KUALA LUMPUR (Dec 20): Bank Negara Malaysia announced that the government, together with insurers, takaful operators (ITOs) and private hospitals, will contribute a total of RM60 million to speed up health reforms in the country.

This includes implementation of the diagnosis-related group or DRG payment model — which groups similar diagnoses and procedures for standardised payment — and the publication of costs of common medical procedures for greater transparency, it said in a statement on Friday.

A portion of the funds will also be dedicated to developing a base medical and health insurance/takaful (MHIT) product that covers essential healthcare needs.

Once available, part of the funds will also be used to facilitate policyholders aged 60 and above to switch to this new base product as a more affordable option.

BNM said it is also working with the Ministry of Health, private hospitals and ITOs to implement broader reforms designed to reduce medical cost inflation.

These initiatives include increasing transparency in drug pricing, digitising medical records to minimise the need for repeated tests, and implementing strategic purchasing strategies by both public and private sectors to achieve cost reductions.

BNM governor Datuk Seri Abdul Rasheed Ghaffour said the design of MHIT products must also be improved to make them more sustainable and aligned with value-based healthcare that prioritises better health outcomes.

This is a complex challenge that requires the concerted action of all stakeholders across the healthcare ecosystem. These interim measures that we are announcing today will provide some temporary support to policyholders, but broader health reforms must be expedited with a commitment to achieve clear outcomes in the coming years," said Abdul Rasheed.

Among interim measures announced include the staggering of health insurance premium hikes over at least three years to ensure annual increases of less than 10% for policyholders, and a one-year pause on premium adjustments for policyholders aged 60 and above who are covered under the minimum premium/contribution plan.

The central bank said it will monitor the progress of these reform efforts and conduct periodic reviews of the interim measures in line with advancements in the broader healthcare landscape.

Policyholders can expect to receive communications from their respective ITOs regarding these changes starting Jan 15, 2025.

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