H E Dr Saeedi who was speaking at the opening of the 11th Middle East Healthcare Insurance Conference, said the government is committed to gradually provide compulsory healthcare insurance for all starting with expatriates in the first stage. He added that Oman is keen on implementing a compulsory healthcare insurance system in order to ensure quality and efficient healthcare services.
He stressed that increased spending on healthcare doesn't necessarily mean better quality and the aim of launching compulsory healthcare insurance is not to cut costs but to ensure efficiency and effectiveness of healthcare services in the first place. In Oman, healthcare accounts for three per cent of government spending. The Capital Market Authority (CMA) believes that the insurance sector is an important source of economic development on the one hand and a means of avoiding and managing risk on the other.
H E Abdullah Salim al Salmi, executive president, CMA said the government has for long paid much attention to the development of the healthcare sector and is continuing its efforts to support the provision of high-quality healthcare services.
“Whether health services are provided by the government or the private sector, comparative development studies show that the cost of healthcare is increasing steadily.
“Public spending and human development indicators show that spending on healthcare has become a major challenge for several countries,” he said. In the GCC, public and private healthcare spending exceeded US$62bn in 2016 and is projected to reach $132bn by 2020.
In Oman, spending on healthcare increased to six per cent of the government expenditures in 2016. Between 2007 and 2016, the government spending on healthcare reached an average annual growth of 14 per cent, while average investment spending in the sector reached around 25 per cent.
“However, with the drop in oil prices and the changing demographic landscape in these (GCC) countries, in terms of expatriate rates, age-groups, gender ratios, economic dependency ratios and urban population distribution, it has become difficult to continue to provide high-quality healthcare services in light of the increasing cost of these services,” he said.
Salmi outlined three necessary elements to overcome the challenge and continue to provide quality and efficient services at an affordable cost: Satisfactory healthcare services capable of responding effectively to the demand for these services, insurance companies which facilitate and smoothen access to services, thirdly an integrated regulatory and control system that would ensure smooth implementation of pertaining legislations and regulations besides safeguarding the rights of all stakeholders.
He noted that healthcare insurance has been growing steadily in Oman to account for 26 per cent of the market GWP in 2016 and achieving CAGR of around 34 per cent over the past five years. Last year, nine per cent of expatriate workforce in Oman were insured, while insurance of local workforce with their families stood at nine per cent. Salmi disclosed that the CMA has recently established a special department for healthcare insurance. “We will work on the development of legislation, regulation and necessary controls to manage and operate healthcare insurance systems, taking advantage of others’ experiences in this field.”
He added that the latest increase in the minimum capital requirements to RO10mn and the stipulation to convert local insurers to publicly listed companies, came to strengthen insurers and enable them to efficiently deal with various insurance branches.