Financing Universal Coverage in Malaysia: a case study

Abstract

One of the challenges to maintain an agenda for universal coverage and equitable health system is to develop effective structuring and management of health financing. Global experiences with different systems of health financing suggests that a strong public role in health financing is essential for health systems to protect the poor and health systems with the strongest state role are likely the more equitable and achieve better aggregate health outcomes. Using Malaysia as a case study, this paper seeks to evaluate the progress and capacity of a middle income country in terms of health financing for universal coverage, and also to highlight some of the key underlying health systems challenges.The WHO Health Financing Strategy for the Asia Pacific Region (2010-2015) was used as the framework to evaluate the Malaysian healthcare financing system in terms of the provision of universal coverage for the population, and the Malaysian National Health Accounts (2008) provided the latest Malaysian data on health spending. Measuring against the four target indicators outlined, Malaysia fared credibly with total health expenditure close to 5% of its GDP (4.75%), out-of-pocket payment below 40% of total health expenditure (30.7%), comprehensive social safety nets for vulnerable populations, and a tax-based financing system that fundamentally poses as a national risk-pooled scheme for the population.Nonetheless, within a holistic systems framework, the financing component interacts synergistically with other health system spheres. In Malaysia, outmigration of public health workers particularly specialist doctors remains an issue and financing strategies critically needs to incorporate a comprehensive workforce compensation strategy to improve the health workforce skill mix. Health expenditure information is systematically collated, but feedback from the private sector remains a challenge. Service delivery-wise, there is a need to enhance financing capacity to expand preventive care, in better managing escalating healthcare costs associated with the increasing trend of non-communicable diseases. In tandem, health financing policies need to infuse the element of cost-effectiveness to better manage the purchasing of new medical supplies and equipment. Ultimately, good governance and leadership are needed to ensure adequate public spending on health and maintain the focus on the attainment of universal coverage, as well as making healthcare financing more accountable to the public, particularly in regards to inefficiencies and better utilisation of public funds and resources.

Health Care as Commons: An Indigenous Approach to Universal Health Coverage

“…All these were achieved with an optimal expenditure on health provision. Malaysia's total health expenditure was 4.75% of GDP, well within the recommended 4% to 5% by WHO for the AsiaPacific region (Chua & Cheah, 2012). These achievements are remarkable compared to countries such as Ghana, which also became independent in 1957 (Mayhew & Adjei, 2004).…”

“…However, since the 1980s, the government has been reducing its role in the provision of services and ceding over initiatives to a forprofit private sector made up chiefly of large publicly-listed companies (Chee & Barraclough, 2007). In fact beginning in 2004, the private sector has overtaken government spending on health with the former accounting for 53.8% of expenditures (Chua & Cheah, 2012). Another effect of the privatization policy is the draining of public medical personnel to the private sector due to the higher monetary rewards (Ramesh, 2007) leaving the public health care sector with reduced quality services.…”

Catastrophic medical expenditure risk

“…The figure is over 20% in India. It is less than 10% in Malaysia, which comes much closer to achieving universal coverage through a tax-financed national health service that accommodates almost three-quarters of all inpatient admissions and delivers over four-fifths of outpatient consultations at very low user fees (Chua and Cheah 2012). More surprisingly, it is also less than 10% in Laos, where public health care provision and formal insurance are extremely sparse.…”

Geriatric Medicine in Malaysia- Riding the Wave of Political Change

“…The biggest challenge has to be addressing the heavily lopsided funding between health and social care whereby healthcare is free for senior citizens, fully funded by taxation, while social care remains almost entirely out of pocket with the expectation that adult children and family members meet the cost [37,38]. While healthcare and social care funding reforms by introducing universal insurance coverage for both health and long term care funded by compulsory salary sacrifice would seem the obvious solution, no self-respecting government, no matter how sincere, is likely to be able to implement such a drastic change [10]. Furthermore, lessons from the UK National Health Service suggest that a universal national insurance system is unlikely to be sustainable [39].…”