Rethink Health Budget As 5-Year Project, Not Annual Earmarks

The Galen Centre moots health budgeting as a multi-year project with costing instead of annual allocations, besides including health spending in the higher education and defence ministries.

PETALING JAYA, Dec 9 – The Galen Centre for Health and Social Policy has called for the health budget to be viewed as a five-year project, rather than an up-or-down annual allocation from the federal government.

Currently, the Ministry of Health (MOH) receives annual allocations, alongside other ministries, under the federal government’s yearly budgets. Allocations for health-related expenditure in other ministries, such as university hospitals under the Ministry of Higher Education and military hospitals under the Defence Ministry, are also set under the respective ministries’ annual budgets.

“I think that’s unhealthy, really, because health should be a multi-year thing,” Galen Centre chief executive officer Azrul Mohd Khalib said at the 6th Health Economics Forum 2022 here last November 23 organised by the Health Economics Outcomes Research (hEOR), a unit of the Galen Centre for Health and Social Policy.

“It shouldn’t be every year that we are dependent on looking at how much has been allocated for health; it should be something that we look at as a five-year project.”

However, Azrul pointed out that five-year action plans often do not include costs, making them “aspirational documents” instead of “actual policy guidance”.

“And herein lies the problem because we look at many things such as strategic plans, action plans, we put these documents together, we put in actions, plan, initiatives, interventions into these plans, and you know what happens? We don’t cost them.

“We have no idea of how much this action plan that is going to be running for the next five years, is going to cost us. 

“As a result, we don’t know exactly, first of all, how much is it going to cost us to implement a national action plan? How much money do we have to allocate each year? And how much or how big is the gap between what we can allocate versus what we need? And what is the shortfall? We have no idea. 

“Oftentimes, these action plans actually become aspirational documents, rather than actual policy guidance for what you want to do over the next couple of years.

“One of our recommendations to the new government, whichever government that will form, is, as Galen Centre, to look at health as a multi-year project with costing. 

“We’re looking at how we can fund over a period of two years rather than this approach, which is currently really about sitting in front of a TV set every budgeting, and hoping, please, can the oncology budget be more this year,” Azrul said.

“We have to do better. I think we have to be able to look at it in a much more holistic sense and plan better.”

Education, Defence Ministry Hospitals Often Left Out

Azrul said annual federal budgets on health also often exclude health spending in other ministries, such as the Ministry of Education (MOE) and Ministry of Defence (Mindef).

“It’s not just for the Ministry of Health (MOH). It’s also about the other ministries as well. I’ve seen presentations abroad when we are looking at how we spend for health, and very often it’s just about the MOH budget.

“There’s no mention of the MOE and Mindef and that’s a mistake because the exclusion of those two important ministries means that we miss out on the teaching hospitals, for example – the University Malaya Medical Centre (UMMC), Hospital Canselor Tuanku Muhriz UKM (HCTM), they are also spending,” Azrul said.

“And if you see their budget, you will find that they remain having the same amount of money, pretty much, over the past several years despite being centres for which Covid-19 response was critical. 

“And we felt it was quite odd that UM, for example, which played a very important role in Klang Valley to manage Covid-19, didn’t get a bump in terms of their budgets, and neither did the others as well. And this is something that you need to be able to look at because it is necessary for them to have more investment go there.

“The Ministry of Defence also has their own health care system in place. They procure separately, as you know, they have their own hospitals et cetera. But we barely mention their contribution to health investment in Malaysia.”

University hospitals in Malaysia are managed and governed by their respective universities. The Ministry of Higher Education (MOHE) was first established in 2004. In 2013, MOHE and MOE were merged as one ministry before the two were split again in 2015.

Pakatan Harapan later merged the two ministries again in 2018 before the two were separated again in 2020. Under Prime Minister Anwar Ibrahim’s administration, the two remain separated. PKR’s Fadhlina Sidek, a freshman MP, is the education minister, while Umno’s Mohamed Khaled Nordin is the higher education minister.

There were six university hospitals listed under the MOHE budget for the year 2020. All university hospitals received an increase in allocation, except for Hospital Universiti Sains Malaysia (HUSM) and Hospital Pakar Kanak-Kanak in UKM, which later became HCTM. 

UMMC’s allocation last saw an increment in 2020, rising by 3.6 per cent or RM14.12 million from RM396 million to RM410.12 million that year. Under the proposed but not passed Budget 2023, the allocation for the country’s largest and oldest teaching hospital remained at RM410.12 million.

HCTM’s allocation, however, has seen steady increases in recent years despite the cut in 2020. Its yearly allocation has risen from RM23.67 million in 2020 to RM63.49 million for the year 2023 under the previously proposed budget, an increase of 168 per cent of RM39.82 million.

