KUALA LUMPUR, Feb 20 — AIA Berhad has “requested” its panel hospitals to provide cheaper care, after Bank Negara Malaysia (BNM) imposed interim measures to curb rising medical insurance premiums.
In a letter sent to private hospitals last February 6, the major insurer said the implementation of the central bank’s measures – which include capping premium increases to 10 per cent for most policyholders until end 2026 – “come at great cost to the industry.”
“As our valued partner, we believe that a sustainable health care ecosystem requires concerted efforts from all stakeholders (including your hospital and AIA) to ensure that private health care remains accessible and affordable for all our customers,” AIA Health Services general manager Ooi Zhen Yang wrote in his letter to hospital CEOs and administrators, as sighted by CodeBlue.
“AIA is very supportive of the Ministry of Health’s (MOH) initiative to move to Diagnosis-Related Group (DRG) pricing models, but we recognise this will require time. In the interim, we respectfully request your hospital’s support on the following initiatives during this challenging time.”
Ooi listed four AIA initiatives for private hospitals:
- Pricing basis: To limit any price hikes in charge codes and further unbundling and layering of charges.
- Evidence-based diagnosis and treatments: To adopt cost-effective approach to diagnostics by prioritising simpler tests before advanced ones when clinically warranted and to avoid reliance on positive defensive medicine and unnecessary patients’ cost.
- Outpatient and daycare management: To drive daycare procedures without unnecessary admission and utilising AIA’s Outpatient Guarantee Letter facility for common illnesses that may not require hospitalisation, where clinically appropriate.
- Pharma management: To substitute brand-name drugs with equivalent and/or equally effective generic drugs, and to practice responsible prescription methods in accordance with the guidelines issued by the Ministry of Health.
AIA said it was currently implementing Bank Negara’s measures for the health insurance industry “responsibly and transparently, as per the framework set forth by BNM.”
“As a leading insurer and takaful operator in Malaysia, AIA is committed to delivering accessible, affordable, and effective health care to our customers. However, the continual rapid rise in medical costs is a serious concern and expected to lead to an unsustainable health insurance premiums/takaful contributions which could potentially impact the private health care industry, putting further pressure on public health care,” Ooi said in his letter to private hospitals.
The insurer added that it would continue to share performance metrics, including a cost efficiency index (CEI), to help its partner hospitals better manage costs.
“As we look to refresh our cashless panel and preferred partners in our SMART Panel network, our team will reach out to you soon to discuss on how we can further strengthen our cooperation and create a sustainable health ecosystem,” wrote Ooi.
AIA’s SMART Panel Provider List, last updated on August 1, 2024, on its website includes hospitals nationwide from major private hospital groups, such as IHH’s Pantai hospitals, Gleneagles hospitals, Penang-based Island Hospital, and Sarawak-based Timberland Medical Centre; KPJ hospitals; Asia OneHealthCare’s Columbia Asia hospitals, Subang Jaya Medical Centre, CVS Kuala Lumpur, and Beacon Hospital; Sunway hospitals; Thomson Hospital Kota Damansara; as well as Aurelius hospitals, among other private hospitals.
Government-owned hospitals that operate as private facilities – such as the National Heart Institute (IJN) and UKM Specialist Centre, both located in the Klang Valley – are also on AIA’s panel.
Late last year, the MOH – which is the payer for pensioners and civil servants seeking treatment at IJN – instructed IJN to switch government patients from innovator medicines to generic equivalents, in a bid to curb ballooning bills from the top cardiac centre that exceeded RM606 million in 2023.
AIA’s letter to private hospitals did not specify what would happen should panel providers refuse to accede to the insurer’s “request”, such as whether AIA would deny reimbursement for sophisticated testing or innovative drugs prescribed to patients.
It is also not immediately clear if other major health insurers have implemented or are planning to propose similar measures as AIA against their panel hospitals.
Both the MOH and university hospitals under the Ministry of Higher Education (MOHE) largely prescribe generics in their facilities, although certain university hospitals also provide treatments that are not available in MOH hospitals. Certain blood tests for multiple myeloma, a rare blood cancer, for example, are also limited in public health care facilities due to budget constraints.
AIA Malaysia’s chief executive officer is Ben Ng, while its chief health care officer is Heng Zee Wang, according to the insurer’s website. Based on their LinkedIn profiles, neither executive is a medical doctor.
According to AIA Bhd’s unaudited condensed interim financial statements for the six months’ period ended June 30, 2024, the Group’s profit before tax increased 52 per cent year-on-year to RM1.6 billion from about RM1 billion.
AIA’s move may be the first reported act in Malaysia in recent years by an insurer that potentially interferes with doctors’ autonomy in deciding what is best for their patients.
In the United States, health insurance is a major perennial issue, intensified after the assassination of UnitedHealthcare CEO Brian Thompson in New York City last December. The suspected killer, Luigi Mangione, pleaded not guilty to state charges.
A day after Thompson’s killing, Anthem Blue Cross Blue Shield, one of the biggest health insurers in the US, halted plans to cap the length of time that anaesthesia could be covered during surgery and medical procedures.
Bayan Baru Sim Tze Tzin, who has been championing the issue of rising medical insurance premium hikes and private hospital bills, told CodeBlue in a recent interview that private health care consumers in Malaysia are “vulnerable and voiceless.”
He also noted how the alleged murderer of Thompson became an “instant hero” in America.
“We don’t want that to happen here,” Sim said.
Parliament’s Public Accounts Committee (PAC) held a town hall in Penang last February 14 on health insurance and private health care. Another session for the general public is scheduled in Parliament this Friday.
In a statement, the Association of Private Hospitals of Malaysia (APHM) said it met PAC members yesterday to discuss medical inflation. APHM has also met with Bank Negara.
“APHM welcomes the PAC’s initiative to address the medical cost inflation issue by providing the rakyat a platform to voice their concerns, and by providing stakeholders such as APHM the opportunity for collaboration.”
