KUALA LUMPUR, Sept 3 — The Ministry of Health (MOH) has yet to decide on whether to regulate private hospital charges, following public outrage over large hospital bills.
While health insurance is regulated by Bank Negara Malaysia, private hospitals fall under the MOH’s purview under the Private Healthcare Facilities and Services Act (PHFSA) 1998. Private hospital charges are currently unregulated, except for doctor fees.
“No policy decision yet on whether to regulate hospital charges as part of the broader health financing reform, which aims to deliver value-based health care,” Health Minister Dzulkefly Ahmad’s office told CodeBlue today.
“However, controlling health care inflation is certainly a target under the health financing reform.”
Malaysians have called for regulation of private hospital charges after insurance industry veteran Mark O’Dell, chief executive of the Life Insurance Association of Malaysia (LIAM), revealed his RM18,837.55 bill for a minor hernia surgery last May at a major private hospital in Kuala Lumpur. His hospital bill included 95 line items across 13 categories.
O’Dell himself advocated for the introduction of Diagnostic Related Groups (DRG), a system that would see hospitals paid a fixed amount based on the complexity of the case, rather than itemising each charge.
The Association of Private Hospitals Malaysia (APHM) said recently that using DRG or transitioning to value-based health care payment models (where payers pay for health outcomes, instead of the current pay-for-service model) can only occur if Malaysia adopts a national health care financing system.
BNM has imposed a minimum 5 per cent copayment mandate on all new health and medical insurance products, amid Malaysia’s high medical inflation rate of 12.6 per cent last year.
Both LIAM and the central bank argue that full-coverage health insurance products are unsustainable due to high claims inflation, while APHM says private hospital costs are unsustainable due to rising global prices of medical equipment and drugs.
APHM also told BFM yesterday that procedures by private hospitals in Malaysia are the cheapest in the region. IHH Healthcare Bhd – which operates a network of private hospitals, including Gleneagles, Pantai, and Prince Court – more than doubled its net profit to RM623 million for the second quarter this year from a year earlier.
Editor’s note: CodeBlue retracted an earlier inaccurate report headlined, “MOH Weighs Regulating Private Hospital Fees Amid Outcry”.
