1Care scheme: Need to allay public fears
IN the last few weeks there has been sporadic debate on the proposed national health scheme dubbed 1Care in both the internet and the mainstream media.
A collective conclusion shared by both the public and the very professionals alike (who play a major role in the system) is the uncanny ability to fully comprehend the confusing entity which remains an uncertainty till today.
This commentary is written to achieve the following objectives: To help the public understand why this system was proposed and what led to the genesis of this scheme;
If possible, to pressure the government to be more transparent in providing information on the 1Care scheme to allay fears among the general public; and
A collective conclusion shared by both the public and the very professionals alike (who play a major role in the system) is the uncanny ability to fully comprehend the confusing entity which remains an uncertainty till today.
This commentary is written to achieve the following objectives: To help the public understand why this system was proposed and what led to the genesis of this scheme;
If possible, to pressure the government to be more transparent in providing information on the 1Care scheme to allay fears among the general public; and
To help the layperson understand the unaddressed policy issues but highly crucial perspectives surrounding the 1Care scheme.
First, it would be wise to have a quick update on the prevailing Malaysian health care system so that it would help shed some light as to why there is a sudden accelerated interest to bring the 1Care scheme into an imminent reality.
The Malaysian health care scenario
The Malaysian health care system has often been hailed globally for its ability to endorse a sustainable health policy that reflects an outstanding and equitable health status at a relatively low economic burden.
By allocating just 3 percent of its GDP to health care (majority of industrialised countries invest rough about six percent, with the exception of the United States which devotes 16 percent), data compiled by World Health Organisation shows that the performance of the Malaysian health system is, in fact, highly efficient.
This is evidenced by the ‘Health Adjusted Life Expectancy’ at birth indicator, which categorises Malaysia as equal to most industrialised countries at 63 years.
However, the complexity of the system has also brought in much uncertainty that has not only slowed down service delivery, but has been closely related to the gradual increase in economic burden.
In an effort to make health care accessible (and most importantly equal) to all fabrics of the society, the concept of Universal Health Care was formulated and adopted by most countries around the world including Malaysia.
The system attempts to finance the health benefits for all by a balance of tax revenues and medical insurance (mostly recommended by private health caregiver in Malaysia currently).
First, it would be wise to have a quick update on the prevailing Malaysian health care system so that it would help shed some light as to why there is a sudden accelerated interest to bring the 1Care scheme into an imminent reality.
The Malaysian health care scenario
The Malaysian health care system has often been hailed globally for its ability to endorse a sustainable health policy that reflects an outstanding and equitable health status at a relatively low economic burden.
By allocating just 3 percent of its GDP to health care (majority of industrialised countries invest rough about six percent, with the exception of the United States which devotes 16 percent), data compiled by World Health Organisation shows that the performance of the Malaysian health system is, in fact, highly efficient.
This is evidenced by the ‘Health Adjusted Life Expectancy’ at birth indicator, which categorises Malaysia as equal to most industrialised countries at 63 years.
However, the complexity of the system has also brought in much uncertainty that has not only slowed down service delivery, but has been closely related to the gradual increase in economic burden.
In an effort to make health care accessible (and most importantly equal) to all fabrics of the society, the concept of Universal Health Care was formulated and adopted by most countries around the world including Malaysia.
The system attempts to finance the health benefits for all by a balance of tax revenues and medical insurance (mostly recommended by private health caregiver in Malaysia currently).
This is imposed on employed, working class population.
In Malaysia, much of the public medical fees are subsidised to a great extent from the much gained tax revenues.
It is important to note that the Malaysian health ministry only manages to recover three percent of its total operating cost through fees collected at health care premises.
The amount is strikingly lower than most payments made in most European health system (which employs the co-payment system where funds are partly subsidised by the government and the insurance premium paid by the patient).
The average consultation at a token rate of RM1 at any primary care centre barely covers one percent of the economic cost per visit.
The resulting non-sustainable system calls for fiscal limitations and will eventually cause much financial loss due to: The spur of an unrealistic and unachievable demand for public health care; and the operational costs to cover universal health care will surpass the government’s current fiscal capacity.
By understanding this, it comes as no surprise that the proposed 1Care scheme is a platform designed to recoup the wastages from a bleeding pre-existing (but noble and functional if properly handled) health care system that is sub-optimally managed.
Like any other subsidised policies, the current health care system is resilient to any structural reform, partly due to the lack of political will (where it is vital to appease voters by holding on to the unsustainable RM1 token fee and RM15-RM20 token fee paid at primary and specialist health clinics, respectively).
