A need for managed care in Saudi Arabia

Abstract

Is the Kingdom of Saudi Arabia getting value for money invested in health? Quality care is being provided throughout health facilities in the Kingdom, however there is minimal control of utilization in all health sectors, consequently leading to abuse and over utilization, particularly in the public sector. Managed care programs have proven effective in reducing unnecessary inpatient and ancillary service utilization by reducing use of expensive procedures and unnecessary, highly specialized services, and shifting to less expensive care options. Health maintenance organizations are the best example of a managed health care model; tracking good performance and cost savings averaging between 20-40% compared to more traditional health plans. Key features of health maintenance organizations include serving a defined population voluntarily enrolled in the health plan; assumption of contractual responsibility and financial risk by plan to provide a range of services, and payment of a fixed periodic payment by the enrollee, independent of the actual use of services. The key characteristic that distinguishes health maintenance organizations from other delivery systems is prepayment for the care that is provided. Preferred Provider Organizations offer discounts for services received from a selected set of physicians and hospitals. Services received by enrollees are not fully reimbursed from this selected list of providers. Preferred Provider Organizations use health maintenance organizations administrative processes for controlling costs but do not include some of the intrinsic cost and quality controls of health maintenance organizations. Review of several studies indicate that patients enrolled in prepaid group practices (managed care organizations) were hospitalized 15-40% less often than those enrolled in fee-for-service health plans.