In my last article, “Who Pays for Treatment of Covid-19 Patients in Private Hospital?”, I argue that to overcome this conundrum, the government should bear the major portion of the payment with contributions from the patients (who opts to get treatment there), the private hospital and the consulting doctors (both of them can reduce their rates), and the insurance companies that insure these patients.
As I have mentioned, previously all diagnosed Covid-19 patients (including foreigners) are treated in government hospitals without any payment under the Ministry of Health (MOH) Fees (Medical) Order (Perintah Fi (Perubatan).
The Chief Secretary to the Government Mohd Zuki Ali, in a statement on January 26 after an Emergency Management Technical Committee meeting, said the government is refining the details of the payment mechanism with various stakeholders including the Finance Ministry, the MOH, Bank Negara Malaysia and insurance industry players.
As of now, the role of the private sector is empowered to treat Covid-19 patients who can afford the medical and treatment costs. On the public-private hospital front, he said the operations of public hospitals including university hospitals, army hospitals and private hospitals will be of a hybrid nature, based on the cluster hospital concept under the integrated Covid-19 Control Centre.
Since then, we have not heard any major public statement made by the stakeholders in this issue. I can foresee the difficulty in making this decision as it involves a major health care financing policy that will have implications on the delivery and financing of health care in the country.
As we are all aware, we have a dual system of delivery and financing in health care in Malaysia. While the public sector continues to be the major health deliverer in terms of services, facilities and patients, the total health expenditure (RM64.4 billion) is of a 52:48 ratio between public and private sector as reported in the latest Malaysian National Health Accounts in 2019.
Out of RM35.5 billion health expenditure in hospitals, the breakdown is 51:42:7 among MOH, private and public non-MOH hospitals. There is hardly any significant collaboration between both these sectors even though the government has been advocating it. It is because of this lack of collaboration and the way that the health care system is operating and being financed that we now face the issue of a dual system.
In the private health care system, the private hospitals are owned by doctors, joint partners, private companies and also the government through GLCs. Therefore, they have shareholders to report to and obviously they have to generate profits, as compared to the public hospitals.
The consulting doctors that work in these hospitals are just using these hospitals as places of work and only a few of them are directly employed by these hospitals.
Some of them work not only in one but a few private hospitals. Their fees are regulated by the MOH, while other hospitals fees, including pharmaceutical items, are not regulated. The private insurance/takaful companies do not insurance pandemic-related risks.
In terms of financing of services in the private hospitals, is through out-of-pocket payments, corporate or personal insurance and by employers. These can be for outpatient, day care or inpatient services.
For in-patient services, they are mostly paid via insurance, and to some extent, by out-of-pocket payments, depending on the size of the bill and the payer’s financial state.
The total health expenditures financed by private health insurance in 2019 was RM4.9 billion, with another RM10.1 billion (with about 50 per cent for inpatient services) out-of-pocket payment spent in these hospitals.
Therefore. it is because of the wide differences in the delivery and financing of both public and private health care system that we are now in this situation. To overcome the payment mechanism for the private hospitals, I propose that the government use a bundled payment mechanism based on episodes of care for Covid-19 patients rather than the fee-for-service payment.
The government should shoulder the major portion of this payment for treatment if these patients are referred by public hospitals to them. But if the patients choose to be treated in the private hospitals, they can pay out-of-pocket or by insurance, if they are covered by their insurance companies.
Presently, the insurance/takaful companies do not cover Covid-19, but Bank Negara can request for the insurance companies to pay individually or pool the insurance companies’ contributions into a Covid-19 fund. I know of an insurance company that has a goodwill fund for their policy holders that have been diagnosed with Covid-19.
The government can also contribute a portion to this pooled Covid-19 fund. The type of payment and funding mechanism can be modified or improved after its implementation or else there will be no end to this issue. This is the reason why health care financing and delivery reform has not taken off even after numerous studies have been carried out in the past 25 years.
- This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.