Table 18: Public and private hospital and bed distribution Chart 56: Public and private hospital and bed distribution Riyadh Jeddah Other 100% Population 7,717,467 4,224,568 18,828,340 Public 80% Hospitals 47 13 210 60% | Beds 7,937 2,993 29,370 40% Beds/hospital 169 230 140 ad 20% 7 Hospitals 34 33 74 0% = Beds 4,554 3,109 8,001 Riyadh Jeddah Other Beds/hospital 134 94 108 Total = % population = % public hospitals ™ % public beds Hospitals 81 46 264 = % private hospitals m% private beds | % hospitals Beds 12,491 6,102 37,371 Beds/hospital 154 133 132 1% beds Source: BofA Merrill Lynch Global Research, Ministry of Health Source: BofA Merrill Lynch Global Research, Ministry of Health Hospital quality would be key to attracting private buyers The government has not invested in hospital infrastructure and some hospitals may require substantial investment by any buyer, if they are acquired at all. One Saudi hospital operator has said that there is no way it would seek to acquire government hospitals for that reason. Bidders would likely want to obtain scale benefits from multiple purchases Operating hospitals has benefits of scale in terms of centralising certain non-medical services (e.g. purchasing, catering, laundering) and allocating central costs over a greater revenue base. The greatest financial benefit would come from acquiring groups of hospitals to maximise these benefits. There would likely be cases where staff, and/or high net worth individuals chose to bid for individual assets. Privatisation proceeds could defray some of NTP cost Amounts raised from any privatisation would reflect the degree of competition for individual assets as well as level of reimbursement and the profits any acquirer could generate. In terms of pure asset values we assume the Riyadh and Jeddah hospitals (60) would be worth more than those elsewhere (210), simply because of the greater population currently and higher expected future growth. Government hospitals are likely lower cost t