The National Health Care Financing Scheme (NHFS)
For over three decades, the Malaysian government has promoted the National Health Care Financing Scheme (NHFS) concept to the public. Many studies have been commissioned.
The launch of NHFS and its progress were thwarted by political masters’ survival concerns and stakeholders’ private agendas.
Until today, the seeds of the NHFS have yet to be planted. Many of the original people in the Ministry of Health (MOH) responsible for the project have since retired. The NHF section handling the NHFS project in MOH remains rudimentary.
At the moment, there is yet to be a department head. No public information or future direction on NHFS has come out from the DG or this section. The minister has only made populist political statements.
In June 2023, Parliament approved the Health White Paper, which focuses on four main thrusts:
- Improving health care service delivery.
- Advancing health promotion and disease prevention.
- Ensuring sustainable and equitable health financing.
- Reinforcing the health care systems’ foundations and governance.
Following the White Paper publication, the MOH announced the setting up of a technical working group called the Health Transformation Office (HTO) in early 2024.
The HTO name suggests that it is a technical group consisting of people with several specialties; it is supposed to oversee the implementation of health care reforms in the country.
After almost a year, very little public information about HTO is available. Who are the members of the technical working group? Where can we find HTO’s dedicated website? Why is the organisational structure kept private? What’s their game plan for the next five years?
Is the HTO part of the MOH or a political structure associated with the minister and his close friends? Does it compete with or complement the NHF section in the MOH? Is there a need for this even? These are some of the questions that the MOH must answer.
From social media, it is found that a little-known personality, Dr Yap Wei Aun, the executive director of Quanticlear Solutions, is said to be the chief executive officer of HTO. Is the HTO a one-person show?
From what is observed, Dr Yap’s association with Health Minister Dzulkefly Ahmad and Dr Musa Nordin was solidified when the minister headed a health task force for Covid-19 (STFC) in Selangor.
The HTO’s functional legal framework and organisational chart need to be made public. What added value does HTO bring to the NHFS when an established section handles the NHF section in MOH?
The NHFS is a political hot potato bound to create issues. Transparency will enhance public confidence. Transparency will remove doubts from the public and opposing groups and ensure the programme’s success.
The government needs to commit to publicising the project timeline. Such secrecy creates distrust, which is one reason why NHFS failed to launch in the past.
The Shift From NHFS To The National Insurance Scheme
In November 2023, then-Health Minister Dr Zaliha Mustafa announced that Malaysia is exploring a National Health Insurance (NHI) scheme. She has created a new label, NHI, but fails to appreciate the consequences of using the term “insurance”.
The NHI appears to have replaced the NHFS. The NHFS agenda is broader than NHI. The assurance programme is just a component of NHFS.
The term “insurance” comes with political, legal, and public perception concerns. In Malaysia, only Bank Negara Malaysia (BNM)-licensed companies can run any insurance scheme. The label reflects the commercialisation of the programme. Is the government’s intent to privatise the scheme?
The term is inappropriate and should be avoided. The term “insurance” will invite religious-centric politicians and pro-Islamic financial bodies and personalities to hijack and push for the formation of a parallel National Health Takaful scheme for Muslims.
We can see this happening in the insurance industry. Sabah and Sarawak governments may use the dichotomy by religion to expand their separation agenda further. This does not augur well for the country.
The government should avoid creating opportunities for national health schemes to be politicised, but ensure they remain a social project.
The government must steer away from the term “insurance”. NHFS is not a commercial but social venture. Insurance is associated with commercial activity. Religious scholars and Muftis have declared it non-permissible (haram) activities.
Why does the government need to expose itself to these unnecessary issues?
A neutral and legally correct term must reflect the NHF scheme. The appropriate term would be the National Health Contribution Scheme (NHCS), where a Statutory National Health Fund (NHF) will be created to pay for contributing members’ medical bills. It is secular, reflects unity, and has a not-for-profit (social) purpose.
It needs to be governed by its own set of laws similar to those of the Employes Provident Fund (EPF), the National Higher Education Fund (PTPTN), the Social Security Organisation (Socso), or Tabung Haji.
