PETALING JAYA: The Federation of Private Medical Practitioners’ Associations has warned of far-reaching implications for families, high-risk patients and overall healthcare equity when medical insurance premiums increase by between 40% and 70% as expected next year.
Its president Dr Shanmuganathan Ganeson told theSun that the increase in insurance premiums is a reflection of the claims burden on insurers that is attributable to many factors, such as healthcare providers inflating costs by performing unnecessary procedures, conducting excessive tests or falsifying billing codes, often under the pretext of “defensive medicine” (conducting medical tests of doubtful clinical value to shield doctors from malpractice suits).
“Hospital billing practices could significantly escalate expenses, with
creative accounting, adding thousands of ringgit to patient bills. Just as bad are fraudulent claims by policyholders or the concealment of pre-existing conditions during policy applications.”
He said there are several industry practices and systemic issues that contribute to the rising cost of healthcare, which in turn impacts insurance premiums, such as insurers intentionally incurring losses in medical insurance portfolios as part of their corporate social responsibility efforts and offsetting the losses through profits in
other portfolios.
“Following reports of heavy claims losses, insurers might raise premiums, target
lower-risk, younger policyholders, and knock off high-risk ones, although it is unclear if this is happening locally.”
Shanmuganathan said the pharmaceutical industry consistently increases drug
prices each year, even as government controlled doctors’ fees have remained stagnant for decades.
He said expensive regulatory costs,
such as those imposed by the National Pharmaceutical Regulatory Agency for
drug licensing and registration, add to consumer prices.
“Lawyers for medical negligence cases, who seek astronomical claims and in so doing push up medical indemnity premiums, further contribute to the overall cost burden.”
He attributed the increase in insurance premiums, above all, to the poor performance of lawmakers and lack of foresight in health policy formulation and implementation.
“Civil servants in authority, who opt for safe retirement and confirmed pensions, do not lift a finger, and are not forthright with their political masters of the day to advise them correctly without fear or favour, share the blame too.
“We are obviously in a mess and need strong leadership in the Health Ministry to unravel it. While its minister Datuk Seri Dr Dzulkefly Ahmad has a lot on his hands, a good starting point would be to look into galvanising private primary care as a
means to help bring down costs.”
He said private healthcare providers
are in a fix regarding controlling costs
and improving efficiency amid the
rising premiums.
“Specialist fees have not been reviewed for years while their indemnity costs continue to rise significantly. For instance, obstetricians face annual premiums as high as RM80,000.
“Recent medico-legal cases have driven many to adopt defensive medicine, further increasing costs. Specialists are under pressure from hospital administrators and shareholders to generate profits but they have limited control of overall expenses.”
He predicted a noticeable decline in demand for private medical services due to the premium hikes, especially among
high-risk groups who leave the private healthcare system, and stressed that the rising costs of medical care negatively affect healthcare providers, policyholders and overall healthcare equity in the country.
“The significant burden that a 40% to 70% increase in premiums would place on individuals and families, especially those already struggling with the rising cost of living, is bound to be devastating.
“Ten per cent of per capita income for medical insurance would be reasonable. If it goes higher, many would invariably depend on public healthcare. Going to private facilities would become a luxury.”
