In light of the announcement of Budget 2018, the Ministry of Health (MOH) Malaysia has been in negotiations with private hospitals, to introduce the “bundling concept”. This is in hopes to reduce the cost of private healthcare among the public.

The bundling concept suggests a single payment to healthcare providers and facilities for all treatment and services a patient receives during a specific episode of care.

However, considering the cost-effectiveness of healthcare for the local citizens, topped by a reduced budget allocation in medical supplies and drugs this may in turn compromise optimal patient care. This will also cause a lack in improvement in the healthcare system, to address drug approvals for rare diseases and cheaper drugs in NCDs.

Exploring “bundling concept” to reduce financial burden in private hospitals

According to Health Minister Dr Subramaniam, the MOH is finding a solution to have better regulation over high medical charges in private hospitals. Photo credit: Malay Mail Online
According to Health Minister Dr Subramaniam, the MOH is finding a solution to have better regulation over high medical charges in private hospitals. Photo credit: Malay Mail Online

The bundling model was proposed by the government due to high medical treatment fees charged by private hospitals. Many private hospital patients often transfer to government hospitals a few days later due to the high medical treatment costs.

Since 2006, MOH has taken control over regulating treatment costs at private hospitals, including consultation fees, under the 13th Schedule of the Private Healthcare Facilities and Services (Private Hospitals and Other Private Healthcare Facilities) Regulations 2006.

However, other additional costs such as hospital accommodation, food, and miscellaneous items could vary, as private hospitals are given the freedom to charge their patients, remarked Dr S Subramaniam.

“If negotiations between the ministry and private hospitals are successful, we may be able to expand the regulation, which is now limited to consultation fees to professionals, to cover treatment entities, in order to make it more holistic and controlled,” commented Health Minister Dr Subramaniam. He added that the ministry is currently observing the experiences of other countries which are using the concept.

Questions over optimal patient care with reduced budget allocation

In order to deliver optimal patient care, it is crucial to address the cost effectiveness of the country’s healthcare system as a whole—not only among private hospitals, but also government hospitals.

There was a 30% hike reported in the number of patients using government healthcare due to the general increase in the cost of living. Nonetheless, there is no GST exemption for the public healthcare.

Kulai MP Teo Nie Ching identified a reduced budget allocation in medical supplies. Photo credit: RoketKini
Kulai MP Teo Nie Ching identified a reduced budget allocation in medical supplies. Photo credit: RoketKini

In addition, Kulai MP, Teo Nie Ching highlighted that the budget allocation for medicine has decreased since 2015, despite an overall increase of at least 10% each year between 2010 and 2014.

For the year 2018, RM2.5 billion is allocated for medical supplies while RM1.6 billion is allocated for consumable items and medical support equipment. This budget is comparatively the same as per 2017’s. However, in 2016, there was a total of RM4.6 billion allocated for supply of medicines, consumables, vaccines and reagents to all Government hospitals and clinics.

The reduced budget for medical supplies prompted questions over the maintenance efficiency of medical supplies, support equipment, consumable items, etc.



Lack of consideration for drugs in rare diseases

Klang MP Charles Santiago also highlighted that Malaysia is not granted “compulsory license” by the World Trade Organisation (WTO) for NCDs like cancer. This meant the government cannot allow the production of cheaper drugs for NCDs.

However, Deputy Health Minister Dr Hilmi Yahya mentioned that “Malaysia has no plans to reduce the price of these medicines – as they did for Hepatitis C – as cancer is not a contagious disease.”

As pointed out by Canadian health economist, Craig Mitton, Malaysia’s current evaluation for drugs approval, involves cost in the considering process, instead of placing priority on the unmet clinical needs and severity of a condition.

Canadian scientist Craig Mitton commented that Malaysia and most developing countries emphasised “cost above everything else” review approach that may reject the approval of some pertinent drugs for rare diseases. Photo credit: Malay Mail Online
Canadian scientist Craig Mitton commented that Malaysia and most developing countries emphasised “cost above everything else” review approach that may reject the approval of some pertinent drugs for rare diseases. Photo credit: Malay Mail Online

This includes using a statistic known as the incremental cost-effectiveness ratio (ICER) per Quality-Adjusted Life Year (QALY). It measures the difference in cost between two possible treatments or drugs, reflecting on the Return on Investment (ROI).

This consequently eliminates the approval of certain appropriate drugs, affecting the MOH’s review process for oncology drugs and efforts to treat rare diseases. Therefore, Mitton suggested the Multiple Criteria Decision Analysis (MCDA) – which is based on safety, appropriateness and equity – for drug approval, instead.

This can be achieved by channelling more funds to the healthcare sector.

“The Malaysian government spends about 10% or less than 4% of its GDP (gross domestic product) for healthcare,” noted Mitton. “If this can be increased, I am sure the MCDA approach can be easily practised,” he asserted.

Santiago on the other hand, has urged the government to pursue “either compulsory licensing or rights of government in the interest of public health.” MIMS

Read more:
Malaysia: Insurance associations urge government to implement fee transparency among private hospitals
General Practitioners (GPs) to work with Health Ministry in planning of bundle system
Budget 2018: An extensive overview on the possibility of improving Malaysia’s healthcare system
Budget 2017: An overview of its impact on Malaysian healthcare in the coming year

Sources:
http://www.themalaymailonline.com/malaysia/article/cost-should-not-be-the-deciding-factor-for-formulary-drugs-scientist-says#EgV0X1dlpEDfYoi6.97
http://www.freemalaysiatoday.com/category/nation/2017/11/07/subra-bundling-concept-can-lower-private-hospital-prices/
http://www.freemalaysiatoday.com/category/nation/2017/11/07/dap-no-reason-to-cut-healthcare-with-gst-revenue/
https://www.malaysiakini.com/news/401247