Investment in Saudi Arabia's health sector continues to rise as the government addresses long-term challenges

Rising levels of investment in the Saudi Arabian health sector over the past decade have drawn praise from the World Health Organisation (WHO) and helped boost capacity to meet growing demand. A sharp increase in the state health budget for 2015 looks set to sustain this growth in the face of some long-term challenges. These include increasing life expectancies and a jump in non-communicable diseases, as well as the drive to promote Saudiisation in the health sector workforce at a time when demand for health professionals continues to rise.

Health System

The government, acting primarily through the Ministry of Health (MoH), is the main provider of health care services in Saudi Arabia, accounting for about 75% of the country’s health spending, down from 83% in 2010. Other state bodies that run hospitals and provide medical services for their employees include the Ministry of Defence and Aviation, which is the second-largest provider, the Ministry of Interior (MoI) and the Saudi Arabian National Guard (SANG). Health care is also provided by King Saud University Medical City and King Khalid University Medical City, while a further 19 university hospitals under construction are expected to provide more than 40,000 beds by 2025.

Saudi nationals, religious pilgrims and foreigners working for the Saudi state are all entitled to free health care. The Kingdom has devised a national strategy for health care delivery based on primary health care centres coupled with a referral system. Primary health care centres, in addition to mobile clinics in remote rural areas, provide preventive, emergency, prenatal and other basic services. If necessary, these primary health care centres can then refer patients to hospitals and other specialised facilities located in the main cities.

Insurance

The Council of Cooperative Health Insurance (CCHI) was established in 1999 to oversee the private health insurance market. Health insurance is already compulsory for foreigners residing in Saudi Arabia, who represent the majority of policyholders in the SR25bn ($6.66bn) health insurance market. In late 2014, the CCHI announced plans to require all temporary visitors to the Kingdom and their dependents – with the exception of religious pilgrims – to obtain private health insurance as well. It is not yet clear when these measures will come into force, but they are eventually expected to affect some 1m visitors to the Kingdom. In the meantime, the private health care industry continues to grow steadily, catering primarily to the expatriate population but also to some segments of the Saudi population who work in the private sector. As of early 2015, proposals to extend private insurance to the rest of the Saudi population were being reviewed by the Saudi Health Council and the CCHI.

Demand Drivers

The growing demand for health care services is being driven by a rapid increase in the country’s population, which reached 28.8m by 2013. Contributing further to this are demographic, economic and social factors, such as an ageing population, increased wealth and the widespread prevalence of sedentary lifestyles, which is driving a rise in non-communicable diseases like diabetes, heart diseases and cancer. “More awareness should be given to diabetes, cancers and non-communicable diseases, which have exploded over the past decade,” Dr Taha Abdulrahman Bakhsh, director of the board at Doctor Bakhsh Hospitals Group, told OBG. “Healthier eating habits could be improved by enforcing educational programmes.”

Indeed, the WHO has described Saudi Arabia as being in the midst of an “epidemiological and demographic transition, represented by a growing burden of chronic non-communicable diseases, while population expectations for quality care services are expanding”. Among the principal health risk factors for Saudi Arabia highlighted by the WHO are unhealthy eating habits, tobacco consumption and limited physical activity, all of which are becoming more common in the Kingdom. Added to this is the large size of the country and the dispersed nature of its population, which has made it more challenging to deliver care to all segments.

Budgets

The government has increased the 2015 health and social affairs budget by 48% year-onyear (y-o-y) to SR160bn ($42.64bn), accounting for 19% of total government spending – a significant rise on the corresponding figure of 13% for 2014. Jadwa Investment noted that the 2015 budget would pay for several new projects in the health sector, including three new hospitals, three blood banks, 11 medical centres, 10 comprehensive care clinics and numerous primary care centres. So central is health care to the government’s strategic development plan that Ahmed El Shaarawy, global marketing director at SPIMACO, a local maker of pharmaceuticals, told OBG he does not expect the fall in oil prices to have an impact on state health spending.

This rising level of investment continues a trend that has seen expenditure on health grow steadily from SR30bn ($8bn) in 2008. According to the most recent data from the World Bank, Saudi Arabia’s spending on health represented 3.2% of GDP in 2012. This is high by regional standards when compared to the UAE’s 2.8% and Kuwait’s 2.5%.

