Published by New Straits Times, image from New Straits Times.
PROTECTING one’s healthcare expenses from unexpected financial hardship is becoming a pricey initiative.
By extension, private healthcare has become a luxury, such that it has influenced private insurers to raise medical premiums on the basis that a larger number of claims has been made in addition to technological advancement across time.
This is despite the fact that private hospitals and insurers had enjoyed huge profit margins and double figure growth, alongside with the world’s lowest medical claims ratio for 16 years at the expense of public healthcare sector.
Most people sign up for health insurance as it helps them avoid major financial problems amalgamated with high healthcare costs at a time when they need treatment.
Health insurance schemes pool the funds and risks across the population, and give it to those who are in need of coverage.
Private insurers claim that medical technologies’ breakthrough and innovation, and the fact that a significant number of people use their health insurance have led them to raise the premiums. Is the private insurers’ claim justifiable?
Indeed, new medical technologies and innovations have spurred demand in better healthcare and an increase for private medical insurance. But new technologies and innovations come at a steep price tag. It is prices — not utilisation — that fuel the healthcare expenditure.
The drawback is that patients may need to undergo a number of procedures that will result in a cumulative rise in medical bills, outweighing the cost savings.
So what can be done? According to the Inaugural Poll by EMIR Research, one of the five bread-and-butter issues that is worrying the rakyat is affordable healthcare.
In this regard, a crucial strategy will be to improve the transparency around the supply chain, particularly on private hospitals medical treatment and health products, which includes nett prices of medicines and research and development costs.
Nett prices are the manufacturers’ selling prices after discounts, rebates and other incentives.
Private medical treatment and drug prices in Malaysia have not been fully disclosed as they should be. Thus it has led the majority to overspend on their medical expenditures on treatment and medicine up to the point of using health insurance for cover.
Thus, improved transparency and disclosure will allow for fairer pricing as this will enable consumers to make better decisions.
This can be consolidated by the government’s position in developing appropriate indicative prices for medical procurement through open tender bids. This will induce greater access of medical care for all.
In this new age, it is imperative that the government incorporates technologies such as artificial intelligence-based diagnosis that is proven to work multiple times faster than human intervention to obtain better data and seamless flow of information (e.g. rate of growth of cost categories).
Evidence shows that digital innovation contributes by boosting the speed of availability of the advanced knowledge globally, with more improved (accurate) testing and diagnosis, resulting in better medical care.
Research conducted by the World Health Organisation states that unregulated or poorly designed private health insurance systems will heighten inequalities and medical costs such that it amortises the coverage to be limited only to the rich, young and healthy.
The shortage of specialised medical practitioners coupled with the public’s high demand for their services have led them to offer high monopolistic service fees. In addition, the government can develop enforcement tools that oversee private health insurance (PHI) regulation, such as ensuring that the medical insurance is provided based on people’s need, rather than their ability to pay.
One way is to establish a minimum health package by PHI institutions that will ensure the insured receives the basic medical benefits as well as protecting them from unreasonable exclusions.
It is morally imperative that the government manages the burgeoning healthcare expenditure, while ensuring that all Malaysians get better access to medical care.
Jamari Mohtar and Alissa Azizi are part of the research team at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.
