Health Clusters and Value-Based Care in Saudi Arabia: What Providers and Pharma Need to Know

Value-based care pays healthcare providers for keeping a population healthy rather than for the volume of services they deliver. Saudi Arabia is now building its public health system around that idea: 20 regional health clusters are moving from the Ministry of Health to the state-owned Health Holding Company, with the goal of becoming accountable care organisations paid for outcomes.

2026 is the year this shift became tangible. Ten clusters and more than 130,000 staff have already transferred, and the Minister of Health expects all 20 to complete the transition by 2027. For hospitals, private providers and pharma companies, the commercial rules of Saudi healthcare are being rewritten.

Key takeaways

• The system is being restructured. The Ministry of Health is becoming a regulator, the Center for National Health Insurance (CNHI) the single national payer, and the clusters accountable care organisations (Strategy&, 2025).
• Transition is well advanced. 10 of 20 clusters and more than 130,000 employees have moved to Health Holding (MOH, 2026).
• Payment is shifting to outcomes. CNHI is introducing risk-adjusted capitation, and the Council of Health Insurance is piloting value-based payment in the private sector.
• The prize is large. Better outcomes could save SAR 40 to 65 billion a year by 2035, around 10% to 15% of total health spending.
• Prevention and chronic care become the business. Providers and pharma that prove outcomes between visits will win contracts in the new model.

What are Health Holding and the Saudi health clusters?

Health Holding Company is a state-owned company that delivers public healthcare through 20 regional health clusters. Each cluster is a vertically integrated network of hospitals, primary care centres and specialist services serving a defined population. Health Holding describes the journey as moving clusters from scattered Ministry facilities, through five gates, to full accountable care organisations.

The pace accelerated in 2026. The first wave moved the Eastern Region, Qassim and Riyadh Second clusters, more than 62,000 employees, with a 99.9% acceptance rate (MOH, May 2026). The second wave added Al Ahsa, Taif, Najran, Hail, Tabuk, Northern Borders and Hafar Al-Batin, more than 68,000 employees, bringing the total to 10 clusters and over 130,000 staff (MOH, 2026).

The Model of Care is already showing results. Speaking at the third Saudi Model of Care Forum in February 2026, the Minister of Health reported a 40% reduction in deaths from chronic diseases and life expectancy of 79.7 years (MOH, 2026).

How does value-based care work in Saudi Arabia?

The new system separates three roles that used to sit together in the Ministry of Health: regulating care, paying for care and delivering care.

Risk-adjusted capitation is the core mechanism. Instead of paying per procedure, CNHI pays a fixed amount per person, adjusted for each patient's risk. According to Strategy&, this rewards three behaviours: investing in primary care and chronic disease management to avoid expensive admissions, using evidence-based treatment instead of excess procedures, and planning budgets around population health.

The stakes are significant. Strategy& estimates Saudi public and private health spending at about SAR 250 billion in 2025, roughly 6% of GDP, with chronic diseases accounting for over 70% of deaths and hospital admissions at 113 per 1,000 people, above global averages. It sizes the potential savings by 2035 at:

• Preventive care incentives: SAR 16 to 26 billion a year.
• Evidence-based treatment: SAR 18 to 30 billion a year.
• Operational efficiency and technology: SAR 6 to 9 billion a year.

The private market is moving in parallel. The Council of Health Insurance's value-based healthcare action plan includes payment pilots for conditions such as diabetes, pregnancy and childbirth, cataract surgery and bariatric surgery, alongside a shift to case-based and bundled payments.

The implication: in a capitated system, a patient who stays well is profit and a patient who is readmitted is cost. Chronic disease management, adherence and prevention stop being nice-to-haves and become the core of the business model.

What changes for providers, the private sector and pharma?

For health clusters. Clusters now carry accountability for a population, not just a set of facilities. They need population health data, risk stratification, care coordination across hospitals and primary care, and the ability to show outcomes to CNHI. Health Holding is also recruiting directly, announcing 3,150 roles across the 20 clusters in 2026, including a family medicine residency pathway that signals the weight placed on primary care.

For private hospitals and clinics. As clusters mature into accountable care organisations with growing private sector participation, private providers become potential partners, subcontractors or competitors for defined pathways. Those who can document outcomes per pathway, such as diabetes control, maternity or elective surgery, will be best placed to win contracts and insurer networks.

