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Healthcare Reimbursement in Saudi Arabia vs. US

The healthcare reimbursement methodologies in Saudi Arabia and the United States primarily rely on salary-based reimbursement and fee-for-service reimbursement. Both systems create incentives for physicians to perform more procedures, including expensive ones, rather than focusing on cheaper but equally effective options. Reforms are needed to both healthcare systems to address ineffective practices.

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John Ndambuki
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7 views1 page

Healthcare Reimbursement in Saudi Arabia vs. US

The healthcare reimbursement methodologies in Saudi Arabia and the United States primarily rely on salary-based reimbursement and fee-for-service reimbursement. Both systems create incentives for physicians to perform more procedures, including expensive ones, rather than focusing on cheaper but equally effective options. Reforms are needed to both healthcare systems to address ineffective practices.

Uploaded by

John Ndambuki
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© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Module 06: Discussion Forum (500)

The healthcare reimbursement methodologies in Saudi Arabia and the United States are
quite unique. In Saudi Arabia, health professionals in the public sector are reimbursed on the
basis of salary. This method has little or no incentives for providers to control costs. Saudi
Arabia also used a fee-for-service method of payment where insurance companies reimburse
hospitals for every specific procedure or service performed by healthcare providers or
hospitals (AlRuthia et al., 2020). Although this method of payment is simple and is associated
with a number of advantages, it creates an incentive for physicians to see more patients and
order costly procedures for patients which are reimbursed highly. This means that physicians
sometimes ignore simple and equally effective procedures just because they are time-
consuming and poorly reimbursed (AlRuthia et al., 2020). The salary model is also is
disadvantageous in that it leads to a lower through-put of patients for every healthcare
professional.
Like Saudi Arabia, the United States also makes use of the fee-for-service method of
reimbursement. Once a patient received medical care, the provider sends a bill to the people
responsible for covering medical costs (Torrey, 2020). The amount is billed on the basis of the
service agreed upon and the amount that Medicare and the health insurer has contracted to pay
for the specific service. Private insurance companies sometimes negotiate their own rates of
reimbursement with hospitals and healthcare providers. There are hospitals and providers that
do not accept patients with insurance that does not pay them enough unless in emergency
cases (Torrey, 2020). The main disadvantage that is associated with this kind of
reimbursement is that doctors are likely to prefer expensive procedures than cheap ones
because expensive procedures give them more money although they may be just as effective
as cheaper ones. To end the problem of ineffective in healthcare, there is need for more
funding in the healthcare systems of both Saudi Arabia and the United States (AlRuthia et al.,
2020).
References
AlRuthia, Y., Aydan, N. A. B., Alorf, N. S., & Asiri, Y. (2020). How can Saudi Arabia
reform its public hospital payment models? A narrative review. Saudi Pharmaceutical
Journal, 28(12), 1520-1525.
Torrey, T. (2020). How Healthcare Providers Are Paid by Reimbursement. Verywell Health.
Retrieved 2 March 2022, from [Link]
2615205.

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