Tackling rising healthcare costs in Malaysia: A call for transparency and market reforms

THE Wawasan Institute for Policy Excellence (Wawasan) has voiced its concern over escalating insurance premiums and private healthcare costs, as highlighted in recent parliamentary discussions led by Bayan Baru MP Sim Tze Tzin.

This underscores the urgent need for comprehensive reforms to establish a resilient, equitable and consumer-centric healthcare ecosystem in Malaysia.

While private sector pricing should be primarily driven by market forces, Wawasan emphasises the government’s role in fostering transparency, strengthening consumer protections and ensuring a competitive marketplace.

These measures will allow the private sector to continue driving innovation while addressing affordability concerns.

“The rising cost of private healthcare highlights systemic weaknesses in our healthcare ecosystem,” Wawasan’s research associate Mohamad Faizal Abu Bakar pointed out in a media statement.

“It is time for the government to prioritise reforms that promote transparency, accountability and competition in the market.”

Balancing market forces

To address the challenges posed by rising insurance premiums and private healthcare costs, Wawasan advocates for promoting transparency and competition within the healthcare market.

A national healthcare pricing oversight mechanism should be introduced to monitor costs, prevent exploitation and ensure transparency in supply chains for medical services, devices and pharmaceuticals.

Such measures will empower consumers and encourage fair practices across the private healthcare sector.

Another key area is the enforcement of antitrust laws to address monopolistic practices that drive up healthcare costs.

Monopolies and market consolidation, including vertical integration of healthcare providers and insurers, limit competition and leave consumers vulnerable to inflated prices.

In this regard, Wawasan calls for proactive regulatory measures to reduce such practices and foster a competitive market environment. Strengthening antitrust enforcement will deter anti-competitive behaviour and uphold fairness for all stakeholders.

“Healthcare should never be compromised by monopolistic practices or lack of oversight,” asserted Mohamad Faizal.

“A transparent pricing model and strong regulatory framework are crucial to ensure affordability and fairness for all Malaysians.”

Parliamentary white paper

Wawasan further advocates a thorough exploration of innovative financing models to bolster the healthcare system.

Inspired by Singapore’s Medisave, Medishield and Medifund frameworks, Malaysia could adapt its own model by leveraging existing institutions like the Employees Provident Fund (EPF), Social Security Organisation (SOCSO) and Retirement Fund Inc (KWAP).

A unified healthcare financing system could ensure equitable access to care for all income groups while reducing strain on public healthcare funding.

“Wawasan calls on MPs to initiate a white paper under the Parliament Select Committee (PSC) to investigate these issues comprehensively,” stressed the think tank.

“This platform will enable a meaningful discourse on long-term solutions to healthcare affordability and sustainability.” — Dec 3, 2024