For pharma and medtech. The buyer is changing. Clusters and payers will increasingly ask what a therapy does to total cost of care and outcomes, not just its price. That raises the value of:

• Real-world evidence generated in Saudi patients and pathways.
• Outcome-based agreements, where part of the price depends on adherence or clinical results.
• Patient Support Programmes that keep patients on therapy and report persistence, because non-adherence now shows up directly as cost in a capitated budget.

For digital health. Remote monitoring, adherence tools and virtual follow-up move from cost centre to margin protector. Strategy& explicitly calls for providers to adopt electronic health records, AI-driven analytics and automated reporting to integrate with the national exchange, and for a phased rollout starting with shadow billing and pilots.

A five-step plan to win in a value-based Saudi system

1. Pick the pathways payers will buy first. Align with conditions already in value-based pilots and with the Kingdom's chronic burden: diabetes, maternity, obesity and cardiometabolic care. Build outcome baselines now, before contracts require them.
2. Measure what capitation rewards. Track admissions and readmissions avoided, HbA1c and blood pressure control, medication persistence and patient-reported outcomes. Report them per pathway and per population, not per facility.
3. Invest between the visits. Under capitation, the cheapest admission is the one that never happens. Remote monitoring, structured follow-up and adherence support are where savings are created.
4. Connect to the national rails. Integrate with NPHIES, use interoperable electronic records and keep data PDPL-compliant. Risk adjustment depends on clean, shared data.
5. Partner across the old boundaries. Clusters, private providers and pharma will increasingly share risk on the same patients. Joint pathways, data-sharing agreements and outcome-based contracts are the new commercial toolkit.

How CareSync helps: CareSync is a white-label continuous-care platform built in Riyadh for hospitals, clinics, clusters and pharma Patient Support Programmes. It runs the between-visit layer that capitation rewards, including remote monitoring, adherence support and outcome reporting, inside the provider's own brand.

Frequently asked questions

What is Health Holding Company? Health Holding is a state-owned company established in 2022 to deliver public healthcare in Saudi Arabia through 20 regional health clusters, operating under the Saudi Model of Care.

How many health clusters have moved to Health Holding? Ten of the 20 clusters, covering more than 130,000 employees, transferred across two waves by mid-2026. The Minister of Health expects all 20 to complete the transition by 2027.

What is an accountable care organisation? An accountable care organisation is a provider network responsible for the health outcomes and total cost of care of a defined population. In Saudi Arabia, the health clusters are being developed into accountable care organisations.

What is risk-adjusted capitation? It is a payment model in which the payer, here the Center for National Health Insurance, pays providers a fixed amount per person, adjusted for each person's health risk, rather than paying per service.

Is value-based care coming to private insurance in Saudi Arabia? Yes. The Council of Health Insurance has a value-based healthcare action plan with payment pilots for conditions including diabetes, pregnancy and childbirth, cataract surgery and bariatric surgery.

What does value-based care mean for pharma companies in Saudi Arabia? Payers and clusters will judge therapies on outcomes and total cost of care. Real-world evidence, outcome-based agreements and Patient Support Programmes that prove adherence become more important.

Outcomes are becoming the currency

Saudi healthcare is shifting from paying for activity to paying for health. Half the clusters have already made the move, the payment models are being piloted, and the remaining clusters follow by 2027. Organisations that start measuring outcomes, managing patients between visits and sharing risk with partners now will be the ones payers choose when the contracts arrive.

Ready to prove outcomes between visits? Book a CareSync demo at care-sync.co.

About CareSync

This article was prepared by the CareSync Team, drawing on experience across pharma, medical affairs, market access and digital health in Saudi Arabia. CareSync is a white-label continuous-care platform built in Riyadh for hospitals, clinics and pharma Patient Support Programmes.

Sources

1. Ministry of Health. Minister of Health opens the 3rd Saudi Healthcare Model Forum 2026, 11 February 2026.
2. Ministry of Health. Health Holding completes staff transfer to seven health clusters, 2026.
3. Ministry of Health. Health Holding disburses over SAR 2 billion in transition bonuses, 4 May 2026.
4. Ministry of Health. Health Holding Company announces 3,150 job opportunities across 20 clusters, 26 February 2026.
5. Health Holding Company. About Health Holding and the health clusters journey.
6. Strategy& (PwC). Transforming healthcare financing in Saudi Arabia, 23 July 2025.
7. Carnall Farrar. A shift from funding activity to purchasing outcomes is central to making the Saudi Model of Care real.
8. Al Tamimi & Company. KSA value-based healthcare: developments in implementation, 2024.
9. Argaam. Health Holding board approves health clusters' organizational structures, 30 June 2024.