Archive \ Volume.6 2015 Issue 4

Health care financing in Malaysia: A way forward

Ashutosh Kumar Verma , Mohamed Azmi Hassali , Fahad Saleem

Malaysia has a two‑tier health care system consisting of the public and private sectors. The Ministry of Health is the main provider of health care services in the country. The private health care sector provides services on a nonsubsidized, fee‑for‑service basis, and mainly serves for those who can afford to pay. For financing health care two types of health insurances are available currently: Private and employee based (aka SOCSO). SOCSO and Employee Provident Fund provide some coverage to private‑sector employees. There are several challenges in pure Bismarckian model (private insurance etc.) like smaller portion of total population will be “economically active,” international competition to attract firms, and maintain/increase employment will put downward pressure on labor taxes. How to sustain universal coverage in this context? In a population setting where unemployment is high informal sector, payroll taxes will not be a major source of funds. However, it is possible to create a universal health financing system by transforming the role of budget funding from directly subsidizing provision to subsidizing the purchase of services on behalf of the entire population. The integration of services between the public and private sector is very much needed, at a cost the people can afford. At present, there is no national health insurance scheme in place. Although there are many models proposed, the main question that the policymakers need to be aware of is that of the equity of access to holistic health services for all Malaysians.