Medical Insurance - Malaysia

With a heavily subsidised healthcare system in Malaysia, it is safe to say that the average Malaysian is greatly aided in their search for medical attention and medication.

However, this comes at a cost to our healthcare system, and that cost has to be borne by someone, in our case ourselves – through taxes, personal out-of-pocket expenses and our insurance companies.

Currently, our healthcare expenditures are consuming an ever increasing portion of our gross domestic product (GDP). Standing at 4.4 per cent of GDP or RM50.3 billion in most recent figures, 52.4 per cent of our current healthcare expenditure is being funded by the Ministry of Health (MoH), followed by private household out-of-pocket (OPP), private insurance, and all other federal agencies and ministries.

When compared to other universal healthcare nations like Japan and Canada, our expenditure of healthcare seems fairly moderate as they each spend 10.2 and 11.03 per cent of their GDPs respectively on healthcare, albeit at higher government funding rate of around 80 per cent.

However, in the long-term, analysts expect our healthcare expenditure to rise dramatically because of our aging population, higher life expectancy and rising lifestyle diseases, shifting a majority of the population to require more medical treatment than before.

During the 2010 to 2040 period, the Malaysian population aged over 65 and over will increase to more than three-fold its 2010 population. This increase will categorise Malaysia as an aging population society by 2021, when our aged 65 years and above population will reach 7.1 per cent of our entire population.

Lifestyle diseases are also on the rise as more Malaysians are dying prematurely due to increased incidents of non-communicable disease (NCDs) arising from poor lifestyles. For example, of the 10 causes of premature death in Malaysia, a large majority are NCDs who have seen large increases of proportion in 2016 from 2005.

Diseases related to blocked arteries and mini strokes saw 36.4 and 20 per cent increase in changes from 2005 to 2016, while diseases known to have strong links to overconsumption of sugar like Diabetes, and chronic kidney disease saw a 37.1 and 28.0 per cent increase.

The predicted rise of healthcare expenditure is not new news as hospitals all around Malaysia have found themselves strained from a lack of resources in both labour and medicine as they try to serve the ever going number of patients.

This has caused much concern as it would be a daunting task for us to overcome if our healthcare expenditure exceeds sustainable levels.

In response to our rising medical expenditure, both the public and private sector have taken steps to curb unsustainable increases.

 Public sector: More awareness needed - In the public sector, public health awareness campaigns are often the first sign of attack when tackling the issue of rising medical expenditure and rising number of diseases, and with good reason.

It is understood that public healthcare awareness is an effective tool in helping maintain the health in a population and is extremely applicable to us locally as statistics from Healthdata indicate found that are top risk factors in Malaysia that drive the most death and disability are dietary risks, high pressure, tobacco usage, high blood sugar, obesity, high cholesterol and alcohol and drug use.

Essentially, it seems that most of our problems stem from poor lifestyle choices such as diets rich in fat, sugar and salt; tobacco, alcohol and drug usage; and a sedentary lifestyle.

In response, the public sector has continually pushed for more publc health awareness initiatives in order curb these associated diseases and its related costs to medical spending.

In particular, its national community health empowerment programme (KOSPEN) is expected to see a further RM30 million budget allocation this year in order to help it achieve its goals.

Screening programs such as those for cancer can help catch the illness early and reduce the need for expensive and costly treatments for later stages.

For example, vaccines and screening programs for cervical cancer can easily reduce the amount of cases of cervical cancer drastically by 75 per cent – allowing hospitals to utilise the funds that would have been sued to treat cervical cancer to be placed in other areas such as research or facility improvement.

Private sector taking more responsibility through healthcare and work - In a sector update by MIDF Amanah Investment Bank Bhd (MIDF Research), the bank explained that both the public and private healthcare sectors would undergo strategic partnerships to ensure that the increasing demand for primary healthcare services can be met by the private sector while public hospitals would concentrate on more complex cases.

“Additionally, urbanisation and increasing standards of living are also expected to be a key driver for increasing demand of private healthcare as majority of private healthcare providers are based in urban areas which would make them attractive and viable options for the increasing number of population moving to the city,” added the bank.

While the shift is expected to make healthcare costs more sustainable as there would be less drain on public health resources, it still doesn’t address the larger picture of how we can reduce our unsustainable healthcare spending.

In fact, it has been suggested that private company employers should step up and take responsibility in helping create a healthier workforce and in turn a healthier population, AIA Bhd (AIA) has been championing this new movement that emphasises prevention over treatment.

Commissioning the first ever comprehensive science-backed workplace survey in Malaysia earlier this year in whicha  total of 47 companies of various sizes participated, AIA found that the average annual cost of health-related absence and presenteeism (working while sick) per organisation in Malaysia is estimated to be a shocking RM2.7 million.

