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King Fahad Medical City

Media Center / . / Medical city at the forefront of Saudi healthcare revolution

Medical city at the forefront of Saudi healthcare revolution

12/11/2016 11:00 AM



Dr Mahmoud Al Yamany

CEO of King Fahad Medical City


Commissioned in 2004, King Fahad Medical City (KFMC) has evolved into one of the most advanced tertiary healthcare facilities in the Middle East. As Saudi Vision 2030 focuses on introducing competition and privatizations in the healthcare sector, CEO Dr. Mahmoud Al Yamany explains how KFMC is focused on developing its research capabilities and expanding its scope to include primary and secondary healthcare provisions, whilst encouraging private sector involvement and embracing corporatization principles.



Healthcare financing is a major challenge across the world. In the recent US elections, healthcare was seen as a decisive factor in some key swing States. As Saudi government policy focuses on moving more people into private sector employment, how effective and sustainable do you think the current healthcare insurance model is for enabling the Kingdom to meet the healthcare needs of its young and growing population?

The vision, as we see it, is to have a national health insurance program for people working in the public sector, with private health insurance for people who are not eligible to be covered by the national system. In addition, private insurance companies can still sell top-ups that allow people to purchase VIP services or services that are not covered by the national insurance policy. Customers can combine the two: they can be covered by the national insurance program but also choose to have high-level private cover for uncovered services like cosmetics. This way, health insurance companies will thrive. The insurance fund will be paying the corporates, and the corporates will be competing against one another as well as against the private sector, which in theory should improve the services they offer in terms of quality and efficiency.  


You were quoted in the Financial Times earlier this year as saying the Kingdom needed to move beyond a focus on treatment into prevention. Advances in genomic research mean that we can now predict and sometimes prevent chronic health problems before they occur. What are the challenges to the introduction of a comprehensive preventative healthcare system across the Kingdom, and how is KFMC helping to spearhead a drive towards predictive healthcare?

The Saudi genome study that we are undertaking with King Abdulaziz City for Science and Technology (KACST) is focused on preventative healthcare. We are identifying the genome sequencing of the Saudi population and trying to map hereditary diseases to find out what we can avert via prevention and genetic engineering, and also to discover what genes don’t match so we can council people before they get married that their offspring may be susceptible to genetic disease. We are already doing that with sickle cell anaemia, for example, and this has reduced the sickle cell anaemia disease burden in the Kingdom.

What we are doing now with KACST is something much broader than this. We are trying to identify all genetically predisposed diseases by identifying the genome sequencing of the Saudi population and mapping that to the common genetic syndromes or diseases. If you identify the genome of the disease that is developing, you can change it through genetic engineering and you can also predict how a condition will develop over time so you can plan treatment and care accordingly. All of this helps in building a healthy nation and at the same time, optimizing healthcare resource planning and utilization.


King Fahad Medical City was commissioned in 2004 and has evolved considerably over the years. How would you define its current scope and vision?

This building was in place for 12 years before it was commissioned. The initial focus back then was just to get the hospital open. We started by moving a community children’s hospital into this building. However, very quickly the vision was rectified. Within six months, the Ministry of Health decided that this would be a tertiary care hospital. When the new plan was conceived, it stipulated that there would be three phases of five years each. The first phase was for KFMC to establish itself in the market as the best healthcare provider at the tertiary level by 2010. The second phase was to establish itself as the best healthcare training facility by 2015. The third phase was to establish itself as the best research facility by 2020. That is why the focus from early 2012 shifted towards the third mandate, which is research. Eventually we developed an executive level research administration that reports directly to the CEO. This reflects the intention of KFMC to become a pioneer and the benchmark for medical research in the region.


What is your assessment of KFMC’s current status as an international benchmark for healthcare services and research?

In terms of healthcare services, we are on a par with the elite international organizations. In terms of research we have some way to go. That is why we will work on building our research capacity and capabilities.


