KUALA LUMPUR, April 5 – Public health expert Dr Jemilah Mahmood has called for “out of the box” thinking to address funding issues involving health care financing and reforms.
Dr Jemilah, who is currently executive director of Sunway Centre for Planetary Health, mooted the idea of utilising a “small percentage” of zakat (an annual alms tax on Muslims to aid poor people in the Muslim community) or wakaf (a voluntary charitable endowment for Shariah-compliant purposes) as a means to provide health care access for the poor.
“I don’t have the answer where the money might come from, but I have one crazy idea. Malaysia collects RM2.6 billion in zakat every year and many many more billions in wakaf.
“Imagine a small percentage of that is put into purchasing health insurance for the very poor, that would really help people have access to high quality health care when they need it.
“We’ve just got to think out of the box, in my opinion, and again, making the case to the Ministry of Finance (MOF), the leaders, this long term investment is required for us to be able to, you know, make sure that people will be safe and protected and have the health care that is required for them,” Dr Jemilah said during a panel discussion after the launch of United Nations University-International Institute for Global Health’s book titled “Malaysian Health Care: Building for Future Excellence, Equity & Resilience” last Tuesday.
Dr Jemilah was responding to a question from an audience, who asked where funds for health care financing, including for potential national health insurance, can come from.
Earlier, Dr Jemilah spoke about the “high cost” of decanting patients to the private sector under the now-disbanded Greater Klang Valley Special Task Force (GKVSTF) when Covid-19 cases peaked during the Delta wave last year.
“The cost of decanting patients to the private sector in that rush moment when cases were high, if we had some form of health insurance, we would have been able to really look at the balance of how much that will cost.
“The rising cost of health care, as I mentioned earlier, with ageing and non-communicable diseases (NCDs) and other illnesses, is going to take away 70 to 80 per cent of our gross domestic product (GDP). So, you know, you’ve got to do the long term math, right, and look at the economics perspective much more from a long-term perspective – and that’s extremely difficult when you have leadership in short-term cycles,” Dr Jemilah said.
Many health care practitioners and field experts have called for a change to Malaysia’s health funding system, taking cues from the many successful public-private partnerships formed during the pandemic, as the population ages and as out-of-pocket spending on health care rises each year.
Former Health director-general Dr Abu Bakar Suleiman said there was a proposal put forward in the past to the National Development Planning Committee (NDPC) under the Economic Planning Unit (EPU) to create a national health fund.
“As part of the studies, we looked at the administrative cost in the United States, [which] as Prof Jomo (Kwame Sundaram) mentioned, is very high. It was estimated to be in the region of 37 per cent (of GDP), which is ridiculous. But our expert, a health economist from the University of Texas, gave us that data.
“And when we put up our proposal, our estimate of the cost of administration was 18 per cent, which is still very high but the Treasury did not believe us. They’d expected it to be much higher. It’s very complex, but if you want to look at the US now, you have to understand over 70 per cent of health care services in the US are done by not-for-profit organisations. It’s not cheap but they are not-for-profit organisations.
“And probably the most efficient system in the US is actually funded by tax revenue, and that is the veteran’s system in the US. It’s the most efficient, the most effective, and most economical. So, we understand what you (Prof Jomo) are saying.
“But in Malaysia, from the early 1980s, the EPU decided that health care cannot be funded purely from tax revenue alone, so we have to mobilise other sources of revenue, that’s why [we have] all the studies that have been done, that’s a bit of history,” Dr Abu Bakar said.
Jomo, who is senior advisor at Khazanah Research Institute, expressed his reservation and concerns about equity in developing a national health insurance scheme.
“There are many things which go under the name of ‘insurance’, we have to be very clear about what is meant when somebody invokes the word ‘insurance’.
“I have gone on record, about 20 years ago, when there was another MMA (Malaysian Medical Association) commission looking at health financing and at that time, a certain Datuk (Ronald) McCoy actually asked for views on this issue – he was the MMA president – and I actually argued very strongly that the proposal at the time, on the table, for a RM50 standard, across the board insurance, would be tantamount to a poll tax.
“RM50, at that time, 20 years ago, would actually be a fairly large amount when you compare, for example, with the minimum wage which was subsequently introduced. So, I think we have to be very clear about the incidence and the burden of that kind of thing.
“One of the beauties of the Malaysian health system, precisely because it is revenue-financed, is you do not have this kind of inequity which has been proposed,” Jomo said.
Jomo also referred to the “layers of bureaucracy” in an insurance system that he attributed as one of the reasons why the US has an “inefficient” health system.
“The US spends far more on health than any other country in the world, yet, in terms of health system outcomes, the US doesn’t do very well. So, I think we have to be very clear about what is actually meant by insurance,” Jomo said.
“As far as many of the main existing proposals are concerned, this is certainly unacceptable from my point of view, from an equity perspective,” Jomo added.