In January 2026, the Kingdom of Saudi Arabia announced the launch and implementation of its National Privatization Strategy, moving the country’s privatization agenda from its foundation-building phase into a more execution-focused stage. The Strategy reinforces the role of private participation across priority sectors, but its relevance to healthcare goes beyond attracting investment.
Healthcare privatization is often framed as a reduction in the government’s role and an expansion in market participation. In Saudi Arabia, however, attempts to understand this approach are too simplistic. The Kingdom’s reform agenda is better understood as an effort to build a more coordinated healthcare system: one in which the government sets clearer rules, purchasers focus more closely on value, and providers, both public and private, are expected to improve performance across access, quality, outcomes, and patient experience. More importantly, this creates an opportunity to bring the full strength of the healthcare market into the Kingdom’s transformation agenda. By combining public-sector stewardship with private-sector capital, innovation, technical expertise, and delivery capacity, Saudi Arabia can build a more collaborative system that draws on the best of both sectors.
This sits within the Kingdom’s broader Vision 2030 transformation of the health sector. Saudi Arabia is reorganizing public provision through health clusters, clarifying payer and provider roles, expanding digital health infrastructure, and creating greater space for private capital and operational capability. The private sector already plays a larger role than it did historically and is expected to continue growing. The more important question, however, is what kind of healthcare system the Kingdom is seeking to build, and whether that system can deliver better care, earlier intervention, stronger patient choice, and more sustainable outcomes over time.
The significance of the National Privatization Strategy in healthcare lies not only in attracting private investment, but in helping align private participation with broader system objectives. Saudi Arabia’s healthcare transformation agenda has been associated with approximately SAR 244 billion (~£47.7 billion) in planned healthcare investment, alongside wider reforms to service delivery, infrastructure, purchasing, and accountability.
This investment is most effective when supported by the system reforms already underway. Clear institutional roles, well-coordinated care delivery, accessible services, and aligned incentives will help ensure that private participation contributes to the Kingdom’s wider health priorities. In this context, ownership is only one part of the reform story. The larger opportunity lies in continuing to build a healthcare system that delivers better value, stronger accountability, improved patient outcomes, and greater financial sustainability over time.
1. How is Saudi Arabia redesigning healthcare governance?
A central feature of the Saudi model is the clearer separation of roles across the health system. Building on Vision 2030 objectives, the Kingdom is progressively differentiating functions that were historically concentrated within the Ministry of Health, including funding, planning, regulation, and care delivery. This enables the Ministry to evolve from a direct operator to a system steward, with responsibility for policy, strategic direction, regulation, sector coordination, and oversight. The Health Sector Transformation Program reinforces this direction by identifying the separation of payer, provider, and regulatory functions as a governance priority.
Importantly, this does not mean the Ministry is becoming less influential; rather, its role is becoming broader and more strategic. As operational, financing, and purchasing responsibilities are distributed across specialized entities, the Ministry is evolving into a sector-wide steward and, in effect, a “super regulator” overseeing the broader health ecosystem. Rather than directly managing all parts of the system, the Ministry governs through a network of specialized institutions responsible for financing, provision, insurance regulation, accreditation, public health, procurement, and other system functions. The result is not a weaker government role, but a more institutionally differentiated and centrally coordinated one.
The clearest expression of this evolving governance model lies in how responsibilities are being redistributed across the healthcare system:
Alongside these, other institutions such as the Saudi Food and Drug Authority, the Saudi Central Board for Accreditation of Healthcare Institutions, the Public Health Authority, and NUPCO are also playing specialized roles within the broader health ecosystem. Increasingly, this institutional architecture is also creating a more enabling environment for private-sector participation, not only as a source of capital, but as a partner in research, development, piloting, and scaling innovation. This is consistent with the Kingdom’s wider Vision 2030 direction, which emphasizes private-sector participation, improved service quality, and stronger investment in research, development, and innovation, including health and wellness as a national priority.
Taken together, these reforms are creating a different model of government involvement in healthcare. The government’s role remains central, but its influence runs through stewardship, purchasing, regulation, standard-setting, innovation enablement, and performance oversight, rather than direct ownership and operation alone. In that model, private participation is expected to support higher-quality care, stronger accountability, greater innovation, and long-term sustainability within a publicly governed framework.
2. How is the new governance model translating into delivery?
Saudi Arabia’s healthcare reforms are becoming increasingly visible not only in institutional redesign, but also in how financing, procurement, and delivery are being operationalized across the sector. The result is a healthcare reform agenda that is grounded in the practical realities of coordination, execution, and long-term system development.
That shift is already visible in the financing structures, partnership models, and delivery mechanisms emerging across the healthcare sector:
Financing healthcare transformation
One example is the healthcare financing initiative launched by the Ministry of Health and the National Infrastructure Fund. Its importance lies not only in the financing itself, but in what it enables: the ability to move reform from strategic ambition into structured, investable, and deliverable projects. In practice, this creates clearer pathways for private capital to support healthcare infrastructure, service quality, and access while remaining aligned with the objectives of the Health Sector Transformation Program.
