The central bank, Bank Negara (BNM), will draft a framework as soon as possible aimed at reducing inflation in medical insurance, which now stands at 12%.
He said rising medical claims had increased pressure on health insurance premiums.
“On average, medical insurance claims rise 14% annually,” Mr Muhammad said. Net claims paid to policyholders had increased to MYR4.9 billion (US$1.14 billion) in 2016 compared with MYR4.5 billion in 2015, driven by demand for better healthcare, ageing population and higher prevalence of chronic and lifestyle diseases.
He also said the increase in the cost of drugs and treatments were among the factors that led to the higher insurance claims.
Mr Muhammad also called for greater transparency in the pricing of healthcare products and services as a means to manage rising medical costs. He suggested a pricing framework for private hospital charges, reported The Edge Markets.
“While doctors’ fees are regulated, other components of private hospital charges are not. We need a framework for private hospital charges so that prices remain fair and appropriate. Consumers are advised to request for more detailed billing of charges, breakdown of cost of treatment and medicines provided to them,” he said.
Currently, fees charged by doctors in private hospitals for consultation and performance of procedures are regulated. Other components of hospital charges which are not regulated include fees for hospital stay, laboratory investigations, nursing care, use of equipment and operation room and drugs.
“[Other] initiatives that we should explore include the publication of recommended retail prices of pharmaceutical products, medical devices and medicine, and the publication of fees or cost of treatment in hospitals to enable consumers to make informed decisions when choosing their healthcare provider,” said Mr Muhamad.
Last week, the Life Insurance Association of Malaysia (LIAM), General Insurance Association of Malaysia and Malaysian Takaful Association (MTA), in a joint statement, called for transparency in the healthcare sector.
- the government to regulate and make public the recommended retail price of pharmaceutical products, medical devices (e.g. stents, implants) and medicines;
- the government to mandate that all hospitals publish treatment fees. This is to provide a choice to policyholders to select the hospital in which he/she would like to be treated and to be aware of the amount that their insurers and takaful operators are able to reimburse;
- hospitals to create awareness to consumers that a more detailed billing of charges can be provided upon request so that consumers are aware of the breakdown of the cost of the treatments/medicines provided to them; and
- healthcare providers especially private hospitals to provide greater transparency in the pricing of all healthcare products and services.
Insurance broker Marsh has projected that the medical insurance rate in the country would rise to 12.7% this year from 11.5% in 2016. The company, which recently surveyed 11 Asian countries on healthcare matters noted that Malaysia has the third highest healthcare inflation rate, after India (14%) and Indonesia (13.1%).