Facilities

The fruits of Saudi Arabia’s investment in the domestic health care sector are evident in the network of facilities that has spread across the country over the past decade. According to the latest data from the MoH, there were 445 hospitals in 2013, offering a total of 64,777 beds. Out of this figure, some 38,970 beds were under the management of the MoH, corresponding to 60.4% of the total beds in the Kingdom. Between 2009 and 2013, 37 new hospitals were built, resulting in a 9.1% increase in the number of hospitals and a 16% rise in hospital bed capacity, equivalent to 8845 beds. This meant that by 2013 there were 21.6 hospital beds per 10,000 population in Saudi Arabia, compared to a figure of 12 in the Eastern Mediterranean region and 30 globally, according to the WHO.

While the MoH saw the largest increase in the number of hospitals under its control between 2009 and 2013 – a rise of 9.4% during this period compared to 8.8% for the private health sector – the private sector outpaced the MoH in terms of hospital beds, with these increasing by 20.9% compared to 16.3% for the MoH during the same period.

Primary Care

These services are delivered through a network of primary health care centres – all run by the MoH – which numbered 2259 in 2013, up 17.4% from 1925 in 2007. Jeddah, Makkah and Hafr Al Baten have seen the largest increases in the number of these centres during this period, recording rises of 35%, 21% and 21%, respectively. In all, according to the MoH, the Kingdom’s primary health care centres in 2013 employed 8691 physicians ( including dentists), 16,283 nurses, 164 pharmacists and 10,552 “allied health professionals”, or support staff.

Each primary health care centre provides services to an average of 13,455 people. Despite the significant expansion of the Kingdom’s primary care centre network in recent years, the staff-to-patient ratios have only increased marginally, due largely to population growth. On average, the centres in 2013 employed 2.9 physicians per 10,000 population, compared to 2.3 physicians per 10,000 in 2008, while the ratios of nurses and pharmacists per 10,000 population went from 5.2 to 5.4, and from 0.07 to 0.05, respectively, between 2008 and 2013.

State Hospitals

The majority of state-run hospitals belong to the MoH, which as of 2013 operated 268 hospitals with a total of 38,970 beds. Between 2009 and 2013 the numbers of MoH hospitals and beds increased by 9.8% and 17.1%, respectively.

State health facilities not operated by the MoH include university hospitals and medical centres, as well as those under the control of other bodies such as the Ministry of Defence and Aviation, the SANG, the MoI, the Royal Commission for Jubail and Yanbu, the Ministry of Education, the Saudi Red Crescent Society, the Water Desalination Corporation and the Institute of Public Administration in Riyadh. Additionally the King Faisal Specialist Hospital and Research Centre is run independently of the MoH. The total number of hospital beds in these non-MoH facilities reached 11,497 in 2013.

Hospital Cities

To cope with anticipated increases in demand for health care, Saudi Arabia is pursuing an integrated and comprehensive public health programme that has already delivered 61 new hospitals, 776 primary health care centres and nine specialist medical centres in the four years to 2014. A further 637 primary health care centres, 30 hospitals and six specialist medical centres are being built in line with the Kingdom’s 2020 targets of 264 hospitals, 70,694 beds, 2750 primary health care centres and 27 specialist medical centres. Central to realising these ambitions are five new medical cities that are set to spring up across the country.

The largest of the medical cities will be King Khalid Medical City (KKMC), which is due to open in Dammam in 2018 and will eventually serve 7m patients in the Eastern Province. KKMC will cost SR4.6bn ($1.23bn) and will comprise a 1500-bed hospital, a 500-bed private community hospital, a research centre, residential buildings, a hotel, a commercial complex and educational facilities set in a 700,000-sq-metre campus. KKMC will also house seven centres of excellence specialising in areas including cardiovascular, neurosciences, rehabilitation, multi-neurosciences, multi-organ transplant, genetic organ transplant, ophthalmology and oncology.

Other medical cities include the $1.1bn King Faisal Medical City in the south of the country offering 1350 beds, the King Abdulaziz Medical City in the north with 1000 beds and the $1bn King Abdullah Medical City, situated in Makkah Province and set to contain three hospitals and 10 medical centres with a total of 1350 beds. Meanwhile, the King Fahad Medical City and the King Saud Medical City in Riyadh are being expanded, and there are plans to build a new 500-bed medical city in Al Jouf.

