The Saudi insurance market will get a big boost when the Cooperative Health Insurance Law is applied to Saudis working in the private sector as well as to expatriate workers.
The law calls for the formation of a health insurance council under the chairmanship of the Minister of Health. This council will supervise the application of the new system, which is designed for expatriates residing in the Kingdom but may later be applied to Saudi nationals. It will be the regulatory body that will oversee and implement the health insurance operation.
Currently, the law stipulates that sponsors of expatriates must enroll them in the system. The council will determine the rights and duties of the sponsor, the beneficiary, the insurance companies and the health providers (clinics, dispensaries, and hospitals), and the appropriations for the cooperative insurance organization that administers the system on behalf of the State.
The health insurance market, estimated at SR 8 billion, is expected to reach SR 18 billion mark within the next five years. The Saudi Arabian Monetary Agency has reported a 9.8 percent increase in the Kingdom's medical insurance to SR 260.9 million last year.
The scheme will be applied to expatriate workers and their families in three phases. In the first phase, companies that employ 500 or more expatriate employees will implement the scheme for their expatriate staff. In the second phase, the scheme will be applied to expatriate employees in companies employing more than 100 foreigners, while in the third stage it will be applied to all companies and all expatriates, including domestic servants.
The scheme, which was approved in 1999, will be eventually applied to the remaining Saudis within three to five years. Health providers - clinics, hospitals and specialized medical institutions - and insurance companies, however, have expressed doubt regarding the implementation of the scheme by next year. They said the cooperative health insurance program could possibly take effect only after the proper linkages have been established between all the parties involved in its implementation.
They say insurance firms have to be electronically linked to hospitals and clinics in order to streamline the operation and rendering of services. A database has also to be established between insurance companies and health service providers.
"We believe it will take effect only after the linkage with the Iqama of the workers is accomplished. This is a very big task, considering that there are about six million expatriate workers in the Kingdom," said Mr. Mansour M. Almana, Vice Chairman of the Almana General Hospitals, the largest group of health provider in the Eastern Province.
He said two things are very crucial in the implementation of the health insurance scheme. First, people covered by the plan must be insured first for the health services. Second, there must be control on the whole insurance operation. "What is going on at the moment is that there is no government control on health insurance. The rights, responsibilities and authorities of the three parties to the program, namely the patient, health provider and the insurance company, have not been outlined yet, which results in many problems, not only in the payments and financial rights, but also on the care and management of the patient."
He said that because there is no arbitrator to arbitrate between the parties, the delivery of services could be effected. "If a patient goes to a hospital and the treating doctor selected the best line of treatment and his or her insurance company objects, then the treatment may be affected," Mr. Almana explained.
Furthermore, in the treatment of emergency cases, by law the health providers are obliged to accept and treat the patients. However, it is not uncommon to find patients unable to pay the expenses or the insurance refusing to cover the case on different basis like pre-existing conditions, according to Mr. Almana.
Almana Hospitals has very good experience in the field of health insurance, according to Mr. Almana. "We have been dealing with the health insurance scheme for years and we are confident we will be able to deliver the best services once the health cooperative insurance system is finally implemented as required by the law."
In the Eastern Province, there are about 20 health providers, including the Almana Hospitals, ready to implement the cooperative health insurance program. Almana Hospitals has four branches in Al Khobar, Dammam, Jubail and Hofuf and a dispensary at the Second Dammam Industrial City.
Regarding the participation of government hospitals in the treatment of private employees for a fee, private health providers feel this is controversial, according to Mr. Almana. "The issue whether government hospitals should share with the private sector in their business is highly controversial," he stressed.
"For one, the private sector would not be able to compete with the prices of government hospitals considering that their (government hospitals) payroll, materials, medicines and the cost of services are shouldered by the government.
Therefore government hospitals can make the cost of their service very low," Mr. Almana explained.
Many of the private sector health providers may not welcome the idea of government hospitals engaging in the private business while they spent lots of investments to establish themselves, he added.
Health providers told the SAUDI COMMERCE they want insurance companies to follow and implement the following measures:
* To be professional in the management of the care program.
* Make regular payment and reconciliation.
* Standardize their operation procedures.
* Standardize their minimal coverage.
* Come out with standard definition and agreed terminology which all of them will follow and implement.
All expatriate workers must be insured and covered at the three levels of health services - primary (clinics), secondary (hospitals), and tertiary (specialist hospitals).
Hospitals also want insurance companies to be properly regulated. In addition to the rules and regulations, insurance companies must have legal sponsorship and assets to make sure that the rights of the community - the insured and the hospitals - are protected and guaranteed.
"Health insurance would be the future of the professional medical services, and proper control and regulations would be the best move for a success," Mr. Almana said.
Dr. B. Vijayakumar, physiatrist and officer-in-charge of the health insurance scheme of Astoon Hospital, said the implementation of the scheme would increase the rejection of claims of health providers by health insurance companies. He urged the reduction of the number of insurance companies to "a good quality number" in order to avert the rejections.
"In our experience in dealing with our 15 or more insurance companies, we have had problems because of rejection. With more people getting the benefit of the health insurance, once implemented, we expect more rejections by the insurance companies, including the big ones," Dr. Vijayakumar said.
© Saudi Commerce and Economic Review 2005