And the society itself, whom have become so accustomed to enjoying cheap but scarce medical resources that has been perpetually vulnerable to potential abuse all these years.
Most importantly, where is the information?
Unlike most countries that have proposed and implemented such a scheme, information on the mechanics and the policies enshrined in the health care scheme is widely available for public scrutiny.
One could easily access any updates and knowledge on the health care scheme through the health ministry website of the respective countries.
The same cannot be said for the 1Care system. The public, at large, have very patchy ideas on the health scheme without corroborative evidence from the health ministry.
It would have been prudent, with all the disparate views available from all avenues of the mass media, to allay all concerns by allowing the public to peer into the workings of the proposed scheme or at least highlight the salient points that matters most to the average Malaysian.
Efforts to make it an intellectual discourse by taking in question from the public would have been highly commendable.
Strangely, the documents or information regarding its modus operandi has remained elusive and is not available on the health ministry’s website (which is mandatory in most civil nations).
The reason as to why this has been enshrouded in secrecy remains anyone’s best guess. However, one could only speculate that perhaps the precise knowledge of the system is within the confines of a privileged few elites who are still, themselves, grappling to reach a consensus on how to implement a scheme that is totally not viable given the current economic climate.
Hypothesized 1Care scheme model
With the escalating rate of medical expenditure in the country, a cost containment approach has to be put in place to eradicate or replace an ailing healthcare system that burdens the economy.
One such option would be the 1Care scheme. Given the very sketchy information on how this would be implemented, one could only draw inferences from other similar healthcare systems.
Bearing that in mind, it would suffice to say that the scheme would promote the technique of ‘managed care’ (by managed care organisations or MCOs) where the autonomy of patients is sacrificed and replaced by a predetermined set of rules.
These rules govern patient’s rights to which doctor, the type of care and the kind of medications he/she receives.
Many of us are aware of this issue has been given much focus in the previous attempts to describe the proposed health system in the media.
This has, in the past, led to reprisals mainly arising from public dissatisfaction. This was due to denial of care stemming from government legislation and tight labour rules that restricts the access one has to healthcare options.
Employers would then offer private health care plans (which are private insurance plans) to fill in this vacuum so that employees could afford all available treatments.
Ultimately (and to the contrary of cost containment), this incident would give rise to the ballooning of medical expenditure in the country.
Population divided into two classes
Unless the full blueprint is made public, one could only hypothesize the magnitude or the process of financing involved in the 1Care scheme which is the crux of understanding how the whole system functions.
The population might be divided up to two broad classes namely: The general public; and concessional patients (the ageing public, citizens below the poverty line, disabled/handicapped).
It will be compulsory for all working citizens of the general public, who have wages within the taxable bracket, to pay 10 percent of their earnings as contribution necessary for the funding of the scheme.
Remember that this 10 percent tax does not mean that one is entitled to the type of care, it is just a contribution which is used to pay the wages of the physicians and other miscellaneous expenses (purchase of new equipment or subsidising the concessional patients, etc.). This will be collected as federal taxes.
Secondly, to be amenable to treatments within the system, the general public will have to take up an insurance policy (social health insurance).
Treatments within this system will be closely regulated by MCOs which could mean that a patient might not be covered for a wide range of interventions (eg. optical surgeries, prosthesis, aesthetics, etc.).
Just one burning question - is the scheme really free in a manner that it provides universal healthcare in a similar vein to the current system?
Will drugs be free now that payments have been made by contributing to taxes and insurance schemes? Read on carefully.
So much focus has been given to the taxable amount that we need to contribute but the society has become oblivious about other aspects of the mandatory payments that one has to make in order to get the full package of services available.
Inherent parts of the formula
In summary, this would be the likely formula for the 1Care scheme: Social health insurance (SHI) + general taxation + minimal co-payments for a defined benefits package.
The fundamentals of SHIs and general taxation have been explained in detail earlier. What are co-payments and benefit packages that are also an inherent part of the formula though?
Copayments are payments that have to be made by patients when their treatment has exceeded the threshold tolerated by the health scheme.
Thus, a patient has to fork out a certain amount of money once the treatment requires more financial assistance due to the nature of their illness.
Benefit packages seem to define the type of insurance from which special groups within the population will be stratified accordingly to separate those who deserve exemption from payments or their treatments costs partially subsidised.
Extrapolating from the statement above, even the casual layperson would demand an explanation by posing several questions: It was said that free treatment will be given to all, but what are these co-payments then?
Will there be co-payments for drugs? Is there a minimum pricing policy? Which class of society will be eligible to total subsidy and exempted from all payments? How will the general public gain access to other treatments that the SHI does not cover?