The number of university hospitals under Budget 2023 proposed by the Ismail Sabri Yaakob administration has also increased to nine teaching university hospitals, with the addition of Hospital Universiti Teknologi MARA under Budget 2021 and Hospital Pengajar Universiti Sultan Zainal Abidin and Hospital Universiti Malaysia Sabah under the latest federal budget.

To compare, the total allocation for university hospitals under MOHE’s annual budget has increased from RM1.33 billion under Budget 2020 to RM1.64 billion under the proposed Budget 2023 – up by 23.3 per cent or RM310.6 million.

Allocations for Hospital Tuanku Mizan and other military field hospitals under Mindef are not clearly indicated in the estimated federal expenditure.

Back To Basics: How Much Do We Spend On Health Individually

In his speech at the two-day forum, co-organised by the Pharmaceutical Association of Malaysia (PhAMA) and the MOH, Azrul urged participants to take stock of their own expenditure on health in order to come up with feasible policy recommendations.

“How many of you have actually done a costing of your individual household expenditure on health? Most of us haven’t really thought about how much we spend on health as a percentage of our income expenditure, how much of that actually factors into our incomes. 

“Yet every year, we’re looking at the health budget that the government puts up. But we ourselves, at the individual level, households, we haven’t done that and it’s a very important exercise. 

“I have to admit, until recently, I didn’t do it myself and I really had no idea how much I was spending on things like Panadol – some people take Ponstan – consultations, how much do you pay for insurance in proportion to everything else?

“So these are very important exercises that, you know, at the policy level, we genuinely want to do, and have done but we haven’t done it ourselves and perhaps we need to be able to look at it and how it impacts [individuals],” Azrul said.

“Because at the end of the day, health is about the individuals and not just the institutions per se. We need to be able to appreciate that as well just as much so that we can understand when we look at some of the decisions that need to be made at the policy level, we appreciate what’s happening on the ground. 

“How does it impact the household, how does it impact decision making, in terms of choosing between whether or not to go for medical consultation for a chronic problem that’s been persisting for years versus putting food on the table, deciding to adopt a healthy lifestyle.

“Why is it for example that a few weeks ago, the MOH put out a report concerning nutrition? We found that malnutrition was very much prevalent in Putrajaya. 

“How does that relate to cost of living? Why is it both obesity and stunting located in the same areas? And these are all going back to the social determinants of health just as much as how much people are earning but also cost of living and how we make decisions concerning that.”

Being Realistic With Health Spending Targets

During the election campaign period, all three major coalitions – Pakatan Harapan (PH), Barisan Nasional (BN), and Perikatan Nasional (PN) – made a pledge to increase the health budget to 5 per cent of GDP, with PH and BN aiming to hit the target within five years.

Azrul highlighted that increasing the health budget by 5 per cent of GDP is equivalent to a 100 per cent increase from the current budget.

“If we were to do the current level of increments, we would actually see 10 years, not five years, 10 years before we can actually get to that level and that is, if we maintain the current level of increments per year.

“Because at the end of the day, if you’re trying to bring it to five per cent, what it actually means is an almost 100 per cent increase from the budget that we have right now.

If the 2022 budget was RM32 billion, and you want to increase it to five per cent of GDP, you have to allocate RM64 billion round about.

“Now I know where the money is. The money actually is in the budget for education. So, if you flip the education budget, you will find that education will get RM32 billion and health care RM64 billion. Not going to happen, right?

“They’re not going to defund or reduce the budget for education, but that’s where the proportion lies,” Azrul said.

“So, KJ’s approach, it was very ambitious also,” he added, referring to former Health Minister Khairy Jamaluddin.

“He wanted to get five per cent from the previous government then. But, obviously, he knew it was going to be a hard sell. But it was good for him to push for it because we need to start thinking five per cent as a near future target, not an aspirational target, which this has always been treated as, but something that we can achieve within maybe five years.”

The previous Ismail Sabri government in October announced an allocation of RM36.14 billion for MOH under Budget 2023, an 11.5 per cent increase from RM32.41 billion under Budget 2022. The 14th Parliament did not pass the budget before its dissolution for the 15th general election.

Although this marked the biggest increase by percentage and absolute terms in the past five years, critics noted that the public health care budget, against the GDP, remained the same at 1.98 per cent as in 2022.

Anwar, in his first press conference as PM, did not discount the possibility of tabling a new budget, although he said the budget tabled in October could also be tweaked. 

Parliament is scheduled to sit from December 19 for two days, with Anwar expected to go through a vote of confidence as the first order of business.

PKR information chief Fahmi Fadzil reportedly said the upcoming Parliament sitting will see the government tabling a provisional supply bill to cover civil service emoluments, while the full federal budget will likely only be tabled in the next meeting in 2023.

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