. Consulting contracts of Furthermore, due to the nature of the Saudi health care industry, which is led by the government, if networking with government agencies is possible through smart city or project participation, the market expandability is higher and it is evaluated that it is worth considering entering the market.
Source: Ministry of Finance, Ministry of Health, Global Health Saudi, Flanders Investment & Trade (FIT), Zawya, NTP 2020, Saudi MedLab Expo, Aumet, Argaam, Business Wire, Chosun Biz, local media (Arab News, Saudi Gazette, etc.) ), KOTRA Riyadh Trade Center data synthesis