Khairy Sounds Caution Over Ambition In Health Financing Reform

Khairy Jamaluddin says he wants to raise MOH’s annual budget to 5% of GDP over the next few years, with the increase ring-fenced in each subsequent budget.

KUALA LUMPUR, August 15 – Khairy Jamaluddin today expressed commitment to doubling Malaysia’s public health care budget, as he acknowledged the “chronic” underfunding of the public health care system post-Covid.

The health minister noted that Malaysia’s total public health spending was only 2.58 per cent of the gross domestic product (GDP) in 2020, just about half the minimum 5 per cent recommended by the World Health Organization (WHO).

He said the Health White Paper, which he intends to table in Parliament by year end, should discuss the development of a robust health care funding model, a “highly detailed and technical endeavour”.

Nonetheless, he said that currently, the Health White Paper’s proposals for long-term reform of Malaysia’s health care system required a “gradual and adaptive approach” due to the current economic, fiscal and political climate. The 15th general election is expected to be held within the next few months.

“As such, we are considering gradually increasing the health care budget up to targeted levels over a number of years while working out funding structures to make the system more sustainable and progressive,” Khairy said in his keynote address today at the Health Policy Summit 2022 on the Health White Paper at the World Trade Centre here, organised by the Ministry of Health (MOH).

“Let me be very clear so that social media does not take me out of context: as Health Minister who is committed to health care as a public good, I want to increase the annual budgetary allocation for public health care to 5 per cent of GDP over the next few years. And that increase must be ring fenced in every subsequent budget. 

“Above and beyond that, we should discuss other long-term solutions. It is not either one or the other.”

A ring-fenced allocation refers to a sum that is reserved for a particular purpose, something which the Finance Ministry does not typically do.

During his keynote today, Khairy did not mention a proposal for social health insurance, or payroll deductions to a health care fund, that he previously told a forum in Singapore last June.

The health minister’s recent parliamentary reply that the RM1 and RM5 medical fees for outpatient and specialist care respectively in Ministry of Health (MOH) facilities are unsustainable had sparked some anger on Twitter, with accusations that Khairy was trying to privatise the public health care system.

Despite the Covid-19 pandemic, MOH’s allocation under Budget 2022 tabled last October increased only by a meagre 1.5 per cent to RM32.4 billion from the 2021 budget. 

The Galen Centre for Health and Social Policy wrote, after the tabling of Budget 2022, that the 1.5 per cent increase in MOH’s allocation was “arguably the smallest increment to the health budget in more than a decade”.

“Coming out of the pandemic, we know and recognise that the public health care system is chronically underfunded against the increasing demands of NCDs (non-communicable diseases), an ageing population and the emergence of new communicable diseases,” Khairy said in his keynote today.

He acknowledged that while the objective of increasing Malaysia’s health care funding to reach the WHO’s benchmark of 5 per cent public health spending for upper middle income countries has fairly broad support, health care financing has been a highly contentious and central debate of Malaysia’s health system reform for decades.

“We need to break the impasse and move forward. The various health care funding mechanisms in the country needs to undergo transformation, and these include private health insurance, employment-based health benefits, and government funding for health and social care,” Khairy said. 

“We need to consider a long-term solution for health care funding where all parties share responsibilities for the health needs of the population.”

Khairy said he will appoint a Health White Paper Advisory Council, comprising 13 diverse subject matter experts, for consultation on the White Paper. 

The Health White Paper will further propose a Health Reform Commission to independently monitor, advise and report on the status of the implementations of suggested reforms over the next 15 years.

“In having a transparent and well appointed Health Reform Commission, we hope that it will create institutional check-and-balance and ensure follow-through on the reforms, regardless of changes in the political sphere,” Khairy said.

“While we have been consulting a diverse range of stakeholders in developing the Health White Paper, we need to make sure the plans for reforms are themselves future-proof and critically will outlast any incumbent minister. 

“Thus bipartisan support for the proposed reforms within the Health White Paper is critical and I hope that we will all play a part in supporting its tabling to Parliament at the end of this year.”

You may also like