Determinants of Healthcare Utilization and Cost among Privately Insured Families in Saudi Arabia

Background: The kingdom of Saudi Arabia is currently restructuring its healthcare system through implementing a number of strategies among which the introduction of insurance coverage for both foreign workers and citizens. Objectives: The aim of the present study is to assess factors that affect utilization and cost of health services among a group of privately insured families in Saudi Arabia Methods: A six month administrative claims database of employees and their dependents from three different companies covered by a major insurance company was utilized to collect demographic enrollment characteristics, service utilization and services costs. The unit of analysis of the present study was families rather than individuals with a total of 131 families included in the analysis. Results: The study revealed that those covered by the highest class of coverage provided by the insurance company (class VIP and A) had more utilization and higher mean charges per family compared to those covered by class B or C. The study also found that middle aged and older families had more utilization and average charges per family compared to younger families. Families in which women were the primary insured had both lower use and lower average charges. Finally, family size seemed not related to any pattern of medical care use. Conclusions: Families with lower insurance class coverage, and families in which women are the primary insured showed lower utilization pattern, but families with older individuals had more utilization. Additional studies are need for a more comprehensive understanding of utilization pattern by the insured population in Saudi Arabia. INTRODUCTION Traditionally, the healthcare system in Saudi Arabia can be classified as a national health care system in which the government provides health care services through a number of government agencies. Public spending on health is financed from the government budget. An estimated 11 percent of the government budget is 686 Bull High Inst Public Health Vol.38 No.3 [2008] devoted to public spending on health. Public spending accounts for 80 percent of all health spending. As some 75 percent of government revenues are from sales of natural resources, the health sector financing for Saudi nationals and public sector expats is largely based on oil and gas revenues. (1,2) Even though the percentage of government outlays allocated to health care has been increasing, the actual amount per capita has been decreasing; a result of the effect of several factors including a fast-growing population, 40% of the population is under the age of 15 years and only 3.5% of the population over the age of 65, and a declining government revenue. Moreover, about 25% of the population, or about 6.1 million people, are considered foreign nationals. (3-5) In order to improve the performance of the current health care system in the kingdom, the country is currently restructuring its healthcare system to privatize public hospitals and introduce insurance coverage for both foreign workers and citizens. (4,6) In 2002, the Health Insurance Council was formed, with the charge of guiding the introduction of mandatory health insurance that was to be implemented in gradual phases. The first phase required employers of more than 500 employees to pay for insurance coverage for foreign workers and their dependent family members. The second phase was applied to companies with more than 100 employees. The third phase included coverage of all employers and their employees. The government now plans to implement insurance coverage for all Saudi citizens, before privatizing stateowned hospitals. (4,7) A governmental subsidy will be provided to cover the cost of the insurance premium for all Saudis not working for private companies. Although, it was planned that in 2005, expatriates making up about 25% of the population, will be