Health Financing Needs Reform To Expand Covid-19 Efforts

Private hospitals may lose some money on particular procedures but costs can be spread across the value chain.

KUALA LUMPUR, Nov 23 — Health funding in Malaysia needs to change in order to support and build on the many public-private partnership efforts carried out over the course of the pandemic.

The country’s Covid-19 outbreaks have not only exposed inadequacies and inequities in the health care system, but have also shown ways to improve medical practice that can offer the most bang for the buck.

One example is ProtectHealth Corporation’s payment of RM14 per dose administered to private hospitals and clinics, which allowed Malaysia to speed and scale up its Covid-19 vaccination rate in the past six months, with the country now having one of the highest vaccination rates globally.

TMC Life Sciences Bhd executive director and group CEO Nadiah Wan said the payment is an example of a value-based health care model where compensation is paid out based on the outcome of the patient.

“Just to put it in contrast, what we have in Malaysia right now is a fee-for-service model. You pay separately for consultation, you pay for every procedure, and basically the total cost for a particular procedure or disease is when you tally up all the services. 

“But in a value-based health care model, what they’re doing is that, usually in the best-case scenario, they will actually set a reimbursement rate. For example, for a diabetic patient in this age profile with this and this complication, this is the amount that we will reimburse to you,” Nadiah said during a panel session with ProtectHealth CEO Anas Alam Faizli at the Employees Provident Fund’s International Social Wellbeing Conference (ISWC) held in hybrid mode today.

However, Nadiah said in order to move towards a value-based health care model, the country needs an extensive output of electronic medical records and a “publicly aligned payer”.

“In order to do that, there are two important things that we need, right. First of all is information and data because you need to analyse the information from thousands of patients in Malaysia, having diabetes in this severity and in this background, how much would it cost to actually treat them? 

“And with this, I think the implementation of electronic medical records is extremely important, because without that, you just can’t collect the data. Number two, you need to have a publicly aligned payer. 

“So for example, in the United States, you have Medicare and Medicaid — although the U.S. has a private health care sector, but they do have Medicare and Medicaid and because of the size of these agencies, they act as if they are a public payer and I think that this part is really important because the insurance companies today in Malaysia, by and large, are private companies, and they are being regulated by Bank Negara Malaysia and it’s not so much acting as a publicly funded reimbursement programme. 

“So, I think that the health financing reform is really important because it’s possible to do it. What will end up happening is that maybe hospitals will make less money on a particular procedure. But by and large, what we’re trying to do is to actually spread that cost across the value chain, because what is happening now is that every individual player is trying to maximise profit within the narrow sector or segment of the value chain in which they’re playing. 

“So there are a few pieces that need to be put together. But absolutely, this is the model that many people within the health care industry are discussing and debating about how to implement, moving forward, value-based health care,” said Nadiah, who is also Thomson Hospital Kota Damansara CEO.

ProtectHealth’s Anas said health spending has to be viewed “as an investment, not a burden” where a healthier population will result in a more productive society. 

He said the government is already considering avenues where health care services can be outsourced to private health care facilities to deal with backlogged surgeries in public hospitals.

“There are many more measures now that the government sees big success (in public-private partnerships). Now they see that if we can come to a more agreeable costing, we can actually do this together with the private sector,” Anas said.

For example, Anas said the government is seriously considering outsourcing treatment of non-communicable diseases (NCD) to general practitioners under ProtectHealth’s Peka B40 scheme. ProtectHealth is an incorporated entity under the Ministry of Health (MOH).

“So, in my personal opinion, the national health financing reform, voluntary health insurance, national health insurance — we have to come together to find a way to do the financing,” Anas said.

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