PETALING JAYA: The healthcare sector continues to demonstrate resilience, despite global challenges.
In a report, RHB Research said a number of key takeaways were realised during Bank Negara Malaysia’s recent Sasana Symposium.
Among them include the introduction of a soft-landing mechanism (Diagnosis-Related Groups – Fee-For-Service or DRG-FFS) which will prevent margin shocks for private healthcare operators during the transition to this new-based pricing.
According to the research house, the shift of pricing could limit private healthcare operators from increasing their revenue through itemised billing.
“Regulators acknowledged that no DRG system globally is immune to operational gaming, including DRG creep (upcoding to inflating case mix), early discharges, patient cherry picking and back-end billings.”
RHB Research also clarified that the participation of this would be voluntary until frameworks and infrastructure are established.
However, for now, the DRG rates are only for newly introduced MediAsas products, while a planned phase introduction of a DRG-FFS hybrid adjustment mechanism is expected to smooth the eventual transition towards DRG-based pricing.
Another key takeaway is that major hospitals under RHB Investment’s coverage had been pilot-onboarded onto the Malaysia Digital Health Certification Network (MDHCN). This proved the progress of public-private health data mobility.
“Progress on MDHCN is moving rapidly, with the network establishing a standardised ‘One Person, One Record’ architecture built on global International Patient Summary standards,” the research house explained.
The on-boarding involves KPJ Healthcare Bhd
, IHH Healthcare Bhd, Sunway Healthcare Holdings Bhd and Mahkota Medical Centre, among others.
A legacy challenge of this network is that hospitals in the past have not wanted to share patient data due to privacy concerns as well as administrative friction.
“Nevertheless, we believe these barriers were addressed by MDHCN via a patientmediated, explicit-consent framework, giving patients control over their data and enabling time-bound access approvals via MySejahtera,” RHB Investment noted.
With that, the research house maintained an “overweight” call on the healthcare sector. It noted that KPJ Healthcare was best positioned to benefit from the eventual implementation of medical and health insurance and takaful or MHIT and DRG.
“This is because it has an extensive network of secondary or community hospitals that operate on a relatively lower cost base, with room to accommodate higher patient volumes.”
Other top picks include Duopharma Biotech Bhd and LAC Med Bhd.
Downside risks for the sector are higher-than-expected operating costs, lower-than-expected patient visits or revenue intensity growth, and adverse regulatory changes.
Meanwhile, in an earlier report, CIMB Research said that as the cost of healthcare continues to rise globally, it has become the job of healthcare providers to address affordability challenges.
It found that providers that actively reduced financial barriers to care were better positioned to contribute positively to social outcomes while maintaining long-term business sustainability.
