12MP: Government Raising Public Health Care Charges For Higher-Income Patients

Under the 12th Malaysia Plan, a National Health Endowment Fund, derived particularly from waqf (donation of assets from Muslims), will be introduced to diversify health care financing.

KUALA LUMPUR, Sept 27 — The federal government has announced plans over the next five years to increase public health care charges for “higher-income” patients in the aftermath of the Covid-19 pandemic.

The Twelfth Malaysia Plan (12MP) 2021-2025 tabled by Prime Minister Ismail Sabri Yaakob in Parliament today simply stated that the government’s current health care charges would be reviewed — with higher fees for “higher-income” patients — to ensure “financial sustainability for health care”, without further justification on the need to raise patients’ burden.

The 12MP stated that subsidies for health care services will be streamlined based on a means test — an assessment to determine whether an individual or family is eligible for government assistance.

It further noted that a National Health Endowment Fund, derived particularly from waqf — the donation of assets, including property and cash, for general or specific charitable causes that are socially beneficial — will be introduced.

The aim is to diversify the sources of funding and create alternative financing for health care. Several other approaches, such as public-private partnership, rent-to-own schemes, leasing and sharing of facilities will be explored to reduce the dependency on federal government allocations.

The 12MP also encouraged Malaysians, including the middle class (M40), to purchase health insurance and takaful to finance health care expenses.

“In addition, income tax relief on health and life as well as employment insurance for the M40 will be reviewed to reduce health care costs.”

The 12MP stated that the existing social protection scheme under the Social Security Organisation (Socso), which provides some health benefits, would be expanded to cover informal workers.

“Meanwhile, the Peka B40 programme will be expanded to cover the cost of treatment and services at private health care facilities through strategic purchasing and service level agreements to ensure sustainable health financing,” said the 12MP.

Additionally, the 12MP stated that a blueprint for Malaysia Healthcare System Reform will be introduced as a new way forward for national health care system transformation.

In designing the blueprint, it stated that a study will be undertaken to strengthen the health care sector landscape. This study will include public health care sector transformation, private health care sector regulatory reform and sustainable health financing.

There have been several studies conducted on the country’s health care system over the past decade. The latest was the Malaysia Health Systems Research report published in March 2016. Another report on the Malaysia Health System Review was published by the World Health Organization (WHO) in 2013.

The 12MP noted that several policies targeting specific health needs will be introduced, such as oral health care, mental health, and immunisation policies. Food safety policies will also be reviewed to protect the public against health hazards and fraud in the food supply chain, including preparation, sale, and use of food. A Drinking Water Quality Act will also be introduced.

It is hoped that the implementation of all these initiatives will ensure comprehensive health coverage, streamline the role of various stakeholders, and facilitate better coordination in health care service delivery involving a whole-of-nation approach.

According to the Malaysia Voluntary National Review (VNR) 2021 report, the public health care system subsidises up to 98 per cent of health care costs, with more than 70 per cent of the population depending on the public health system.

The government’s total expenditure on health has been steadily increasing over the past decade, rising from RM32.89 billion or 4 per cent of the gross domestic product (GDP) in 2010, to RM64.31 billion or 4.3 per cent of GDP in 2019. About 52.5 per cent of the amount in 2019 were from public funding, while 47.5 per cent were from private spending.

In 2020, the Ministry of Health (MOH) received RM30.6 billion or 10.23 per cent of the overall RM299 billion budget for the year.

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