Private Investment

As of February 2014, total ongoing health care projects in Saudi Arabia stood at $14.8bn, which represented approximately 48.5% of all health care projects in the GCC at the time, according to research by Kuwait Finance House. To help finance these projects, Saudi Arabia has been liberalising some of the rules governing investment in the industry. These measures are expected to drive the expansion of the private health care sector at a five-year compound annual growth rate (CAGR) of 10.4%, going from SR32.7bn ($8.71bn) in 2013 to SR53.5bn ($14.26bn) by 2018.

According to new regulations announced in 2014, citizens who are not health care professionals will be allowed to run hospitals for the first time. The new rules are also designed to attract investment from global health care companies, according to the MoH. Previously, non-Saudis were prevented from owning any clinical centres in the Kingdom.

Private Facilities

Between 2009 and 2013, there was an 8.8% increase in the number of private hospitals, from 125 to 136, accompanied by 2477 extra hospital beds, representing a rise of 20.9% in the bed count during the same period. Of all regions, Jeddah has the most private hospitals, accounting for 24.2% of the Kingdom’s total, followed by Riyadh with 23.5%. However, the private hospitals in Riyadh tend to be larger, which explains why that city holds 30.5% of the Kingdom’s private hospital beds – or 4369 beds – compared to 21.2% in Jeddah. Meanwhile, the highest ratio of private hospital beds to population is to be found in the oil-rich Eastern Province, where there are 9.7 beds per 10,000 people.

The private health care sector also includes private clinics and pharmacies. In 2013 there were 192 private clinics across the Kingdom, most of them concentrated in Jeddah (91) and Riyadh (50). The total number of private pharmacies reached 7180 in 2013, equivalent to one pharmacy per 4203 individuals.

Major Players

The private health care services market comprises both public and private companies, some of which have developed into regional leaders in their field. Among the major players identified in research by Alpen Capital are Al Mouwasat Medical Services (Mouwasat), Elaj Group, Dallah Healthcare Holding Company, Magrabi Hospitals and Centres, National Medical Care Company and the Dr Sulaiman Al Habib Medical Group.

Mouwasat, which was listed on the Saudi Stock Exchange in September 2009, provides health care services and equipment primarily in the country’s Eastern Province. Operating through its three subsidiaries, it owns four hospitals and manages a 120-bed hospital in Medina as well as two dispensaries. The company’s facilities specialise in a wide range of fields, including internal medicine, obstetrics and gynaecology, paediatrics, orthopaedics, dermatology, venereology, general surgery, ophthalmology, dentistry and plastic surgery.

A more recent arrival on the Saudi Stock Exchange, having listed in 2013, is National Medical Care Company, which likewise focuses on health care services and medical supplies. The company owns and operates two private hospitals in Riyadh. Its Riyadh National Hospital, established in 1967, has a total capacity of 100 beds and concentrates on internal medicine, radiology, dentistry and surgery, while its 360-bed Riyadh Care Hospital, established in 1991, specialises in internal medicine, general surgery, specialised surgery, paediatrics, obstetrics, gynaecology and radiology. National Medical Care Company also established operations as a distributor for medical supplies and equipment in 2011.

A third major publicly listed hospital operator is Dallah Healthcare Holding Company, one of the largest private hospitals in Riyadh, employing 220 doctors and 1553 support staff. The company is building a new hospital in west Riyadh with a capacity of 300 beds and 80 outpatient clinics, which is due to open in late 2017.

Besides these public health care groups, there are a number of major private Saudi Arabian hospital operators that have expanded regionally. The Dr Sulaiman Al Habib Medical Group, for example, has grown to become one of the largest private health care providers in the GCC, with numerous facilities located across Saudi Arabia, the UAE and Bahrain, and is currently developing one of the largest private medical cities in Saudi Arabia. Elaj Group has similarly expanded into neighbouring countries, with various medical centres in Egypt, Qatar, the UAE and Saudi Arabia, and has plans to open future centres in Bahrain, Kuwait, Oman and Yemen. Magrabi Hospitals and Centres, which began operations in 1955 as the first private specialised eye hospital in Jeddah before expanding into ear, nose and throat and dental clinics, has a portfolio that now includes nine hospitals and 15 clinics spread across Saudi Arabia, the UAE, Egypt, Yemen, Qatar and Oman.

