SAUDI ARABIA - Finance
Secretary General, the Council of Cooperative Health Insurance (CCHI)
Dr. Abdullah bin Ibrahim Al-Sharif has been the Secretary General of the Council of Cooperative Health Insurance since 2006. From 2003 until 2006, he was the Assistant Deputy Minister for Curative Medicine, before which he was the Director General of Health Affairs for the Riyadh Region. From 2001 until 2003 he acted at the Director General of Hospitals in the Ministry of Health, and between 1997 and 2001 he was the Director General of Health Affairs for the Asser Region. He has also been the Director of the Alamal Hospital Dammam and Director of Qatif General Hospital. He obtained his Bachelor’s degree in Medicine and Surgery from King Saud University and a Master’s in Health Administration from Washington University in Saint Louis, Missouri.
The health insurance law was announced by the Saudi Arabian Royal Cabinet in August 1999, and the law aims to cover everyone working in the private sector, be they Saudi or non-Saudi nationals—around 12 million people are targeted by this law. It does not cover public-sector workers. The health insurance system constitutes around one-third of the Saudi health system. The Council of Cooperative Health Insurance (CCHI) is an independent governmental agency that seeks to govern the lawful rights of the insured. The main stakeholders are health insurance companies, employers, who pay the health insurance premiums, and the healthcare providers. The CCHI’s task is to ensure that the law is carried out to the satisfaction of those covered. Healthcare service providers, including public and private healthcare facilities such as Ministry of Health hospitals, have to register with the CCHI to be eligible to treat insured patients. The Minister of Health chairs the CCHI board, which consists of 10 council members. The CCHI shares responsibility with the Saudi Arabian Monetary Agency (SAMA). SAMA regulates the insurance companies as a financial entity; they regulate and control the financial aspect of the health insurance sector, including the solvency issue. SAMA applies the insurance companies’ law. The employers are fundamental stakeholders. The CCHI deals with other stakeholders, too, and they’re represented on the board. They are the Ministers of the Interior, Health, Finance, Labor, and Trade, the Chamber of Commerce, government healthcare providers, and the insurance sector. The CCHI expects groups to be targeted for health insurance, such as visitors to Saudi Arabia, whether for business, leisure, or educational purposes. Another issue is universal health insurance, which is awaiting a government decision. There will be health insurance for the remaining two-thirds of the population. It would be a social health insurance system, like those we see in Europe.
When the law was created in 1999, it was applied to non-Saudis working in the private sector, stipulating that it might later include Saudis working in the private sector as well. That amendment came through in 2003 or 2004, and it was up to the CCHI to implement it. We started with the big companies, working our way down through medium to small companies, because we didn’t want a bottleneck and we wanted our tools to be ready for everyone; we did it in a sequential way. We started with non-Saudis and their families, then Saudis and their families. The SAMA report can also give you a good idea of how the sector has grown and developed since implementation.
When we started the health insurance project, health insurance was not understood or accepted by some communities. Now, all forms of insurance are becoming accepted, though the penetration and density is still very low compared to international standards. That means there’s a lot of potential to develop the sector.
There cannot be any non-Saudi private healthcare providers in Saudi Arabia. The insurance companies must be Saudi by law and must have a minimum capital requirement of SAR100 million within the country. The company has to be at least 51% Saudi owned, meaning a maximum 49% foreign owned. However, we still see strong potential for major multinationals in Saudi Arabia.
Rather than a change of regulation, there might be some additional regulations regarding that. Foreign investment is a good thing: until mid-2013 foreign investors were not allowed to invest in hospitals. Things are changing, but presently foreign investors can only invest in hospitals. The government no longer wants to send people abroad for treatment. The government is thinking of buying services from the private sector, and they want to work with those who know the business. There’s a lot of opportunity in this area. When the international hospitals open, they will be fit for medical students. We used to have eight medical schools, now we have more than 24. There’s great demand for training centers, at both the undergraduate and post-graduate levels. To sum up, private companies will have the opportunity to sell their services to the government at a reasonable price. They will provide a genuine private business model, offering services that will keep people from having to seek treatment abroad, as well as offer training services for students.
We’re not just tasked with implementation of health insurance laws and regulations; we’re also considered a reference body for all issues related to health insurance. In addition, we are expanding our services to customers. In five years we hope to have new tools to insure more people and provide the best quality of insurance possible for them. For this reason we’ve developed a huge program called the Saudi Health Insurance Bus (SHIB). It’s a purely electronic IT hub through which all transactions will pass regarding healthcare providers and insurance companies. We’ll be using national standards for communication between these agencies; we’ll be using international classifications of diseases, and we’re using the national drug code and the national Saudi health data dictionary. All these transactions will be in a coded format so we can serve and support people faster and more efficiently by extracting the indicators and indices for reviewing these statistics. Also, we will need to expand the customer relations department. We used to outsource customer services, but now we feel we need to have that in-house. We’re also preparing to move into a new building to support our continued expansion. As well, we will expand to include new groups, such as short-term, non-Saudi visitors. That may also include religious pilgrims who come for the hajj. One final project I’d like to mention is our work with the Saudi Council of Health Services to create a committee for developing health insurance. They will create a specialized curriculum in the health insurance field, in the form of a diploma. We’re also working with the Ministry of Higher Education to create a Bachelor’s and Master’s degree in health insurance in Saudi Arabia.
© The Business Year – February 2014
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