National Health Insurance - Anas Alam Faizli
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Malaysia’s Healthcare Is Unsustainable. Drastic Reform Is Inevitable
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Wed, 30 Sep 2026 11:43:04 +0000
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Malaysia’s healthcare system is often praised as one of the most efficient in the developing world. This is largely because access is widespread and costs are heavily subsidised. Yet beneath that reputation lies a structural strain that is becoming increasingly difficult to ignore. In 2023, Malaysia’s total health expenditure reached RM84.2 billion, equivalent to 4.6 …
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Malaysia’s healthcare system is often praised as one of the most efficient in the developing world. This is largely because access is widespread and costs are heavily subsidised. Yet beneath that reputation lies a structural strain that is becoming increasingly difficult to ignore.
In 2023, Malaysia’s total health expenditure reached RM84.2 billion, equivalent to 4.6 percent of GDP. Public sources accounted for 55.7 percent while private spending made up 44.3 percent. Most concerning is that out of pocket payments accounted for approximately 36 percent of total health expenditure.
The World Health Organization considers systems where out of pocket spending exceeds 20 percent to be at risk of financial hardship. Malaysia is almost double that threshold.
This is not merely a statistic. It is a warning.
At the same time, demand is rising rapidly. Malaysia is projected to become an aged nation by 2030. The proportion of the population aged 65 and above is expected to rise from around 8 percent today to more than 15 percent by 2040.
Non communicable diseases already account for more than 70 percent of deaths. Adult diabetes prevalence is close to 18 percent. Hypertension affects roughly 30 percent of adults. More than half of Malaysians are overweight or obese.
These are not short term pressures. They are long term cost drivers that will compound over decades.
Yet Malaysia’s healthcare financing model has remained largely unchanged.
Malaysia has been discussing financing reform, including National Health Insurance, since at least 2008. The 1Care proposal more than a decade ago attempted to introduce structured financing and risk pooling. Since then, multiple studies and consultations have been undertaken, including input from global institutions. Most recently, the Health White Paper acknowledged that financing reform is essential to ensure long term sustainability.
Seventeen years of analysis.
Very limited execution.
The issue is not a lack of understanding. The issue is alignment.
Meanwhile, the strain on the public healthcare system continues to intensify.
Public hospitals in major centres frequently operate above 90 percent bed occupancy, well beyond the level considered optimal for system resilience. Waiting times for specialist care can stretch for months. In some cases, elective procedures take significantly longer. Waiting period for bypass can be more than 13 months.
The contract doctor issue has affected more than twenty thousand medical officers over recent years, contributing to uncertainty in career progression and morale. Migration to private practice and neighbouring countries continues.
This is not a failure of our healthcare professionals.
It is a system operating beyond its intended capacity.
Malaysia’s healthcare system today resembles a structure under constant pressure. It continues to function, but the margin for error is narrowing.
What is often overlooked is that Malaysia has already demonstrated the ability to operate a more integrated model.
We did it before!
Between 2021 and 2022, I had the opportunity to be involved in this effort as the country administered more than 70 million COVID 19 vaccine doses. Over 50 million were delivered under the national immunisation programme, with more than half executed through coordinated public private partnerships supported by centralised purchasing and digital systems.
For a brief period, Malaysia functioned as a unified healthcare system. It is clear that Malaysia already possesses the capability to execute such a model at scale.
Public and private providers were mobilised at scale. Digital platforms coordinated scheduling and certification across more than 30 million users, including migrants. Claims and payments were standardised. Capacity was deployed where it was needed most.
This was not incremental improvement.
It was system level execution.
It proved something fundamental.
Fragmentation is not inevitable. It is a choice.
The tragedy is not that Malaysia lacks capability. The tragedy is that we have not institutionalised what we have already demonstrated.
At the heart of this discussion is a concept that remains underutilised.
Strategic purchasing.
In many systems, healthcare financing is either input based or reactive. Budgets are allocated based on historical spending. Costs are reimbursed after services are delivered. This often leads to inefficiency and rising expenditure without corresponding outcomes.
Strategic purchasing changes that dynamic.
