Budget 2022: Old and new issues to consider for healthcare

While healthcare receives a significant amount of allocation in the annual Budget, it is still below the average percentage countries of similar income level provide for this sector. — Filepic

There is usually much buzz and anticipation this time of the year, and indeed, a certain amount of trepidation and fear.

No, I am not talking about Halloween. Rather, it is Budget season, causing the city to be filled with conversations consisting of wish lists and gossip masquerading as educated guesswork.

It is likely that we will have an expansionary Budget.

In other words, the government will increase spending or cut taxes, which is not easy as government revenue has been decreasing.

However, the rationale for an expansionary approach is to boost growth in order to minimise the risk of an economic downturn.

More money for health

More than ever, economic recovery is strongly linked to healthcare.

Healthcare is always a key component of the Budget, usually second only to education as a sector.

Almost RM32 billion was set aside for healthcare last year (2020).

Of this, approximately 7% was allocated as development expenditure, with the balance of RM27bil for operating costs.

However, the allocation for Budget 2021 was the equivalent of only 2.2% of Malaysia’s gross domestic product (GDP) for the public healthcare system.

Most upper-middle-income countries spend an average of 3.8% GDP on their public healthcare system.

In the context of a pandemic, alongside significant delays in the diagnosis and management of non-Covid-19-related diseases, the government could not do wrong by increasing the allocation for healthcare.

What will more money do for healthcare?

To answer, we have to remind ourselves of the cost of the Covid-19 pandemic over the past year.

The direct costs include hospital beds (with significantly higher costs for intensive care unit beds), medications, consumables and healthcare personnel.

There are indirect costs too; non-communicable diseases (NCDs), e.g. heart disease and cancer, has not stopped.

The focus on the pandemic has led to significant delay in follow-ups and elective procedures.

The RM24mil allocated in Budget 2021 for mental health issues will also need to be raised for 2022, given the increase of frequency and severity of emotional stress, anxiety and depression.

Indirect non-healthcare costs also come from job absenteeism (from disease or lack of childcare), premature death, the prolonged lockdown, and the cognitive and psychological impact on an entire generation of schoolchildren.

It is not difficult to appreciate the manner in which additional allocations will help us improve the outcomes of the issues listed above.

Furthermore, the additional funding can be channelled towards hiring more fulltime healthcare employees.

Planning ahead

The pandemic has also hastened the impact of digital technological disruption in our lives.

In the context of dealing with longer waiting lists and the need to reduce physical congestion, funds should be allocated to establish and improve health sector data and digital infrastructure and capability.

This should not only involve data transfer to the cloud, but also escalating the use of telemedicine, while providing adequate training for practitioners.

More focus must be placed on preventative medicine.

Besides the obvious vaccination programme for Covid-19, the availability of incentives (including tax exemptions) for a healthier lifestyle (e.g. sports activities, club memberships, more nutritious food) will help address the bleak outcomes associated with the high prevalence of diabetes and obesity in Malaysia.

Taxing tobacco

A study titled “The relationships between tobacco taxation and demand determinants to reduce cigarettes consumption and smoking prevalence in Malaysia” demonstrated that the price of cigarettes in Malaysia is still affordable, even for youth.

Increasing excise duty for cigarettes is often blamed for higher use of illicit cigarettes, but independent studies state otherwise.

Indeed, the spread of illicit cigarettes has continued to grow since 2015 – the last time excise duty was increased on cigarettes.

Malaysians continue to suffer from the effects of tobacco.

The Health Ministry spent RM7.4bil in 2017 alone just for the treatment of two diseases caused by tobacco (i.e. lung cancer and coronary artery disease), in comparison to the paltry RM3bil collected from cigarette taxes.

The optimal tax strategy is for the government to increase excise duty for cigarettes (including so-called smokeless cigarettes).

This is to not only increase revenue, but also decrease the illnesses and deaths of both primary and secondhand smokers.

This must be done in tandem with efforts by the Customs Department to further restrict the spread of illicit tobacco.

Revenue collected from cigarettes of all forms should be earmarked for efforts to reduce the prevalence of chronic diseases caused by smoking.

This should include smoking cessation treatment and education/advocacy efforts to improve health literacy amongst the public.Better governance

Any increase in the Budget – healthcare or otherwise – will only result in changes on the ground if it is done in tandem with better governance.

More transparent and independent procurement oversight will help eliminate corruption and inefficiencies.

For healthcare in particular, leakages only serve to enrich the pockets of the few at the expense of the health and lives of the many.

Tackling poverty

Physical and mental health are very much affected by economic factors.

Not earning enough can have farflung consequences, from the inability to provide sufficient nutrition for children, to increased domestic abuse from prolonged stress within a small confined space.

The need to look at poverty in a multidimensional manner has cross-party political support from the likes of Members of Parliament Datuk Seri Mustapa Mohamed (Bersatu) and Nurul Izzah Anwar (PKR), underpinned by policy proposals from the likes of Universiti Malaya, Khazanah Research Institute, and the Social & Economic Research Initiative.

It is imperative that the Budget takes into account the provision of a social safety net through a basket of solutions that include direct cash transfers to those in need – provided that they are done in not only a timely, but also transparent fashion.

Ultimately, the Budget has to balance the needs of the rakyat today, while clearing a path for recovery tomorrow.

Doing so in an inclusive and clear manner will provide the exit strategy that Malaysia desperately needs.

Dr Helmy Haja Mydin is a respiratory physician and chief executive officer of the Social & Economic Research Initiative, a thinktank dedicated to evidence-based policies. For further information, email starhealth@thestar.com.my. The information provided is for educational and communication purposes only. The Star does not give any warranty on accuracy, completeness, functionality, usefulness or other assurances as to the content appearing in this column. The Star disclaims all responsibility for any losses, damage to property or personal injury suffered directly or indirectly from reliance on such information.

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Budget 2022 , healthcare , Covid-19


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