First: Table (1) illustrates the core foundations (key questions) upon which the proposed model is based:

The question arises: Does the proposed model have specific requirements that contribute to its success? The answer is yes, as Table (2) illustrates the requirements for the success of the proposed model.

So, what is the proposed privatization model, and where has it been implemented?

It consists of privatizing three government hospitals through a direct sale to the private sector as "joint-stock companies" in the Kingdom's major regions, namely Riyadh, Makkah, and the Eastern Province.

This proposed model was implemented in the United States, where it contributed to expanding private ownership as an initial step toward full healthcare sector privatization. Furthermore, it helped ease the burden on the state budget and achieved significant positive results, most notably: meeting financial requirements, eliminating bureaucratic procedures, and improving performance and quality.

Additionally, an evaluation of this model ten years after its implementation showed that it facilitated a $50 million investment, which contributed significantly to the construction of specialized primary healthcare centers. Figure (1) illustrates the scenario of the proposed privatization model.

The question that arises is: Will selling (privatizing) one hospital in each city negatively affect the provision of (free) medical services to citizens in the Kingdom? The answer is no, as shown in Figure (2).

Figure (2)

Share Allocation: 75% of the capital is divided into shares, while the State (Ministry of Health) retains 25%.

Board Membership: 18% of the shares are designated for obtaining board membership in the joint-stock company (based on the opinion of Dr. Tariq Koshak).

Board Composition: Board memberships are offered to private hospital groups, such as Dr. Sulaiman Al-Habib Hospitals and the Saudi German Hospital group (as examples).

Public Offering: Following approval from the Ministry of Finance, the three hospitals will be offered for public subscription (IPO). Shares will be sold via commercial banks, inviting the general public—and the private medical sector in particular—to subscribe after determining the offering price per share.

Employee Participation: A specific number of shares may be allocated to hospital staff, with a subscription cap and a price point accessible to the middle class to serve as an incentive.

Incentives: To encourage subscription, the board may be granted an exclusive insurance concession within the three hospitals for citizens, in accordance with contractual terms and regulations.

B) Advantages of the Proposed Model:

Investment Broadening: Privatizing the three hospitals as joint-stock companies facilitates effective private sector participation in development. This aligns with the Eighth Health Development Plan, which aims to "enhance the private sector's capacity to manage large-scale health projects by converting public hospitals into entities operating on economic bases, where the State covers the treatment costs for patients referred from its health centers."

Fiscal Relief: Assisting the State in reducing the healthcare budget post-privatization.

Productivity Gains: Increasing productivity within the health sector.

Strategic Phase-in: Reducing public hospitals by 2% as an initial step toward full healthcare privatization. As Richard Tradwell noted, the start of privatization may involve navigating a "minefield"; however, successful implementation saves time and resources, reduces debt, and provides a superior healthcare system.

Reinvestment: Investing sale proceeds (amounting to hundreds of millions) in upgrading primary healthcare centers—which handle approximately 85% of health issues—as well as constructing new, equitably distributed centers. Implementing a mechanism to prevent dual patient registration (similar to the network model implemented in Croatia) can lead to significant financial savings.

Sustainability of Free Care: Maintaining free treatment even if 51% of public hospitals were privatized, provided that primary healthcare centers are properly prioritized.