Under Vision 2030, the government wishes to introduce more competition into the healthcare sector. Corporatisation principles are expected to be introduced in public hospitals and at least one medical city is expected to be privatised. KFMC already has experience of PPPs through your Proton Therapy Center. What further opportunities do you see for PPPs or private sector involvement in KFMC?

There are tonnes of opportunities. The objective of corporatizing or privatizing healthcare in Saudi Arabia is to have an accountable care provision system. You see a lot of duplication of healthcare provisions due to the system being free and open to all. Often one patient will be visiting several facilities and specialists for treatment of the same condition. This is very expensive when it comes to complicated diseases. The only way to rectify this is to corporatize so that facilities are paid for what they do rather than their size. At present, the budget allocation is based on the number of beds and it is up to the healthcare facility to decide how to spend that, within certain parameters. The system doesn’t recognize the number of encounters, nor does it hold hospitals accountable to the population. There are no penalties for decreasing the number of patients seen, or incentives for treating more patients or conducting more procedures. The change with corporatisation is that facilities will be accountable care organizations and they will only get paid for what they do. The payment system will depend on outcomes and the reimbursement system will likely follow the international standard, which is the Diagnosis Related Grouping (DRG).

The 2030 plan is to streamline healthcare through, on the one hand, corporatizing public providers so corporates are responsible for outcomes, and on the other hand, developing a finance system that sustains the healthcare system and treats public and private organizations equally, taking into consideration the overheads of the public organizations, based on a national mandate for training, research and academics. The end result is the following: firstly, public hospitals will have to raise their productivity levels to match the private sector, otherwise they will not survive. Secondly, the private sector will be incorporated into the equation so that the current level of 2.3 beds per 1,000 of the population becomes 2.5-2.7 beds. Thirdly, patients will have a wider choices of providers.

It happens that we foresaw this at KFMC back in 2013 and we did two important things. Firstly, we recognized that healthcare expenditures were growing at very high rate in terms of dollar per capita and that this was unsustainable. We realized that change was coming and it would be focused on payment based on productivity and the number of patients treated and procedures performed. We began looking at cost accounting because we wanted to know what services we were very efficient at, so we could expand them, and what services we were less efficient at, so we could improve or outsource them. This is in line with Vision 2030 and the objective of increasing private sector involvement in the economy. We saw the potential for outsourcing in several areas, one of which was radiology. We have a lot of capacity in radiology, so we found that the best solution was to spin off the radiology department as a company through a public private partnership (PPP) and we are now very close to our objective.

With the lab, we realized that we are very competitive on pricing compared to several other high-level tertiary care organizations. So, we thought about making business out of this by expanding the lab so we can bring in revenue from other hospitals. This will require third party involvement from the private sector that can scale up quickly. As you know, we already have experience of building the private sector into the provision of healthcare services. The prime example of this is the Proton Therapy Center at KFMC, which is being built by the private sector as a PPP project.  


Whilst you are recognized as one of the most advanced tertiary care facilities in the region, tertiary care in general is costly and the profit margins are low. Are you considering expanding the scope of KFMC to include primary and secondary healthcare?

We cannot survive purely as a tertiary healthcare institution because the revenues barely cover the cost. In secondary care, we can generate more revenue to enhance tertiary care. Further to that, there is a huge supply-demand gap in family physicians in the country. The gap is approximately 13,000 family physicians at present and we saw this as an opportunity. As such, we have agreed with the Saudi Commission for Health Specialities to look into acquiring a number of primary healthcare centers and establish a 3-year training program with the objective of training 100 family physicians per year. This will ignite competition to create similar academies and will help us to close the gap in family physicians, whilst also serving the purpose of creating an integrated care model at KFMC at a very reasonable cost.

Furthermore, there are a lot of changes that can be done at secondary healthcare level that can lead to cost savings. For example, converting most of the in-patient services to day services would induce considerable savings.

For a government, the most convenient way to deal with healthcare is to capitate, but this is very difficult for a healthcare provider because it requires risk analysis and accountant capabilities that are scarce in the local market today. The way to work towards a population capitation healthcare model is to focus heavily on primary care, particularly preventative care, to minimize the number of people requiring costly tertiary care. This is what the Kingdom is trying to achieve by introducing corporatization principles.

