Wednesday, June 07, 2023

#Newsflash: Is a national health insurance like South Korea or Singapore the way to go for Malaysia?

KUALA LUMPUR: As Malaysia gears up for six state elections in the coming months, monumental healthcare reform is expected to be proposed in parliament in June.

The Health White Paper to be tabled will highlight challenges and propose solutions for a "higher quality, more sustainable and resilient health system", according to the health ministry, which has been collecting feedback through townhall sessions and recently, through the ministry’s website.

One proposed change that is a hot-button issue is how Malaysia’s breaking public healthcare system will be funded. 

It is currently funded by tax revenue, with massive subsidies provided to keep charges as low as RM1 (US$0.22) for an outpatient visit and RM5 to see a specialist in public facilities. Patients are required to pay for devices, implants, orthotics and medicines that are not on the health ministry’s formulary list.

The issue lies with sustainability - the high subsidies will have to keep up with the rising cost of care provision. 

There are suggestions for Malaysia to emulate Taiwan, South Korea or Singapore, by introducing a national healthcare insurance. But is this the way to go for Malaysia? 

NOT A NEW IDEA
Previous health ministers have unsuccessfully attempted to introduce insurance-based funding.

In 2012, Mr Liow Tiong Lai tried to introduce 1Care national health insurance during former prime minister Najib Razak’s administration. The idea was not well-received by the people: One concern was healthcare cost escalation for Malaysians and contracts financed by public funds being outsourced to corporate interests.

Months before the 2018 general election, Dr Subramaniam Sathasivam announced the Voluntary Health Insurance as an incremental step towards a national health insurance, but the government lost the election. 

The winning coalition’s Dr Dzulkefly Ahmad also considered the idea but the Pakatan Harapan administration was short-lived. 

Mr Khairy Jamaluddin, who started the Health White Paper, said in 2022 that national health insurance is one of the forms of healthcare funding to be considered - something his successor has continued. 

Current Health Minister Dr Zaliha Mustafa announced in March that the White Paper will look into diversifying funding sources, with focus on a national health insurance scheme.

If the paper passes in parliament, the ministry will begin basic work required for the development of a national health insurance scheme, such as calculating contribution rates, developing health benefit packages and determining the payment mechanism for health service providers, she said.

WHY THE INTEREST IN A NATIONAL HEALTH INSURANCE?
It is given that more funding is needed, given the pressures on Malaysia’s health system, made worse by the pandemic.


Many old health facilities and equipment likely cost too much to repair. Shortage of health personnel, brain drain and maldistribution of resources in the public and private sectors have added to the long waiting time for patients.

The rising burden of non-communicable diseases and their long-term complications, increasing mental health prevalence, and an ageing population by 2030 will put more demand on healthcare resources. A pandemic, crisis or disaster will cause a sudden increase in demand and utilisation of healthcare services. 

The current Pakatan Harapan-led unity government had, in its election manifesto, pledged to increase healthcare spending to 5 per cent of the gross domestic product in five years but the current budget does not reflect any meaningful step towards reaching it.

In a radio talk show in May, Mr Shahril Ridza Ridzuan, co-chair of the Health White Paper Advisory Council raised the issue of sustainability when public healthcare is almost free across all income levels, including for millionaires. 

“Nobody in their right mind would accept that a free healthcare system is completely sustainable when there are so many other pressures on government finances, to actually spend money on education, social welfare and other things,” he said.

But it may be politically challenging to remove the low public healthcare fees at a time when many Malaysians are struggling with the rising cost of living. Almost 35 per cent of Malaysia’s healthcare spending comes directly from out-of-pocket payments.

As such, the health ministry may think that some form of risk-pooling is worth considering, to help spread the financial risks, especially if an unexpected major health event could bankrupt individuals if they had to shoulder the burden alone.

Unlike a private insurance scheme, a national health insurance normally covers those with pre-existing conditions as well and patients can gain access to public as well as private healthcare facilities.

WHAT MALAYSIANS WANT
Before healthcare reforms and a financing model are decided, the government must understand what the people want.

According to the National Health and Morbidity Survey 2019, almost 65 per cent of the Malaysian population use highly subsidised public health services, while the rest sought care in private health facilities. A huge 71.2 per cent of the low-income B40 group use public health facilities, as do 53.4 per cent of the middle-income M40 group and 37.5 per cent of the high-income T20 group.

It shows that people across income groups want to use public health care services. Richer Malaysians feel that they should not be turned away from using public health services since they pay taxes too.

Many find private healthcare, especially in hospitals, exorbitant. They want affordable healthcare. It may be difficult collecting more money from the poor but the middle- and high-income earners can afford to pay more.


Meanwhile, why not work towards taxing untaxed wealth and profits as proposed by some economists? Earmarking these taxes for health could be more acceptable knowing where exactly one’s taxes go.

Does Malaysia need a total healthcare reform or just an improvement on the good healthcare system that it already has?

Another proposed reform in the Health White Paper is for the health ministry to progressively separate its role as a purchaser of medical services from its role as a provider.

If its health service providers are given operational and financial autonomy, will this mean doctors have to start thinking about profit?

What are the benefits of such a restructuring, and what is the cost to patients? Will it be sustainable?



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