Health Minister Dzulkefly Ahmad wants private hospitals to shift from pay-for-service to pay-for-outcome to improve health outcomes and curb Malaysia’s high medical inflation rate from uncontrolled procedure costs
Health Minister Dzulkefly Ahmad has called on private hospitals in Malaysia to adopt value-based health care to curb medical cost inflation and improve health outcomes.
Admitting that the country’s medical inflation rate of 12.6 per cent is high compared to the global average of 5.6 per cent, Dzulkefly urged private health care providers to shift from a pay-for-service model to a pay-for-outcome approach.
“I urge private health facilities, especially the Association of Private Hospitals Malaysia (APHM), to consider this approach. As a minister, I want value-based health care — not pay-for-service but pay-for-outcome — to ensure payment effectiveness and health outcomes without fueling inflation due to uncontrolled procedure costs,” Dzulkefly said.
The intention is good. The problem of who will be paying for uncontrollable bad medical outcome that might arise.
These are afew bad possible outcome:
1. Private hospital might reject severe admission. Resulting more serious patient have to go to public hospital.
2. Private hospital will be encourage to do more investigative and apply heavy treatment to ensure the good imeadiate outcome instead of the overall long term wellness.
3. Private hospital might increase cost for serius admission due to less admission and to recuperate loss of payment from bad medical outcome.
4. Lengthy procedure and cost to determine what is a good outcome and defend a bad outcome.
The gov better to prepare to patch these issues before all in and see the back lashed several years after and " Uturn ".
Cost containment such as, deductible() , coinsurance(), and preferred partner(), always been effective at controling medical inflation. Other method are copay(a fee to be charge to access the insurance coverage , normaly play a similar function like deductible), stop loss(limiting the maximum loss from a medical bill), and access delivery restriction(specialist and emergency only accesible to what it is meant for ) , are other available option to be explore. Another option which is less explored is the medical second opinion, so far this option is being offered as an insurance benifit where policy owner can consult with another reknown specialist on their current treatment case. This card can serve the purpose of having peer/supervise review on the heathcare provider. Yet the process of implementing have much space for improvement. Current challenge is the geografical limitation for patient to be really consult with a new specialist. Usualy only very serius cases will take this steps, but the patient is not at a very healthy stage to travel to more central or urban area where specialist usialy located, or even over sea, yet most insurance cover has a reasonable customary charges clause that limit the oversea treatment clause(usualy a more advance country with better healthcare quality but higher medical cost) thus patient are less encourage to use this facility, given all the limitation. Another possible solution to this is to make medical treatment operation and cost to be transparent and allow third party hospital to offer treatment to a case, like a bidding system. With such, patient are able to make informed desicion and peer competition could realy drop the service price. Though the legal and privacy havent been considered in. Finaly bulk purchase from medical suplier should be consider, as we know economic of size mostly works, just the determination from the policy maker that matters.
Opposition lawmaker Dr Alias from PAS asked about the government’s strategy to address medical cost inflation and whether an impact study had been conducted on copayments for medical health insurance and takaful (MHIT) products. Infact we do have data to be analyze. Only recent years the insurer are competing to design policy that allow near full 100% claim. In the not so recent years insurer had been coming out with deductible (prudential), co insurance and stop loss(great easternl) method as what i remembered, and these lasted for some time until the whole insurance market are competing to offer 100% claim medical health insurance. By comparing the claim data for the effect of cost containtment effort we can know how effective these effort are at cost containment and the acceptance by the public from the insurance penetration rate.
Starting September 1, insurance and takaful operators (ITOs) must offer at least one medical product with co-payment features, requiring a minimum of 5 per cent co-insurance and/ or an RM500 deductible per policy or certificate year. This applies to both new and renewed MHIT policies or certificates. From my point of view deductible are not that effective, it serve the purpose of denying people to private hospital for small cases. Which inturn they went to the public hospital. Co insurance is so far the good card to play. When patient bare a certain amount. They will take responsible to control the cost. This will arise one problem where if the bill is so high that cant be afordable even only paying coinsurance , this is wherr the stop loss option comes in. Either goverment has to take up the responsibility of subsidizing the stoploss feature to those eligible for application, or introduse the "medisave" like policy to ensure public allocated budget as a safety net for medical/accidental cause financial risk. Besides, i am sure that bnm has a say for banks to play a part in the safety net policy making. Banks can offer interest free loans for such medical risk.
In the end, if such issue are not taken care of the social libility will soon fall back to the gov where family could nolonger affort kids or kids education, our demographic atm the moment shown sign of getting bad. With a much higher portion of the population are at an older age.
Dzulkefly requested for Bank Negara Malaysia (BNM) to clearly explain the policy to prevent people from abandoning private medical insurance and overburdening public health care facilities.
"I ask BNM to provide clear explanations. "We want to ensure the policy does not burden the public or health facilities. If many people are uninsured, they will crowd public health care facilities,” Dzulkefly said. We should not just say that and pass the responsibility only to bnm. We have public health expert, statistic department (although our statistic report available publicly are not that updated or obsolete)
Tung Kai Xu is writing this artical responding to the article attached based on the limited understanding on insurance, health care system and claim experience in apac region mainly in malaysia and singapore.
