The Diagnosis-Related Groups (DRG) system has become a very fashionable abbreviation after the medical insurance providers announced yet another spike in excess of 40 to 70 per cent in medical insurance premiums.
This premium tsunami is framed against the backdrop of RM963 million to RM1.41 billion profit after tax for the year ending 2023 for medical insurance providers. Dividends paid out in 2023 amounted to RM451 million to RM975 million.
The medical insurance providers have, however, pointed their fingers at exorbitant hospital bills by private hospitals.
PKR MPs, in their letter, alleged that, “Bank Negara Malaysia (BNM), also highlighted the charges for hospital supplies and services which they said are 59 to 70 per cent higher than drug bills, as well as the lack of government regulation over consumable items such as syringes, gloves and gauze in hospitals.”
Not unlike medical insurance providers, undoubtedly, laughing their way to the banks, private hospitals are reaping net earnings of RM263.4 million to RM2.95 billion for the year ending 2023. This represented private hospital group profit surges of between 58 per cent to 90 per cent.
Therefore, it is of utmost importance for Members of Parliament (allegedly championing the rakyat’s cause), BNM, the Ministry of Health (MOH), and most critically, the lay public, to note that the medical specialist is a minor player in the billion-ringgit corporatisation of the health care industry in Malaysia.
Why? This is because the specialist’s fee is only a tiny fraction of the itemised hospital bill. The medical specialist fee is strictly regulated by the 13th Schedule of the Private Healthcare Facilities and Services (Amendment) Order 2013, published by the Attorney General’s Chambers (AGC).
This means that the specialist’s fees in the hospital’s itemised bill has NOT been reviewed or revised for 11 long inflationary years.
Specialist fees by and large (with the rare exception of the very few black sheep in this “most trusted professional group voted by Malaysians and the global public”) have NOT significantly contributed to medical inflation in Malaysia for the last decade.
This contrasts sharply against the laissez-faire and virtually unregulated business of medicine by medical insurance providers and private hospital groups.
The medical insurance providers and private hospital groups have been “allowed to do as they choose”, with minimal government interference in the reckless embrace of the doctrine of “hands off policy of crass capitalistic economics”.
This alarming state of health care affairs, apparently, only recently realized by BNM and the MOH has, unfortunately raised medical inflation in excess of 12 per cent, which is expected to rise to 16.4 per cent in 2025, well above the global average of 10.4 per cent.
Now that we have all the chips on the table, we will next discuss whether the DRG system is the right way forward to transform our health care ecosystem.
The authors – Dr Musa Mohd Nordin (paediatrician), Dr Ahmad Faizal Mohd Perdaus (chest physician), and Dr Rajeentheran Suntheralingam (urologist) – are from KPJ Damansara Specialist Hospital.
- This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.
