KUALA LUMPUR, July 19 — The Association of Private Hospitals Malaysia (APHM) has opposed any move to regulate private hospital charges, while at the same time, criticised copayments in health insurance.
APHM president Dr Kuljit Singh said out-of-pocket (OOP) expenses can quickly accumulate with copayment medical cards, particularly for people with chronic diseases or regular health care needs.
He described this as the “biggest downside” of Bank Negara Malaysia’s (BNM) mandate, effective last June 1, for insurance and takaful operators (ITOs) to include co-payment features in the design of any new individual medical reimbursement insurance/ takaful products introduced to the market.
The central bank set copayments – which are payments paid out-of-pocket by policyholders at the time of a claim – at a minimum 5 per cent of claimable expenses (after deductible) and/ or an RM500 deductible, leaving the copayment cap to insurers. By this September 1, ITOs must offer at least one co-payment product with the minimum 5 per cent copayment level and design a new product if they do not already have such products on the shelf.
“This can create financial hardship and may prevent people from getting necessary medical care because they want to avoid making the copayment,” APHM president Dr Kuljit Singh told CodeBlue in a statement last week.
He added that copayments can be complex, complicating people’s understanding of their total health care costs.
“The lack of price transparency may result in unexpected fees and customer dissatisfaction,” Kuljit said.
He highlighted how BNM’s minimum 5 per cent copayment requirement – without a regulated cap – allows ITOs to fix higher copayments for health insurance.
“Overall, copayments can be a significant disadvantage for individuals because they increase health care expenditures and may jeopardise access to care,” Dr Kuljit said.
The insurance industry places some blame on private hospitals for medical inflation in Malaysia, which is significantly higher than the global average, leading to BNM’s copayment mandate as the insurance industry finds full-coverage products to be increasingly unsustainable.
APHM, however, defended the private hospital industry, saying: “Private hospital bills cannot be regulated.”
Dr Kuljit said that private hospitals are expected to give reductions on hospital bills without considering factors that are beyond their control such as high administrative expenses, rising staff salaries like for nurses, limited pricing transparency, competition in procuring medical equipment from overseas, expensive new medical technologies and treatments, and increasing pharmaceutical and medical device costs.
Other factors contributing to rising health care expenses include Malaysia’s ageing population, increasing prevalence of chronic diseases, defensive medical practices due to liability trends, and currency instability.
“The factors influencing health care costs are complex and vary significantly by geographical location,” Dr Kuljit said.
“Most Malaysian private hospitals maintain high ethical standards and good clinical outcomes, although these are rarely monitored by payers, except for a few outliers.”
He explained that hospital costs can be complex, covering accommodation and board fees, medication, treatments, equipment, and non-doctor fees. Doctors’ fees in private hospitals are regulated under Schedule 13 of the Private Healthcare Facilities and Services Act (PHFSA) 1998.
Dr Kuljit also said hospitals employ internal procedures to competitively calculate these components. Variances in overhead, staffing, equipment, and operational factors can impact pricing across private hospitals.
“It’s unfair for anyone to cherry-pick one item and then try to compare; bills must be assessed holistically.”