A central entity actively contracts providers, negotiates prices, defines benefit packages and links payments to performance. International evidence from organisations such as the World Health Organization (WHO) and the Organisation for Economic Co-operation and Development (OECD) shows that systems with stronger purchasing power achieve better cost control and lower price variation, particularly in pharmaceuticals and hospital services.
In simple terms, those who control the wallet shape the system.
Malaysia has already built elements of this architecture.
Entities such as ProtectHealth Corporation were established to function as strategic purchasers, managing programmes such as PeKa B40 and parts of SPIKPA. These initiatives introduced targeted coverage, risk pooling and centralised purchasing mechanisms.
SPIKPA, the mandatory insurance scheme for foreign workers, covers an estimated two to three million individuals. With premiums of approximately RM120 per worker annually, it generates a pool of around RM300 million each year. While modest in the context of total health expenditure, it represents a structured financing base that can be integrated into a broader national system.
These are not abstract ideas.
They are existing building blocks.
The question is whether Malaysia is prepared to scale them.
International experience provides perspective.
Thailand’s Universal Coverage Scheme has achieved near universal coverage with out of pocket spending reduced to below 12 percent.
Indonesia’s national health insurance system covers more than 90 percent of its population, with out of pocket spending around 28 percent.
South Korea operates a unified national insurance system funded largely through payroll contributions, with health expenditure around 8.4 percent of GDP and comprehensive coverage for both inpatient and outpatient care.
The United Kingdom’s National Health Service, funded through taxation, spends approximately 10.8 percent of GDP while maintaining low financial barriers to care.
Malaysia sits in between.
We spend 4.6 percent of GDP. Out of pocket spending remains high. Risk pooling is fragmented.
If current trends continue, the financial implications are clear.
If healthcare expenditure rises from 4.6 percent to 6 percent of GDP over the next decade, this would translate into an additional RM25 billion to RM30 billion in annual healthcare spending.
Without reform, this burden will either fall on government finances or on households.
Neither is sustainable.
The way forward does not require choosing between extremes.
A hybrid model offers a pragmatic path.
Recent developments such as the proposed Malaysia Health Insurance or Takaful base plan signal that reform is beginning to take shape. The intent to expand coverage through a structured baseline product is a step in the right direction, particularly in improving access and affordability for segments that remain underinsured.
However, insurance products alone cannot resolve the structural imbalance in Malaysia’s healthcare system. Without a unified financing backbone and stronger risk pooling, fragmented insurance expansion risks adding complexity rather than solving it.
For MHIT to succeed, it must be integrated into a broader national framework anchored by strategic purchasing, pooled financing, and clear governance. Otherwise, it risks becoming another layer in an already fragmented system. MHIT is a step forward but it is not yet a system. Insurance expansion without purchasing reform risks driving utilisation without controlling cost.
A National Health Insurance layer can provide baseline protection and pooled financing, complemented by voluntary insurance for those seeking additional coverage. If political conditions do not yet allow full implementation, Malaysia can begin with a structured expansion of voluntary insurance while building toward a broader pooled system.
Execution must be deliberate.
First, consolidate purchasing authority under a central entity with clear governance.
Second, integrate existing schemes such as SPIKPA into a unified risk pool.
Third, define a basic benefit package supported by a mix of public funding and phased contributions.
Fourth, strengthen digital infrastructure to enable real time claims management and system oversight.
Fifth, ensure leadership is technocratic, accountable and insulated from short term cycles.
Malaysia has already shown what it can do under pressure.
When faced with crisis, the system aligned. Public and private sectors worked together. Execution was decisive. The challenge now is not capability. It is continuity.
Healthcare reform will not get easier with time. Every year of delay increases fiscal pressure, widens inequality and deepens workforce strain.
The question is no longer whether Malaysia can afford to reform its healthcare financing system. The question is whether Malaysia can afford not to.
Seventeen years of discussion is enough. We already know what needs to be done. The only question that remains is whether we will act before the system forces us to.
