KUALA LUMPUR (June 25): The Galen Centre for Health and Social Policy has urged the Malaysian government to set up an independent statutory commission to oversee Malaysia’s private healthcare sector, citing the Public Accounts Committee’s (PAC) report tabled in Parliament on medical inflation and rising insurance premiums.
In a statement on Thursday, the independent policy group said that existing oversight of private healthcare is split across multiple agencies, leaving gaps in consumer protection as patients grapple with rising hospital bills and higher medical insurance and takaful premiums.
“The government should establish an independent statutory Private Healthcare Commission with an explicit consumer-protection mandate,” said founder and CEO Azrul Mohd Khalib.
Its proposal follows the PAC’s recommendation for a new governance mechanism for the private healthcare sector after the Galen Centre found that the current legal framework does not sufficiently address non-professional charges imposed by private hospitals, such as medicine, consumables, laboratory tests and equipment.
Azrul added that the proposed commission should be empowered to oversee increases in private hospital charges and medical insurance premiums, introduce standardised billing practices, and investigate pricing disparities and excessive mark-ups in the private healthcare system.
It should also regulate the dealings between hospitals, insurers, takaful operators and third-party administrators, he said.
In addition, the new commission should publish comparable data on treatment prices, rejected claims, premium increases and patient complaints, while serving as an independent avenue for consumer grievances, appeals and enforcement action against unfair practices.
He said changes to the Private Healthcare Facilities and Services Act 1998 are necessary, but a dedicated regulator with more enforcement and resources is needed to resolve issues arising from legislative amendments.
The PAC report, tabled on Wednesday, outlined a range of cost drivers in the private healthcare system, including the absence of a standardised billing structure, separate charges for basic items and instances where insured patients were billed differently compared to patients paying from their own pockets.
The Galen Centre also urged that the Health Ministry have more regulatory empowerment over private hospital charges and that medicine and medical equipment prices be subject to stronger control measures.
It also highlighted concerns in the medical insurance market, particularly around the treatment of long-standing policyholders when insurers close older risk pools and shift newer, healthier customers into separate portfolios, which is part of the findings of the PAC report.
“Bank Negara Malaysia must require fairer pooling arrangements across comparable portfolios, prohibit practices which disadvantage long-term policyholders and ensure smaller, predictable annual premium adjustments instead of allowing people to be hit with sudden increases of 40%, 50% or even 70%, which has already occurred,” said Azrul in the statement.
On the future rollout of the diagnosis-related groups (DRGs) mechanism, he said it would need to be supported by better cost data, standardised coding, interoperable medical records and independent monitoring to avoid complex or high-risk patients being sidelined by hospitals.
The Galen Centre for Health and Social Policy is an independent organisation focused on advocacy for health and social issues from a public policy standpoint.