A Joint-Press Statement by the Life Insurance Association of Malaysia (LIAM), Persatuan Insurans Am Malaysia (PIAM) and Malaysian Takaful Association (MTA)

Kuala Lumpur, 12 December 2019 - Reference is made to the announcement by the Health Minister, Yang Berhormat Datuk Seri Dr Dzulkefly Ahmad on the decision by the Cabinet to deregulate the consultation fees of doctors in private clinics and private hospitals on 6 December 2019.

The insurance and takaful industry is of the opinion that the most important thing for insurers and consumers is price transparency so that consumers can make informed choices.  We welcome the Ministry’s move to mandate the disclosures of consultation fee up front and we believe that this should be extended to charges of common medical procedures in all private hospitals. This would help the public make informed decisions on the cost of treatment.   In this regard, private hospitals in Malaysia should publish their actual average costs similar to what is currently practised in some countries.
 
It is important to ensure that deregulation of fees will encourage competition among doctors to offer affordable rates to the rakyat.   Currently, doctor’s charges for inpatient stays for Non-surgical and Surgical treatments are about 20% and 35% respectively. We believe that with transparency in medical charges, it will encourage competition and hopefully it will help to control prices over the long term.

We hope that the Ministry of Health will look into setting up benchmark prices for drugs and pharmaceutical supplies. These are essential items to patients and should be made affordable to the rakyat.

In 2019, Malaysia is ranked among the highest in the region with 13.1% expected increase in medical costs according to the Willis Towers Watson’s 2019 Global Medical Trends Survey Report and this has caused concerns to all stakeholders.  In response, the industry has formed a joint task force to understand the issue better and address it.
The total health expenditure in 2018 is RM60.147 billion, of which 52% is funded by Government with the balance paid by private household out-of-pocket (35%), private insurance (7%), corporations (4%) and other agencies (2%).

If healthcare costs are not contained, increase in premiums for medical and health insurance will be inevitable.  If medical insurance is no longer affordable, it will drive more patients to seek treatment at government hospitals.  For self-paying patients, it will cost them more to seek treatment at private clinics and hospitals.