Reimbursement Methodologies in Saudi Arabia and United States

Healthcare systems around the world use a variety of funding and reimbursement mechanisms,
which affect the quality and accessibility of care as well as overall healthcare expenditures. The
purpose of this discussion is to compare healthcare reimbursement procedures in Saudi Arabia
and the United States (U.S.), two nations with diverse healthcare systems, and to evaluate the
need for more public and private investment in Saudi Arabia's healthcare sector.

Saudi Arabia's Healthcare Payment System

The Ministry of Health (MOH) oversees Saudi Arabia's primarily publicly funded healthcare
system. The funding comes mostly from the government's general budget, which is primarily
supported by oil earnings. Healthcare services are provided at no cost at the point of delivery,
ensuring that all citizens and residents have equal access. Other government agencies and the
commercial sector supplement the healthcare system in the country (Almalki, Fitzgerald, &
Clark, 2011).

The diagnosis-Related Group (DRG) system is the principal reimbursement methodology in

Saudi Arabia. This approach categorizes patients based on characteristics including as diagnosis,
procedures, age, gender, and the occurrence of problems or comorbidities. Each group receives a
predetermined payment rate, which aids in the regulation of healthcare costs (Albejaidi, 2010).

The benefits of the Saudi healthcare system include universal healthcare access and cost control
via the DRG system. It does, however, provide certain difficulties. The quality of care, for
example, can differ dramatically between public and private providers. Furthermore, the system
is primarily reliant on government funding, which may prove unsustainable owing to fiscal
difficulties caused by oil price volatility.

Model of Healthcare Reimbursement in the United States

In contrast, the United States has a mixed healthcare system with strong private sector
involvement. Private insurance is critical, and it is supplemented by government programs such
as Medicare for seniors and Medicaid for low-income individuals and families. Fee-for-service
reimbursement, capitation, bundled payments, and value-based payments are all options
(Chernew & Newhouse, 2011).
The healthcare system in the United States allows patients to select their healthcare providers,
stimulating competition and innovation in healthcare delivery. However, it is also the most
expensive in the world, resulting in substantial out-of-pocket expenses for many patients. Despite
healthcare reforms, millions of Americans are still uninsured or underinsured, highlighting the
importance of access to healthcare.

The Need for More Public and Private Funding in Saudi Arabia

Given Saudi Arabia's Vision 2030, which aspires to diversify the country's economy away from
oil, increasing private sector involvement in healthcare may benefit the kingdom. More private
investment could relieve some of the strain on state resources, boost competition, improve care
quality, and foster innovation in the healthcare industry (Eljilany & El-Dahiyat, 2019).

Such a change, however, must be carefully managed in order to retain universal access while
improving quality and efficiency. As witnessed in the United States, a hasty or poorly planned
shift toward increasing private funding could result in higher healthcare prices and less access.
As a result, further study is needed to investigate viable models for private sector engagement
that balance access, quality, and affordability (Albejaidi, 2010).

To summarize, while both Saudi Arabia and the United States have distinct strengths and
weaknesses in their healthcare reimbursement structures, they provide useful insights to one
another. Finding a balance between public and private finance while ensuring universal access is
a critical step toward a sustainable and functional healthcare system in Saudi Arabia.

References:

Almalki, M., Fitzgerald, G., & Clark, M. (2011). Health care system in Saudi Arabia: an
overview. Eastern Mediterranean Health Journal, 17(10), 784-793.

Albejaidi, F. M. (2010). Healthcare system in Saudi Arabia: An analysis of structure, total quality
management and future challenges. Journal of Alternative Perspectives in the Social Sciences,
2(2), 794-818.

Chernew, M., & Newhouse, J. P. (2011). Health care spending growth. Handbook of health
economics, 2, 1-43.
Eljilany, I., & El-Dahiyat, F. (2019). Understanding the factors influencing healthcare providers'
burnout in the Kingdom of Saudi Arabia: a qualitative investigation. The International journal of
health planning and management, 34(4), e1784-e1794.

Reply1:

Hello Salem, In order to ensure that people have access to required medical services, let me
make sure that healthcare reimbursement is crucial. Public and private entities are contributing
equally to the cost of this collaborative initiative. All citizens are guaranteed access to
fundamental medical care thanks to publicly sponsored services. Private health insurance is
supplementary because it provides more flexible and adaptable coverage options. It is essential to
strike this balance so that preferences of all users can be met. Overreliance on private insurance,
however, could lead to inequalities in healthcare access and must be avoided at all costs. A strong
and fair healthcare reimbursement system relies on finding that sweet spot.

Baicker, K., & Glied, S. M. (2017). Value-based payment in healthcare: A review of the
evidence. JAMA, 318(19), 1919-1928.

R2

The move toward privatizing Saudi Arabia's healthcare system is a major reform aimed at easing
the country's strained public finances. The government has played a crucial role in providing
citizens with affordable healthcare during the pandemic and the treatment of chronic diseases,
but this cannot continue indefinitely, especially given the country's emphasis on technical
breakthroughs. Involving commercial businesses in healthcare delivery is a strategic approach
towards distributing costs more evenly between the public and private sectors. While this shift
could result in higher healthcare expenditures for the general public, it also has the potential to
spur industry-wide innovation and efficiency. The government of the KSA is working to strike a
balance between the two competing goals of providing universal healthcare and maintaining
fiscal stability.

Alammari, A., & Al-Huthaili, A. (2022). The impact of digital payments on the Saudi
economy. Journal of Economic Studies, 49(4), 860-877.