In my previous article, I spoke about the important role played by the private hospitals and its staff and specialists. In this article, I will touch upon some of the issues brought on to the private health care ecosystem by an equally important partner, which is the insurance and Takaful organisations, with some potential suggestions to consider.
In 2023, the Life Insurance Association of Malaysia (LIAM) Annual report highlighted that the total medical claims payout increased 26.2 per cent (RM7.7 billion compared with RM6.1 billion in 2022).
In the same report, the agency remuneration was stated as RM5.3 billion and management expenses were RM4.4 billion. The role of licensed financial planners or agents (more than 80,000 strong) are important as they are the patients advocate as well, but at the same time, RM 5.3 billion represents almost two-thirds of the cost for medical claims.
In this day and age, the ease of procuring and managing life insurance online might outweigh the pros of working with an agent, particularly if you’re relatively young, healthy, and understand your needs and capabilities.
The industry should offer options, especially for the young ones, with good and clear products. They should have access to make purchases online and the process should be made easy at the point of claims.
The Business Times of Singapore reported that in 2022, Direct Purchased Insurance accounted for about 40 per cent of insurance policies sold in Singapore. We can potentially pass the savings to the insured who may not require a licensed financial planner to understand the products and his requirements, thus keeping his premiums low.
The underwriting terms and conditions of the policy must also be transparent and clear to the patients who are paying on the assumption that they will get what they pay for. But do they truly understand?
The problem that we frequently encounter is they don’t and usually the doctors and hospitals are blamed for “not writing it correctly“ by some agents.
Doctors cannot and should not change their patient’s medical history just to get a claim approved. This is unethical and doctors need to be aware that the Malaysian Medical Council (MMC) may potentially investigate claims which are fraudulent in nature if a complaint is made.
Insurance companies also need to strip out the complexity in the products they offer and make it easier for consumers to feel assured they are purchasing something that will protect them.
What’s the point in having a RM10 million lifetime limit or no annual limit when you’re not allowed to pay for the latest chemotherapy or surgical intervention because it’s not part of their covered treatment as decided by their claims team?
We have noticed of late of some insurance companies employing arm-twisting tactics to squeeze hospitals and indirectly doctors to give huge discounts, if not, the provision of cashless facilities will be moved to other hospitals. That’s not a healthy development as well.
In fact, it’s outright silly when you squeeze hospital who are generally reasonable and move business to pricier hospitals who have high marks up first and then later, they discount it.
Access to health care must not be restricted on the guise of having hospitals as preferred panel hospitals. There must be transparency and proper logical reasoning for it, not just an arbitrary decision of moving business away just because the insurance company has the upper hand.
This takes away the clinical decision-making process away from the patient of what’s best for them which includes the choice of doctor and hospital.
Private hospitals should be made known of errors that have occurred which it must correct, and errant individuals and hospitals must be brought to task.
Another tactic that frustrates doctors and patients are the incessant questions that are sent to approve a claim, what we call the pre-authorisation process. The back-and-forth process is actually hampering patient care.
The problem is some of the policy definition and exclusion criteria are vague and sometimes show lack of understanding of the disease process and management plans.
We have to admit that quite a lot of these decisions to approve or decline the claims are made by junior doctors and to be fair, it’s not easy to keep up with all the latest treatment modalities. It’s hard for even us specialists to keep up with new technology and medications and protocols.
Declinatures are also not properly explained. The industry needs to show data on declinature rates and why they occur.
We need to remind our insurance and Takaful partners that the MMC’s position on managed care practice is very clear in that the medical and dental management of patients vests in a registered medical practitioner and a registered dental practitioner respectively.” (Section 78a of the Private Healthcare Facilities and Services Act).
The licensee of a private health care facility or service or the holder of a certificate of registration shall not enter into a contract or make any arrangement with any managed care organisation that results in a change in the powers of the registered medical practitioner or dental practitioner over the medical or dental management of patients, as vested in Paragraph 78(a).
Diagnosis Related Groupings (DRG)
The buzzword that we are hearing right now is Diagnosis Related Groupings (DRG), which is touted to be one of the solutions for this problem of increasing medical premiums to counter medical inflation.
However, if we are not careful, DRG will in a way stop patients from access to certain medicines and equipment if “standard pricing “is followed. How often will the DRG treatment protocols and the fees be updated?
Will it be able to keep pace with the medical advancements? These are some of the questions that remain unclear to this day, and we are not sure whether it will help the insurance industry more instead of the patients.
The intent of DRG seems to be moving the risk away from the insurer and patient to the doctor and hospital. Medicine does not work that way and our fear of what’s going to happen is that high risk cases won’t be done.
The patient may end up with suboptimal care as certain test or intervention are not paid for. When a problem or complication occurs, it’s not the insurance companies that will be held responsible but the doctors and the hospitals.
You can call it defensive medicine, but the threat of litigation is very real if something goes wrong.
In the spirit of competition, let the market forces decide ultimately. Typically doctors and private hospitals can give a range of fees prior to admission and the patients can choose based on their preferences.
The misconception is that our fees are bankrupting patients. Just an example of range of fees, about 60 per cent of hospital bill sizes fall below RM10,000 (mainly medical admissions), 30 per cent between RM10,000 and 50,000 (simple surgeries), and 5 per cent RM50,000 and RM100,000 (complex surgeries),
Only about 3 to 5 per cent of cases actually exceeded RM100,000, and this is when a patient presents with a complicated problem (cardiovascular or neurology) and multi-organ failure that needs end organ support via ventilation, dialysis, interventional radiology (coronary or neuro). These are the bills that generally depletes the savings of our patients, if the insurance is not able to cover the costs.
And that’s where probably the government can come in. Let’s have some kind of mechanism where the care can be continued in our private hospitals using our facilities and staff and offset some of the cost for the family from the taxpayer’s pool.
As ultimately, when there is a request to transfer out by the family the patient would still be utilising the taxpayer’s money for their ICU care albeit in a government setting.
We have done that before during Covid-19, so let’s make it work again. This can be part of our CSR initiative where both hospitals and doctors can agree to reduce certain costs of care.
Conclusion
A frank open discussion needs to take place between all stakeholders in the private health care ecosystem as we know what we are seeing today was eventually going to happen as it was just a matter of time.
To this end, the Public Accounts Committee (PAC) Hearing on Private insurance Premiums and Hospital Charges led by Bayan Baru MP Sim Tze Tzin is most welcome.
Bank Negara Malaysia and the Ministry of Health (MOH) as the regulatory parties with the stakeholders will need to discuss all our issues in a meaningful objective manner, with set frequency of meetings and clear outcomes.
I hope that a fair and balanced process with some trade-offs between the parties can be reached so that the interests of policyholders, patients, and health care providers are looked into.
So, let’s work together to find the best balance to this equation in a sustainable manner. The health and wellbeing of the Malaysian public is our ultimate aim.
Dr Gunalan Palari Arumugam is currently practising as a Consultant Anaesthesiologist and Critical Care Physician at a tertiary level private centre in Klang Valley. He was previously a Chairman of the Medical Advisory Board of two private hospitals, a medical director with a global insurance company, and represented doctors and hospitals in medicolegal cases, besides holding various portfolios in a few medical societies over the years.
- This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.