To minimise co-payments, steps will be taken to provide cheap but ‘equally’ good quality drugs or services determined by the MCOs.
In Malaysia, much of the public medical fees are subsidised to a great extent from the much gained tax revenues.
It is important to note that the Malaysian health ministry only manages to recover three percent of its total operating cost through fees collected at health care premises.
The amount is strikingly lower than most payments made in most European health system (which employs the co-payment system where funds are partly subsidised by the government and the insurance premium paid by the patient).
The average consultation at a token rate of RM1 at any primary care centre barely covers one percent of the economic cost per visit.
The resulting non-sustainable system calls for fiscal limitations and will eventually cause much financial loss due to: The spur of an unrealistic and unachievable demand for public health care; and the operational costs to cover universal health care will surpass the government’s current fiscal capacity.
By understanding this, it comes as no surprise that the proposed 1Care scheme is a platform designed to recoup the wastages from a bleeding pre-existing (but noble and functional if properly handled) health care system that is sub-optimally managed.
Like any other subsidised policies, the current health care system is resilient to any structural reform, partly due to the lack of political will (where it is vital to appease voters by holding on to the unsustainable RM1 token fee and RM15-RM20 token fee paid at primary and specialist health clinics, respectively).
And the society itself, whom have become so accustomed to enjoying cheap but scarce medical resources that has been perpetually vulnerable to potential abuse all these years.
Most importantly, where is the information?
Unlike most countries that have proposed and implemented such a scheme, information on the mechanics and the policies enshrined in the health care scheme is widely available for public scrutiny.
One could easily access any updates and knowledge on the health care scheme through the health ministry website of the respective countries.
The same cannot be said for the 1Care system. The public, at large, have very patchy ideas on the health scheme without corroborative evidence from the health ministry.
It would have been prudent, with all the disparate views available from all avenues of the mass media, to allay all concerns by allowing the public to peer into the workings of the proposed scheme or at least highlight the salient points that matters most to the average Malaysian.
Efforts to make it an intellectual discourse by taking in question from the public would have been highly commendable.
Strangely, the documents or information regarding its modus operandi has remained elusive and is not available on the health ministry’s website (which is mandatory in most civil nations).
The reason as to why this has been enshrouded in secrecy remains anyone’s best guess. However, one could only speculate that perhaps the precise knowledge of the system is within the confines of a privileged few elites who are still, themselves, grappling to reach a consensus on how to implement a scheme that is totally not viable given the current economic climate.
Hypothesized 1Care scheme model
With the escalating rate of medical expenditure in the country, a cost containment approach has to be put in place to eradicate or replace an ailing healthcare system that burdens the economy.
One such option would be the 1Care scheme. Given the very sketchy information on how this would be implemented, one could only draw inferences from other similar healthcare systems.
Bearing that in mind, it would suffice to say that the scheme would promote the technique of ‘managed care’ (by managed care organisations or MCOs) where the autonomy of patients is sacrificed and replaced by a predetermined set of rules.
These rules govern patient’s rights to which doctor, the type of care and the kind of medications he/she receives.
Many of us are aware of this issue has been given much focus in the previous attempts to describe the proposed health system in the media.
This has, in the past, led to reprisals mainly arising from public dissatisfaction. This was due to denial of care stemming from government legislation and tight labour rules that restricts the access one has to healthcare options.
Employers would then offer private health care plans (which are private insurance plans) to fill in this vacuum so that employees could afford all available treatments.
Ultimately (and to the contrary of cost containment), this incident would give rise to the ballooning of medical expenditure in the country.
Population divided into two classes
Unless the full blueprint is made public, one could only hypothesize the magnitude or the process of financing involved in the 1Care scheme which is the crux of understanding how the whole system functions.
The population might be divided up to two broad classes namely: The general public; and concessional patients (the ageing public, citizens below the poverty line, disabled/handicapped).
It will be compulsory for all working citizens of the general public, who have wages within the taxable bracket, to pay 10 percent of their earnings as contribution necessary for the funding of the scheme.
Remember that this 10 percent tax does not mean that one is entitled to the type of care, it is just a contribution which is used to pay the wages of the physicians and other miscellaneous expenses (purchase of new equipment or subsidising the concessional patients, etc.). This will be collected as federal taxes.
Secondly, to be amenable to treatments within the system, the general public will have to take up an insurance policy (social health insurance).
Treatments within this system will be closely regulated by MCOs which could mean that a patient might not be covered for a wide range of interventions (eg. optical surgeries, prosthesis, aesthetics, etc.).
