INCENTIVISE NON-PROFIT HOSPITAL EXPANSION TO EASE MEDICAL COSTS – BNM

KUALA LUMPUR, March 24 (Bernama) -- Increasing the supply of affordable, mid-tier hospital beds and providing incentives for the expansion of not-for-profit hospitals can help mitigate spiralling medical insurance and medical costs.

Private hospitals could also display the price of drugs and price range of hospital services so that medical insurance policyholders can compare prices which will promote healthy competition, Bank Negara Malaysia (BNM) said.

Unveiling a slew of strategic thrusts and initiatives to address the phenomenal spike in medical inflation, it said the affordable hospitals initiative could be done by implementing and scaling up the Rakan KKM initiative by the Ministry of Health (MOH).

This could also serve as a price benchmark, the central bank said in a box article titled “Securing Sustainable Access to Medical and Health Insurance/ Takaful Protection” in its 2024 Annual Report released today.

The Rakan KKM programme offers ‘premium economy’ services at selected public hospitals for elective outpatient, daycare and inpatient services.

These are among the strategies which offer cost-effective options for medical and health insurance/takaful (MHIT) policyholders who are being financially burdened to continue to secure access to medical insurance.

BNM, together with key stakeholders including the Ministry of Finance, MOH, insurers and takaful operators (ITOs), private hospitals and clinics and consumer groups are working closely to implement these initiatives.

PRIVATE HOSPITALS MUST DISPLAY PRICES OF MEDS

To facilitate greater price transparency, private hospitals could display the retail prices for drugs and the publication of price ranges for common healthcare services which will help policyholders and insurers to compare prices across different medical providers.

BNM said that MOH will also undertake regulatory and legislative review of current oversight arrangements of private hospitals to see how inflation is calculated.

It said the implementation of a Diagnosis-Related Groups (DRG) payment mechanism to replace the existing fee-for-service provider payment mechanism at hospitals would also help alleviate medical costs.

Under DRG, patients are categorised into groups based on their diagnoses and medical needs, adjusting for severity and co-morbidities.

Each group is then associated with a predetermined payment amount. This incentivises efficiency and health outcomes while providing greater price predictability.

SHARING MEDICAL RECORDS WILL REDUCE DUPLICATING DIAGNOSTIC TESTS & PROCEDURES

Another initiative to reduce costs is to enhance the interoperability of electronic medical records (EMR) across hospitals.

EMR will address the current fragmentation of health records in different healthcare facilities.

Greater accessibility and portability of a patient’s medical data will improve quality and continuity of care while reducing duplication of diagnostic tests and procedures, which over the longer term, will increase operational efficiency and reduce costs.

As of 2023, Bank Negara said there were 7.7 million individuals covered under MHIT.

Overall, Malaysia spent RM84.2 billion on healthcare in 2023, and of this, the amount funded by MHIT had grown six times over the past two decades, from RM0.96 billion in 2003 to RM6.75 billion in 2023.

BNM noted that the interim measures introduced in December last year to alleviate the immediate impact of premium adjustments to policyholders were temporary and “cannot be sustained if high medical inflation persists.”

“It is therefore imperative that key stakeholders holistically and effectively implement broader health reforms to address medical inflation,” it added.

– BERNAMA