Malaysian Health System: Current Development, Budget 2017 and Future Challenges

INTERNATIONAL CENTRE FOR CASEMIX AND CLINICAL CODING (ITCC-UKM)
FACULTY OF PUBLIC HEALTH, KUWAIT UNIVERSITY
Malaysian Health System:
Current Development, Budget
2017 and Future Challenges
Professor Dato’ Dr Syed Mohamed Aljunid
MD (UKM) MPH ( Singapore) PhD (London); DLSHTM (London); FAMM, FPHMM
Professor of Health Policy and Management
Faculty of Public Health
Kuwait University
&
Professor of Health Economics & Public Health Medicine
National University of Malaysia
Copyright of ITCC-UKM

Outline
u Malaysian Health System: Historical
Perspective
u Organisation of Malaysian Health System
u Roles of Private Providers
u Roles of Ministry of Health
u Health Financing Scenario
u Implications of Budget 2017
u Proposed Solutions To Enhance MHS
u Conclusion

The History
u Pre-Independent Period
u 13th – 14th Century
§ Malacca Empire
• Arrival of Arabs Merchants with some form of
early modern medicine
u  16th Century – 18th Century
§ Malacca falls to Portuguese (1511)
§ Dutch took over Malacca from Portuguese
Occupation (1641)
§ British occupy Penang (1786)

Hospitals in Malacca
u 1641 - Dutch captured Melaka
u Governor: Balthasar Bort
u Surgery Clinic - M. Willen
Cornelias Van Alsameer
u Hospital - for Dutch citizens
§ Staff - senior surgeon, 4 junior
surgeons

Pre-Independent Period
u 19th Century
§ British occupied Singapore (1819)
§ Malacca, Singapore and Penang
becomes Straits Settlement (1826)
§ British bring in Chinese to work in tin
mines and Indians to work in rubber
estates (1840s)
•  Health care services in mining area and
rubber estates
•  Malaria and Beri-beri very common diseases
§ Buildings of Hospitals in major cities

Pre-Independent Period
u 1900
§ Institute For Medical Research was
established as “Pathological Institute”
•  Sir Frank Athelstane Swettenham, the
Resident-General of the Federated Malay States
• Objectives is to “carry out scientific and
sustained research into the causes, treatment
and prevention of such scourges as beri-beri
and all forms of malaria fevers ”.

Post-Independent
u 1957
§ Malaysia gains independent
§ Ministry of Health established to replace Medical
Services Department under British Colony
u Further Development of Rural Health
Services started in 1955.
•  Three Tier System
u Start Training of Bidan Kampung by National
Family Planning Board in 1969
u 1973
§ Gradual conversion of 3 Tier to 2 Tier System

The New Generation
Hospitals
Putrajaya
Hospital
Ampang Hospital
H Selayang

Rural Health Services
u Rural Health Unit
§ Smallest unit in a district headed by a
physician providing basic health services to
the population
§ (WHO)

Three Tier System
(1957 – 1973)
MCQ
MHC
HSC
(Coverage: 50,000
people)

TWO TIER SYSTEM
KD
HC
(15,000- 20,000 People)

Primary Care Facilities in Malaysia

Modern Health Centre in
Malaysia

PHC in Other Developing
Countries: Vanuatu

ThreePillars
PUBLIC
•  Ministry of
Health
•  Ministry of
Education
•  Ministry of
Defense
•  Local
Authorities
PRIVATE
FOR
PROFIT
PRIVATE
NOT-FOR-
PROFIT
• Private
Hospitals
• Private Clinics
• Pharmacies
• Laboratories
• Hospice
• Nursing Homes
• Cancer Care
NGOs
• Care for HIV/
AIDS
• Palliative Care

Health Services
u Primary Health Care Services
§ Health Centres for MCH
§ Outpatient Services (GP Clinics); 65% Ambulatory
Contact with Private GPs
u Secondary and Tertiary Care
§ Public Hospitals (75% of In-patient Beds)
§ Private Hospitals (25% of In-patients Beds)
u Hospice and Nursing Homes
§ Private-For-Profit
§ NGOs

“Important Questions”
u What have we done right in our
Health System ?

