The Star, Comment by Steve Chia
Which option would he choose? This depends on three important factors: cost involved, service quality and urgency/complexity of the medical situation. But one fact remains: he will likely be faced with a higher medical bill than ever before. The cost of healthcare has rapidly escalated in the last decade. How expensive will it be in the next five to 10 years?
A visit to a public hospital would cost RM1 for outpatient clinic visits, RM5 for specialist clinic visits, and a maximum of RM50 for a third-class ward hospitalisation – these costs have not changed since the 1970s! This is due to the substantial subsidy from the Government. With rising costs, however, is this sustainable?
Private healthcare providers, meanwhile, are charging many times more than government rates in the name of service superiority and shorter service time. The question here is whether these rates will be affordable to the average man in the street in future.
In addition to higher costs, our healthcare industry is grappling with patchy quality, talent and technology. Much has been said about how Malaysia can address this sensitive yet tricky issue, and we are not alone as other developed countries are also aggressively looking at how their healthcare systems can be revamped.
Fostering greater public-private partnership or integration, corporatisation/privatisation of some government-funded hospitals and the radical single-payer health insurance scheme (Skim Insurans Kesihatan Kebangsaan or SIKK) have been considered.
There is no one clear solution but a transformation of the industry will take time. Meanwhile, what can the rakyat and corporate community do to cushion themselves from the escalating costs? The Government should take the lead in providing the necessary policy and support as it finds a holistic approach in the long run.
Increasingly, individuals are taking up medical insurance to cover their costs if they opt for private medical care. The Government can assist the rakyat by enhancing existing personal tax relief from a maximum of RM3,000 per year for insurance premiums for education or medical benefits to say, RM6,000. This would encourage individuals to take a more comprehensive medical insurance package to cover the rising cost and, over time, could partially relieve the public hospitals.
The much-talked-about private pension plans could be another source of savings for individuals and cover medical bills during old age; with the right government policy, this could prove to be successful in promoting sustainable retirement planning.
An area which tends to be overlooked is preventive health. With the right balance, preventive healthcare can reduce overall medical cost. The Government is already according personal tax relief for complete medical check-ups of RM500 but this may no longer be sufficient. As the relief amount has not been revised since 2001, Malaysians would be delighted to see the Government increasing this to RM1,000.
Corporate citizens, too, can play a role here. Rather than focusing on covering basic medical benefits for employees, preventive health elements can be incorporated into overall staff benefits – subsidised medical check-ups, subscriptions fees to gyms, providing sports facilities and healthy food options in cafeterias are some options. Corporate citizens can view this as an investment to protect productivity and reduce workforce down-time, while the Government can offer double-deduction benefits as a tool to encourage this.
In assisting the lower-income group, the Government’s efforts in setting up the 1Malaysia Clinics should be applauded. Private healthcare players could emulate this and step up efforts. A good example of this in action is a local healthcare provider’s initiative to establish outpatient charity clinics in several parts of Malaysia. A visit to each clinic, staffed by qualified medical doctors, only costs RM5. The Government should encourage such initiatives by bestowing double-deduction benefits for the cost incurred in setting up and maintaining the clinics.
It is heartening to note that private healthcare has been earmarked as one of the 12 National Key Economic Areas. It is our ambition to transform Malaysia into the preferred healthcare destination for the region with a targeted 10% annual increase of medical travel revenue, but this would put pressure on the already scarce healthcare resources. However, with a comprehensive plan that is implemented and managed properly, the anticipated improvement in healthcare quality and ability to draw top-notch medical practitioners will bring a host of benefits to Malaysia.
A comprehensive revamp of our healthcare system to tackle rising costs is long overdue. The time is now to make a change, given our aspirations to become a model nation for the region. Cliché though it may sound, being healthy, wealthy and wise really do go hand in hand.
Steve Chia is a senior executive director of PricewaterhouseCoopers Taxation Services Sdn Bhd.