Just one burning question - is the scheme really free in a manner that it provides universal healthcare in a similar vein to the current system?
Will drugs be free now that payments have been made by contributing to taxes and insurance schemes? Read on carefully.
So much focus has been given to the taxable amount that we need to contribute but the society has become oblivious about other aspects of the mandatory payments that one has to make in order to get the full package of services available.
Inherent parts of the formula
In summary, this would be the likely formula for the 1Care scheme: Social health insurance (SHI) + general taxation + minimal co-payments for a defined benefits package.
The fundamentals of SHIs and general taxation have been explained in detail earlier. What are co-payments and benefit packages that are also an inherent part of the formula though?
Copayments are payments that have to be made by patients when their treatment has exceeded the threshold tolerated by the health scheme.
Thus, a patient has to fork out a certain amount of money once the treatment requires more financial assistance due to the nature of their illness.
Benefit packages seem to define the type of insurance from which special groups within the population will be stratified accordingly to separate those who deserve exemption from payments or their treatments costs partially subsidised.
Extrapolating from the statement above, even the casual layperson would demand an explanation by posing several questions: It was said that free treatment will be given to all, but what are these co-payments then?
Will there be co-payments for drugs? Is there a minimum pricing policy? Which class of society will be eligible to total subsidy and exempted from all payments? How will the general public gain access to other treatments that the SHI does not cover?
To minimise co-payments, steps will be taken to provide cheap but ‘equally’ good quality drugs or services determined by the MCOs.
This is called the minimum pricing policy, a key policy issue that has been very much in the shadows since the planning of 1Care policy.
MCOs will only allow more patient autonomy if they willing to endure an additional cost by purchasing an additional private insurance which will bestow certain benefits: Patients will now be provided with the added benefits which are not covered by the SHI policy; and patients will be able to then choose doctors and types of procedures (dental/optical/physiotherapy that was previously not available in the SHI scheme).
Rise in care burden secondary to rise in demand
The trend of an increase in purchase of additional private health insurance will influence the increase in demand of services as a whole.
With the access to an affordable yearly insurance premium, the growing population will have a lowered out-of-the pocket price to pay when seeking medical treatment.
MCOs will only allow more patient autonomy if they willing to endure an additional cost by purchasing an additional private insurance which will bestow certain benefits: Patients will now be provided with the added benefits which are not covered by the SHI policy; and patients will be able to then choose doctors and types of procedures (dental/optical/physiotherapy that was previously not available in the SHI scheme).
Rise in care burden secondary to rise in demand
The trend of an increase in purchase of additional private health insurance will influence the increase in demand of services as a whole.
With the access to an affordable yearly insurance premium, the growing population will have a lowered out-of-the pocket price to pay when seeking medical treatment.
This will directly lead to the increase in market demand for health care services for the medical needy and indirectly cause the sudden surge of prices for medical services.
With the increase in slow increase in inflation rates in Malaysia (upward trend towards the level of 3.3 percent in December 2011), larger spectrum of the working population would be pushed into the higher marginal tax brackets.
This would often leave citizens with lesser disposal income for their utilisation.
In line with this scenario, many tax payers would prefer out-of-pocket medical expenses be paid before-tax ringgit than after-tax ringgit (which is subject to tax imposition) by purchasing health insurance.
Thus, this will inexorably increase market demand and simultaneously increase prices of medical services, especially if it is poorly regulated and unprepared.
Reeling from the aftermath
Faced with rising trends of medical expenditure, the federal government will be dogged by limited and painful options to defuse the crisis: Raise the 1Care payroll tax and incomes taxes on the non-age to sustain the failing 1Care scheme;
Necessitate higher premiums for 1Care among the aged and increase their deductibles and co-payments; and reduce payments to hospitals and physicians.
The full brunt of the burden will be directed towards the public when the system becomes faulty beyond remedy.
Physicians will opt out of the 1Care scheme as their fees will be slashed to lower levels. Patients will need then need to pay higher out of the pocket settlements to their doctors who are no longer under the 1Care scheme.
The aged and the non-working class, who have little or minimum wage, will have to face a less forgiving reality that their benefits to subsidy will be greatly reduced.
The working population, with already rapidly diminishing disposal income will find it extremely difficult to come to terms with a scheme that requires them to be taxed higher and receive very little benefit from such health policy.
Stakes are higher
It is time that the government stepped up to the plate and educates the nation on its intentions behind the 1Care scheme.
Let it not be a half-baked policy reminiscent of the recent SBPA debacle (that still remains unresolved till this date) as the stakes are much higher and a bigger calamity looms in the horizon if the scheme is not reviewed with due diligence.
