KUALA LUMPUR: The Malaysian public will be able to compare medical procedure costs between private hospitals in 2025.
The Life Insurance Association of Malaysia (Liam) will start publishing data on procedure costs at private hospitals from mid-2025 as part of a directive by Bank Negara Malaysia.
Liam chief executive officer Mark O'Dell told Business Times that the association is currently working on presenting the data in a consumer-friendly format.
"We have the data that shows the cost of every insured admission for the last three years and now we are gathering it on a regular basis at every quarter so that we know how much the procedure costs at every private hospital.
"Bank Negara has mandated us to publish that. It should be out sometime in the middle of next year. However, it would not be on every procedure. There will be 10 or 15 common procedures. But you would get an idea of the difference in costs between hospitals quite clearly," O'Dell explained.
He said Singapore has been implementing the approach for the past five years.
O'Dell added that efforts will be made to simplify it to help consumers identify hospitals offering good services at reasonable costs and understand the cost differences between hospitals.
Additionally, O'Dell said Liam - which represents 14 life insurers and two life reinsurers - had asked the Health Ministry to enforce cost containment measures at private hospitals as a prerequisite for implementing diagnostic-related group (DRG) pricing.
Insurance players have called for a roadmap to guide the implementation of DRG pricing, which aims to enhance hospital efficiency.
"Right now hospitals have basically an 'a la carte' billing. Every line item, every syringe, every gauze pad, every nursing charge is itemised separately. What DRG pricing means is like a package. You get a fixed amount and then the hospital has to make do with that amount.
"Let's say a knee replacement might cost RM25,000. You would not get 15 pages of bills with 95 line items but you would get one cost that is pre-negotiated between the payer and the hospital.
"This, we think, will force hospitals to try to go the other way. So instead of trying to sell more services, they would be interested in giving what is necessary and conserve as much as they can out of the package price," O'Dell explained.
Liam also clarified that there will be no immediate changes to the recent medical insurance premium hikes which range from 40 per cent to 70 per cent.
Last week, Bank Negara instructed Liam, the Malaysian Takaful Association (MTA) and Persatuan Insurans Am Malaysia (Piam) to review its repricing strategy.
O'Dell explained a joint statement by LIam, MTA and Piam last week had referred to future repricing adjustments and not a review of the recent premium hikes for medical and health insurance/takaful (MHIT).
"We are working with the central bank and with the Health Ministry to try and see what can immediately be done to alleviate the issue. We recognise no matter how justified things look, that there's a number of people that are still in a tough position because of it.
"What we had agreed with is to review implementation of future pricing increases to ensure that staggering of significant price increases, maybe above a certain level, provide relief for policyholders that are significantly affected by the MHIT pricing," he added.
Meanwhile, Universiti Malaya director of Social Wellbeing Research Centre Professor Datuk Norma Mansor said such publicly available data on procedure costs can help eliminate price disparities and address the problem of overcharging.
She added that having access to accurate information allows consumers to make informed decisions rather than relying on hearsay. This will also encourage hospitals to be more transparent about their pricing.
"I think the other responsibility is also on the government, on the Health Ministry to regulate private healthcare. If the MoH can regulate our private healthcare, then hospitals will also have to abide by the procedures, and costs would be contained, so inflation will be able to be better," she told Business Times.