KFMC’s task at formation was to deal with tertiary care, so adding primary care to the portfolio is challenging and the most effective for us to do this is through a third party from the private sector until we develop the required capacity. We may even discover that this is the best way to run primary services permanently.


In April this year, a US healthcare technology and services trade mission, organized by the US Department of Commerce, toured hospitals in Riyadh and Jeddah to explore investment and partnership opportunities. Given all the privatization possibilities you have just mentioned, do you see scope for American companies to play a role in the evolution of KFMC?

Absolutely. The existing private market within Saudi Arabia has a limited knowhow in integrating healthcare and functioned based on cost-reimbursement, and it will take some time for the private sector to adjust to a competitive market. In addition, the current capacity of Saudi private sector operators does not give them much room to expand. So, in order to expand capacity in an efficacious way, we will require international third parties, from the United States and any other country with the necessary expertise.

Saudi Arabia is unique in that it focused on tertiary care in the 1990s. As it stands, we have the best tertiary care in the region, comparable to the USA, but when it comes to secondary care we are a little behind and in primary care we are a little further behind. This is where we need help from international operators.


You have previously stated that one of the biggest challenges at KFMC is finding enough qualified professionals to staff your medical facility. Only one in three healthcare workers in the Kingdom is a local, according to McKinsey. Can you expand on KFMC’s strategy for attracting and nurturing Saudi talent? 

Today it is not as difficult to attract talent in the highly sub-specialist areas. The difficulty is to attract generalists, such as GPs, internists, and general pediatricians. All the Saudi graduates from medical schools wish to super sub-specialize, so we are left with the base uncovered.  In response, we have expanded our training programs and we are working on changing the payment model to drive people into the general specialties.

The most difficult struggle is nursing. There is an international shortage of nurses and in Saudi Arabia it is even worse because we are a conservative society and many families do not approve of jobs where young ladies work late hours and night shifts. A lot of Saudi nurses drift towards day-time work like research or admin to avoid late shifts. Having said that, it is more acceptable now than it was a decade ago. To build on this momentum, we send senior nurses, both males and females, to high schools to promote nursing as a profession. We also sponsor high school grad scholarships to qualify as nurses, either within the Kingdom or outside, and we choose some of them to do further studies so that they can lead certain specialist areas.

The nursing profession tends to attract more females than males, so this is an effective way to create more jobs for Saudi females. The other way is to bring females into the leadership positions at KFMC and one example is that the executive director of nursing affairs in KFMC is a female, as is the chief for the innovation center and the chief informatics officer, chief of quality, the director of the main hospitals and many others. We tend to promote females into leadership positions to show Saudi women that they can lead. We start by increasing the number of females in leadership positions. I look forward to the day when a Saudi woman becomes a CEO of a leading organization like KFMC.


To date, medical tourism is underdeveloped in KSA, with outbound medical tourism much more common than inbound. According to the Medical Tourism Index (TMI) the Kingdom ranks 37th among the most desired countries to receive medical care. However, with the government looking to generate new growth engines under Vision 2030, there have been some discussions on nurturing a medical tourism industry, particularly as many religious pilgrims who visit the Kingdom are seeking relief from some kind of medical condition. How do you assess the potential for Saudi Arabia to develop into a leading medical tourism destination in the Middle East, and what role can KFMC play in enhancing the Kingdom’s appeal for medical tourists?

The potential is huge because health tourists usually only travel for tertiary care and, as mentioned earlier, tertiary care in Saudi Arabia is the most advanced in the region. What we are lacking is a visa system that allows people to enter the country easily. If this problem is solved, the returns could be great. We are working at KFMC with insurance companies to provide coverage for their tertiary care patients and VIP clients and this is the first step towards developing health tourism at KFMC. As we target international clients from outside of the country, the initial stage would not be to generate a profit, but rather brand the service and create demand to generate enough volume. In the beginning, we will have to caution our clients that the visa application process may take a long time.