costs. Hospitals would be under pressure to be more flexible on prices to avoid any pressure should lower-cost packages impact their volumes. Vision implies a long process To us, the government's vision implies a two stage process over a long time-frame: e Inthe short-term: improve the quality of care offered in the public sector, potentially with the assistance of private healthcare e In the long-term: Only when public facilities have improved, privatise such facilities (although one medical city is to be privatised under a public-private partnership) e Concurrently: Prepare for a roll-out of private health insurance to finance private provision Abu Dhabi and Dubai are probably not parallels In Abu Dhabi and Dubai, private healthcare was encouraged to avoid expats relying on public facilities. The large expat population in proportion to the locals (85:15) supported the creation of private facilities that it was then possible for the governments to fully fund Emiratis to use. The quality of public facilities was not a cause for concern - many Emiratis still prefer to use government facilities for more serious problems. Expat population and quality of public system differ in Saudi The proportion of expats (33% of the population) is not large enough to drive the establishment of a large, high quality private hospital base sufficient to serve the entire Saudi population. Additionally, the quality of both care and infrastructure in the public system is seen as lacking, suggesting additional investment in facilities is required. Degree to which private sector will benefit is uncertain Given the lack of detail provided to date, it is hard to assess the benefits, or risks to the incumbent private hospital operators in detail. We see two main ways the private sector can participate in healthcare reform: e Win contracts to run and improve public health facilities e Benefit from volume growth any roll-out of private health insurance could spur e Partic