Malaysia Dateline

Skim Peduli Sihat health insurance scheme may be unsustainable

Dear Editors,

We view with great concern that the public has been generally left uninformed over the new government’s plan for providing healthcare to the B40s. At the time of writing, Malaysians still do not have any concrete idea (or worse, have not heard) regarding the previously hinted at healthcare scheme which was listed in one of the 100 days’ promises of the Pakatan Harapan government.

The new health minister, Dr Dzulkefly Ahmad has since remained tight-lipped about the development of B40’s healthcare, except to promise that a national healthcare financing scheme for the B40s would be included in the impending Budget 2019 and will be ‘better’ than the Skim Peduli Sihat (SPS) initiated by the Selangor state government 1.

He also announced that B40s would enjoy free healthcare under this scheme, which would also include tertiary care in the private sector, since allocation would be provided. Yesterday (30 th Oct) in a press conference 2 he coined the programme as a “Social Health Insurance (SHI) scheme” for the B40 low income groups, which also includes preventive care, health promotion, health screening especially related to Non-communicable diseases.

Based on limited publicly available information about the operation and allocation of the soon-to-be rolled out federal healthcare scheme, we have produced a study 3 to inform the public about the potentially unsustainable nature of this scheme for the B40s, even if it is only include tertiary care services.

First, we calculated the B40 healthcare demand projection for in- and out-patient services in private hospitals, based on B40 healthcare utilisation and prevalence patterns recorded in the 2015 National Health and Morbidity Survey. This projection calculation was done to match the estimated budget following the promised original Selangor model whereby every B40 family will be provided with RM500 per year.

In this case, the maximum budget could go up to RM1.4 billion 4 in the current year. If the MOH budget allocation for the next year is only adjusted nominally and does not get significantly improved as promised in the PH manifesto, will we see the allocation for this SPS scheme come also from the same MOH budget pool?

We are worried that the introduction of such a healthcare scheme would come at the expense of further cuts to the development expenditure of the MOH which is crucial to the development, upgrading and expansion of our public healthcare. If not, how could the government justify when most, if not all, SPS funds would be spent in the private sector?

In 2015, the prevalence of in-patient utilisation of B40 population was 7.8%. Since the average household size in Malaysia is 4.1, this would translate to 28.3% of B40 households equivalent to about 806,000 B40 households needing the annual access to hospital care. Also, according to




4) equivalent to 5.3% of 2018 MOH budget the 2015 survey, the B40 average perceived payment amount for major surgery in private hospitals is already slightly over RM10,000. This indicates that more than half would not have enough to cover their hospital expenses, if the maximum claim threshold limit is set at RM10,000 per family per annum.

When major illness or major surgery requirement happens to strike one of the family members, RM10,000 is probably inadequate even to treat one person and we must take note that Malaysia has an average household of about 4 persons If the B40 patient has exhausted their annual limit- where would they turn to next?

Currently the B40 utilisation rate for private hospital in-patient services is about 10% (i.e. 90% go to public), T20 households are about 40%. If it is based on the current rate, it would exceed 56.6% of the maximum SPS budget.

But what if the B40 population changes their health-seeking behaviour with access to the SPS programme, say twice or four times the current rate? Our findings show that it would already bankrupt the scheme even if the annual household claim limit is set at RM10,000 for just in-patient services, let alone out-patient and health screening services.

Thus, if the claim mechanism is based on fee-for-service, and the government does not have any cost-containment strategies, we are afraid that the private sector might ‘game’ the system by inducing demand from the B40 population probably for unnecessary diagnostic scans and treatments, just to maximise their profit at the expense of government funding.

The unintended consequences of the scheme could be that the B40 group might become more reliant on private sector, this could in turn widen the resource gap between public and private hospitals and encourage a greater exodus of experienced specialists and allied health practitioners from public to private sector.

The result will be that public healthcare becomes more financially and socially deprived, more like an inferior and ‘last resort’ choice for certain groups, even though it is universal and definitely a cheaper option for the rakyat.

Our recommendations for the MOH are, first, to create a mandate for public doctors to act as ‘gatekeepers’ at the primary care level, such that SPS claimants would first need to obtain a referral from the doctors before utilising the claims in pre-determined and pre-negotiated private healthcare facilities.

Second, the claim mechanism should not be based on fee-for-service, but rather on Disease Related Group (DRG), to prevent system abuse and/or induced demand. Third, the MOH should collect co-payment as low as the current MOH rate for SPS claims when using private service. We believe that this would only be fair to public hospital users.

Generally we agree that the MOH should flexibly share resources with private sector, by paying them to use their underutilised equipment and services when in need. At the same time, we also applaud the MOH’s efforts to give greater access of healthcare to the needy B40s on tertiary care, however we are most of all doubtful about the financial sustainability and the long-term implication of such SPS scheme.

With huge budget allocations involved, and the significant shift of the healthcare finance system (in terms of Social Health Insurance system), MOH should be more transparent and open tor multi-stakeholders and public consultation, before the policy motion is tabled to the parliament. Most of all, we believe that MOH’s priority should be enhancing and defending our public healthcare. To that end, a well-funded public healthcare system would provide greater benefits compared to the current SPS scheme that is on the cards.


  • Dr. Lim Chee Han, Senior Analyst, Penang Institute
    Kenneth Cheng Chee Kin, Analyst, Penang Institute