By: Chai Ming Hooi, Nahrizul Adib Kadri

With the state elections around the corner and the country still struggling in facing the aftermath of COVID-19 pandemic, it is high time that we take a closer look at one of the continuing issues that has always concerned the citizens at large – the cost of healthcare in the country. Managing the cost of healthcare is a delicate matter and much of what can be done depends on how policy makers structure the cost system to provide funding for healthcare, control the cost stability in healthcare and drive operational efficiency among healthcare providers.

With the release of Budget 2023 that estimated the total expenditure of Federal government at RM372.34b, we can see that around 9.7% of the budget or RM36.14b will be spent through the hands of Ministry of Health. Of this amount, RM31.5b (87%) is allocated for operating expenditure in healthcare and the remaining RM4.64b (13%) is allocated for development expenditure in healthcare. However, the actual cost of healthcare in Malaysia, correctly named as Total Expenditure in Healthcare (TEH), far exceeds the allocated budget. In fact, TEH in 2019 has reached RM64.3b . Therefore, relying on government funding to support the cost of healthcare is insufficient if at all sustainable.

Let us look at how the remaining 55 percent or so of the TEH is funded. In 2019, RM22.49b (35% of TEH) was paid out-of-pocket by private households and only RM4.89b (7.6% of TEH) by private insurance. This raises the issue of how higher income households can afford to pay medical bills using their disposable income at private hospitals and clinics, while patients from the lower income households receive their medical service from public hospitals. If the service level provided by both the public and private healthcare providers are comparable, why would richer people pay out-of-pocket at private hospitals? Thus, this signifies an issue of social disparity to receive medical service in the country. Policy makers need to come up with ideas that give access to health coverage to the entire population beyond access to public hospitals and clinics.

While it is important to look at where the funding for healthcare comes from, it is equally important to look at how much healthcare services are priced at. Without a control in this respect, it is only inevitable that highly priced medical services separate the rich from the poor, thus again become an issue of social disparity. The healthcare industry therefore needs an oversight, by means of government policies, to prevent monopolisation. To create competition for the healthcare institutions, tax incentives can be given to attract more foreign investments in the healthcare industry. With competition, prices can be driven down while their operational efficiency and services will improve.

Finally, a forward-looking approach is needed to control the cost of healthcare for the future. At the current rate, Malaysia will become an ageing nation by 2050 where more than 15% of the population reaches beyond 65 years old. Healthy lifestyle that starts from a younger age, such as regular exercises, diet, and work-life balance, is important to prevent cardiovascular diseases and diabetes. If our generation takes good care of our health, we will lessen the burden on our future generation.

_{Chai Ming Hooi is a postgraduate student, and Nahrizul Adib Kadri is an Associate Professor, at the Department of Biomedical Engineering, Universiti Malaya. The authors may be reached at nahrizuladib@um.edu.my}