SEPTEMBER 6 — It is 2024. Malaysia’s public healthcare system took a massive beating after the Covid-19 crisis from 2020 to 2022.
Millions of patients, at least 70 per cent of the population, continue to depend upon its services, especially with the increasing number of people living with non-communicable diseases such as diabetes, cardiovascular diseases, and chronic kidney disease, as well as those becoming infirm or needing elderly medicine.
Health workers and professionals are increasingly leaving the service, either to the private sector, other countries, or departing the health sector altogether.
The healthcare financing system relied upon by the public health system today, which dates back to the mid 1980s and is derived from tax revenue, continues to subsidise up to 98 per cent of patients’ costs.
We do not need to be reminded again about how fortunate we are to have an affordable healthcare system, accessible to all or hear again how cheap these services or treatments are.
The truth is that nothing in healthcare has ever cost RM1 or RM5. Consultation with doctors, care by nurses, diagnostic tests, medicines, surgeries and other procedures are costs that are borne by patients, the government, tax payers or all the above.
What we need to discuss is how to sustain, maintain and grow what we have today to ensure that it meets the needs of Malaysia’s population for at least the next 30 years. The current financing mechanism has never been sustainable, nor intended to be forever.
From the offices in Putrajaya to the Klinik Kesihatan and District Hospitals, policy decisions are often being made based on the reality of what we can afford, as opposed to what we need to achieve the best possible health outcomes.
Recognising this fact, more than a dozen reports and papers commissioned by past governments since the early 90s have recommended reforms to Malaysia’s financing of healthcare to ensure that it would be fit for purpose and future-proofed against the expanding needs of a growing population.
Each time, the government of the day was unwilling to take up those recommendations which would have required bold, necessary but unpopular action, and preferred instead to continue to solely depend on taxes and the federal Consolidated Fund, kicking the can down the road for someone else to take up the responsibility of tough reforms.
Seven years ago, RM25 billion was allocated for health under the Federal Budget. In 2024, it was RM41.2 billion and the amount is still considered an underinvestment, falling short of actual needs.
For health allocations to reach the aspired level of 5 per cent of GDP, at least RM85 billion would have to be secured today, representing more than a 100 per cent increase to existing levels, and 22 per cent of this year’s entire federal Budget. It will not likely happen.
Therefore, we need to change the conversation. We have reached the limits of a tax-based system to fund our public healthcare. We need to secure an additional consistent source of funds to complement the existing allocation to improve access and quality as well as widen the funding base to continue providing affordable healthcare for all.
As of 2023, the Department of Statistics states that the current average life expectancy for Malaysia is 74.8 years, 77.4 years for females, and 72.5 for males.
In spite of excess mortality due to the Covid-19 pandemic, this data represents progress and improvement in the quality of life, and access to healthcare.
However, it is sobering to note that the last eight years for many people are often spent in ill health and poor quality of life.
Despite the fact that 11.1 per cent of the total population are already older persons, aged 60 and above today, there is no one government body with the mandate, responsibility, and necessary budget to provide for the care, wellbeing and support of the aged.
Neither welfare nor healthcare under the Ministry of Women, Family and Community Development and Ministry of Health respectively, sufficiently cover what is needed.
Aged care remains traditionally largely dependent on individuals, families, and communities which is unsustainable.
Malaysia has been deemed ill-prepared for its future status as an aged nation by 2030. Funding is also desperately needed to meet these needs as spending for aged care is estimated to be four times higher than the rest of the population.
What we need today is a new source of funds which will help fund Malaysia’s healthcare needs as well as the care for the aged population. One realistic possibility is the adoption of a national health and social insurance, where means-tested mandatory contributions from eligible working adults insures the population against the costs of both health and aged care, guaranteeing a minimum level of care for all.
It will create a vast reservoir of funds similar to what is available under the Employees’ Provident Fund (EPF) and Social Security Organisation (Socso).
This would be applicable to all workers, and be based on a sliding scale linked to monthly income and age. There would be collective pooling of both funding and risk. It would also enable patients to access both private and public healthcare systems. allowing for better utilisation of existing resources.
This national scheme would co-exist with existing private health insurance. It would make it possible for new treatments, drugs and therapies to be introduced and funded without solely being dependent on the yearly national budget. These contributions would complement existing federal allocations, not replace them.
The RM1 and RM5 fees should also be eliminated. Some erroneously believe that these fees fund the bulk of our healthcare expenditure. They believe that by simply increasing these rates to RM10 and RM50 respectively (an increase of 900 per cent!), we can close the funding gap.
Unfortunately, these fees collect less than 0.5 per cent of total health expenditure. They are obsolete, inadequate for meaningful cost recovery, and mislead the public regarding the true cost of health care.
These charges now act as one of the barriers and distractions to healthcare financing reform. They should be removed altogether. Patients should not be required to pay anything at the point of registration.
A national health and social insurance would be a disruptive innovation. It would be a game-changer. It could also catapult the entirety of Malaysian healthcare into the 21st century, rather than piecemeal.
We cannot depend on maintaining what we have today based on a “living from national Budget to national Budget” mindset, facing almost existential questions every September and October.
A national health and social insurance could be how we pave the way forward to ensuring that our healthcare workers are compensated appropriately, more nurses, doctors and medical technicians recruited and retained, modernise ageing infrastructure, effectively address East Malaysia’s needs, prevent shortages of essential medicines, and for conversations regarding life-changing and life-saving treatment and care to change from how we cannot access and afford them to how we can get these medicines to those who need them.
The government is steadfast in its commitment to ensuring that Malaysians have access to high quality and affordable healthcare.
Despite that, the proposal of a national health and social insurance will be confronted with the harsh reality of a continuing trust deficit among Malaysians.
With more funds collected from the public, comes higher responsibility, and demands for and expectations of accountability and transparency. It will be politically challenging.
Nonetheless, there will never be a right moment or perfect conditions to introduce such an initiative. There is no Goldilocks moment.
The United Kingdom’s National Health Service (NHS), which Malaysia is modelled after, was founded in 1948, shortly after the end of the Second World War by a nation still rebuilding amidst the ashes of armed conflict.
We need forward looking, strong and audacious leadership as well as collaborations and partnerships between the public and private sectors.
The key benefits of a national health and social insurance should be made clear: potential to stabilise public subsidisation, allow space for cost-containment, maintain and improve access and quality to essential services, improve access to innovative treatment, fund equitable access to services in the private health space, and modernise the healthcare infrastructure.
Meaningful healthcare reform is absolutely necessary if we are serious about ensuring that we have sufficient funds, resources and capacity to support and invest in the other changes that we need to get done or aspire to do. We need to also be brave enough to adopt solutions which are out of our comfort zone.
Note: This article is Part 1 of a 3 part series covering healthcare financing, human resources and health infrastructure in conjunction with the upcoming National Budget 2025
* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail.
