Reform expected to increase healthcare financing

THE Government is expected to face challenges in meeting the financial and social service needs of various healthcare-related issues, according to Fitch Solutions Country Risk & Industry Research.

Such issues include the increasing number of senior citizens due to longer lifespans, stagnating birth and fertility rates, escalating healthcare costs and a shrinking productive workforce.

All this have the tendency to cause Malaysia’s medical insurance premiums to increase up to 30% this year, on the back of rising healthcare costs, technological advancements used in treatments and the increase of patient count.

Similarly, the health insurance schemes in neighbouring countries have also been increased due to the pandemic.

“In May 2020, Indonesia raised premiums for health insurance and also increased subsidies for the lowest rate, impacting tens of thousands of policyholders, followed by an announcement by the Indonesian government that it plans to subsidise all of the increases,” Fitch Solutions said in a report released today.

Additionally, in the wake of a recent warning that Taiwan’s National Health Insurance’s reserve funds will be fully depleted by the end of 2021, Taiwan’s health minister urged a premium hike to maintain the quality and sustainability of the system in October 2020.

However, in the case of Malaysia, the Government’s support for the provision of medical services reinforces the positive outlook for healthcare providers.

In the previous year’s Budget 2020, delivered by former Finance Minister Lim Guan Eng, the Government allocated RM30.6 bil to the Ministry of Health compared to RM28.7 bil in 2019.

The allocation includes the budget for construction of new hospitals and the expansion, as well as upgrading existing hospitals. It also includes the construction and upgrades of health and dental clinics.

“As the country’s economy expands, this proportion will continue to increase further, bringing commercial benefits to pharmaceutical companies, medical device manufacturers and healthcare infrastructure firms. – Nov 12, 2020

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