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Who Actually Governs Malaysia? A System Without Alignment
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Wed, 27 May 2026 11:41:37 +0000
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By Anas Alam Faizli Malaysia is not short of plans. Nor is it short of capital. Malaysia’s major institutional funds collectively manage close to RM2 trillion, a figure broadly comparable to the size of the economy itself. Yet national investment in research and development remains at approximately 1% of GDP, far below leading economies such …
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By Anas Alam Faizli
Malaysia is not short of plans. Nor is it short of capital.
Malaysia’s major institutional funds collectively manage close to RM2 trillion, a figure broadly comparable to the size of the economy itself. Yet national investment in research and development remains at approximately 1% of GDP, far below leading economies such as South Korea, which consistently invests between 4% to 5%.
This gap is not one of resources. It is one of alignment.
Over the past decade, Malaysia has introduced multiple national strategies across industry, healthcare and energy transition, each designed to position the country for its next phase of growth. Its corporate sector remains regionally competitive, with the electrical and electronics sector contributing over 40% of exports, exceeding RM570 billion annually. The digital economy contributes more than 23% of GDP.
On paper, the ingredients are in place.
Yet outcomes often fall short of potential.
Industrial upgrading progresses, but not at the pace required. Innovation exists, but rarely scales into global leadership. Strategic sectors emerge, but seldom with the coherence or speed seen in more competitive economies.
This raises a question that is seldom asked directly.
Who actually governs Malaysia, not in theory, but in execution?
Having worked across healthcare, pharmaceuticals, energy and regulated industries, I have often observed that outcomes are rarely determined by any single institution, but by how well they move together.
Malaysia operates less like a single coordinated system and more like a federation of capable actors, each with its own mandate, authority and priorities. Ministries design policies. Government-linked companies execute strategies. Institutional funds allocate capital. Regulators shape markets. State governments control land and approvals.
Each performs its role.
But they do not always move in the same direction.
This misalignment is not abstract. It is visible in sectors that matter.
In healthcare, Malaysia’s dual system remains under strain. Public facilities handle close to 19 million outpatient visits annually and continue to operate at near capacity, while private healthcare capacity remains underutilised for broader national needs.
Malaysia has been discussing a national health insurance model since as early as 2008. Yet close to two decades later, implementation remains elusive.
By contrast, Indonesia launched its national health insurance system, Jaminan Kesehatan Nasional, in 2014. Today, it covers over 250 million people, making it one of the largest single-payer systems globally.
The difference is not intent.
It is alignment and execution.
In pharmaceuticals, Malaysia has built strong capabilities in generics manufacturing and domestic distribution. Yet upstream capabilities, including active pharmaceutical ingredient production, biologics and advanced drug development, remain limited, leaving the country dependent on imported inputs.
Meanwhile, Bangladesh has emerged as one of the largest exporters of pharmaceutical products to low- and middle-income countries, with exports exceeding USD 2 billion annually. This was not accidental. It was driven by a coordinated national strategy aligning policy incentives, industry development and export focus.
Again, the difference is not capability.
It is alignment.
A similar dynamic can be observed in Malaysia’s automotive industry. National car initiatives such as Proton and Perodua have successfully built domestic manufacturing capabilities and strong market presence. Perodua, in particular, has become the country’s top-selling brand, accounting for over 40% of total vehicle sales.
Yet much of the value chain, including advanced design, critical components and proprietary technology, remains externally anchored through partnerships. While the industry has achieved scale in production, the progression into higher-value upstream capabilities has been more gradual.
This again reflects not a lack of capability, but the challenge of aligning long-term industrial strategy, technology development and capital deployment into a cohesive system.
In energy, Malaysia is both an established oil and gas producer and an emerging participant in the renewable transition. Yet responsibilities across the ecosystem are distributed across multiple entities, including national oil companies, utilities, regulators and state authorities.
Each plays a role. But without stronger coordination, the transition risks progressing in parallel rather than as a unified national strategy.
Across healthcare, pharmaceuticals, manufacturing and energy, the pattern is consistent.
Malaysia is a country where capital at times exceeds the scale of its economy, yet outcomes continue to fall below potential.
The issue is not scarcity.
It is coordination.
Capabilities exist. Institutions are present. Resources are available.
But alignment is incomplete.
The issue is not the absence of policy. Malaysia arguably produces more strategic plans than most economies of comparable size. The issue is not the lack of capital. Few countries can mobilise domestic institutional capital at a scale comparable to their GDP.
