White Paper On Future-Proof Health System: Who Is Paying For Health Care Now? — Chua Hong Teck

There will be many more shocks, stresses, and challenges to the health care system, and Malaysia must be ready to face them in the near future.

In the health minister’s 2022 new year message to Ministry of Health (MOH) staff, he said that the country must future-proof the health care system in light of the Covid-19 pandemic.

There will be many more shocks, stresses, and challenges to the health care system, and Malaysia must be ready to face them in the near future.

This was mentioned again in Parliament recently, where the minister said that a White Paper will be tabled in November to get the support of both sides of the political divide. He emphasised that it should be future-proof, even with a change of government in the future. 

The White Paper was proposed for the reformation of the health care system, including its financing. He said that adequate allocation for the MOH is essential for the country to face these unforeseen challenges.

It should also involve how the health care burden could be shared with the people. The minister asked: “Are we going to still adopt a subsidy system for all regardless of income, or will we move to a system where those who can afford it, can pay more than what they are paying?”

As a starting point on paying for health care for the future, we should examine who are paying for health care services and the sources of financing.

The Malaysia National Health Accounts (MNHA) framework consists of sources of financing, functions of health care, and providers of health care.

In 2020, Malaysia spent RM67,022 million, which was 4.7 per cent of GDP. It was a significant increase from 2018 and 2019, when it was 4.2 per cent of GDP.

The increase was due to extra expenditures to battle the Covid-19 pandemic and the overall contraction of the GDP in 2020. The public and private mix was 54.6 per cent and 45.4 per cent.

The percentage of public source has seen a slight increase in the past two years because of the government’s commitment to increase health care expenditure amid the pandemic.

The three major sources of financing are still the MOH, private out-of-pocket expenditure, and private insurance, accounting for 86.5 per cent of the total health expenditure. Details of the sources are as depicted below:

Sources of FinancingAmount (RM Million)Percentage (%)
Ministry of Health30,83346.1
Private out-of-pocket expenditure23,15034.5
Private Insurance (other than social insurance)4,9487.4
Other federal agencies (including statutory bodies)2,5333.8
Ministry of Education1,6032.4
All corporations 1,0441.6
Private Managed Care Organizations (MCOs)   9751.5
State Government, agencies and local authorities9711.4
Social Security Organisation (SOCSO) and EPF4880.7
NGOs and others2920.4
Ministry of Defence1350.2

From the above, we can see that the rakyat have been paying a larger share of the total health care expenditure, through the tax-based system to fund the MOH and other government agencies, both at the federal and local levels.

Apart from this, people are also paying from their own pockets by way of out-of-pocket expenditure and private insurance. Therefore. I do not think the minister is asking the right question.

I am of the opinion that lower and middle-income classes are already paying too much for health care through the tax-based health care system, out-of-pocket expenditure, and private insurance.

This is also reflected in housing, car ownership, and private education, where the rakyat are shouldering a huge burden. 

In the White Paper on a future-proof health care system that the minister wants to table in Parliament in November, I have a few suggestions to make:

  • Health care is the responsibility of everyone and every agency in the government. 
  • The social determinants of health care must be taken into consideration.
  • Have a financing philosophy for health care.
  • Change the fee-for-service payment system to a value-based system. 
  • Place more emphasis on preventive health and make the population more active and healthy. 
  • Better collaboration between public and private health providers in human resources, facilities, and delivery of services.
  • Separate the governance and delivery of public health care services. 

I sincerely hope that any future government will place greater importance on the health care system, having learnt valuable lessons from the Covid-19 pandemic.

Only with a healthy nation can there be sustainable socio-economic development and real progress for the people and the country.

  • This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.

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