More importantly, it reflects an important feature of the Saudi reform model: private-sector participation is being introduced through formalized financing, procurement, and governance structures rather than through fragmented or ad hoc privatization efforts. This matters because healthcare transformation at scale depends not only on attracting capital, but on building the institutional capacity to identify, structure, govern, and deliver projects consistently over time.
This sits within a wider privatization and public-private partnership ecosystem led by the National Center for Privatization and Public-Private Partnership (NCP). Beyond facilitating transactions, the NCP is helping establish a more standardized national framework for prioritization, procurement, risk allocation, and project delivery across sectors. In healthcare, that institutional discipline is particularly important because sustainable reform depends not only on expanding private participation, but on ensuring that projects remain aligned with broader system objectives around access, coordination, quality, and sustainability.
Deploying private participation strategically
The Ministry of Health’s radiology public-private partnership (PPP) with Altakassusi Alliance Medical, launched in cooperation with the NCP, offers a practical example of how the Kingdom’s governance model is translating into operational delivery. The 10-year partnership is focused on managing and operating radiology departments across seven public hospitals within the second and third health clusters in Riyadh, with the aim of improving access to diagnostic services for more than 1.5 million beneficiaries. Crucially, the project is designed to raise capability, reduce waiting times, improve service quality, and equip and maintain departments with advanced imaging technology, while keeping services free of charge for beneficiaries.
The significance of the project lies less in radiology itself and more in the delivery model it represents. Rather than pursuing broad hospital privatization upfront, the Saudi approach uses targeted partnerships in operationally specific areas where private-sector expertise, technology, and execution capability can address identifiable service bottlenecks while remaining aligned with wider healthcare priorities.
Advanced diagnostics are often operational pressure points within healthcare systems: they are capital-intensive, technologically complex, and highly dependent on workforce capacity and equipment availability. In that context, targeted service-line partnerships can improve access, throughput, reporting quality, and operational performance without requiring full transfer of hospital ownership or strategic control.
More broadly, the project illustrates an important feature of the Saudi model: private participation does not necessarily require wholesale transfer of healthcare delivery. Its value lies in showing how private operators can be deployed selectively across targeted service lines and enabling functions, including diagnostics, facilities management, information technology, and digital infrastructure, where investment, operational capability, and service quality matter, while government retains strategic oversight of the broader healthcare system.
The broader institutional reforms are important for the same reason. HHC, the health clusters, the CNHI, the CHI, and entities related to the health sector transformation are not merely abstract organizational changes. Together, they are creating the implementation architecture through which the government can shape incentives, strengthen accountability, coordinate delivery, and steer long-term system performance across the health sector.
3. What international lessons are most relevant to Saudi Arabia’s healthcare reforms?
International experience can offer valuable lessons for Saudi Arabia’s healthcare reforms, but not because foreign systems can be replicated directly. Different healthcare models reflect different institutional histories, financing structures, and policy priorities. The more relevant insight lies in understanding which governance mechanisms, finance approaches, and accountability structures have strengthened healthcare performance elsewhere, which have created unintended consequences, and how those lessons can be adapted selectively within the Kingdom’s own institutional context.
Healthcare privatization lessons from the Netherlands
The Netherlands offers a useful example of how tightly governed private participation can support public health objectives. The Dutch system does not simply rely on private insurers operating within a market framework. It uses detailed regulation, risk adjustment mechanisms, mandatory coverage requirements, and managed competition designed to align insurer incentives with access, quality, and overall system sustainability. The model also depends heavily on data transparency, standardized reporting, and measurable performance indicators to support purchasing and regulatory oversight.
At the same time, the Dutch experience also highlights some of the tensions that can emerge in highly regulated insurance-based systems, including administrative complexity, pricing pressures, and ongoing debates around affordability and market concentration.
For Saudi Arabia, the relevance is therefore not the replication of Dutch social insurance, as the institutional context is fundamentally different. The more important insight is the central role of governance in making private participation work in the public interest. In this context, CHI is already a critical system enabler: through mechanisms such as the Essential Benefits Package, insurer regulation, data requirements, and market oversight, it can help ensure that private insurance evolves in line with national priorities for access, quality, prevention, value-based care, and long-term health outcomes. As the Kingdom expands the role of private insurers and purchasers, CHI’s role will become increasingly important in shaping a transparent, outcomes-focused insurance market that supports both beneficiary protection and wider health system transformation.
Healthcare private finance and private provision lessons from the United Kingdom
The United Kingdom offers a different lesson. The Private Finance Initiative (PFI) demonstrated that private capital can accelerate infrastructure development, improve lifecycle maintenance, and introduce stronger delivery discipline into public infrastructure projects. However, it also exposed weaknesses where contracts were inflexible, risk transfer was overstated, and long-term affordability was not always tested rigorously enough over the full life of the agreement. By 2018, long-term payment obligations associated with UK privately financed infrastructure projects had reached approximately SAR 1 trillion (£199 billion), significantly exceeding the original capital value of the projects themselves.
