We write as two doctors trained in paediatrics and ethics (EK) and public health and public policies (KSK), in response to the CodeBlue article “Limit Advanced Tests, Prescribe Generic Drugs, AIA Tells Private Hospital”, published on February 20, 2025).
Rising health care costs are a global concern. Therefore, the four initiatives published in the article should resonate with clinicians, the public, and policymakers.
Cost-cutting measures in health care are appealing and necessary, but require careful implementation, monitoring and evaluation and accountability to prevent unintended consequences.
Patients and health care professionals deserve autonomy, informed choices, and quality care that also balances long-term financial sustainability and cost containment.
We agree that some tests are unnecessarily prescribed, for reasons of convenience, defensive medicine, or requests by “worried well” patients. However, some (expensive) tests should be prescribed in the first instance for reasons of higher accuracy, higher relevance or higher speeds.
Therefore, inappropriately restricting diagnostic tests may delay or misdiagnose conditions, leading to worse health outcomes and higher long-term costs.
We also agree that there should be a common sense hierarchy of “simple tests first”, but we caution against blunt instrument or rigid hierarchies that prescribe a “one-size-fits-all” approach to medicine and patients.
In other words, a rigid hierarchy favouring simpler tests may not suit individual patient needs. Similarly, while generic drugs are cost-effective, they may not be suitable for all patients all the time due to individual needs, allergies, or specific clinical conditions.
We strongly support common-sense, nuanced and effective measures to reduce health care costs. While cost containment is essential, it must be implemented judiciously to avoid compromising care.
Limiting advanced imaging could delay critical diagnoses. Likewise, bioavailability differences and patient-specific reactions sometimes necessitate brand-name medications.
The four measures described in the article can be helpful, but not adequate, to reduce rising health care costs. Other measures are needed: Our current fee-for-service model incentivises volume over quality, contributing to rising costs and inefficiencies without clear benefits on care quality.
A transition to value-based care, value-based purchasing and diagnosis-related groups (DRGs) is necessary but challenging, so Malaysia must start now.
Short-term financial losses may precede long-term savings as providers adopt preventive care and new payment models. Initiatives like Medicare’s Hospital Readmissions Reduction Programme and bundled payments encourage efficiency by linking reimbursement to outcomes.
Yet other measures include drug pricing reform as well as price setting are also crucial, with a National Medicines Policy that appropriately balances innovation into new molecules, a coherent generics strategy and strengthening of local manufacturing capacity.
Systems like Germany’s AMNOG and Canada’s Patented Medicine Prices Review Board align drug prices with clinical benefits. We also believe in price transparency in the health care system, such as the United States’ Hospital Price Transparency Rule that helps patients make informed decisions, reducing unnecessary expenses.
Public-private-academia-industry collaborations can drive sustainable cost management. Institutions like the Mayo Clinic and Karolinska Institute show how academia can foster innovation while optimising resources.
Administrative costs also require attention. Taiwan’s National Health Insurance system demonstrates how a single-payer model with digital records and strategic budgeting can minimise bureaucracy and free up resources for patient care.
A one-size-fits-all approach would not work. Malaysia needs a multi-solution approach that integrates value-based care, pay-for-performance, strategic purchasing, price transparency, promoting competition, preventive health investments, digital innovations, and cross-sector partnerships.
Cost-cutting should not undermine moral obligations and duty of care; financial sustainability must align with high-quality, equitable care.
Rather than imposing rigid restrictions, insurers, healthcare providers, policymakers, and academia should collaborate on flexible and nuanced policies that preserve clinical autonomy and address individual patient needs.
Insurers face complex negotiations with hospitals struggling with rising costs due to technology, consumer expectations, and medico-legal risks.
Addressing the principal-agent problem in insurance is difficult, but a multi-solution approach is preferable to blunt “single-solution” instruments.
Erwin Khoo is a paediatrician, bioethicist, and medical educator, and currently a Research Fellow in Global Health and Social Medicine at Harvard Medical School and an Affiliate at its Center for Bioethics. Additionally, he serves as the Head of the Paediatrics Department at IMU University. Khor Swee Kheng is a physician trained in public health and public policies.
- This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.
