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Events in Saudi show who will get what

Recent news from Saudi Arabia gives some indications as to who will get what as the country opens up its healthcare sector.

That Saudi Arabia wants to outsource large swathes of its healthcare service provision is true and known. Less known is when it will happen as a PPP law remains elusive, contacts saying it could come any quarter but, just as easily, a year from now. What is becoming clearer is which international operators will succeed in which parts of the healthcare sector.

UAE-based groups look set to dominate acute and primary care. NMC’s partnership with the state private sector pension fund is a bold move and local contacts expect similar approaches from competitors like VPS and Aster DM, but not Mediclinic. Local hospital leader by beds Dr Sulaiman Al Habib Medical Group, which NMC’s new JV trails by a few hundred, won’t go quietly by any means as its partnership with outsourcing specialist Serco shows. But as far as we can tell European and American hospital groups have no interest, or access, to this segment. NMC looked liked the best-placed outsider already and this JV confirms that.

Europeans and Americans will see more success in the more technology-driven, high-Capex and less consumer-facing areas of diagnostics. All major European lab and imaging groups like Synlab, Unilabs, Cerba and US giant labcorp have UAE-based subsidiaries looking to get into Saudi to build on existing export test markets. Affidea is looking too. No emerging market lab player has achieved the international scale of these groups, while in acute care it is closer to being the other way around.

Niche areas are more uncertain. Air Liquide has been an early mover in the medicalised homecare market with an acquisition, but regional players are likely to have the upper hand with their local expertise. While dialysis, the first area to be outsourced four years ago, shows that even once you have a foot in the door it is far from simple. The future of who provides it to the 10,000 existing public patients remains uncertain as large international operators face delays in having contracts renewed. But the likely candidates that will fight it out for each sector are becoming clearer.

We would welcome your thoughts on this story. Email your views to Cameron Murray or call 0207 183 3779.