Selected priority labor market demand interventions

Maximize oversight of working conditions and standards There must be proper regulatory oversight of the private sector to ensure that standards are upheld—quality standards as well as wage standards—and the private sector should be included in Saudi Arabia’s unified minimum wage scales.

SELECTED PRIORITY LABOR MARKET DEMAND INTERVENTIONS

This section discusses some of the main labor market demand-side interventions that should be prioritized in the future. The projections find that overall labor market demand (that is, financing) far exceeds the amounts needed to absorb the projected growth in Saudi physicians and nurses and is likely sufficient to absorb all health workers when 100 percent Saudization is considered or the retirement age is raised. Projected labor market demand reflects combined public and private sector labor market demand and the demand for both Saudi and non-Saudi nationals. These workforce dynamics explain why the modeled numbers far exceed the labor market demand needed from an epidemiological standpoint. What is clear is that the fiscal space for a particular submarket, such as the MOh only, may be substantially lower. In fact, the back-of-the-envelope calculation for MOh labor market demand has shown it to be much lower than overall labor market demand. In addition, with the majority of the Saudi nurse and physician supply expected to be flowing into MOh facilities, maximizing the efficiency of existing resources and freeing resources for investing in workforce development (such as the solutions outlined in this chapter) are critical for Saudi Arabia, and particularly the MOh, if it wants to maximize the number of physicians and nurses that can be absorbed.

Increase the efficiency of existing resources

Increasing the efficiency of existing resources going toward the wage bill can open up more financing and thus labor market demand—in the MOh as well as other sectors—for investments in the health workforce more broadly. A number of different interventions should be considered, several of which are already being implemented, including (1) reforming service delivery with a focus on results and greater accountability, and (2) decentralizing financing and autonomy from national- to subnational-level structures.

Reform accountability and pay for results Currently, the majority of the budget for health worker education and wages comes from Saudi central government revenue. In the Vision 2030 plan, and the reform currently being implemented, Saudi Arabia intends to “corporatize” MOh facilities into accountable care organizations (ACOs). The ACOs will initially be allocated budgets in accordance with historical budgets; these budgets will increasingly be allocated based on each ACO’s performance as measured against a set of key performance indicators focused on quality and efficiency. Such mechanisms can also help with negotiating prices and services, enhancing and ensuring quality of care, and encouraging healthy behavior (dey and bach 2019).

Decentralize funding The ongoing model of reform toward ACOs within the health sector clusters— the integrated network of health care providers under one administrative structure—will ensure that more autonomy over financing and hiring and firing will also be given to the subnational level. The reform will allow health care to become the responsibility of each cluster (each ACO) and will allow health care budgets to be shifted to such clusters. In general, lower levels of government (such as clusters, as opposed to the central government) can forge closer relationships with the population and be more responsive to their needs. The ACOs can free up resources for targeted and needed recruitment, thus increasing labor market demand.

Shift financing partly to the public

Currently, the Saudi central government acts as the de facto health insurer for most Saudis. This arrangement may not be sustainable in the future, and copayments or private health insurance considerations for some populations or services could be explored. The public sector may want to focus on insuring only those services that meet health priorities, that emphasize prevention, or that have a public health angle, and may want to predominantly cover lower-income individuals.

Scale up private health insurance by shifting some services or Saudi income groups to a private or parastatal insurance model, the benefits of health insurance functions can be widened and better realized. These insurance models include risk pooling and financial protection from some catastrophic events. As with any insurance considerations, particular attention should be paid to poorer segments of the population who may need continued government subsidies to pay for select services.

Expand the private sector

Currently, most health care in Saudi Arabia is provided by the public sector. This model has limitations because it places full responsibility for investing in health care on the government and, at the same time, government health care is generally recognized as having management inefficiencies. A number of interventions could be considered, including shifting some of the financing of education and service provision to the private sector, with simultaneous measures to address equity concerns. expanding the private sector is a particularly important recommendation given the huge difference observed in previous chapters between the epidemiological need and labor market demand from the public and private sectors.

Expand private professional schools The private sector can be encouraged to invest in opening and expanding private health professional schools and private postgraduate education programs. Saudi Arabia can provide incentives for this private sector investment through the provision of land grants, tax incentives, matching funds, advance contracts, and more flexible regulatory mandates. for private schools, Saudi Arabia can agree to provide public scholarships to qualified students at accredited private schools in good standing.