The UK experience is not only about private finance. The NHS has also used private-sector capacity to deliver publicly funded care, particularly for planned, high-volume, lower-complexity procedures such as hip and knee replacements and cataract surgery. Nuffield Trust analysis found that private providers delivered 36% of NHS-funded hip and knee replacements and 41% of NHS-funded cataract procedures in 2021/22
For Saudi Arabia, the UK experience offers two relevant insights. First, private finance can support infrastructure delivery when it is aligned with long-term affordability, appropriate risk allocation, operational flexibility, and public value. Second, private provision can support access and patient choice in defined service lines, particularly where pathways are standardized and quality can be measured consistently. However, the UK experience also shows that private-sector capacity should not be treated as additional capacity to the public system. In practice, public and private providers often draw on overlapping clinical workforce pools, which can create unintended pressures if activity, staffing, quality, and system-wide capacity are not visible and actively managed. For the Kingdom, this reinforces the importance of treating private-sector participation not simply as a capacity solution, but as part of a broader value-based healthcare model: one that requires transparent data, workforce planning, aligned incentives, clear commissioning arrangements, and accountability for access, quality, productivity, patient experience, and long-term system value.
4. What will determine success in the next phase of reform?
Structure matters. But over time, incentives matter more.
A healthcare system can redesign institutions and redistribute responsibilities on paper while still reproducing many of the same behaviors in practice. Providers ultimately respond to what the system rewards, what it measures, and what it makes difficult to ignore.
As the Kingdom continues advancing toward more value-based models of healthcare delivery, those priorities will need to appear in contracts, payment models, and performance frameworks. Population health management, preventive care, operational efficiency, patient choice, and quality improvement are all features of that wider shift, but they do not emerge automatically from structural reform alone. They need to be designed into the way services are purchased, delivered, measured, and renewed.
If providers are rewarded mainly for volume, they will tend to produce volume. If incentives reward keeping people healthier, coordinating care more effectively, reducing avoidable hospital use, and improving outcomes, system behavior begins to shift over time. That is the promise of a more mature purchasing model: not simply to reimburse activity, but to shape overall system performance.
For the Kingdom, that could include stronger incentives for chronic disease management, earlier diagnosis, better screening uptake, cleaner referral pathways, and more effective use of clinical capacity. It could also involve clearer accountability around quality, coordination, patient experience, and data integrity, helping ensure that the system sends more consistent signals about what sustainable high performance looks like.
This is where private participation becomes more deeply integrated into broader system reform. If private participation is used primarily as a supply-side tool, it may improve capacity in parts of the system, but when paired with stronger purchasing mechanisms, aligned incentives, and clearer accountability frameworks, it can also support the shift toward prevention, efficiency, coordination, and better long-term value across the healthcare sector.
5. What makes this reform different?
The real significance of Saudi Arabia’s healthcare reforms is not simply that the Kingdom is expanding public-private partnerships. Many countries have done that. What makes the Saudi approach different is the redesign of how the healthcare system itself is governed: separating institutional roles more clearly, strengthening purchasing and regulatory functions, and using private participation within a more coordinated and accountable framework.
The foundations of that model are already beginning to take shape: a national transformation program, evolving purchasing mechanisms, specialized regulatory institutions, new financing structures, health clusters, PPPs, and a growing emphasis on value, prevention, and population health. Taken together, these reforms reflect a structural shift away from a system centered primarily on ownership and administration toward one increasingly focused on performance, coordination, accountability, and long-term sustainability.
Delivering healthcare reform at this scale will inevitably remain complex. As the next phase of reform progresses, success will depend on how effectively incentives, financing models, purchasing mechanisms, regulation, and accountability structures are aligned across the system. Just as importantly, it will depend on how the handovers between institutions are governed. For private-sector participation to deliver its full value, investors, operators, innovators, and providers need a coherent and predictable operating environment, with clear roles, decision rights, escalation routes, data expectations, and accountability mechanisms across the bodies overseeing the sector. Ultimately, the Saudi model will be defined less by the balance between public and private provision, and more by how effectively its institutions work together to strengthen access, coordination, outcomes, and value for patients.
About CF
CF is a leading consultancy dedicated to making an enduring impact on health and healthcare. We work with leaders and frontline teams to improve health, transform healthcare, embed life science innovation and boost growth through investment. With unmatched access to UK healthcare data and award-winning data science expertise, our team are a driving force for delivering positive and meaningful change.
About the authors
Rafal Baker
Rafal is a Consultant at CF, bringing extensive expertise in high-impact strategy and implementation projects within Life Sciences and Healthcare, helping clients navigate complex R&D decisions, optimise clinical development strategies, and accelerate time-to-market for innovative treatments, as well as supporting healthcare systems with evidence-based care pathway improvements.
Nada Raoof
Nada Raoof is Director Middle East at CF, based in Riyadh, Saudi Arabia. She brings deep expertise in healthcare strategy, institutional excellence, and translating complex vision into measurable outcomes. She has extensive experience leading organisational strategy, performance management, and board engagement. She strengthened institutional governance, improved strategic delivery effectiveness, and secured significant funding for national health initiatives including biosafety, biosecurity, and public health data systems.
