What’s driving the increase in healthcare costs in our country?
The cost of healthcare in Malaysia has been on an upward trajectory in recent years.
Such increase in costs are the inevitable consequence of the country’s aspiration to reach the status of a developed nation by 2020, which requires numerous standards to be fulfilled.
Many issues are in play when you talk about the increase in costs. The increase in minimum wages has increased the cost of employment of clinic staff, with wage bills increasing by more than double.
The Private Healthcare Act 1996 has brought more new regulations, which require clinics and doctors to modify their premises to comply with these standards. However, it has to be said that such standards improve the safety of care given to patients.
In recent years, clinics need to renew the registration of their clinics at a regular basis, which has a cost attached to it, especially as they need to be inspected prior to registration.
The professional fees of doctors are controlled by the Private Healthcare Act 1996. These fees have already been given a maximum ceiling. However, unfortunately, the cost of hospital care is not controlled, and continues to increase.
This dichotomy in fees should be addressed. Either both fees should be controlled, or both be allowed to be determined by market forces.
The cost of drugs is increasing, although the availability of generic drugs has somewhat circumvented some of this increase. However, even some generic drugs are now more expensive.
Added to this mix is the increasing use of technology to help diagnose and treat patients. For example, we have moved from X-rays to CT scans, and now to MRIs. The use of such technology increases the cost of overall healthcare.
Based on what is occurring now, the future does not look very optimistic. There are many issues that may initially appear to be unrelated to healthcare, but have a significant impact on healthcare costs.
In part, this is related to rules and regulations enacted by ministries other than the Health Ministry that impact on healthcare.
Personal Data Protection Act (PDPA) 2010
We are one of the very few countries (compared to most Western countries) who are mandating the healthcare sector to comply with this.
We already have the Malaysian Medical Council monitoring the actions of doctors, especially in their professional handling of patients and patient information.
Further laws can complicate matters, what with other parties involved. Also, there’s a cost factor in the form of an annual registration fee.
The Trans-Pacific Partnership Agreement (TPPA)
The Trade and Industry Ministry is embarking on a discussion with 11 other countries to sign this agreement. It may look good for trade, but the implications are immense for the healthcare sector.
First, patented drugs will cost more. In addition, these drugs will see their patency period extended, making such drugs more expensive for a longer time.
“Patent linkage” further delays the introduction of generics for up to two years.
“Data exclusivity” would also cause companies planning to produce generics to delay their production. This is because they would need to create their own clinical studies to prove the efficacy of their generic, or pay royalties to the original company to produce the generics. This would further increase the price.
Goods and Services Tax (GST)
Healthcare may appear to be tax-exempt, but there will be increased costs.
Yes, professional fees are regulated and fixed, and hence, will not have a GST tax as they are tax-exempt.
However, other hospital and clinic costs are not tax-exempt. The other services provided will now need to be documented and charged. These will usually have a GST. Only then, can clinics and hospitals be able to claim back the GST that they are paying for the purchases they are making.
In the end, it is the consumer who will have to pay for all these costs.
I do not wish to be the bearer of gloomy news, but as things go, it’s not looking too bright.
We, the people of Malaysia, should make an effort to have a say in this matter, in order to safeguard our future.
> Dr H. Krishna Kumar is president of the Malaysian Medical Association (MMA). For further information, email email@example.com. The information provided is for educational and communication purposes only and it should not be construed as personal medical advice. Information published in this article is not intended to replace, supplant or augment a consultation with a health professional regarding the reader’s own medical care.