Law reviews underway to tackle rising private healthcare costs: PM

The government is looking to amend existing laws, including the Private Healthcare Facilities and Services Act 1998 (Act 586), as part of an overall strategy aimed at addressing rising private healthcare costs.

Prime Minister Anwar Ibrahim said the Health Ministry is refining the legal framework to support the implementation of the Reset strategy, including adopting the Diagnosis-Related Group (DRG) payment system.

“If necessary, the government will consider amendments to other related laws under the ministry’s jurisdiction to empower the overall Reset strategy,” said Anwar, who is also the finance minister, in a written parliamentary reply today.

Reset - an acronym for Revamp insurance and takaful products, Enhance transparency, Strengthen digital health systems, Expand affordable care, and Transform provider payment - was introduced through a joint initiative by Bank Negara Malaysia, the Health Ministry and the Finance Ministry.

The DRG payment system is a method where hospitals are paid a fixed amount for each patient case based on diagnosis and procedures, no matter the actual treatment cost.

Overall, the strategic framework comprises five core pillars and 11 key initiatives.

Key components

According to Anwar, one of the pillars involves revamping Medical and Health Insurance and Takaful (MHIT) by introducing a basic MHIT product to promote more sustainable and stable premium pricing.

Other key components include:

• Enhancing price transparency through drug price display, publication of service price ranges, consistent medical inflation estimates and standardised healthcare cost data collection.

• Strengthening the digital health ecosystem via electronic medical records to improve care quality and reduce repeated diagnostic testing.

• Expanding cost-effective options through affordable non-profit hospitals and public-private partnerships with the Health Ministry.

• Transforming provider payment mechanisms by shifting to the DRG system to align payments with value-based care.

Anwar said the implementation of Reset is overseen by the Joint Ministerial Committee on Private Healthcare Costs, co-chaired by the second finance minister and health minister.

The committee held its inaugural meeting on June 24 and included stakeholders from private hospitals, healthcare professionals, insurers, consumer groups and academia, with input from relevant associations.

Reporting by Alyaa Alhadjri, Qistina Nadia Dzulqarnain, N Faizal Ghazali

No plans to review tax relief for life insurance, personal income - PM

COMMENT | How can we resurrect our national health services?

MOF, MOH form joint committee on insurance, healthcare costs

DAP senator warns of risky EPF-insurance plan, potential exploitation

Proposed EPF health insurance scheme will be voluntary - Dzulkefly