Enforcing Standards

The MoH is active in enforcing standards in the health sector across the Kingdom, periodically closing or fining non-performing institutions. In March 2015 the MoH announced the closure of 38 private health institutions, including two hospitals in Riyadh and Medina, during the preceding month for failing to comply with the country’s health regulations. An additional 299 irregularities were identified in the private health and pharmaceuticals sectors in the same period. Besides overseeing institutions, the MoH is responsible for monitoring the performance of health care professionals and holding individuals to account for the manner in which they provide care. In order to discourage malpractice, any infringements are publicised on the MoH’s website.

Patients

Even as Saudi Arabia has raced to build new health facilities, the extra supply has also been matched with growing demand from patients. The total number of outpatient visits in the Kingdom grew to reach a record 135.19m in 2013, even though the per-person average number of such visits had fallen slightly from 4.6 in 2012 to 4.5 in 2013. Of this total number of visits, some 53.19m were made at primary health care centres operated by the MoH, of which 89.9% were by Saudi citizens.

“The government is seeking a greater return on its investment in health care,” Atif Choudhary, marketing development manager at Arabian Health Care Supply, told OBG. As part of this drive to treat ever-greater numbers of patients more efficiently, the government is promoting the take-up of family medicine through initiatives such as the expansion of primary care centres. However, Choudhary pointed out that changing people’s behaviour in this way will take time, as the primary care centres still lack credibility in patients’ eyes, and private health insurance policies still allow policyholders to go straight to a specialist if they so desire.

During the period from 2009 to 2013, the average number of admissions to hospital per 100 individuals dropped from 12 to 10.5, though the total number of inpatients admitted remained relatively stable at around 3m per year, except for a small surge in 2010, when the figure reached 3.3m.

Over half of inpatients – 54% of the total, equivalent to 1.7m patients – continue to be treated at MoH hospitals, a rise of 2.8% on the 1.66m received by MoH facilities in 2009. Saudi nationals constitute 86.4% of the inpatients at MoH hospitals, while a further 16% of inpatients receive treatment at other government hospitals not under the MoH.

In 2013 private hospitals received 923,944 inpatients, which represents 20% of the market. By number of surgeries performed, however, the private sector hospitals are gaining on the rest of the market. Private hospitals increased their performed surgeries by 21.1% between 2009 and 2013, while the health sector overall raised its output from 929,403 to 1,013,135 surgeries, up 9%, in the same period.

Non-Communicable Diseases

According to the WHO, non-communicable diseases account for 71% of all deaths in Saudi Arabia, with cardiovascular disease being the leading cause of mortality. The WHO has noted “an alarmingly high rate of physical inactivity among the Saudi population, predisposing them to health problems”, with young Saudis being particularly vulnerable to obesity.

The government is seeking to address this challenge by establishing a centre for non-communicable diseases, instituting programmes for diabetes prevention, promoting healthy diets and physical activity, instituting early examination of new-borns, screening for osteoporosis and changing unhealthy behaviours through advocacy campaigns. Indeed, the WHO has praised Saudi Arabia for its commitment to reducing the prevalence of smoking.

Hajj

Each year, the Kingdom attracts more than 3m pilgrims who come to perform the Hajj pilgrimage from more than 183 countries. The influx during this period poses a range of health risks, including infectious diseases such as seasonal, respiratory, foodborne and other gastro-intestinal illnesses, skin diseases and injuries. The MoH is responsible for providing pilgrims with medical care should they require it during their stay in the Kingdom, as well as for administering special medical requirements for those performing the Hajj, such as vaccinations against meningococcal meningitis, polio and yellow fever. In 2013 alone, chemoprophylaxis was provided to some 286,548 pilgrims as a preventive measure for some infectious diseases, and vaccination against poliomyelitis was given to 430,490 pilgrims. In 2013, some 1.98m people performed the Hajj in Saudi Arabia, of which around 70% came from outside the Kingdom. That year, the MoH operated 23 hospitals to serve pilgrims, including eight temporary facilities. A total of 4326 hospital beds were provided, equivalent to one bed per 458 pilgrims, in addition to 110 emergency beds. In addition the MoH provided 154 health care centres for pilgrims, of which 112 were seasonal.

To operate these facilities, the MoH recruited an additional 21,732 workers, of which 79% were physicians, nurses and allied health professionals. On average, each physician served 474 pilgrims, each nurse 290 and each allied health professional 316.