What have we done right?
u Priority on Primary Health Care
§ Health Services
§ Health Infrastructure
u Block funding by government
§ Tax-based funding since Independent
u Government plays major role
§ Ministry of Health as the main agency given almost
all responsibilities
u Development of Local Specialists Training
§ Support to local universities

Modernisation of Health System

Life Expectancy

Selected Vital Statistics
1957-2006

Health Indicators: 2000-2013
Indicators 2000 2005 2008 2010 2013
Life Expectancy At Birth (Years)
Male
70.0 70.6 71.6 71.9 72.6
Female
75.1 76.4 76.4 77.0 77.2
Crude Birth Rate (per 1,000 pop)
24.5 21.0 18.4 17.5 17.2
Crude Death Rate (Per 1,000 pop)
4.4 4.5 4.7 4.8 4.7
Infant Mortality Rate (per 1,000 lv. births)
6.6 5.8 6.2 6.8 6.6
Toddler Mortality Rate (per 1,00o toddlers pop)
0.6 0.5 0.4 0.4 0.4
Maternal Mortality Rate (per 100,000 live
births)
30 30 27.3 27.0 25.6
Perinatal Mortality Rate (per 1,000 total births)
7.5 6.8 7.3 7.8 7.4
Neonatal Mortality Rate (per 1,000 live births)
3.8 3.8 3.9 4.4 4.0

12/7/16
27
Roles of Private Health Care
u Most Primary Health Care Facilities are in private
Sector
§ Private Clinics – 8,736 (Medical: 6,978; Dental 1,758)
§ Health Centres – 1,061
u Most In-patient Beds are in Public Sector
§ Public sector (2014)
•  Hospitals : 150 (MOH: 142; Non-MOH: 8)
•  Beds : 43,822 (MOH: 40,260: Non-MOH: 3,562)
§ Private Sector (2014)
•  Hospitals: 214
•  Beds: 14,033

u What is wrong with our current
Health System?

What is wrong with our current
Health System?
MHSGovernance
Health
Infrastructure
Financing
Research and
Development
Health Human
Resource

Ministry of Health Malaysia
u Main provider of health care services
u Responsible for most health policy matters
u Main regulator of healthcare services
u Very dominant role in Malaysian Health
Care System

MultipleRolesofMOH
MOH
Policy
Maker
Funder
Regulator
Provider
Education
&
Training
R&D

Governance
u Too much power with too much diversified
roles
u “Jack of all Trade; Master of None”
u Work in Silos
§ Poor coordination with other ministries
§ Carry out actions with no expertise
§ Recent Vape/e-Cigarette issues
u Reactive response and fire fighting rather
than proactive
§ Dengue Epidemic Copyright of ITCC-UKM

Issue of VAPE: MOH vs Ministy of Rural
and Regional Development Vs Ministry of
Youth and Sports

Health Infrastructure
u Poor planning in development of health
infrastructure
u Building of hospitals based on political and
commercial need rather than health needs
§ Affect in distribution of hospital services
u Poorly planned health facilities
§ 1 Malaysia Clinic

Malaysia vs OECD
Hospital Beds Per 10,000 Pop
(2013)
133
110
91
83
77
73 70
66 65 63 63
58 58
51 50 49 48 48 47 46
39 38
34 34 33 32 31 31 30 29 28 28 28 27 27 26 23 23 22
17 16 15
0
20
40
60
80
100
120
140
Japan
Korea
RussianFed.
Germany
Austria
Lithuania
Hungary
Poland
CzechRep.
France
Belgium
SlovakRep.
Latvia
Luxembourg
Estonia
Finland
Greece
OECD
Switzerland
Slovenia
Norway
Australia
Italy
Portugal
China
Iceland
Israel
Denmark
Spain
UnitedStates
Ireland
NewZealand
UnitedKingdom
Canada
Turkey
Sweden
Brazil
SouthAfrica
Chile
Malaysia
Mexico
Colombia

Hospital Beds in Malaysia (2009)
State Total Nos of Beds Beds/10,000 Pop
MALAYSIA 35,745 17.06
Perlis 404 17.05
Kedah 2,634 13.56
Pulau Pinang 3,913 24.77
Perak 4,387 18.07
Selangor 7,332 14.57
WP Kuala Lumpur 6,875 40.37
Negeri Sembilan 1,964 19.63
Melaka 1,665 21.86
Johor 4,542 13.89
Pahang 2,036 13.42
Terengganu 1,382 13.34
Kelantan 2,541 15.50
Sabah 4,050 12.36
Sarawak 3,861 15.63

Building of Hospitals

Fire at HSA JB

Health Financing Scenario

Source of Funding for Health
u Public (52%)
§ Taxation
• Direct Taxation (60%)
• Indirect Tax (40%) including GST-Introduce in
April 2015)
u Private (48%)
§ Out-of-Pocket Payment (39%)
§ Private Insurance (7%)
§ Other Private (2%)

