Malaysian Healthcare: The Shape of Things to Come?

Malaysian Healthcare: The Shape of Things to Come?

Divining the future of Malaysian healthcare is risky business. Between the
Official Secrets Act, cautious technocrats, and pre-election bluster, any
crystal ball would be rendered close to opacity.

On 13 August 1999, amidst mounting pre-election anxiety over the ongoing
privatisation of healthcare, the Health Minister announced that the policy
of corporatising public hospitals had been scrapped. The less credulous
then proceeded to speculate as to how the substance of the policy might yet
be achieved without too blatant a reversal of the minister's statement.

In the meantime, the action has now shifted to a related and equally
important aspect of healthcare reforms: the financing of healthcare.

In the last three months, a series of announcements have dribbled out,
hinting at the emergence of a patchwork of health (insurance) funds, which
collectively may be the basis of a de facto mosaic of national health
financing.

On 18 December 1999, the Health Minister referred to a "special medical
fund for the poor" without going into further details about this scheme.

A month later, on 17 January 2000, the Employees' Provident Fund (EPF)
announced its joint-venture with the Life Insurers Association of Malaysia
(LIAM) for a risk-rated health insurance scheme for coverage of 13 (or
expanded coverage of 36) critical illnesses or procedures. The premiums
payable were to be charged in accordance with an age-gradient, rising
sharply from RM30 annually (RM10,000 pay-out upon diagnosis, age 35 years
and below) to RM20,034 annually (RM100,000 pay-out upon diagnosis, expanded
coverage, age 65-70 years).

With less fanfare-a soft launch in November 1999 followed by an ongoing,
nationwide roadshow-Cuepacs (the confederation of public service unions)
introduced its own version of health insurance, CuepacsCare, in joint
venture with AMI Insurans Bhd and MediCare Assistance Sdn Bhd. Unlike the
EPF-LIAM scheme, CuepacsCare charges uniform premiums, but excludes a
larger proportion of the elderly from eligibility (see below).

A further difference is that CuepacsCare re-imbursements are based on
specified inpatient services, subject to a ceiling on payments (max.
RM60,000 a year for individual subscribers) and exclusions of congenital
abnormalities, disabilities arising from wars or civil disorders, mental
illness, eyesight deficiencies and visual aids, artificial limbs and
prostheses, sexually transmitted diseases, quarantinable infectious
disease, pregnancy and child delivery services, vaccinations, AIDS and
related complications, as well as other pre-existing chronic conditions
(such as diabetes, high blood pressure, kidney dysfunction, cardiovascular
disease, cancer) in the first year of subscription.

Among the salient points to note in this emerging melange of health
insurance schemes are the following:

** the EPF-LIAM scheme is a risk-rated scheme, more in line with
commercial underwriting rather than social insurance. The most
objectionable consequence is that those who (will) need health care most
would least be able to afford it. Undeniably, healthcare financing for an
increasingly aged population is a major challenge, but a risk-rated scheme
with exorbitant premiums for the elderly and other high-risk groups (in
effect, rationing by the market) is unacceptable as a solution. The
CuepacsCare scheme side-steps this by excluding from coverage a larger
group of the elderly (next point).

** exclusion of the elderly from coverage: the EPF-LIAM scheme is
available only to those aged 70 years of age and below, with the annual
premiums increasing sharply with age; CuepacsCare subscribers pay a uniform
premium regardless of age, but they have to enrol before the age of 60, and
coverage ceases at age 65. Given that the life expectancy of Malaysians is
approaching the mid-70s, added to the high prevalence of chronic ailments
among the elderly, it is clear that healthcare financing for the aged has
become a major issue of social policy.

** the CuepacsCare scheme is a voluntary scheme for civil servants and
public service retirees (i.e. non-mandatory and allows for opting out).
Because the scheme is community-rated with uniform premiums for all
subscribers, there is the possibility of selective opting out by eligible,
low-risk individuals so that the subscriber pool might end up being
disproportionately high-risk, with over-representation of intensive users
of healthcare. It is unclear if the premiums of RM87 for individual plans
and RM225 for family plans would be viable in the long term under such a
scenario.

** most national health insurance schemes rely on joint employer/employee
contributions. The emerging patchwork of health insurance schemes appear
to be solely the responsibility of employees (EPF contributions were
jointly made, but with the clear understanding that these were employee
savings and assets, distinct from employment health benefits).

In view of the continuing, simmering crisis of Malaysian healthcare - by no
means abolished by the scrapping of corporatisation plans for the public
hospitals - the Citizens' Health Initiative (CHI) calls on the Health
Minister and the Economic Planning Unit to clarify whether this patchwork
of health funds is intended as a de facto national health financing scheme,
perhaps supplemented with additional social safety nets (the special
medical fund for the poor, and perhaps a separate one for the aged)?

Is this the shape of things to come? If so, it increasingly resembles the
crisis-ridden system of healthcare financing in the United States (private
insurance-based, increasing reliance on for-profit managed care, plus
Medicare and Medicaid) but worse, with employees largely shouldering the
burden. Left in limbo for the moment is the issue of healthcare access for
the rural communities, for migrant workers, and for the low-income
self-employed.

CHI re-iterates its stand, in concert with the Malaysian Medical
Association, the Malayan Nurses' Union and other healthcare professionals,
that a far better alternative to ensure equitable, universal and
cost-efficient coverage of all Malaysian residents is a National Health
(Insurance) Fund - a payroll-based scheme (employer/employee contributions)
with supplementary contributions from progressive taxation to extend its
benefits to ALL citizens and residents. It would be operated as a
non-profit statutory institution with effective and credible citizen
participation.

We consider this option, a single-payer publicly operated healthcare fund,
as a realistic, immediate-term goal which would be compatible with a
continuing mix of public-private healthcare providers, and with the broad
interests of consumers, salaried/unionised workers, and the elderly.

Dr Chan Chee Khoon
Co-ordinator
Citizens' Health Initiative
http://www.malaysia.net/aliran/
11 March 2000

http://www.malaysia.net/lists/sangkancil/2000-03/msg00497.html