KUALA LUMPUR: Healthcare costs have crept up at a rate of as much as 15% annually over the past three years — another rising living cost for of Malaysians.

The depreciation of the ringgit is partly to blame for the increasingly expensive medical bills in the country. This leads to longer queues in public hospitals, while in contrast, the number of patients at private hospitals has dropped 20%. This exposes the structural problem of the existing healthcare system.

Adding to the problem is the government’s tight budget. The government has trimmed healthcare spending to avoid a yawning budget deficit.

According to Datuk Dr Jacob Thomas, president of the Association of Private Hospitals of Malaysia, there is a pressing need to reform the country’s healthcare system to ensure better access to affordable medical treatment, considering that healthcare costs have increased at an annual rate of 10% to 15% in the last three years.

He expects medical costs to continue climbing as the ringgit remains weak, coupled with rising overall operating costs.

Thomas, who is also chairman of Ramsay Sime Darby HealthCare, told The Edge Financial Daily that after the implementation of the goods and services tax (GST) of 6% in April last year, most private hospitals are seeing between 20% and 30% less patients per day. Some private hospitals have closed down some wards simply because there were not enough patients.

“What is happening is that patients come to private hospitals and consult [the] doctors, [but] when [the] doctors say they need surgery and medicines, they [just] get [the] doctors’ advice, and go to public hospitals to get the surgery and medicines,” says Thomas.

He said the drop in the number of private hospital patients means more people are going to public hospitals. But he doubts that public hospitals would be able to cope with the additional number of patients given the problems of being understaffed and having limited facilities.

“In public hospitals, patients are lying on the floor, while private hospitals have unoccupied beds.” Thomas said. Currently, 70% of the country’s hospital beds are publicly owned, while 30% are privately owned.

Thomas also stressed the importance of public-private partnership, as under a national insurance scheme, private hospitals would be able to fill the gap with public hospitals efficiently, and the government would not be burdened with rising healthcare cost.

Last month, Health Minister Datuk Seri Dr S Subramaniam said the government is mulling a national health insurance scheme.

The minister highlighted that the government health insurance scheme would be voluntary and that it would be an alternative to the private healthcare system currently used by more than half of Malaysians.   

Under a national health insurance scheme, every Malaysian would be able to enjoy basic medical coverage by deducting a certain amount of monthly gross income as a premium. Malaysians can also opt to pay extra premiums to private insurance providers for better coverage.

Talk on reforming the country’s healthcare system is certainly not new. Back in 2012, the government made an attempt to implement a similar plan called 1Care for 1Malaysia amid increasing public healthcare costs. But the plan did not take off.

“The national insurance [scheme] is definitely coming because we have [had] discussions with [the] ministry of health ... they are working out on how to put the system in place. They have talked to private sectors, public hospitals [and] the Association of Private Hospitals. They are going to recommend what will be a new model that benefits everybody,” Thomas said.

According to him, the government has studied the scheme for 15 years, and it hopes to implement the scheme by 2018.

However, he noted, the government needs to make sure the system will be better than the current one. He sees a need for the government to fix the premium at an affordable rate to prevent abuse of the welfare system and control the ceiling on hospitals charges to avoid profiteering.

Senior citizens and unemployed people should be taken into consideration, Thomas added.

He opined that cost-sharing under a national insurance scheme would be a way to solve the current structural problem.

“If national insurance works in many countries, it should work in Malaysia as well,” he said.

Citing Indonesia as an example, Thomas pointed out that when the national insurance scheme was implemented there, charges at hospitals were set 20% to 30% lower than current costs. Private medical centres there provide no-frill wards for patients sent from public hospitals.

Over there, private hospitals that have joined the scheme receive patients from public hospitals, and the charges are set by the government. “So, you (private hospitals) will have the volume. What the private hospitals do is to set up a special ward [with] no air con[ditioner], no TV,” said Thomas.   

Thomas disagreed that “overcharging patients” is a weakness of current private hospital operators.

“Patients who come to private hospitals often compare the charges with the government’s public services. But when you go to government hospitals, 98% are subsidised. [For the] private sector, you have to pay [the] full cost.

“The impression is we are charging a lot, but we are charging more as the cost of providing service is higher. It is not like in public hospitals, [where] everything [is] absorbed by the government,” he said.

To him, medical bills go up because the cost of medical supplies is higher when the ringgit depreciates against the US dollar, while operating costs are higher when wages have increased.

He also sees the GST as a key factor of the rising medical cost, as its impact is more than its official rate of 6%, despite the fact that the government has been urged not to charge the GST on medicine, medical supply and equipment, and doctor fees.

“Despite these, we are still seen as service providers with reasonable prices in the region. Our costs of healthcare are definitely less than Singapore and Thailand,” he said.