The issue is alignment.
Alignment, in this context, is not coordination for its own sake. It is the ability to bring policy, capital and execution into a shared direction over time.
When policy is set in one part of the system, capital does not always follow. When agencies pursue similar objectives, efforts are not always synchronised. When national priorities require sustained execution, continuity depends on institutions rather than the system itself.
Over time, this results in a familiar pattern.
Progress, but uneven.Investment, but fragmented.Capability, but under-leveraged.
In more complex economies, coordination is no longer an advantage.
It is a prerequisite.
Countries that have successfully navigated similar transitions do not necessarily have more institutions. They have more aligned systems.
In Singapore, alignment is achieved through strong central coordination. Policy direction, capital deployment and industry development are closely linked through institutions such as its economic agencies and state investment arms, enabling strategic sectors to be built deliberately.
In South Korea, alignment has historically been driven through close coordination between government, capital and industry. National priorities are translated into targeted investments, supported by sustained R&D spending exceeding 4% of GDP, enabling the country to move decisively into high-value sectors such as semiconductors and advanced manufacturing.
Indonesia offers a different lesson by alignment through execution. Despite its scale and complexity, it aligned policy, financing and delivery to roll out national healthcare to over 250 million people, and more recently coordinated industrial policy and investment to position itself in the electric vehicle and battery value chain.
These countries differ in structure.
But they share one characteristic.
They align policy, capital and execution within a coherent system.
Malaysia, by contrast, has built strong components of a system, but has yet to fully align them.
This distinction is subtle, but critical.
It suggests that Malaysia’s next phase of development will depend less on creating new institutions, and more on strengthening the connections between existing ones.
What then might alignment look like in practice?
One starting point is capital.
Malaysia’s institutional funds manage close to RM2 trillion. If even 5% to 10% of this were deliberately aligned toward strategic sectors such as healthcare reform, upstream pharmaceuticals or energy transition, it would represent tens of billions of ringgit in patient capital.
At that scale, coordination becomes transformative.
The question is where such coordination resides.
It is unlikely to sit within any single ministry or institution. Alignment requires a vantage point that cuts across mandates, bringing together policy, capital and execution.
Malaysia has demonstrated this capability before. With clear targets, structured oversight and consistent leadership, complex national initiatives have been delivered successfully.
The challenge is not whether Malaysia can align.
It is whether it does so consistently.
Malaysia is not lacking in capability. It is not lacking in capital. It is not lacking in ambition.
But when a system managing resources equivalent to its entire economy is not fully aligned, the outcome is not failure.
It is underperformance.
And so the question remains.
Not whether Malaysia is governed, but whether it is governed as a system.
*This article first appeared on The Edge 25 May 2026
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A Barometer on Malaysia’s HealthCare System: Are We Doomed to Fail?
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Thu, 22 Sep 2016 16:00:09 +0000
Imagine 10 jumbo jets crashing every week for a year or the whole population of Petaling Jaya dying every year. The loss of life would be equivalent to the 210,000 – 440,000 deaths due to medical errors in the United States annually, based on a report from the Institute of Medicine (2013). Healthcare in America …
The post A Barometer on Malaysia’s HealthCare System: Are We Doomed to Fail? first appeared on Anas Alam Faizli.]]>
Imagine 10 jumbo jets crashing every week for a year or the whole population of Petaling Jaya dying every year. The loss of life would be equivalent to the 210,000 – 440,000 deaths due to medical errors in the United States annually, based on a report from the Institute of Medicine (2013).
Healthcare in America is failing, although ironically it has the largest private healthcare system in the world and spends more than any country on private and public healthcare, amounting to USD 2.8 trillion. Its annual healthcare spending is larger than the whole economy of the United Kingdom at USD 2-6 trillion or France at USD 2.7 trillion. If there are no changes in the way we do things, Malaysia could become another America. So, how are we faring?
