Private Sector Hospitals’ Response to Changes in Demand for Health Insurance in Arab Countries

TL;DR

This study examines how private hospitals in Saudi Arabia, UAE, and Jordan respond to changes in health insurance demand from 2006 to 2022.

Contribution

The study introduces a novel analysis of the dynamic relationship between health insurance demand and healthcare infrastructure in Arab countries.

Findings

There is a negative relationship between health insurance demand and healthcare infrastructure indicators like hospitals, beds, and nurses.

A two-way Granger causal relationship exists between insurance demand and infrastructure.

Health insurance demand is statistically significantly negatively associated with the number of beds and doctors.

Abstract

Background: Health insurance (HI) plays a vital role in providing health services, as it covers relevant healthcare costs to improve health outcomes. Objectives: The study aimed to analyze the extent to which private sector hospitals respond to changes in demand for HI in 3 Arab countries between 2006 and 2022. Methods: A structural equation model was used to evaluate the dynamic association between the variables. The study sample comprised the Kingdom of Saudi Arabia, the United Arab Emirates, and Jordan. Results: There were largely negative relationships between the demand for insurance and indicators of healthcare capacity, namely, the number of hospitals, hospital beds, and nurses. This suggests that publicly funded and organized healthcare systems limit private insurance demand. Furthermore, the panel vector autoregression Granger causality tests indicated a dynamic, 2-way Granger causal relationship between insurance demand and infrastructure. The policy implications of the study therefore suggest recommendations that healthcare planning be coordinated with insurance policy planning. Discussion: Regarding the number of hospitals, the coefficient for demand for HI was -0.169 (P = .032, indicating a negative but not significant relationship between HI and the number of hospitals. For beds, the coefficient for HI was 0.0000574 (P <  .001), suggesting a statistically significant negative relationship between HI and number of beds. Regarding the number of doctors, the coefficient for HI was -0.0000266 (P< .001), indicating a statistically significant negative relationship between HI and number of doctors. For the number of nurses, the coefficient for future insurance demand was -0.0000968 (P <  .001), reinforcing a negative relationship between HI and number of nurses. Conclusions: The study presents important insights into the intricate interplay between healthcare infrastructure and insurance demand in the private hospital markets of Saudi Arabia, the United Arab Emirates, and Jordan. These findings highlight the need for comprehensive health system planning in conjuction with insurance reforms, infrastructure development, and workforce reinforcement to maximize the sustainability and effectiveness of HI plans in the region.