It would be pertinent, for the time being (while 1Care scheme is being mulled upon), that the following recommendations be considered: Assess the agent status of the majority of practitioners (whether they are they are perfect or imperfect agents for the proposed health care system);
Take all steps possible, and in a transparent manner, to convince the nation regarding the relevance of the 1Care scheme (including the detailed explanation of safety nets provided as a contingency); and establish the importance of primary care facilities are the major players and the gatekeepers to tertiary care.
The government should (like their other developed counterparts) pay more emphasis on training more general specialists than having a compartmentalised highly subspecialised health care system.
Meanwhile, and until it is acceptable to the public, minor tweaks or reforms could be made to the pre-existing healthcare system to make its function far superior than at present:
With the increase in slow increase in inflation rates in Malaysia (upward trend towards the level of 3.3 percent in December 2011), larger spectrum of the working population would be pushed into the higher marginal tax brackets.
This would often leave citizens with lesser disposal income for their utilisation.
In line with this scenario, many tax payers would prefer out-of-pocket medical expenses be paid before-tax ringgit than after-tax ringgit (which is subject to tax imposition) by purchasing health insurance.
Thus, this will inexorably increase market demand and simultaneously increase prices of medical services, especially if it is poorly regulated and unprepared.
Reeling from the aftermath
Faced with rising trends of medical expenditure, the federal government will be dogged by limited and painful options to defuse the crisis: Raise the 1Care payroll tax and incomes taxes on the non-age to sustain the failing 1Care scheme;
Necessitate higher premiums for 1Care among the aged and increase their deductibles and co-payments; and reduce payments to hospitals and physicians.
The full brunt of the burden will be directed towards the public when the system becomes faulty beyond remedy.
Physicians will opt out of the 1Care scheme as their fees will be slashed to lower levels. Patients will need then need to pay higher out of the pocket settlements to their doctors who are no longer under the 1Care scheme.
The aged and the non-working class, who have little or minimum wage, will have to face a less forgiving reality that their benefits to subsidy will be greatly reduced.
The working population, with already rapidly diminishing disposal income will find it extremely difficult to come to terms with a scheme that requires them to be taxed higher and receive very little benefit from such health policy.
Stakes are higher
It is time that the government stepped up to the plate and educates the nation on its intentions behind the 1Care scheme.
Let it not be a half-baked policy reminiscent of the recent SBPA debacle (that still remains unresolved till this date) as the stakes are much higher and a bigger calamity looms in the horizon if the scheme is not reviewed with due diligence.
It would be pertinent, for the time being (while 1Care scheme is being mulled upon), that the following recommendations be considered: Assess the agent status of the majority of practitioners (whether they are they are perfect or imperfect agents for the proposed health care system);
Take all steps possible, and in a transparent manner, to convince the nation regarding the relevance of the 1Care scheme (including the detailed explanation of safety nets provided as a contingency); and establish the importance of primary care facilities are the major players and the gatekeepers to tertiary care.
The government should (like their other developed counterparts) pay more emphasis on training more general specialists than having a compartmentalised highly subspecialised health care system.
Meanwhile, and until it is acceptable to the public, minor tweaks or reforms could be made to the pre-existing healthcare system to make its function far superior than at present:
The symbiotic relationship between health care provider and patients is strongly encouraged in the hope that patients themselves could be an active participant (and agents of cost reduction) in the system;
The reduction in over-reliance of services provided by the privatisation of healthcare, thus curbing progressive increase in market prices by decreasing the percentage of the population who seek inexpensive medical treatment (due to insurance premiums and lower out-of-pocket payments) which could be prove to be economic vicious cycle;
Corporatisation of health care services (rather than a full change in the health care system) permits better operations management and greater accountability of a highly complex organisation such as the primary health care system (better clinical governance); and
Careful and gradual integration of new information technology advancements to the pre-existing service delivery system (e-mail consultation for example) which could ultimately reduce cost and lead times.
The reduction in over-reliance of services provided by the privatisation of healthcare, thus curbing progressive increase in market prices by decreasing the percentage of the population who seek inexpensive medical treatment (due to insurance premiums and lower out-of-pocket payments) which could be prove to be economic vicious cycle;
Corporatisation of health care services (rather than a full change in the health care system) permits better operations management and greater accountability of a highly complex organisation such as the primary health care system (better clinical governance); and
Careful and gradual integration of new information technology advancements to the pre-existing service delivery system (e-mail consultation for example) which could ultimately reduce cost and lead times.
THE BLACK CACTUS
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