Ageing Population and Measuring Healthcare Performance
By the year 2030, Malaysia’s population will be as old as ageing Japan. Asia and Malaysia, specifically, have one of the fastest ageing populations in the world. According to the Singapore-based Asia Pacific Risk Center (APRC), the swelling ranks of the elderly will cost the region $20 trillion in healthcare by 2030. Malaysia will take only 23 years to double from 7% in 2020 to 14% in 2043. This ageing process took Europe 100 years.
Japan spends 8% of its Gross Domestic Product (GDP) on healthcare and 80% of the expenditure is government-funded, while Malaysia spends 4.4% and 52.4% respectively. The total expenditure on healthcare, both public and private, stands at RM50.3 billion, where operational costs take 93% of the pie and development only 7%.
The GDP percentage spent on healthcare ranks Malaysia at number 156 in the world. Majority Malaysians go to public healthcare facilities. 75% of Malaysians seek in-patient treatment and 90% of Malaysians seek out-patient treatment at public facilities. Despite that, the government spends only 52.4% for total healthcare expenses. This indicates two things; the far higher cost of private facilities and the affordability for the public majority to go for private healthcare.
Trying to summarise healthcare in one article is a mammoth task. The healthcare system is very complex, with many indicators and different expectations. This includes patients, doctors, other healthcare providers, the supply chain, and also government and other healthcare regulators.
How do we measure the healthcare of a nation? A performance measurement is required. A monitoring plan that can ensure continuous improvement in quality, effectiveness, accountability and, most importantly, affordability. The measure must also cover holistic aspects of healthcare from patient satisfaction, efficiencies of healthcare professionals, utilisation, clinical quality, equipment, technology and financial performance.
How do we measure performance? Using affordability is a measure, the cost of birthing in hospital with a 2.6 days stay in the United Kingdom and Australia amounts to one month’s median wage versus three months’ median wage in Malaysia. The cost of birthing is intentionally chosen, as pregnancy and childbirth are the main cause for hospitalisation at 19.9% for both public and private hospitals. (Ministry of Health, 2016)
Some selected healthcare statistics below indicate where Malaysia stands.
Selected Healthcare Measurement Statistics
Source: World Health Statistics, 2016
Profit, Subsidy or a Government’s Responsibility
There is an ongoing debate whether healthcare is a personal responsibility or a government’s responsibility. In fact, it is a joint responsibility. The individual is responsible for choosing a healthy lifestyle, and the government is responsible for ensuring a healthy environment, including housing and a safe water supply, providing equitable, affordable, good quality healthcare, including an effective immunisation programme, and addressing the social determinants of health, such as poverty and unemployment.
The rising cost of healthcare has shown that the government has a major responsibility and duty to provide the facilities and personnel for a high standard of healthcare and to meet the cost of healthcare through an equitable health insurance scheme. The recurring question is whether healthcare expenditure by the government is a form of subsidy or does it represent one of its unavoidable responsibilities?
I find it irresponsible that, in PEMANDU’s Subsidy Rationalisation Labs, healthcare is identified as an item to be rationalised under the subsidy programme. Such a policy attitude does not recognise healthcare as an investment. This will have an unhealthy impact on healthcare.
By agreeing that healthcare is a government responsibility, we need to begin addressing issues related to the privatisation of healthcare, the high cost of pharmaceutical drugs and medical services, the development of healthcare personnel, healthcare facilities, and third party administrators. Malaysia also needs to explore and learn from other successful models adopted by other countries.
Privatisation of Healthcare, Profiteering Private Hospitals and Government Linked Companies
In 1983, the Malaysian government under then Prime Minister Dr Mahathir Mohamad introduced privatisation policies which allowed the private sector to play a greater role by taking away some of the government’s responsibilities in both healthcare and education. Since then, healthcare costs have risen considerably. Private hospitals that were run by non-profit organisations and religious organisations are now increasingly run as profit- motivated private hospitals. The flawed reasoning was simple. As the rich could afford private hospitals, this would reduce demands on government hospitals and make available better services for the poor.
Privatisation did not stop there. In 1993, the pharmaceutical services under the Ministry of Health were privatised. For example, Renong company was awarded an exclusive long-term contract for providing medicines and medical supplies, which subsequently doubled government expenditure for such purchases. Instead of discontinuing privatisation, the Ministry of Health extended the privatisation of other support services such as laundry and linen, clinical waste management, cleaning services, facility engineering and maintenance in 1996, three years later. Within a year, the cost of these services tripled from RM140 million to RM450 million.