Total Health Expenditure
Malaysia (1997-2013)

Reforms in Health Financing
System of Malaysia
u High OOP Expenditure and Catastrophic Expenditure
u Long Waiting times in public facilities
u Shortage of drugs in public faculties esp for CNCD
u Brain drain of specialists to private sector
u Too much wastages in health spending (eg: Drugs etc
u Lack of Quality and Efficiency monitoring
mechanism
u Five attempts to Reform since 1985
Health
Financing Issues
in SEA:
Challenges in
Achieving UHC.
Lancet (2011),
377 : 863-73

Why
do
we
need
NHFS?

u Low
level
spending
on
health
care
in
most

less
developed
countries

u Fragmenta<on
in
source
of
funding

u Lack
of
con<nuity
of
and
streamlining
of

healthcare
services

u Poor
coordina<on
of
care
provided
by

public
and
private
providers

u Need
to
separate
payers
and
providers
to

promote
eﬃciency


The Stakeholders…….
Public
Providers Private
Providers
Consumers
Politicians
Trade Unions
Employers
Medical
Associations
Ministry of Health
MCOs
Private
Insurers
Drug
Companies
HEALTH FINANCING
SCHEME

Why Our Reforms Failed?
u Lack of Political Will to pursue the reform
u Weakness of Reform Team
§  Technical Capacity of MOH Staff/Silos)
u Lack of Information (Cost/PPM etc)
u Fighting over control of the proposed Agency: MOH
vs EPU
u Role of Potential losers: Private Insurers
u Lack of Transparency and Public Consultation
u Loss of public confidence on government to handle
large fund (Cronyism, Corruptions)

Research and Development
in Health
u Gross lack of trained researchers
u Inadequate and fragmented research funding
u National Institute of Health Research
§  Inefficient use of tax-payer money
§  Limited output and poor quality research
§  Staff not properly trained researchers
§  Creates obstacles for researchers in universities
§  Lack of outstanding publication records
u Clinical Research Centres
§  Many hospitals have these centres
§  Staff are mainly MOs who are not trained in research

Researchers in Malaysia

Approval Process

“Pakar Perubatan
Penyelidikan”

Health Human Resource
u Rural-urban Maldistribution of doctors
u Public-private skewness of specialists
u Planning for Human Resource in Health
u Allied health and Support staff
u Role of MOH in Specialist Training
u Pay-For-Performance

Specialists Training in
Malaysia: Role of MOH
u Role of Universities
§ Local Master Programmes
u Open and Close System
§ Access to MOH Hospitals for Training
u Creation of Parallel Pathways
§ Link to training programme overseas/off-shore/
Exported Programme

Parallel Pathway to Train Specialists:
What is the Impact on Local
Universities?

Malaysian Budget
u 2017
§ Total Budget: 260.8 billion RM
§ Operations: 214.8
§ Development: 46.0
§ MOH: 25 billion
u 2016
§ Total Budget: 267.2 billion RM
§ Operations: 215.2
§ Development: 52.0
§ MOH: 23 billion

For Doctors
u Introduction of Gred 56
§ Between 54 and Jusa C
§ To reduce out flow of doctors and dentists to
private sector
u Contract Appointment
§ 2600 Doctors and Dentist to be appointed on
contract basis for housemenship

Gred 56 For Doctors & Dentists

u What should we do now to enhance
our Health System?

Proposed Solutions
SOLUTIONSDecentralisation
Higher Priority
on Prevention
Active R&D in
Health
Social Health
Insurance
Enhance
Efficiency
Effective
Human
Resource
Planning

Decentralisation of Health
Services
u What is Decentralisation:
§ “the transfer of authority and responsibility for
public functions from the central government to
intermediate and local governments or quasi-
independent government organizations and/or
the private sector” “ World Bank”
§ is a complex multifaceted concept.

Benefits of
Decentralisation
u  A more rational and unified health service that caters to local
preferences
u  Improved implementation of health programs
u  Decrease in duplication of services as the target populations are more
specifically defined
u  Reduction of inequalities between rural and urban areas
u  Cost containment from moving to streamlined targeted programs
u  Greater community financing and involvement of local communities
u  Greater integration of activities of different public and private agencies
u  Improved intersectoral coordination, particularly in local government
and rural development activities.

