Insurance associations refute allegation of member companies receiving 'cut' from hospitals

In a joint statement today, the Life Insurance Association of Malaysia, General Insurance Association Malaysia and Malaysian Takaful Association said they viewed such an unfounded allegation by the hospitals with serious concern.

They said insurance companies and takaful operators had worked closely with the hospitals and third party administrators to ensure that the cost of healthcare remained affordable.

The associations said the increase in premium rate in recent years was driven by high inflation in healthcare costs, which averaged at 12 per cent per annum from 2010 to 2014, and projected to increase at 15 per cent going forward, due to a number of reasons.

The demand for better healthcare services from the affluent segment of the population, an aging population and higher prevalence of chronic and lifestyle diseases such as hypertension, diabetes and obesity, were the other factors contributing to an increase in healthcare costs.

Apart from the increasing cost of drugs and treatment, technological advances in healthcare also led to an increase in the utilisation of advanced healthcare treatment technologies in medical facilities.

"For example, we have evolved from X-ray to Computerized Tomography (CT) scan and now to Magnetic Resonance Imaging (MRI).Thus, consumers have a wider choice of diagnostic treatments," they said.

Currently, the fees charged by doctors in private hospitals for consultation and performance of procedures are regulated under the Thirteenth Schedule of the Private Healthcare Facilities and Services Regulations.

However, other components of hospital charges, such as fees for hospital stays, laboratory investigations, nursing care, use of equipment and operation room and drugs are not regulated, leading to a wide range of costs differences among private hospitals.

The insurance companies and takaful operators suggested the implementation of several measures to manage the rising healthcare costs, including a suggestion for the government to regulate and make public the recommended retail price of pharmaceutical products, medical devices (example stents, implants) and medicines.

"While doctors' fees are regulated, there is currently no regulation to curtail the increase in the prices of drugs," they said.

Additionally, the government should put forth a mandate for all hospitals to publish their cost of treatment, enabling policyholders to choose where they wish to seek for it and be aware of the amount that their insurers and takaful operators would reimburse.

The associations said hospitals should also let consumers know that they can request for a more detailed bill of charges to be aware of the breakdown of the cost of the treatment/medicine provided to them.

"Healthcare providers, especially the private hospitals, should also provide greater transparency in the pricing of all healthcare products and services," they added.

The associations maintained that insurance companies and takaful operators would continue working with the Ministry of Health, Bank Negara Malaysia and healthcare providers to ensure that medical treatment is fairly priced and treatment recommended clinically required.

"Medical costs are on the rise, and insurance companies and takaful operators will continue efforts at maintaining health insurance premiums at a fair and affordable level, with the cooperation of all stakeholders and for the benefit of all consumers," the statement added.