As a result of privatisation, highly qualified and experienced doctors flocked to the private sector. Within twenty years, two-thirds of the total number of specialists and consultants resigned from government hospitals to enter the private sector. This brain drain inevitably increased the waiting times of patients in government hospitals and led to a deterioration in the quality of patient care, which sometimes resulted in delays in diagnosis and treatment and inevitably in deaths.
As reflected earlier, the cost of healthcare in private hospitals is very high. For example, maternity charges for Class 1 patients in a public hospital amount to RM800. This is a fraction of the cost in the private sector which averages around RM3,500-RM6,000. The cost of medicines has also recently risen sharply since the implementation of the General Services Tax (GST), particularly in private hospitals where the cost of GST is not absorbed.
We need to determine the real cost of healthcare. Why are there Approved Permits for medicines? Profiteering must not be allowed, especially by the large health conglomerates and Government Linked Companies (GLC) such as Sime Darby, Pantai, Khazanah, KPJ Healthcare Berhad and others which account for more than 40% of private hospital beds.
The unhappy consequences of privatisation in the healthcare sector call for an urgent review of the government’s policy of privatisation. There is an unavoidable conflict of interest when the government, in effect, is wearing three hats – as a public healthcare provider, as a regulator, and as an investor in a profiteering healthcare sector.
Insurance Supply over Demand and the Third Party Administrators’ Expenses
The mandate in privatising healthcare claims that it will shift the burden of healthcare to the private sector. At the same time, a financial model needs to be established to bear the cost, and the insurance industry has done well to achieve this. It is estimated that the total cost that would insure every Malaysian would be around RM30 billion per year with a minimum premium that will cover the cost of hospitalisation.
Over the years, the number of insurance policy holders has increased and more private hospitals have been built. With the creation of such supply versus demand, the cost of healthcare should have been reduced. However, this has not been the case. Recent years have seen a sharp rise in the cost of healthcare services and medicines. New artificial demands have been created. For instance, patients in private hospitals are often over-investigated and over-treated.
There is also a need to review the high fees charged by specialists. On average, in a standard hospitalisation bill, hospital fees, including the cost of medical equipment, disposables and nursing, come to 60% of the total bill, while specialist fees amount to 40%. These fees are governed by the 13th Fee Schedule which should be reviewed.
Like any other industry, the cost of healthcare has been increasing unnecessarily because of the activities of the so-called ‘middle-man,’ also known as Third Party Administrators (TPA) or Managed Care Organisations (MCO). They provide interface administration between medical providers, corporations and insurance companies and assist in processing claims and administering corporate and retail policies and financial procedures. They charge fees or commissions which are standardised by the Insurance Regulatory Development Authority (IRDA). Most Malaysians are unaware of the extra premium charged by insurance companies for TPA services.
Regulations can be enforced by amending and including such provisions in existing Acts, such as the Private Healthcare Facilities and Services Act 1998 (PHFSA). There are at least 30 TPAs/MCOs currently operating in Malaysia.
Malaysia’s Healthcare Human Resources and Facilities
According to the Ministry of Health (2016), Malaysia has 46,491 doctors working in both public and private hospitals – a ratio of 1:656. The ratio for dentists is 1:4,775, pharmacists 1:2,900, opticians 1:9,578, and optometrists 1:19,053. The Eleventh Malaysia Plan (2016-2020) calls for a doctor ratio of 1:400, which translates to a target of 75,000 doctors by 2020. The question is whether there are enough training hospitals and future graduate doctors to achieve such goals. This translates to 28,509 newly qualified doctors within the next four years.
The Ministry of Health, however, is saying that the infrastructure needed for completing internship or housemanship training is inadequate and that new medical schools are being frozen, as a remedy. In other words, there is a shortage of hospitals and training posts.
At the moment, there are 143 public hospitals with 41,389 beds and 183 private hospitals with 12,963 beds. As 75% of the population use public hospitals, one public hospital would need to serve 157,342 Malaysians, while one private hospital would need to serve 40,983 Malaysians.
