Malaysia may see soaring healthcare cost

A RECENT survey by a global firm showed that while certain nations may see a decline in healthcare costs, several others may also see a spike in the future.

As for Malaysia, this year’s rate will be carried across next year, which is 14%.

The report, entitled Aon’s 2021 Global Medical Trend Reports, also showed that Malaysia’s healthcare cost is one of the highest in the region.

In an email to FocusM, Aon Head of Wellbeing Solutions (South Asia and Aon Care) Dr Amitabh Deka said Malaysia has seen a rise in medical inflation in recent years, due to certain determinants.

“On average, the Gross Medical Inflation for Malaysia was 15.3% in 2018, 16.1% in 2019 and 14% this year.

“In terms of demand, with an ageing population, the utilisation of healthcare services has increased in families. Ageing not just leads to higher vulnerability to diseases but also to higher incidences of co-morbidities (more than one disease conditions existing together).

“So in the context of non-communicable diseases (NCDs), this adds to complexity of treatment and consequently, higher hospital bills,” he explained.

Another issue compounding to soaring healthcare costs, he added, was due to patients now seeking home-based remedies or prevention at an individual level, a service usually offered with higher fees.

Amitabh said on the supply side, consumers these days preferred to consult specialists over general practitioners even for basic medical services, leading to higher prices.

“This has led to specialists controlling prices in the market. A system level outcome has been the proliferation of private health institutions, bringing marked spike in the cost of services compared to services rendered by public hospitals and clinics in the past,” he noted.

Healthy lifestyle, gov’t regulation needed

Amitabh added the cost for health technological advancements in the market was also passed to consumers, despite such breakthrough only addressing the needs of a few critical patients.

In comparison, he said, investment on preventive measures could be considered ‘negligible’.

“To improve overall health status and manage medical inflation, wider penetration of preventive service is essential,” suggested Amitabh.

He observed an increase in utilisation of medical services, particularly hospitalisation due to higher affordability and accessibility, had resulted in the system recalibrating itself periodically through price revisions based on increasing health claims.

On another note, Amitabh also attributed the rising healthcare cost in Malaysia to the lack of pricing benchmarks in the market.

“So when you combine all these together, with consumer behaviour of trying to squeeze the maximum benefit from the services, it provides a fertile ground for the rise of medical inflation over the next few years,” he said.

On how to ensure Malaysia’s healthcare cost remain affordable, Amitabh said it was a complex situation and any changes to the system should be done incrementally.

“All stakeholders must play their part responsibly here. One way is for the Government to strengthen the public healthcare infrastructure so the burden can be shared by the private sector too.

“But most importantly, consumers need to invest in their physical and mental wellbeing and not seek relief through hospitalisation or consultation alone.

“They ought to be aware that continued acts of irresponsibility or abuse will have a consequential effect on their future healthcare benefits,” he remarked.

Amitabh continued, “Availability of granular data across the healthcare value chain will not only promote transparency and control but also build a strong foundation for the evolution of the healthcare system”.

Aon is a leading global professional services firm, headquartered in the United Kingdom. It has multiple branches in the Asia Pacific,  providing a broad range of risk, retirement and health solutions, and has been in Malaysia for years. 

Other nations involved in the survey were China, India, Indonesia, Japan, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. – Nov 3, 2020


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