KUALA LUMPUR (Dec 11): The shift towards social healthcare insurance (SHI) mooted in the recently tabled Health White Paper (HWP) might have repercussions towards societal impact on public health and employment, according to experts.

HWP — which was tabled in Parliament in June this year — aims to reform the state of our nation’s healthcare system in stages over a 15-year period.

Health Minister Dr Zaliha Mustafa told the Parliament in October that the ministry is currently fine-tuning matters pertaining to the establishment of a Health Reform Commission that will oversee the implementation of the HWP.

Under the HWP framework, one of the initiatives outlined is the government aiming to integrate private hospitals into the national healthcare system.

One of the ways this will be achieved is via a benefit package that specifies services and medications available to the public for a standard set of affordable fees with the same level of care, regardless of whether the provider is from the public, private, or non-profit sector.

This package will be financed by a dedicated health fund which will largely be supported by government funding, with contributions from large donors and individual contributors, which experts call a form of SHI.

The SHI, according to Agora Society Malaysia founding member Dr Lim Chee Han, would further disrupt the dynamics of healthcare consumption if there were a large shift in demand for healthcare to the private sector.

“What would happen to the funding of public hospitals in smaller towns and rural areas?

“Can the SHI really be realistically trusted to keep healthcare costs down if more and more of the population shifts to using the services of the profit-driven private healthcare sector?” he asked during the People’s Healthcare Forum Roundtable Discussion that took place in October.

He added that based on the Covid-19 pandemic experience, the government should be pessimistic about getting a fair deal and reducing costs from the public through dealing with the private healthcare sector providers.

Researcher and convener of the People’s Health Forum Chee Heng Leng concurred with Lim, pointing out that if the government were to integrate the healthcare system, the fundamental differences between private and public hospitals would lead to intense and heavy lobbying from the private hospitals as they are largely driven by responsibility to generate return to their respective shareholders.

“With publicly collected and administered funding available for utilising private healthcare, this could lead to increased demand for, and further expansion of, the private hospital sector, thereby continuing the leaching of expertise from public sector hospitals.

“Private hospital staff are incentivised by increasing patient numbers and use of medical procedures, technology, and medication.

“This is not the case in public hospitals. In fact, if the public healthcare services at the primary, secondary and tertiary levels are working effectively in tandem, then the whole system should be keeping people out of hospitals,” she said.

Meanwhile, Lim said that for SHI to be more efficient, enrolment and premium collection from employees and employers has to be the common practice.

However, he cited a previous study produced by the World Bank which showed that a shift to SHI would reduce the formal sector's share of employment by 8%-10%.

This means that some employers would resort to casualising certain positions to part-time or short-term contracts in order to avoid contributing to their employees' compulsory health insurance.

“Malaysia's current tax-based system ensures heavily subsidised healthcare based on entitlement, as simple as showing an ID card, with no other bureaucratic hurdles,” Lim added.

In the long run, Chee believed that the financing structure through SHI would lead to rising costs due to the difficulty of controlling the over-use of medical care, such as unnecessary procedures and over-medication.

She said private providers are incentivised to increase utilisation and medication, leading to spiralling costs.

“To control these cost increases will require effective monitoring and strong administrative controls.

“The administrative controls that are needed in SHI adds a thick layer of administrative costs to the healthcare system,” she added.

According to Chee, countries where SHI is successful tend to have a history of social insurance; Germany’s system, for instance, has evolved through a long history of workers’ mutual help and social welfare organisations.

She also noted that in countries where private health services predominate and funding is led by private health insurance, social health insurance may actually represent a progressive step forward.

“However, Malaysia starts from a position where we have a strong public healthcare system financed by general tax revenue. To transition from tax-financed citizen entitlements to SHI would be regressive in terms of equity.

“Furthermore, SHI is more suited to countries with large formal employment sectors because it is payroll-based. Malaysia has a very large informal sector where it is very difficult to collect a payroll-based SHI,” she said.

Meanwhile, SHI also may not automatically correct the workload imbalance between public and private sectors, in terms of the number of patients and types of diseases seen.

According to Chee and Lim, depending on how the system is structured, the specific criteria under which specialist care is covered, and whether the way in which specialists are employed in public hospitals will change under SHI.

“For example, the private specialists are owner-operators of businesses (businessmen-entrepreneurs), while the doctors in the public hospitals are government employees. Hence, they are incentivised in very different ways,” they said.

They added that allowing publicly collected and administered funds to be used for private healthcare risks the equitability and accessibility of the Malaysian public healthcare system.

“We propose instead an alternative scenario, which is to use the dedicated health fund to strengthen our public healthcare system.

“Rather than a strategic purchaser paying both private and public sectors for services, the dedicated health fund should be used to improve the remuneration and service conditions of public healthcare personnel, expand public health facilities, revamp and re-orientate towards primary healthcare, and re-invigorate the public health sector in all the ways that have been proposed, and more.”