There are now only 44 training hospitals. This lack of training hospitals is a real problem and has led to the enforcement of an additional year of training for interns before they can be registered professionally. The other problem is that the heavy workload of doctors is having an impact on the quality of training of interns.
There could be a way out. More training hospitals should be built and training regulations can be revisited to allow interns to seek training overseas in training posts certified by the Ministry of Higher Education. Another possible solution could be the upgrading of rural clinics into mini hospitals with qualified doctors. All these measures could help to increase the placement of trainees and doctors, but they are far from ideal.
I have always advocated a minimum wage and a bigger pie for the general workforce. Despite the size of profit generated in healthcare, the salaries of doctors in the public sector have always remained proportionately small. The Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) over Revenue percentage for Malaysia’s private healthcare sector is approximately 35%, while its Wages/Revenue stands at 20%. By comparison, the benchmark in Australia, a developed country, stands at approximately 12% EBITDA/Revenue and at 45% Wages/Revenue.
Affordable Care Act and Non-Profit Hospitals
The government of South Korea has found that promoting preventive medicine is cost-effective. This has been achieved by bearing all medical costs for its citizens, as long as they undergo annual medical examinations without fail.
There are also other options that can be explored, such as social hospitals where non-profits run hospitals in government-provided buildings. New legislation can also be drafted and can be literally labelled as the “Affordable Care Act,” which will obligate the government to provide affordable healthcare. A measure to correlate insurance premium costs to income can also be introduced to ensure that every Malaysian citizen will find such health insurance affordable.
Indonesia has a Muslim reformist organisation, Muhammadiyah, which is active mainly in matters of religion and education. Some of its 5,754 schools are open to non-Muslims and its latest venture is in running non-profit medical clinics and hospitals. Today, it owns several hundred clinics and hospitals in Indonesia.
Since 19.9% of hospital admissions in Malaysia are related to pregnancy, it would be feasible to start off with the establishment of a chain of maternity and paediatric hospitals, easily accessible and affordably priced, with no frills. A chain of such hospitals in shoplots is envisaged, operated by non-profit organisations or cooperatives.
Kamataka, a state in the southwestern region of India, has led the way in introducing the Yeshasvini Health Scheme for the rural masses, providing access to quality healthcare at only 5 Rupees (RM0.30) per month. The scheme provides for free outpatient consultation and 1,700 different types of operations entirely free of cost to the patient! Within seven months of its launch, more than 5,000 farmers had various types of operations and 23,500 farmers had outpatient medical consultations.
Healthcare is a Collective Obligation
According to the ‘State of Households II Report’ by Khazanah Research Institute (KRI), a nutritionally adequate diet is beyond the reach of many Malaysians, particularly in urban areas, taking other living expenses into account. Such economic straits are bound to affect the state of healthcare, which must not be the sole responsibility of the government but the collective responsibility of every Malaysian.
The collective payment of income taxes, real property gains taxes, goods and services taxes, road taxes and others must be for the benefit of the people. Taxes collected by the government must be used for two primary social obligations – health and education. The allocation of funds for health and education will eventually bring many benefits for both the government and the people by ensuring a healthy, educated and productive population who will contribute to the nation’s economy and wellbeing.
Looking ahead, the remuneration of doctors should not be based on a fee-for-service, as it is known to encourage over-investigation and over-treatment. Income disparity between the public and private health sectors must be narrowed. The doubling of investment in the public health sector, in terms of facilities and personnel, must be accomplished in the next decade. Privatisation of healthcare must be reviewed and reduced. Universal national health insurance must be introduced and the whole philosophy of healthcare rewritten, so that healthcare becomes a non-profit social enterprise that is ingrained as a common social responsibility.
I have always been a strong proponent that the government has a responsibility and a duty to provide adequate healthcare and education, as both are basic fundamental rights necessary for an advanced society. A healthy and educated society is the backbone of any successful and enlightened country. Both are important investments to be made by any government. A completely holistic revisit of the healthcare system and a measurement of healthcare performance are pivotal and essential for our future. It is something that needs our urgent attention and commitment. Let us get our act together or we will be doomed to fail.
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