Over the years, the MoH and other branches of the Saudi government have gained extensive expertise in how to safely handle the increasing numbers of pilgrims coming for the Hajj. In all, in 2013 pilgrims made 659,146 outpatient visits to hospitals and health centres, and 31,218 emergency visits.

Pharmaceuticals

The growing demand for health care across the Kingdom has also given a boost to the market for pharmaceuticals and medical supplies. Roland Berger, a consultancy, attributes the recent high growth rates in the Saudi Arabian pharmaceuticals market to several factors, including rising wealth and incomes, increased private consumption of medicines, greater life expectancy and the growing prevalence of the so-called lifestyle chronic diseases like diabetes.

By the end of 2014, the pharmaceuticals market in the Kingdom was worth $5.1bn, with 55% of these sales going to private health care providers and the rest to the government. Nevertheless, 2014 was considered a slightly disappointing year for the medicines industry. “We had been expecting growth of 12% y-o-y in the pharmaceuticals sector in 2014, but in fact sales grew by between 6% and 7%,” El Shaarawy told OBG. With respect to 2015, El Shaarawy told OBG that he expects the private side of the market to grow by 12% and the government side to grow by 6%.

Growth Areas

Growth in 2015 will be primarily in biological drugs, such as monoclonal antibodies, as pharmaceuticals companies’ efforts to raise awareness of these medications with health care providers begin to pay off,” El Shaarawy told OBG. Faisal Bindail, deputy general manager for business development at AJA Pharma, told OBG that branded drugs currently account for between 20% and 30% of local drug production, but added that he expects this proportion to rise as companies like Pfizer open new manufacturing facilities planned for the Kingdom. “Saudi Arabia is a very brand-driven market,” El Shaarawy told OBG. In 2014 branded pharmaceutical products accounted for around 80% of the market. This is one of the factors that has made the Saudi market so attractive to international players.

Economic Free Zones

International pharmaceuticals companies looking to enter the Saudi market stand to gain from the country’s economic free zones, where 100% foreign-owned subsidiaries can set up operations. According to Roland Berger, the free zones policy should enable Saudi Arabia to develop into a “pharmaceuticals manufacturing hotspot capable of luring global giants”. As Aiman H Hamadallah, vice-president of finance at Banaja Holdings, a distributor of medicines and medical supplies, told OBG, “We are seeing more and more international pharmaceutical companies rushing to Saudi Arabia to open new plants in order to increase production capacity. Through relatively low prices, and incentives such as those available at the King Abdullah Economic City (KAEC), the government is facilitating a better business environment for those companies.”

Foreign Entrants

Already the KAEC has managed to persuade Sanofi Aventis and Pfizer to set up local manufacturing plants. Sanofi Aventis is planning to build a 35,000-sq-metre factory that will produce around 20 drugs, including cardiovascular medicines and anti-diabetics. In parallel with this, Sanofi Aventis will also conduct research jointly with the King Abdullah University of Science and Technology. Pfizer’s planned facility at KAEC, meanwhile, will cover 32,000 sq metres and have the capacity to produce up to 18m packs per year.

Other companies have entered the Saudi market through joint ventures. Astellas and Daiichi Sankyo have teamed up with Tamer to produce Sankyo and Yamanouchi drugs as well as products on behalf of other Japanese pharmaceuticals companies at their 30,000-sq-metre facility in Jeddah. GlaxoSmithKline (GSK) has entered a partnership with Banaja Holdings and built a 75,000-sq-metre production facility with the capacity to manufacture 15m tablet packs, 12m tubes, 4m inhalers and 3.5m bottles. Alongside this, in 2014 GSK signed a deal with local firm Arabio to manufacture vaccines, as part of which GSK will support Arabio in its manufacturing operations, including in training local employees. This partnership is set to boost the country’s vaccine production capabilities and add to the supply of vaccines for immunisation programmes in the GCC.

By setting up local operations, foreign entrants can gain a competitive advantage over international peers through increased visibility and the ability to respond to changing requirements when it comes to bidding for government tenders. According to El Shaarawy, the wider pharmaceuticals industry in Saudi Arabia stands to benefit from this move as well. “The localisation of multinationals’ production will help grow the pharmaceuticals market in Saudi Arabia by accelerating the education of clinicians.”

