Health Spending: The Malaysian Experience

Chen Chaw Min, PhD

Deputy Secretary General (Finance)

Ministry of Health Malaysia

Malaysia Socio-Economic Indicators

Source : Department of Statistics, Malaysia2

2013 Total Population: 29,714,700Age 0-14 years: 26.1%Age 15-59 years: 65.4%Age ≥ 60 years : 8.6%

Life expectancy (2014) Male: 72.5 yearsFemale: 77.2 years

Aging society by 2019 (WHO

definition)Age ≥ 60 years : 10.3%

Urban: 71% (2010 Census)

Multi-cultural & multi-religious

Citizenship: 92% are Malaysians

Real GDP Growth: 5.6% (2012)

Per capita gross national income

(2012): MYR 30,809 (USD 9,974)

but High GINI coefficient – 0.431,

more than Thai, Indo, India

Overall national incidence of poverty

has reduced significantly from 49.3%

in 1970 → 1.7% in 2012

The estimated labour force for 2012

is 12.9M (44% of the total population

or 66% of the total working age

population).

Unemployment – 3%

International Acknowledgment

Malaysia health care system is a successful, modern government-regulated health system that provides effective health services.

2013 Bloomberg - Malaysia is among the world’s top 20 countries with the most efficient healthcare system

2014 International Living, US Magazine - Rated the third best system (after France and Uruguay) out of 24 countries in its Global Retirement Index 2014 -boost for Health Tourism and Malaysia My 2nd Home

3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

1957

1960

1970

1980

1990

1995

1999

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Selected Vital Statistics, Malaysia 1957- 2012

Source : Department of Statistics, Malaysia, & Health Fact, HIC, MOH, M’sia*World Bank: WHO GHED**World Bank: Estimates developed by the UN Inter-agency Group for Child Mortality Estimation

IMR

NMR

TMR

CDR

4

IMR - Infant Mortality Rate

NMR - neonatal Mortality Rate

CDR - Crude Death Rate

TMR - Toddler Mortality Rate

Country

*HealthSpending as %

of GDP(2013)

**Infant Mortality

Rate (2013)

Japan 10.3 2

Singapore 4.6 2

Australia 9.0 3

France 11.7 4

United Kingdom 9.1 4

Poland 6.7 5

Chile 7.7 7

Malaysia 4.0 7

China 5.6 11

Thailand 4.6 11

Philippines 4.4 24

Indonesia 3.1 25

•Consumer centered

•Equitable

•Affordable

•Efficient

•Technologically appropriate

•Environmentally adaptable

•Innovative

Health System • Caring, professionalism & teamwork

• Respect for human dignity

• Community participation

Emphasis

• Take individual responsibility & positive

action for their health

• Appreciate health as a valuable asset

• Attain their full potential in health

Empower the people

Malaysia’s Vision for Health

5

A nation working together for better health

Primary health care is the

thrust of Malaysian health

care system,

supported by

secondary care services

which are devolved &

regionalized tertiary care

services

National

Referral

System

Greater

equity,

accessibility

& better

utilization

of resources

MOH Health Policies

6

Targeting of Public Spending

0.0

0.2

0.4

0.6

0.8

1.0

Cum

mu

lativ

e s

har

e o

f sub

sid

iary

0.0 0.2 0.4 0.6 0.8 1.0Cumulative share of population

Inpatient

Hospital outpatient

Non-hospital outpatient

Preventive and family planning

Source: Benefit Incidence Analysis. Healthcare Demand Analysis (Preliminary Analysis). Sources of data include NHMS 2011, MNHA 2009 & GIS study. 7

Ratio of Public & Private Expenditures 2011

8Source: World Health Statistic Report 2014 for data year 2011

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Low income Lower middleincome

Malaysia Upper middleincome

High income Global

46.6

55.2

37.432.5

14.520.4

0.9

2.8

6.9

7.5

18.9

15.7

13.6

5.4

3.4

3.8

5.25.0

11.20.8

0.0

0.2

0.00.2

1.7

6.0

0.5

28.3 40.1 35.6

26.029.8

51.8

27.721.2 22.9

Gen Gov Expenditure

Social Security

External Resources

Other Private

Private Insurance (Prepaid Plan)

Private OOP

9

Health Expenditures (1997 – 2013)

7.37 7.43 8.21

9.31

11.05 11.61

14.75 14.04

12.33

15.42 16.09

16.66

20.06 21.11 20.87

22.82 23.25

6.47 6.42 7.00 7.95 8.32 9.06 10.51 11.35

12.36 13.35 14.31 14.13

15.23 17.18

18.61 20.11

21.50

2.94

3.16 3.26 3.28

3.68 3.70

4.27

4.05

3.58

3.95 3.92 3.78

4.40 4.46 4.35

4.49 4.53

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

-

5.00

10.00

15.00

20.00

25.00

30.00

RM

Bill

ion

, Co

nst

ant

20

13

RM

Public Private TEH as % GDP

Source :MNHA Health Expenditure Report 1997-2012*2013 Preliminary Data: Mesy. J/K Pemandu MNHA bil 2/2014

Challenges in Improving Health Outcomes

10

Public & Private Sector Resources and Workload (2011 & 2013)

Source: Health Informatics Center (HIC) , Family Health Development Division, NHMS 2011 , Mesy J/K Pemandu MNHA Bil 2/2014, Human Resource MOH

23.3

25,247

11,947,836

43,437

149

58,775,194

664

21.5

11,697

2,590,606

14,033

214

62,349,900

6,801

0% 20% 40% 60% 80% 100%

Health Expenditure RM Billion (2013)

Doctors(excl. Houseman) (2013)

Bed Days (NHMS 2011)

Hospital Bed (2013)

No. of Hospitals (2013)

Outpatient visits (NHMS 2011)

Health clinics (with doctors) (2013)

Public Private

9%

49%

41% 59%

51%

91%

76%

82%

24%

18%

68%

52%

32%

48%

11

Financing of current health expenditures (~2009)

12

Source: HCD Project analysis of HIES data for Malaysia 2004/05 & 2009/10 , van Doorslaer, E., et al. 2007 & Anuranga, C et al. 2012 for others in early 2000s.

9%

16%

2%

35%2%

36%

Public Sector only

Primary Health Care Specialist OutpatientDental Outpatient Care InpatientDay Care Others

12%

11%

2%

29%

2%

43%

Total

Health Expenditure by Functions of Health Care (2011)

For private sector – 16%

13Source: Unpublished Malaysia National Health Accounts data dated June 2013. Data for year 2011.

Addressing needs of the People• In general, current public health system is good, reasonably priced

and good service.

• However - long waiting time, insufficient staff, crowded waiting area and problems with accessibility, need to spend additional money for their travel.

• The private sector plays a complementary role but the concern - high cost of private health care.

• Public wants improved healthcare system and higher quality .

• Expanding and strengthening of scope, increased number of equipment and facilities, increased number and quality of health workforce.

• They also want lower cost of care. 14

3 Areas of Improvement

• Mixed financing

• Purchaser Provider Split

• Relevant PPM

• Pay for Performance

• Supply and Demand side

incentives

Service Delivery Reforms

• Public private integration

• Public sector autonomy

• Streamlining MOH

Stewardship

Governance

Public health services

Research

Training

• Increase quality of care

• Public & Private healthcare delivery

• Family doctor for each individual

• Gatekeeper to higher level

• Clear benefits package

15

Organisational ReformsFinancing Reforms

Thank You