Improving effective access to healthcare in Malaysia

By Jason Loh


EFFECTIVE access to healthcare as a controversial and thorny issue in Malaysia might spill-over into full-blown political and financial crises of sorts if not tackled sufficiently and proportionately.

We have seen how Budget 2021 had attracted brickbats for claims of “under-funding” our public healthcare system. Finance Minister Tengku Zafrul Aziz have clarified that in actuality, the allocation for the Ministry of Health (MOH) stood at RM31.9 bil which is higher than the RM30.6 bil under Budget 2020.

Additional provisions were not included in the operating expenditure allocation contained in the Federal Projected Income and Expenditure 2021 as it’s allocated separately under the COVID-19 Fund.

Generally speaking, effective access to healthcare has to do with the continual enjoyment of the use of healthcare services and products in expectation of the same in the future – analogous to the economic term of “flow” (dynamic concept).

Overall, the Government needs to continuously spend a minimum of 6% of the GDP on healthcare (as recommended by the World Health Organisation/WHO). At current levels, we are spending, at best, some 3% to 4%.

An EMIR Research poll that was released in 1Q of this year revealed the rakyat’s attitude about the issue of allocation for healthcare.

To reiterate, only 45% indicated their satisfaction with Government efforts at allocating funds for healthcare, and only 47.1% were satisfied with the Government’s effort in “extending healthcare scheme throughout the nation”.

Although the figures are not seriously low, nonetheless, it goes without saying that these might plummet if two things happen.

Firstly, effective access to healthcare becomes rationed or re-prioritised (intentionally or unintentionally).

Secondly, effective access to healthcare becomes more costly in terms of both financial and transactional (i.e., additional or extra – both financial and non-financial) costs (incurred).

That is, rising healthcare costs serve to inevitably curb or constrain access by the B40 in the form of impacting the policy of heavily subsidising or in effect provision of treatment free at the point of delivery.

The RM1 outpatient fee and RM5 specialist fee are what they are, i.e., nominal. And so, our public healthcare system really is, in effect, another form of the National Health Service (NHS).

Taking the logic further, rising healthcare costs in in-patient care might affect provision of delivery for out-patient care.

For future costs management, EMIR Research would like to echo the call of healthcare professionals, among others, for the wider implementation and streamlining of the application of the case-mix system (for public hospitals in highly urbanised areas).

The call builds upon the implementation of a diagnosis-related group (DRG)-based case mix system under the 11th Malaysia Plan and policy proposals for its continuing development under the Strategic Framework of the Medical Programme of the MOH (2021-2025).

Case-mix system is a tool to improve efficiency, quality of care and costs control in the healthcare system, particularly at the secondary (specialised care and treatment – clinics and hospitals) and tertiary (specialised care and treatment – hospitals) levels.

It allows for a cost-effective classification of types of patients and treatments. A subsidiary of case-mix system is DRG-based payment scheme.

Under the DRG-based payment scheme, payments are pre-determined according to their respective codes as assigned to the various categories of the cluster-based patient’s data under the Case-Mix Index (CMI) such as severity of illness and average cost per disease, and outputs are retrievable under the Executive Information System (EIS module).

DRG-based case mix system was first introduced in 1998. Since then, Hospital Universiti Kebangsaan Malaysia (HUKM) became the first hospital in Malaysia to implement the case-mix system based on the Internationally Refined Diagnostic Group (IR-DRG).

In 2011, a Memorandum of Understanding (MOU) was forged between United Nations University-International Institute for Global Health (UNU-IIGH) and Hospital Universiti Sains Malaysia (HUSM) for collaboration on implementing the case-mix system deploying the Grouper Software.

And in 2018, both Universiti Kebangsaan Malaysia (UKM) and Universiti Sains Malaysia (USM) collaborated to develop the My-DRG case-mix system as the world’s first oral health case-mix system.

In expanding the DRG schemes in highly urbanised areas, the implementation could be synchronised with the full paying patient (FPP) arrangements aka provision of private wings in government hospitals.

That means the FPP would serve as a “backstop” or “cross-subsidy” to cover any shortfall resulting from DRG-based payments (with the Government as purchaser) because of, for example, the Case-Mix Index (CMI) for a particular period is lower than the projected financial outcome calculated by the purchaser.

The expanded applications of the wider case-mix system would also be an impetus and catalyst in driving the digitalisation of the entire healthcare system – reliant as it is on big data and predictive analytics and wide-ranging use of AI-based algorithms.

This is also in line with the MOH’s strategic intent to further digitalise the public healthcare system by implementing a centralised database in the form of the electronic medical record (EMR) structure – which is a systemised collection of patient’s health information, with the use of 5G technology, among others.

In short, the case-mix system and, in particular, the DRG-based payment scheme will help improve healthcare costs for in-patient care in the long-run and ensure sustainability in the overall costs of managing the public healthcare system including not least, out-patient care, thus ensuring adequate access for all time.


Jason Loh Seong Wei is Head of Social, Law & Human Rights at EMIR Research, an independent think tank focused on strategic policy recommendations based on rigorous research.

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.

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