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HOSPITAL PRIVATIZATION IN SAUDI ARABIA
In lieu with the Kingdom’s Seventh Development Plan, the role of the private sector, the local labor force and the non-oil resource generation were strengthened. For the Saudi Arabian government, privatization was perceived to be the most effective tool. The extended role of the private sector is intended for the advancement of social sector services such as hospitals, schools and housing. Nonetheless, such endeavor gives rise to various issues and challenges that the government must pay attention to. Change management, transparency and the speed of implementation are just three of the pressing issues. The problematic nature of privatization, however, lies in the specific topic as competition, labor and fiscal benefits.
Thesis Statement #1
The privatization of hospital will only lead to private hospital monopoly and increased competition.
Statement of the Problem
The privatization will benefit private hospitals in various ways including the scope as a resultant factor of the transfer from public to private, improved efficiency and effectiveness of healthcare services, improved overall corporate governance because of the addition of professionals and the creation of new opportunities within the healthcare industry. Provided that private hospitals have the financial, administrative and technical capabilities to control and influence the healthcare business, the economic balance between private and public hospitals will become blurry. Within the competitive environment, the healthcare industry structure, this is also subjected to market forces, must conform to commercial objectives and private sector principles at the expense of the public hospitals and the end-users.
Thesis Statement #2
Hospital privatization will negatively impact the Saudi Arabian nationals employment.
Statement of the Problem
The impact of privatization on labor is evident on the negative trend in employment. Labor retrenchment will be viable resulting to employee turnover. Saudi Arabian workers make up only a small portion of the private sector. As such, there may be the fear of laying off of workers and be replaced by foreign workforce who tend to be much cheaper and productive. Further, the terms of employment and necessary employee arrangement could be restructured in light of the privatization. When workers are made redundant, the compensation structure could be altered. Another issue to ponder on will be the skill development and retraining required once hospital privatization materializes. The extent to which the Saudi Arabian government could extend to help Arabian nations due to the switched in demographics will be a matter of debate.
Thesis Statement #3
Due to hospitals privatization, the economic control of the Saudi Arabian government over the healthcare industry will be limited.
Statement of the Problem
In the presence of foreign investors, the extent of ownership of these privatized hospitals will be tended on external forces and not the Saudi Arabian government. Since infrastructure, natural resources and social assets such as health and education resources are managed by the Saudi Arabian government, the degree of ownership and management will be lessened. Moreover, the government revenue could likewise be limited because there are no corporate taxes to which the government could benefit from. The non-existence of taxes could not necessarily mean better prices for hospital services end-users. If the government will lose control and authority in privatized hospitals, revenue sharing arrangements, fee charging regimes and sale proceeds will eventually be inadequate.
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