KUALA LUMPUR (May 20): Sunway Healthcare Holdings Bhd (KL:SUNMED) said it supports the pilot rollout of the government’s base medical and health insurance/takaful (MHIT) product, as private healthcare providers prepare for broader reforms aimed at making medical coverage more affordable and sustainable.
The MHIT plan is a voluntary, standardised medical insurance and takaful product introduced under the government’s healthcare financing reform agenda to provide more affordable and sustainable private healthcare coverage. The launch of the base plan is expected to be in early 2027.
"The group will support the pilot rollout of the base MHIT, with the trial phase expected to commence in the Greater Klang Valley by July 2026," Sunway Healthcare said in a statement on Wednesday following the release of its first quarterly financial results since listing.
Kenanga Investment Bank previously cautioned that copayments and deductibles under the proposed MHIT plan could deter uptake among lower-income groups, particularly B40 policyholders, despite the product being positioned as a more affordable alternative.
The research house said the annual coverage limits under the proposed plan may prove insufficient for complex or prolonged illnesses such as cancer, while hospitals may need to adjust service offerings towards more standardised and cost-efficient packages.
Think tank the Galen Centre for Health and Social Policy had also described the proposed base plan as potentially less attractive than existing medical insurance products currently available in the market, adding that it may struggle to attract uninsured individuals.
Delayed DRG rollout allows time for clarity
Meanwhile, Sunway Healthcare said the Ministry of Health’s decision to defer implementation of the diagnosis-related group (DRG) system to 2027 "provides greater clarity and allows the group to continue strengthening its internal systems, clinical coding and data readiness".
The group, in its listing prospectus, had previously flagged the impending DRG payment model as a major regulatory risk ahead of its listing on Bursa Malaysia, warning that the system could cap revenues from high-cost procedures that underpin profitability.
Under the DRG framework, hospitals would be reimbursed based on predetermined amounts tied to diagnosis categories and medical needs, regardless of actual treatment costs, replacing the current fee-for-service model used by private hospitals.
The Ministry of Health had initially targeted a mid-2025 rollout for the DRG system, but implementation was later deferred to 2027 to allow more time to finalise the cost model, develop the DRG algorithm and build an integrated hospital information system, with pilot tests to be conducted beforehand.
Shares of Sunway Healthcare slipped two sen or 1.08% to RM1.84 on Wednesday, valuing the group at RM21.16 billion. Since its listing on March 18, the counter has gained 26.9% from its IPO price of RM1.45.