PETALING JAYA: The Health Ministry should develop a national grouper on diagnosis-related groups (DRG) that will work for all hospitals.
DRG groupers are used to categorise patients into DRGs, which are groups of cases with similar diagnoses, procedures and other characteristics.
Prof Dr Maznah Dahlui, a health economist at Universiti Malaya and chairperson of the technical advisory committee for the DRG under the Health Ministry, said currently, there are different groupers based on hospital type.
“The ministry needs to come up with a DRG grouper that can be used by all types of hospitals. Currently, public hospitals use the grouper that they developed and teaching hospitals use the grouper developed by Universiti Kebangsaan Malaysia, while some private hospitals adopt (the model) from Australia,” she said when contacted.
The main purpose of the DRG grouper is to assign DRGs, which are then used to determine payment for the hospital stay under the inpatient prospective payment system (IPPS).
Prof Maznah said DRGs work as a costing model to improve hospital efficiency and as a payment model, but may not necessarily be applied for health insurance reimbursement.
“At the end of June, representatives from hospitals will have a workshop to discuss the development of the national grouper.
“Most likely, we will adopt the available grouper in public hospitals but modify it to consider patient characteristics (diagnosis and procedure) in private hospitals. So it’s still under discussion,” she said.
“There is another group under the Health Ministry that looks at developing the health benefits package and the healthcare payment model for Malaysia, in preparation towards National Health Insurance (NHI). So, DRG is only part of and not necessarily only for NHI,” she said.
The DRG, she added, is the bundling of treatment costs, which is equivalent to treating a certain DRG.
“We want to standardise how we group the patients for diagnosis plus procedure. It gives transparency of treatment cost,” she said.
Dr Khor Swee Kheng, health systems specialist and CEO of Angsana Health, said implementation of DRG could take up to a decade if done in phases.
“Any DRG implementation should take five to 10 years, and it happens in phases. This has been the experience in other countries that have launched their DRGs, which started in 1983 in the United States,” he said.
Dr Ginsky Chan, co-founder and access director at Angsana Health, said the phased introduction of DRGs, starting with minor illnesses, is a positive move towards value-based healthcare.
“Implementing it by the end of 2025 is ambitious but feasible with strong coordination.
“While it does not require a national insurance system immediately, it does highlight the need for integrated financing across the public and private sectors. A phased, collaborative approach will be key to its success,” he said.
The DRG-based model has been implemented in a number of countries, including Indonesia and South Korea.
However, there appears to be some resistance in the private sector towards its implementation.
IHH Healthcare Bhd said last month that the payment model is not suitable to be implemented in local private hospitals, and feels that further studies are needed before considering its adoption.
Its group chief executive officer, Dr Prem Kumar Nair, said DRGs are very difficult to implement in private hospitals, adding that it was originally designed to fund public healthcare through a single-payer model.
Under the framework, inpatient cases are grouped into categories based on clinical similarity and expected resource use, allowing payers to reimburse hospitals with a fixed rate per case rather than through itemised billing.
