Let’s review the current issues affecting the public in terms of healthcare costs.
Recently, medical insurance premiums in Malaysia were announced to increase by 30 to 70 percent annually by insurers. This has led to a significant outcry from the Malaysian public, with many expressing concerns that they will no longer be able to afford their annual medical insurance premiums. As a result, many may be forced to rely on already overstretched government hospitals for the treatment of non-communicable diseases (NCDs) and other medical conditions requiring outpatient and inpatient care. Bank Negara Malaysia (BNM) intervened to curtail increases in premium to only 10 percent per year over 3 years and give those 60 years an over a year’s moratorium from increase in premiums. However, there are many complaints that this is not actually the reality. This band aid response however still leads to a rise in medical insurance premiums of over 30 percent now or in 3 years and for those over 60 there may be significant increase in premiums after the moratorium of one year.
Government hospitals provide the public with heavily subsidized medical care, but there are instances where out-of-pocket payments are required for certain consumables, such as prostheses, stents, pacemakers, etc. These out-of-pocket expenses can amount to thousands of ringgit, causing financial hardship, especially for those in the B40 and M40 income groups.
Medical insurance coverage is not standardized across different age groups for basic coverage, and this issue needs to be addressed, especially for patients up to 90 years of age. Premiums should remain affordable or consistent, with lifetime limits as they currently are. To make this possible, insurers are asking for co-payments to be made for most inpatient visits. This would allow insurers to maintain stable premiums or only slightly increase them, as they would receive co-payments for all inpatient admissions. Additionally, insurers are calling for the regulation of private hospital charges, as they claim that overcharging is currently a concern.
Reviewing all 3 of the issues raised above, the main factor affecting the public is the out-of-pocket payments for medical healthcare coverage have gone up tremendously.
In Malaysia in 2019 out-of-pocket payments account for 35 percent of healthcare expenditure which funded 74% of private healthcare expenditure (1). In the USA, medical debt leading to poverty or the inability to pay mortgages is a problem not only for the uninsured but also for those who are insured, as they may struggle to afford co-payments or uncovered items.
POTENTIAL SOLUTIONS:
There is a great need to have a National Health Fund which has income sourced from many and varied sources to cover out-of-pocket payments in healthcare.
Sources of funding are listed below:
The Employee Provident Fund (EPF) plays a crucial role in helping individuals save for retirement. It has been reported that about 6.1 million members (38 percent) have less than RM 10000 in their accounts and 3.6 million members have less than RM 1000 in their accounts and a major illness or high out-of-pocket expenses for insurance could easily wipe out these savings upon retirement (2).
My recommendation is to think outside the box to address medical out-of-pocket expenses. One potential solution is to allocate RM 10 per month from all 16 million EPF members with savings and/or SOCSO funds into a Tabung Kesihatan Negara. (2). This fund would cover out of pocket medical expenses that are agreed upon by the Tabung.
The taxation income from various taxes imposed in Malaysia, including income tax, sin tax, and other suggestions by NGOs and individuals, can potentially be used to address healthcare funding.
The current out-of-pocket payments that could be covered by the fund include:
KKM consumables not covered, or non-generic medications, etc.
Co-payments for medical admission to private hospitals so that insurers can provide insurance with premiums that are fixed or slightly adjusted for risk and remain affordable to those who would like to purchase private insurance and attend private hospitals till old age.
Non-covered items by some insurers, such as pacemakers, etc.
The actuaries would need to calculate and work out the coverage of out of pocket insurance and the number of years covered for instance up to RM 50000 coverage for 3 years etc.
The Health Ministry’s manpower is already covered by a complex system of doctors, nurses other allied health personnel. A Tabung Kesihatan Negara can easily claim for the out-of-pocket consumables to proceed with an operation without delays sourcing funding from Social welfare or other funds or borrowing from relatives and friends etc.
There is a significant need to establish standardized national insurance packages for individuals aged 18 to 90, categorized into 5 or 10-year age brackets. All medical insurance providers should collaborate to offer comprehensive national insurance plans with maximum coverage at affordable premiums.
To help insurers reduce payouts to private hospitals and keep premiums low, cost-containment techniques, such as Diagnosis-Related Groups (DRGs), will need to be implemented. However, the new DRGs must account for expected complications, severity, and quantity—for example, differentiating between the removal of 5 polyps versus 15 polyps, with distinct DRG codes to allow specialists and doctors to charge appropriately for additional work.
While upcoding abuse (claiming a more complicated DRG when the case is not complicated) is a known issue, measures must be put in place to prevent such misuse. Premiums for all age groups should be kept as consistent as possible, using methods such as the Tabung Kesihatan Negara covering co-payments for individuals facing catastrophic illnesses or requiring inpatient care at private or semi-private hospitals. This would allow all Malaysians up to the age of 90 to have access to national insurance provided by Tabung Kesihatan Negara.
Beyond the primary uses mentioned above, the expansion of Tabung Kesihatan funds could include paying general practitioners (GPs) to review patients who attend specialist outpatient clinics for check-ups or new prescriptions, up to three times a year to reduce the load on the public sector. Repeat medications may still need to be collected via E- prescriptions from the general hospital where they previously attended. In case of any complication or changes patients would be referred back to the specialist clinics.
References:
1. Malaysian Ministry of Health. Malaysia National Health Accounts: Health Expenditure Report 1997–2019. Ministry of Health Malaysia; Putrajaya, Malaysia: 2021.
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Dr. John George is the former National Chairman of the Government Doctors (SCHOMOS) and submitted the proposal for limited private practice to JPA, which was approved in 2000, leading to the development of UMSC. He was also a former Professor and Head of Musculoskeletal Radiology at UMMC. Currently, he is a Radiologist at the National Sports Institute and Beverly Wilshire Medical Centre in Kuala Lumpur. His publications can be found on ResearchGate by searching for "Dr. John George." You can contact him via email at msk.rad@gmail.com.
Please note that the views expressed in this article are those of the author and do not necessarily reflect the opinions or positions of Vital Signs.
