KUALA LUMPUR (July 10): A major overhaul of Malaysia’s private healthcare system will benefit KPJ Healthcare Bhd (KL:KPJ) the most in the near term, according to Maybank Investment Bank.

The hospital operator, which mainly targets lower- to middle-income groups, is best placed to capture the incremental volume from the roll-out of the government-designed basic insurance plan known as MediAsas covering lower-acuity or uninsured patients, the research house said in a note.

“We believe MediAsas’ capped coverage and thin premiums make it a case-count driver rather than a case-mix upgrade, which should matter most to volume-oriented operators” like KPJ, Maybank Investment said.

MediAsas is a pilot programme for the basic medical and health insurance and takaful plan launching by the end of July with monthly premiums starting from around RM60.

The initiative forms part of Malaysia’s ‘Reset’ strategy to address soaring insurance premiums and medical inflation. In the longer run, the government will implement the diagnosis-related group (DRG) system to standardise hospital bills based on case complexity and severity.

“We believe these reforms are aimed at improving how healthcare costs are borne by payors rather than reducing healthcare demand,” Maybank Investment said as it maintained a ‘positive’ rating on healthcare stocks.

The greater transparency should narrow pricing differentiation between operators for common, routine care though complex healthcare remains inherently difficult to standardise, the research house cautioned.

In the long term, winners will have to rely on their ability to deliver increasingly complex care efficiently, Maybank Investment said and picked IHH Healthcare Bhd (KL:IHH) and Sunway Healthcare Holdings Bhd (KL:SUNMED) for their “differentiated specialist capabilities, higher-acuity case mix and operational scale”.