Strive for sustainable healthcare financing

RISING medical inflation has been a continuous concern for the public, but the rise in insurance premiums could just be the tipping point.

To mitigate the impact, the Health Ministry mooted the use of a Diagnosis-Related Group (DRG) system, which places hospital services into categories according to a patient's condition and charges according to a fixed rate.

The DRG system aims to compel hospitals to manage resources more effectively by focusing on quality patient outcomes rather than the volume of services. But, with patients defined by their category of DRG, personalised medicine is no longer a priority.

Private hospitals may begin to select cases that are easier and cheaper to treat under fixed payment models, transferring high-risk and complex cases to public hospitals.

Countries where DRG have seen successful pair the concept with the Value-Based Care (VBC) model, where health outcomes are at the centre of the diagnosis and ensuing treatment. Essentially, VBC goes beyond treating the patient while he or she is hospitalised, but monitoring their condition in terms of:

1. Capability to perform normal duties before hospitalisation.

2. Comfort levels encompassing management of pain, distress levels and anxiety. Calm when receiving care, knowing that their healthcare provider has their best interests at heart.

3. Prioritises efficacy and empathy of care in the long term, reducing complications and disease complications that will result in more healthcare costs in the long term.

For a start, private hospitals should begin incorporating VBC as an underlying policy, making patient outcomes the ultimate goal rather than frivolous elements such as hospitality, gift packs and corporate branding.

To achieve true universal health coverage where no one is left behind in healthcare, we need to look at the bigger picture.

According to the National Health and Morbidity Survey 2019, only 22 per cent of the population have personal health insurance. Hence, the rise in medical insurance premiums affects less than a quarter of the population, who utilise private hospitals anyway.

If DRG and VBC models are believed to be effective in increasing efficiency and reducing healthcare costs in the private healthcare sector, it only makes sense to extend them to public hospitals that cater to 80 per cent of the population.

The reality is we need more robust and sustainable healthcare financing systems to ensure a healthy population in the future.

Calls to increase healthcare spending to five per cent of government spending would mean taking 32.2 per cent of government revenue, which would mean reduced budgets for equally important national developmental plans.

In conclusion, the rise in medical insurance premiums cannot be viewed in isolation. If we look at the whole picture, it all boils down to sustainable healthcare financing.