NHF is a fund to which the government, employers, and the people contribute periodically, and the monies shall be used solely to finance contributing members’ medical bills.
An NHF bill will prevent politicians from using religion as their political fodder. It avoids any need for BNM licensing, and the fund will be independent of BNM.
It must have its legal framework (for example, the National Health Fund Act). The formation must be reviewed by the Public Accounts Committee (PAC) and brought to Parliament to avoid any potential politicking over the matter.
The second component of the NHFS is the incremental corporatisation of government hospitals. Malaysia has excellent success stories when it comes to corporatisation, as shown by past exercises involving Tenaga Nasional Berhad (TNB) and Telekom Malaysia, which the government can leverage on.
The NHF legal framework and the fund can be set up parallel with the hospital’s corporatisation.
Corporatisation is about improving hospital services, retaining talents, and removing assets and liabilities from government books. It will bring some degree of check and balance to the existing overpriced private health care service.
Corporatisation allows the organization to raise funds using corporate instruments like sukuks, bonds, and debentures. Funds raised would enhance hospital services or set up new health centers. Such an entity should be placed under the Ministry of Finance (MOF) with a board representative from various private and government agencies, including the MOH.
The third component of NHFS is strengthening the MOH’s role as a regulator and shifting its responsibilities from managing treatment centres.
In the initial stage of NHFS, the MOH would be responsible for most of the health services and will gradually corporatise primary, secondary, and tertiary treatment centres.
Assets and resources will be migrated to the corporatised entity. MOH will eventually focus on public health, setting standards, and regulating all private health care services.
NHFS Driver
A special task force under the Ministry of Finance (MOF) or the Prime Minister’s Office (PMO) should lead the NHFS project. The task force must comprise people from the Attorney-General’s Chambers (AGC), the MOH’s NHFS section, the MOF, and the private sector.
The scheme is about setting up a legal framework, a statutory fund, and the corporatisation of hospitals. Initially, it is about setting up the legal and financial structures. NHFS should be independent of the MOH as its primary activity is finance, not health services.
With a legal framework, a statutory National Health Fund can be formed and operationalised with some seed funding from the government. The task force must work out the necessary contribution on a population basis and who should pay for it.
The government is expected to pay for government employees, retirees, and low-income people. The rest of the population is paid either by themselves or their employees. The legal framework should be able to address this issue.
The fund board members should be professionals with financial strength and experience managing statutory funds.
Hospital corporatisation would be done incrementally. It will start with a few major hospitals, and the corporate entity will take over the secondary hospitals over some time. Primary care services will be corporatised eventually through another vehicle.
The corporatised companies’ board should be people with strong corporate and government backgrounds in health care services and governance and be detached from MOH. Politicians should not be on the board.
The MOH remains relevant in the NHFS agendam as it plays a critical role as a regulator. They remain essential in setting and maintaining service standards and providing other public health care services. They retain ownership and operations of non-corporatised clinics and hospitals until the corporatisation services mature.
Conclusion
The Health White Paper 2023 proposed a time frame of 15 years to implement its thrust. Three items (A, C, and D) mentioned in the White Paper do not take much time to implement if the stakeholders or drivers are clear about their plan and have no side agendas.
Setting up the legal framework and the fund should take, at the most, two years if proper resources with the correct drivers are in place. Corporatisation and realignment of the MOH role would require about three to four years and can run concurrently.
Again, success depends on having exemplary leadership without any side agendas.
The seeds of the NHFS need to be planted to ensure that the 1980s NHFS scheme is not derailed by a new scheme called NHI. The health sector needs a total 360-degree solution. Many vendors can provide a population health financing management system with little customisation.
The politics of health care, involving politicians and civil servants, have been the source of problems preventing the planting of the NHFS seed and its growth.
It is still ongoing today. It affects the public’s need for efficient and timely diagnostic and treatment services.
The author is a reassurer and assurance industry consultant. Dr Mohamed Rafick is a trained physician with 12 years in the military medical services and over 22 years of experience in the assurance industry. He retired as the CEO of a multinational reinsurance company in 2019. Currently, he remains active as an independent international assurance industry consultant.
- This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.
