Private healthcare sector needs independent regulator, says economist

 

Malaysia’s medical inflation reached 15% this year, much higher than the global and Asia-Pacific average of 10%. (Facebook pic)

PETALING JAYA: 

An economist has called for an independent regulator to monitor the private healthcare sector to prevent any unethical rise in medical costs leading to higher insurance premiums.

Geoffrey Williams said an independent body would ensure greater transparency in the pricing regulations of private hospitals.

He said the private healthcare system is not incentivised to curb higher medical costs as it could affect their revenues.

Geoffrey Williams.

“The private hospitals and insurers are unaffected by the rising costs as long as they can maintain profits by passing them (higher costs) to the patients,” he told FMT.

Williams said the regulatory body must include economists who can provide the relevant insights as they “understand the well-known economic issues in healthcare funding and alternatives used around the world to address them”.

The private healthcare sector is currently being regulated by the Malaysian Medical Council (MMC).

He was responding to Bank Negara Malaysia’s announcement on Friday that insurance and takaful operators will be required to spread out the increase in premiums over a minimum of three years until the end of 2026.

The central bank said Malaysia’s medical inflation reached 15% this year, much higher than the global and Asia-Pacific average of 10%.

It said the inflation rate was driven by medical technology advancements and the rising prevalence of non-communicable diseases among Malaysians, triggering a greater demand for healthcare services.

Williams dismissed the claim by private hospitals that investments in expensive medical technologies have forced them to transfer the costs to patients.

He said such technologies would reduce the hospital’s operation fees in the long run.

Calling for a thorough probe into the rising medical costs in Malaysia, he said “it is likely because of behavioural failures in the Malaysian private health ecosystem which is over-prescribing, and overcharging”.

Niaz Asadullah.

Economist Niaz Asadullah said the increased reliance on healthcare insurance is caused by the declining quality and overcrowding issues in public hospitals, driving patients to the more expensive private hospitals.

The shift from public to private healthcare due to the public system’s inefficiencies has led to higher insurance claims and premiums, Niaz said.

“(The government should) invest in public hospitals and make them a viable alternative to private care,” he said. - FMT