Services in Malaysia
u Transfer of ownership of hospitals and
clinic to Regional Health Authorities (RHA)
u Combine State Health and Medical Services
Departments as fully-functioning RHA
Greater autonomy given to hospitals to
provide services
u RHA given full responsibility to plan,
deliver and monitor health services

Services in Malaysia
u Limited number of hospitals owned and
maintain by MOH directly
§ National Referral Centre
§ Specialised Hospitals
• National Cancer Hospitals
• Mental Institutions
• Respiratory Centre
• Hospital for Infectious Disease

Transform Role of MOH
u Development of Health Policy
u Health Planning and Development
u Regulation and Enforcement
§ Licensing and accreditation of hospitals and
clinics
§ Monitor private providers
u Minor role as Service providers
u Health Promotion and Preventive Services

Transform Role of MOH
u Enhance role of MOH in Monitoring and
Evaluation
§ Benchmarking of Hospitals
§ Set and Monitor KPI
u Health Management Information System
§ Systematic collection of Health Information
§ More detail and high quality data to support
strategic decision making
§ High quality data analysis

TransformedRolesofMOH
MOH
Health
Policy
Monitoring
and
Evaluation
Service
Provider

Proposed Solutions
SOLUTIONSDecentralisation
Higher Priority
on Prevention
Active R&D in
Health
Social Health
Insurance
Improve
Efficiency
Effective
Human
Resource
Planning

Priority on Prevention and
Promotion
u Higher spending on Preventive and Promotive
Services
u Empower community and Local Authorities
u Employ more innovative approach in Prevention
u Focus on Primary and Secondary Prevention
u Trained more health workers on Prevention and
Promotion
§ Trained more Public Health Medicine Specialists

Research and Development
u Establish National Research Council (Korean
Model)
u Collate all funding resources under NRC
u Research funding on competitive basis
u Stop block research funding directly to
specific agencies or ministries
u Assess contribution and productivity of NIH
in MOH
u Enhance role of universities in R&DCopyright of ITCC-UKM

Health Financing System
u Establish National Health Fund based on SHI
concept outside MOH
u Coordinate contributions from public and private
sector
u Introduce Provider and Purchase Split
u Set-up Multiple agencies to process payment and
claims from providers
u Use Strategic Purchasing Methods (Prospective
payment: Capitation and Casemix)

NHFS
Implemen<ng
Agency

u Set
up
by
legal
provision

u Public
non-‐proﬁt
organisa<on

u Responsible
for
All
aspects
of
Policy

Development

u With
Strong
Link
and
control
of

Cabinet

u Monitors
the
implementa<on
of
HFM

u Appoint
agent
to
operate
the
HFM


Voluntary Health Insurance
u Potential Strengths
§ More acceptable to population than private-for-
profit health insurance
§ Easier to set-up than Social Health Insurance
§ More freedom of choice to enrollees
§ Government in control since the entity is under
MOH
§ Benefit package might be the same as present
§ Fund may be injected by government

Voluntary Health Insurance
u Weakness and Issues
§ Prone to adverse selection (the sick and high
risk will be more attractive to join)
§ Limited risk pooling and risk sharing
§ Premium may be too high without government
subsidy
§ Provider payment method must be carefully
design to promote efficiency
§ Providers have to enticed to join the scheme

The
Hybrid
Model…

Social Health
Insurance
•  Mandatory
•  Working population
•  Formal Sector & Informal
Sector
•  Curative Care
Taxation
•  Poor and Unemployed
•  Preventive and Promotive
Services
Private
Insurance
•  The Rich
•  Top-up from Basic
Benefit Package
Copyright of ITCC-
UKM

Health Technology
Assessment
u Establish a dedicated independent agency on
HTA
u Conduct HTA activities covering new and existing
technologies in public and private health sector
u Source staff from universities with proper skills in
HTA
u Strict use of Economic Evaluation in decision
making: (CE Threshold < 3 GDP)
u HTA Report should be taken on board by
implementing agency

Human Resource For Health
u Give priority to Local Specialists
Programme
u Reduce the number of Medical Schools
u Establish more Faculty of Public Health/
School of Public Health
u Start undergraduate Training in Public
Health
u Use innovative approach in HRM

Faculty of Public Health, Kuwait
University

Conclusion
u Malaysian Health System has undergone
series of gradual development since pre-
independent era
u Priority to primary health care and rural
development has benefitted most Malaysian
u MHS need to be transformed to provide
effective, efficient, equitable and innovative
services to the Malaysian population
u Budget 2017 posed major challenges to
MHS Copyright of ITCC-UKM

syed.aljunid@hsc.edu.kw
saljunid@gmail.com
smohamed@ppukm.ukm.edu.my
www.casemix.com.my
Casemix
E
IQ

Malaysian Health System: Current Development, Budget 2017 and Future Challenges

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