MOH Admits Trust Deficit With Private Sector Amid Limited Cost Data

MOH deputy director for national health financing Dr Muhammed Anis admits trust issues between public and private health care providers and says MOH also must be more transparent with data.

KUALA LUMPUR, August 15 – As non-communicable diseases (NCDs) become a growing crisis in Malaysia, experts are worried there is insufficient data, particularly from the private health care sector, that could aid planning, bridge deficit and inform policy decisions.

A report released by the Ministry of Health (MOH) and the World Health Organization (WHO) last Tuesday on the direct health care cost of NCDs in Malaysia – focused on diabetes, cardiovascular disease (CVD), and cancer – relied heavily on data from MOH facilities that was then extrapolated to estimate expenditure in private facilities.

Private health insurance data was made available for the study, upon regulatory approval, though information from private insurers were not “deep enough” to work with, said MOH’s deputy director for national health financing Dr Muhammed Anis Abd Wahab.

“I remember – this is a sharing of some trade secrets, I suppose – that before we even went to the private hospitals, we went to private health insurers in hopes that some of that [sic] data that they had would help us out,” Dr Muhammed Anis said during a panel discussion at the launch of the report titled The Direct Health-Care Cost of Noncommunicable Diseases in Malaysia by MOH and WHO’s Malaysia, Brunei Darussalam and Singapore office.

“The reality was that the data wasn’t deep enough for us to work with.

“The fact is some insurers are still working with manual data. And of course, that makes the whole process difficult because we would need to go through all these manual plain forms to come up with any meaningful data for us to analyse,” Dr Muhammed Anis said.

He added that issues of “trust” between public and private health care providers further prevented useful data from being accessible.

“Certainly, there is also the issue that when we do go to private hospitals, it is still a matter of trust deficit between both parties (MOH and the private sector). 

“On the MOH itself, I admit that there needs to be more transparency with MOH data that we can share with all sectors, including NGOs. But until we get over that deficit of trust with the private sector, they will not be willing to share,” Dr Muhammed Anis said.

According to the MOH-WHO cost analysis study, the annual direct health care costs of diabetes (RM4.38 billion), CVD (RM3.93 billion), and cancer (RM1.34 billion) ran upwards of RM9.65 billion, accounting for 16.8 per cent of total health expenditures in 2017.

The largest components of the total annual direct health care costs across diabetes, CVD, and cancer were primary care and outpatient attendances that accounted for RM4.2 billion, or 43.5 per cent of the total, and medications at RM1.72 billion (17.9 per cent of total costs), followed closely by medical tests at RM1.67 billion (17.3 per cent of total costs).

The private sector accounted for RM3.49 billion or 83.6 per cent of total costs for outpatient and primary care attendances. Outpatient and primary care attendances refer to all medical attendances occuring outside the hospital in-patient system.

By NCD category, spending on primary care and outpatient attendances for diabetes was the highest at RM3.1 billion, 204 per cent higher than that for CVD at RM1 billion and 3,408 per cent higher than that for cancer at RM88.1 million.

The private sector also accounted for nearly two-thirds (61 per cent) of expenditure on medications across all three selected NCDs, which amounted to RM1.72 billion in 2017.

The private sector accounted for RM1.06 billion on drugs, the largest proportion being distributed through pharmacies, followed by private hospitals and private clinics. 

The public sector accounted for RM667.67 million (38.7 per cent) on medications for the three NCD categories, with public hospitals making up the biggest proportion.

Nearly half (46 per cent) of the total medication expenditure was incurred on drugs for patients with CVD, while the balance was reasonably evenly distributed between drugs for diabetes (30.3 per cent) and cancer (23.7 per cent). 

Malaysia has a dual health care system consisting of government-run hospitals by MOH, university teaching hospitals, and military hospitals, as well as primary health care centres that are tax-funded and a fee-for-service private sector.

There were 200 private hospitals and over 7,000 private medical clinics in 2017. Fees for consultations at private facilities are regulated under the Private Healthcare Facilities and Services Act 1998 (Act 586), although private providers preserve autonomy to set prices for other components of medical bills, such as ward charges and medications. 

Mark O’Dell, CEO of Life Insurance Association of Malaysia (LIAM), in June, spoke about medical claims inflation which he partly attributed to unregulated private hospital charges.

He said while doctors’ fees and related expenses are regulated under scheduled benefits, about 60 to 70 per cent of a hospital bill consists of charges which are not regulated.

An industry report commissioned by LIAM, Malaysian Takaful Association (MTA), and the General Insurance Association of Malaysia (PIAM) found that medical costs in Malaysia climbed at an average of eight to nine per cent annually between 2013 and 2018.

Five key drivers identified as contributing to the yearly increase in private medical costs and claims in Malaysia were advances in medical treatment, imported equipment and medicine, high prevalence of NCDs, ageing population, and increasing benefits and policy design.

Recommendations from the report include engagement with stakeholders – doctors, private hospitals, insurers, and regulators – to explore ways to curb unnecessary expenses, while greater transparency in publishing the average costs of common procedures and treatments (itemised billing and explanation on availability of treatment alternatives) are needed.

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