Privatization, Corporatization, and Public-Private Partnership in the Kingdom of Saudi Arabia

Abstract

There are different governmental reasons and technologies for seeking public-private partnerships throughout the developed countries. Significant motives have been to improve efficiency and risk distribution in comparison to traditional financing techniques and to lessen budget and borrowing limits. In this study, the movement toward privatization enhancing the efficiency of MoH’s hospitals has been assessed using Data Envelopment Analysis (DEA) from 1979 to 2020. Moreover, the efficiencies of the individual hospital were estimated through the DEA model, which includes: scale efficiency (SE), pure technical efficiency (PTE), and overall technical efficiency (OTE). In addition, factor affecting such efficiencies was analyzed through Tobit regression. The VRS results suggest that the numbers of hospitals benefiting from the complete corporatized phase are greater than those benefiting from the last phase (and vice versa in the case of DRS). The variance between inefficient hospitals in the less corporatized phase (2000-2020) was more prominent than in the fully corporatized phase (1988-1999). In conclusion, fully corporatized hospitals (on average) achieve relatively better overall efficiency. It is recommended that additional corporatization might be stimulated by a standardized set of performance measures, which cover both the quality criteria and economic efficiency measurements from a healthcare perspective.