More affordable hospitals needed to curb medical costs, says BNM

 

Bank Negara Malaysia also called on private hospitals to display drug prices and costs for common procedures to help policyholders and insurers compare prices easily. (Bernama pic)

KUALA LUMPUR: 

Increasing affordable, mid-tier hospital beds and providing incentives for the expansion of not-for-profit hospitals can help combat rising medical insurance and costs, says Bank Negara Malaysia (BNM).

In its annual report for 2024 released today, the central bank said the initiative could be implemented by scaling up the health ministry’s Rakan KKM programme.

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

“This move will provide policyholders with more cost-effective treatment options while serving as a benchmark for hospital pricing,” it said in a box article titled “Securing Sustainable Access to Medical and Health Insurance/Takaful Protection”.

BNM also called on private hospitals to display retail drug prices and publish the range of prices for common procedures to allow policyholders and insurers to compare costs more effectively.

“This publication enables policyholders and ITOs (insurers and takaful operators) to compare prices across different medical providers while promoting healthy competition.

“Additionally, a mechanism to consistently produce, monitor and publish key medical inflation measures will be developed … to better align the methodology with how general inflation is calculated.”

BNM added that the health ministry will also undertake a regulatory review of current oversight arrangements with private hospitals.

Malaysia’s healthcare costs have surged in recent years, with national healthcare spending reaching RM84.2 billion in 2023. Of this amount, the portion covered by medical and health insurance/takaful grew sixfold, from RM0.96 billion in 2003 to RM6.75 billion in 2023.

While interim premium relief measures were introduced last year to ease the burden on policyholders, BNM cautioned that such solutions are not sustainable in the long run.

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

Other measures proposed include shifting towards a diagnosis-related groups payment system to replace the current fee-for-service model and enhancing the interoperability of electronic medical records to reduce redundant diagnostic tests and procedures. - Mkini