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Volume :30 Issue : 113 2004      Add To Cart                                                                    Download

Resource Allocation For Financing Health Services in the Kingdom of Saudi Arabia

Auther : Abdulmunim I. Al-Abdulmunin& Abdulaziz A. Al-Soudani

     Public Health standards in Saudi Arabia are improving rapidly.  Health care costs have increased more than consumer price indices.  But the public funds for health care are declining.  This fact raises a problem related to the prospects of financing health services in Saudi Arabia.

     This study aims to review the components and the growth rate of health expenditure, and determine if Saudi Arabia’s spending is too much or too little on health services.

     The study proposes two main hypotheses:

 (1)  The real health expenditure per capita tends to decline, owing to the population growth, inflation rate, depreciation of assets and declining public funds for health services.  The study used time series analysis (1960 – 2000) applying convenient deflators for each variable.  A double logarithmic function is fitted.  The statistical model used in this part is multiple regression.  The specific estimating equation was estimated via ordinary least squares (OLS) regression techniques using SPSS version 10.(2)  Saudi government could optimally reallocate financial resources between public and private health sectors and the Ministry of Health could introduce fees charges to finance and cover the cost of specific health service.  In this respect, two hypotheses are formulated for testing the relationship between governmental financing health service and the outcome of public health services.  This is Samuelson rule, which suggests a positive relation between government health sector and private health sector.  And another relation between government funds and the outcome of public health services. A regression model for health expenditure and funds was constructed and used to predict a norm for each sector.  The study specifically draws on the economic theory of consumer demand.  The main tool of analysis used here is based on normative approach at first, and them combined with a single macroeconomic model.

     The study consists of two parts: In part one, an attempt is made to analyze the composition and trends of actual health expenditures; part two presents a normative approach and the argument for reallocating the financial resources between government and non-government agencies and discusses how user charges could be applied to the impure public health services.  The conclusion presents some applicable recommendation.

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