Bigger budget health allocation an absolute necessity
WHEN Prime Minister Datuk Seri Najib Razak proudly declared that Malaysia has the best healthcare system worldwide (as rated by a monthly magazine, International Living), many social media users responded to his statement with cynicism. This reaction was perhaps due to the discrepancy between the magazine’s evaluation of public and private healthcare and the reality experienced or perceived by Malaysians.
Most people do not give much thought to planning for their health, let alone healthcare policies, until illness strikes and the need for medical assistance arises. Perhaps we Malaysians do not realise how fortunate we are.
In terms of health systems, our country’s model has inherited the Beveridge model from the UK, in which the government acts as the major healthcare provider and payer in addition to the roles of public health planner, regulator and enforcer.
In this welfare-based system, many Malaysians may have taken their right to health for granted, unlike in Singapore and Indonesia, where individual responsibility is more heavily emphasised. There, citizens are more mindful about their own health savings, insurance premium and co-payments for healthcare services.
Those of us who utilise healthcare services would typically rate the system according to the following factors: (i) Accessibility: whether facilities are located within a proximate distance to their community, (ii) Affordability: whether fees charged are reasonable and in accordance with their household income (iii) Efficiency: the waiting period to receive treatment should be reasonable and not impede the patient’s work and life, and lastly (iv) Quality care: care should be delivered in an effective and professional manner, and the patient treated with respect.
Our Ministry of Health (MOH) often claims that Malaysia’s health system is progressive and pro-poor, as public health financing is largely derived from general taxation (where the richer get taxed progressively more) and public healthcare majority users are mostly from the lowest two socioeconomic segments (Quantile 1 and 2, poorest 20% and the next 20%) of society. Moreover, co-payment user fees (unrevised since 1982) are extremely nominal (i.e. RM1 for outpatient visit, RM5 for specialist visit). This amounts to approximately 2% revenue collection against healthcare spending.
The crux of the issue is whether the MOH has adequate finances to meet the rising demand, and a holistic long term strategic plan to (i) expand the infrastructure and facilities capacity (ii) increase the health workforce while (iii) improving efficiency of healthcare delivery (i.e. containing cost but increasing productivity).
The global rise of medical costs is being felt in Malaysia’s private health sector too. The 2017 Global Medical Trend Rates report has forecasted Malaysia’s medical inflation rates to experience a 12.0% net increase, twice the Asia net average (6%). This increases pressure on the MOH to contain costs, especially given the mere 7.7% increase in allocation in the 2017 Budget.
Recently, the Director General of Health Dato Dr Noor Hisham Abdullah told the media that “(the MOH hospitals are) seeing an additional 10 million outpatientslast year compared to the 45 million received in 2015”. This number translates to a 22% increase in service demand.
To that end, health minister Datuk Seri S. Subramaniam was right in claiming that the 2017 budget allocation was not enough and to urge for greater resource allocations next year.
Private hospitals are also the victims of rising medical cost. Last year, these hospitals suffered a 20-30% drop in patient volume as more patients opted for public health service. The National Health and Morbidity Survey 2015 found public perception towards treatment charges in private healthcare to be somewhat negative, with 25.9% respondents nationwide giving it a ‘poor’ rating.
An increasing proportion of those from middle and lower household income classes could not afford to utilise private healthcare services, let alone in the event of a catastrophic illness. Out of the total population health expenditure in 2015, only 8% of contributions were made from private insurance. While not entirely conclusive, one may safely assume that under 10% of citizens had private insurance coverage. A greater volume of patients may turn to public health facilities in coming years. The government must be prepared for this increased pressure on health services.
Granted, greater financial resources does not necessarily guarantee an improvement of services; nevertheless, last year’s stretched budget did affect Public Health and Medical Care, with across-the-board reductions for most services and supplies line items.
If MOH still continues to operate under-resourced, the likelihood of basic test materials and medical supplies running out of stock may become a more frequent and familiar scenario. In line with the increasing public demand for healthcare services, more resources should be given to MOH’s development budget to expand the current capacity of the healthcare system as well as to alleviate the current stress in the system.
After considering various adjustment factors such as the forecasted 15% medical inflation rate, typical salary increases of between 10-20% per department, and a projected higher healthcare demand from the public, the MOH should minimally secure a 15% larger budget allocation compared to what it received last year (in other words, more than RM28.5 billion).
Spending priorities should be to ensure that at the very least, all drugs listed in the National Essential Medicine List (NEML) and basic test reagents are readily available at all times. Furthermore, MOH should channel an appropriate level of funds towards increasing capacity and improving service delivery in all its healthcare facilities, especially in congested urban hospitals.
A responsible government should set its priorities right for the type and amount of public investments to make, to reflect how much they care for the well-being of the people. For this, long-term strategic planning, not firefighting, is the way to go. It is my hope that, when the 2018 Budget is tabled, the MOH receives a fair allocation that matches its needs.