Prime Minister Dato' Seri Anwar Ibrahim has announced plans to amend the Private Healthcare Facilities & Services Act 1998 (Act 586) in 2024, aiming to regulate private hospital charges through the adoption of a Diagnosis-Related Group (DRG) payment model. This significant reform is expected to address rising healthcare costs and curb surging health insurance premiums.
Tackling Unregulated Costs in Private Healthcare
Speaking in the Dewan Rakyat, Anwar acknowledged that private healthcare charges, while still competitive globally, are unregulated in many aspects, leading to higher medical expenses for Malaysians. Act 586 currently caps only specialist doctors’ fees under its 13th Schedule, while hospital services like accommodation, nursing care, laboratory investigations, and drugs remain unrestricted.
The Prime Minister cited the insurance industry's concerns about uncontrolled hospital billing practices, which have directly contributed to increased medical insurance premiums. In response, the proposed amendment will implement the DRG model, introducing a fixed-rate system based on the complexity of medical cases, rather than the current itemized billing system.
“This approach will ensure fairness and transparency for patients and insurers while maintaining the competitiveness of private healthcare,” Anwar remarked.
A Balancing Act for Patients and Industry
Addressing the issue of rising insurance premiums, Anwar rejected calls for a moratorium but assured a “reasonable and small increase” in premiums for the coming year. He also mentioned that new guidelines on this matter would be issued by year-end.
Anwar highlighted Malaysia’s growing reputation as a medical tourism hub, attributing it to relatively affordable healthcare costs. However, he emphasized that regulatory reforms are necessary to maintain affordability for locals while keeping private healthcare attractive to international patients.
Affordable Options in Government Hospitals
The Prime Minister also pointed to the Ministry of Health’s (MOH) new Rakan KKM initiative, designed to offer affordable healthcare services in government hospitals. This program aims to provide additional, minimally priced facilities separate from the congested public wing, presenting a middle ground for patients seeking alternatives to costly private treatment.
Briefing and Stakeholder Input
The announcement followed a briefing in Parliament by officials from Bank Negara, the Finance Ministry, and the MOH, who discussed medical inflation and insurance premium hikes. Health Minister Dzulkefly Ahmad had earlier briefed Anwar ahead of the Prime Minister’s Question Time.
The proposed amendments, alongside complementary initiatives, mark a decisive step toward striking a balance between ensuring affordability for Malaysians and sustaining the private healthcare sector. If successfully implemented, the reforms could set a precedent for healthcare cost regulation in the region.
By: Kpost
Information Source: CodeBlue
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