Regulation

Policies designed to protect the local industry have resulted in only a few of the large pharmaceutical companies establishing a presence in Saudi Arabia to date, with most foreign firms preferring to manufacture their drugs locally under licence or just export to the Kingdom. Such policies include protracted registration procedures for foreign drugs, requirements for re-certification, stringent price control mechanisms on certain drugs and a perceived lack of protection for intellectual property, according to Roland Berger. Another challenge is inconsistencies in regulations governing the dispensing of pain medication and anti-infectives by pharmacists. “For example, sedatives are tightly controlled at present, but things like Viagra and antibiotics are easily available over the counter when they really shouldn’t be,” Choudhary told OBG.

With the aim of improving the efficiency and safety of the pharmaceuticals sector in the Kingdom, two significant pieces of regulation are coming into force in 2015. The first of these, called an electronic common technical document, or eCTD, took effect on January 3, 2015, and requires that the registration files for all new medicines be submitted for inspection to the Saudi Food and Drug Authority (SFDA) in electronic form from now on.

The second regulation concerns the bar coding of pharmaceuticals in the Kingdom. From March 21, 2015 onwards, all pharmaceuticals are required to carry a 2D barcode containing a Global Trade Item Number, an expiration date, a batch number and a pack size. This is considered as a first step towards the SFDA’s ultimate goal of implementing a comprehensive track-and-trace system that will cover all drugs and medicines in the Kingdom. Such a system will ensure the safety of patients by reducing medication errors, detecting counterfeit medicines, and improving traceability and the speed with which products can be recalled when necessary.

Price Harmonisation

The year 2015 is also expected to be an important one for pharmaceutical companies with regard to pricing. “Price harmonisation in the pharmaceuticals sector has been applied across the GCC since 2014. So far we have felt little impact from these measures; however, we expect that to change in 2015,” El Shaarawy said. The GCC-wide price harmonisation mechanism comes in addition to Saudi Arabia’s existing price-setting legislation for pharmaceuticals, which determines the sale price of a drug in the Kingdom based on the prices of the same product in 30 other countries, including Turkey, Greece and Egypt. Under these regulations, pharmaceutical companies are obliged to resubmit documents – such as a drug’s price certificate, which states the price of the drug in the countries used for reference – every five years following the drug’s initial registration. If the review process shows the product to be on sale for less in one of the reference countries, the price in Saudi Arabia must be lowered accordingly.

Pharmacies

The retail distribution of pharmaceuticals by pharmacies accounts for around 88% of the total market in Saudi Arabia. Pharmacies in the Kingdom offer an increasing range of products, including medicine, personal hygiene and beauty products, baby care products and nutritional supplements, as well as products targeting impulse shoppers and services for weight management and blood pressure measurement. Saudi pharmacies are protected by a ban on the sale of over-the-counter pharmaceuticals in other shops. However, a lack of trained staff to work in pharmacies is an ongoing challenge for the sector, while the ownership of pharmacies in the Kingdom remains restricted by law to entities from within the GCC.

Research

The molecular diagnostics and personalised therapeutics unit (MDPTU) at the University of Hail, established in 2013, serves as an example of the progressive research that is being conducted in the Kingdom. The MDPTU infrastructure includes high-throughput DNA sequencing platforms that can perform genomic analysis, namely sequencing, genotype processing and bioinformatics. The unit should help gather the critical mass and expertise necessary to strengthen the competitiveness of the Kingdom’s health care sector and attract large international projects. This research is being done in Hail in collaboration with Cambridge and Nottingham universities. In addition, the MDPTU was selected as one of the centres for the Saudi Genome Project to help in identification of hereditary diseases in the northern region of Saudi Arabia.

Outlook

Investment bank Alpen Capital expects the Saudi health care market to expand at a CAGR of 11.4% in the years to 2018. Growth will continue to be driven mainly by fundamentals such as the increase in population and rises in life expectancy, while also benefitting from the government’s prioritisation of health and education spending even as oil revenues decline. This forecast growth will translate into a CAGR of 1.7% in the number of hospital beds in the Kingdom to reach 66,635 by 2018. Additional opportunities for investors are likely to emerge over the coming years in both the pharmaceuticals market and the private health services sector as the government seeks to attract foreign investment and expertise, although the deregulation necessary for this will most likely remain a gradual process.