KUALA LUMPUR, March 24 (Bernama) —
Introduction
Despite calls to engage insurers privately and not moot their points through media, APHM continues airing its concerns publicly. The general public couldn’t care less about this issue. These are private matters between APHM and Insurers. As mentioned in the same article, the relationship between private hospitals and insurers is best described as symbiotic. APHM must find solutions that flourish this relationship rather than be parasitic.
APHM proposes the formation of a joint working committee between the association and Assurers to review billing structures and ensure fair pricing of healthcare services. It is a good start, but it needs to focus its energy on the core matter, the burdening hospital charges that cause assurers to increase their prices. The billing structure and so-called fair pricing don’t solve the current problems. It is more of an academic exercise.
APHM’s public statements call for assurers to keep cashless medical products while using patient care as a smoke screen. It is a ruse to maintain its top and bottom line, and its sincerity can be seen when it issued a statement rejecting Assurer’s proposal for private hospitals to freeze costs for three years and also for the Health Ministry to regulate the pricing of pharmaceuticals or medication during the period assurers facing premium pricing caps.
Public Education
Since APHM is only interested in making public statements to try to arouse policyholders’ sentiments to protect their cash flow and profit margins, it is time for assurers to take steps to protect policy owners’ interests. The public is concerned about rising health premiums. They don’t understand the reasons behind it.
Therefore, assurers need to expand their role in public education on how assurers develop their product prices. Most of the cost goes toward paying claims, distribution costs, and maintaining statutory reserves. Assurers must demonstrate how much premium is allocated to companies as their pretax profits for every ringgit of premium received.
Public education goes a long way and will make the public understand the financial burden caused by APHM members.
Cheaper, Scalable & Customized Direct Products
Policy owners deserve access to cheaper health assurance products. Insurers can consider two critical modifiable parameters: direct distribution without going through agents and selling the product on a reimbursement basis. Distribution through agents is costly. Technology today allows companies to educate customers on product features with ease. Product distribution has greater depth today.
Assurers can develop tier products that cover the treatment of medical risks for specific age groups. The young have a lesser risk of admission due to chronic illnesses. The sum cover can be lowered since the cost of treatment for acute illnesses and injuries is low. Employees can buy a small sum for the employed category to cover health top-up products, where the primary claim should be against the employer’s paid assurance. The top-up is used only when the primary product limits are exhausted.
The second strategy would be reintroducing reimbursement-based products. It has dual key advantages. First, the policy owners are responsible for controlling hospital bill expenses. Coupled with BNM directives of Co-payment, policy owners would question their hospital charges. Introducing Co-pay reimbursement products is within the assurer’s rights. We cannot blame APHMs for making public statements and calling for assurers to keep cashless medical products as they know it significantly impacts their earnings.
The third strategy is for assurers to revisit and expand the strategy they introduced in early 2000, where they formed a consortium that markets national health assurance products instead of individual company products. An industry-wide product allows the consolidation of claim data to determine the true industry burning costs. More importantly, consolidating policy owners’ data enables the industry to spread costs and introduce cheaper products. Individual assurance companies only need to focus on distribution and customer service. The focus would be on customer service. This approach would be the seed of the National Health Assurance under the assurance industry-driven National Healthcare Financing System.
Under this approach, the competition among the assurance companies is no longer on pricing. The law of large numbers dictates and has an impact on price. However, if private hospitals continue to have the unchecked freedom to determine the charges, the proposed measures will only temporarily reprieve policy owners.
Conclusion
In the best interest of policy owners & to protect them against increasing premiums, re-introducing reimbursement health products would be the best approach. Policy owners themselves must take the role of questioning hospital charges, which directly impacts health assurance premiums.
Assurers must develop products that limit the benefit payment according to age, gender, pre-existing conditions and risk exposure. A young person who enjoys employer insurance coverage does not need an RM1000,000 sum of cover. Having high annual and lifetime limits promotes “medical inflation”.
Assurers must get their act together as an industry, focus on their policy owners, ignore APHM public statements and develop a structured public education program explaining how assurers’ price their products.
21-3-2025
Dr Mohamed Rafick Khan
Reassurer and Assurance Industry Consultant
Dr. Mohamed Rafick is a trained physician with 12 years of experience in military medical services and over 22 years of experience in the assurance industry. He retired as the CEO of a multinational reinsurance company in 2019. Currently, he remains active as an independent international assurance industry consultant.
SOURCE: Dr Mohamed Rafick Khan
Reassurer and Assurance Industry Consultant
FOR MORE INFORMATION, PLEASE CONTACT:
Name: Dr Rafick
Tel: 012 2218956
Email: drrafick@gmail.com
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