MUSCAT, NOV 23 – Seeking to ease its longstanding dependence on the government for its annual funding requirements, Oman’s Ministry of Health is set to launch a first-of-its-kind endowment fund to help raise monies to support the financing of public health care services in the Sultanate.
The initiative, according to a key official, is modelled on ‘Siraj’ — an endowment fund set up at the behest of the Education Council to help fund the development of higher education in the Sultanate.
Dr Halima al Hinaiya (pictured), Senior Consultant at the Ministry’s Directorate of Health Investment and Financing Alternatives, said the new endowment fund offers a “non-traditional approach” to help sustain the financing of the public health care sector in the Sultanate.
Speaking at an Islamic Finance Conference organised by the Oman-French Friendship Association (OA) recently, Dr Al Hinaiya said the initiative has its origins in reforms pondered by the Ministry in the wake of the fiscal crisis triggered by the slump in global oil prices in 2014.
“The Ministry came up with the idea of setting up an endowment fund that (capitalises) on some of its assets, uses donations, and explores investments in partnership with Islamic banks,” said the official.
“The initiative has already been approved by the Ministry itself, as well as by the Ministry of Awqaf and Religious Affairs. We are now waiting for its official launch.”
Importantly, the Health care Endowment Fund is being positioned as a primary source of finance for the running of Oman’s public health care sector in the future, according to the official.
“The Fund is proposed to eventually take over the financial burden of the Ministry, support the construction of hospitals, establish health care institutions at different levels, purchase hospital equipment and medicines, and support medical education and R&D in health care,” said Dr Al Hinaiya. “It will also explore investments in health care related projects, such as pharmaceutical industries, private hospitals, and so on.”
Rising public health care costs, fuelled in part by population growth as well as the strong uptrend in non-communicable diseases, are severely constraining the Ministry’s limited financial resources, according to the official. Renal dialysis treatment alone costs the Ministry around RO 35 million annually, while maternity care is estimated at around RO 21 million. Only a small fraction of the estimated RO 700 million in budgetary allocations to the sector is recouped in fees and revenues, she said.
The concept of charitable endowment (Awqaf) in supporting the delivery of the health care is well-established in the region and elsewhere around the world, Dr Halima pointed out. In Oman, however, while Awqaf is strongly prevalent as a vehicle for supporting philanthropic and charitable causes in general, contributions to health care in particular are negligible, she noted.
Also as part of fund-raising efforts, the Endowment Fund will look to develop lands belonging to the Ministry for future healthcare projects via the Public Private Partnership (PPP) route. The Fund will work in consultation with Islamic banks in the Sultanate for guidance on investment opportunities that can be explored and pursued in this regard, she added.