The shape of healthcare 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 Aug 13, 1999, amidst mounting pre-election anxiety over the ongoing privatisation of healthcare, the Minister of Health 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 Dec 18, 1999 the Minister of Health made reference to a "special medical fund for the poor" without going into further details about this scheme.
A month later (Jan 17, 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 a 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 reimbursements are based on specified in-patient services, subject to a ceiling on payments (maximum 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 diseases, 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:
1) 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 sidesteps this by excluding from coverage a larger group of the elderly (see below).
2) Exclusion of the elderly from coverage: the EPF-LIAM scheme is available only to those aged 70 years of age and below, with 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.
3) 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.
4) 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 Minister of Health and the Economic Planning Unit to clarify as to 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 US (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 is the coordinator of the Citizens' Health Initiative.
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