According to AIA, this was a large concern as employees often times found themselves feeling obligated to work while under the weather due to workplace policies used to manage absenteeism and Malaysian corporate culture.

Speaking at the opening of Malaysia’s Healthiest Workplace Summit held at the Hilton Kuala Lumpur today, AIA Malaysia’s Chief Executive Officer Anusha Thavarajah said it was high time for employers to take a closer look at the health and wellbeing of their people, especially given that working Malaysians spend most of their waking hours at work.

“There has been little focus on the role of employers in championing good health at the workplace so far. As the country’s leading provider of employee benefits schemes, AIA believes that this survey serves as a fantastic platform that will not only help to promote awareness on the importance of workplace health and wellbeing among employers and employees, but will also enable and encourage constructive discussions and actions around this increasingly important topic. After all, having a healthy workforce is good for business,” she added.

Adding to the argument of the need of a healthy workforce, AIA’s study also showcased that Malaysian employees reported more health risks than their peers in the other 3 countries, due to behaviours and factors such as poor nutrition, physical inactivity, long hours spent at work, a lack of sleep and stress.

Of the employees surveyed, AIA found that 90 per cent do not have a balanced diet, 64 per cent reported being physically inactive where they remain sedentary throughout most of their working hours, 56 per cent sleep less than seven hours a night with 67 per cent reporting at least one sleep problem, 53 per cent have at least one dimension of work-related stress and 12 per cent experience high levels of anxiety or depressive symptoms.

Malaysians also work the longest hours – on average 15 hours more than their contracted hours each week, compared to employees in Singapore, Hong Kong and Australia.

However, it is not all gloom and doom as the survey also found that Malaysian employees were very motivated to change their lifestyles – 90 per cent indicated they want to lose weight, while 65 per cent were eager to improve their levels of physical activity.

Associate Professor Dr Wee Lei Hum from the Faculty of Health Sciences at Universiti Kebangsaan Malaysia, the local academic partner on the study, said employers have a huge role to play in enabling employees to act on their motivation to change.

“The key to successful behavioural change is through the promotion of health and wellness strategies in the workplace and making sure that they are ingrained in the organisational culture. This can only be achieved with strong support from employers,” she said.

Echoing her sentiment, Anusha said the Malaysia’s Healthiest Workplace by AIA Vitality survey was designed to be a catalyst to get employers to place employee health and wellbeing at the centre of their corporate strategy.

“Armed with insights and data on their employees’ health and wellbeing, companies can now pursue proactive interventions that can affect positive behavioural change among their people.

“Over time, we believe that these interventions will help companies provide better workplaces to attract and retain people, improve employee engagement and ultimately increase business productivity. It will be a win for the employee, a win for the employer and a win for Malaysia,” she remarked.

What else can be done? - Instead of just looking at what the government or private sector players can do, we should also look towards lawmakers to better the industry.

According a report by the World Health Organisations (WHO), the ‘best buy’ or highly cost-effective interventions for NCDs that a nation can incorporate are tobacco and alcohol legislation, reduction of salt and sugar in foods, and encouragement of physical activity.

Our neighbour Singapore in particular is a good example of how these actions have helped them as their heavy taxes on tobacco and alcohol products in conjunction with their continuous initiatives to motivate citizens to be active has shown a vastly different scenario than the one seen in Malaysia.

Public Sector Expenditure by Providers of Health Services 2013

Besides boasting a longer life span compared to the average Malaysian, data from Institute of Health Metric and Evaluation has also shown that the risk of Singaporeans dying or being disabled from dietary risks, tobacco usage, and high cholesterol has actually gone down when comparing figures form 2005 to 2016.

In comparison, Malaysians saw a 30.1 per cent increase in dietary risks, 26.6 per cent in tobacco and 33.3 per cent increase in high cholesterol. Despite already being an ageing nation, Singapore only utilises 4.9 per cent of their GDP in healthcare expenditure, at 4.4 per cent, Malaysia is not too far behind.

While we’ve explored some of the many ways we can attempt to offset our total medical expenditure, Ramzi Toubassy, the vice-president of the Life Insurance Association of Malaysia reckoned that they may help improve the situation – but not solve it.

“The only way this is going to work is when all insurance companies and hospitals get together and work on a scheme to help the public. From our side, of course it is to our benefit to insure as many people as possible, but if medical expenditure continues to go up, it is not good for us either.

“So we will continue trying to find a way where hospitals can work with us together for the benefit of the public and not for the benefit of making profit, and as long as this is not happening, the situation will not improve much.”