Govt to control private hospitals’ diagnosis-related groups, study other ways to keep costs reasonable: PM 

Measures include dismantling drug procurement monopolies, choosing generic medicines, and hospital-patient cost sharing models

Prime Minister Datuk Seri Anwar Ibrahim said the Health Ministry will be instructed to introduce controls on diagnosis-related groups (DRG) on hospitals next year. - Bernama pic, December 10, 2024

KUALA LUMPUR — The government aims to keep private healthcare costs reasonable by introducing controls on diagnosis-related groups (DRG), Prime Minister Datuk Seri Anwar Ibrahim told Dewan Rakyat today.

DRG, which is a system for classifying hospital patients into groups based on their clinical conditions and treatment needs, and thus the costs involved, are currently unregulated in Malaysia.

“The short-term measure (that we can propose) is to control DRG. In Malaysia there is no control or standardised costs (for DRG). (It is up to) specialists to determine, but there are guidelines called DRG on what is a reasonable cost for a MRI or CT scan.

“So this must be controlled, that comes first of all,” Anwar said, adding that it is “very difficult” for the government to accept drastic hikes in private healthcare and insurance premiums.

“Having the (control) on DRG…I have instructed the Health Ministry to set it immediately, if possible by early next year,” he added.

Anwar was responding to Suhaizan Kaiat (Pulai-PH), who asked a supplementary question on the short-term measures that the government can undertake to address the excessive increase of health insurance premiums. 

The Amanah lawmaker told the Dewan Rakyat that he received a complaint that a private hospital had imposed much higher charges for patients with medical insurance coverage.

“There is a discrimination on treatment cost in the private hospital for dengue treatment, where the RM1,288 is charged on those without insurance, but those with insurance are charged RM4,978 which is four times more,” he said.

Suhaizan’s original question to the prime minister was on what the government would do to address the 40% to 70% hike in insurance premiums next year, as well as medical costs inflation in Malaysia which was at 12.6% in 2023, double the global average of 5.6%.

Anwar said the government was also studying the possibility of amending the Sales of Drugs Act 1952 (Act 368).

He said big pharmaceutical companies are selling drugs to Malaysia at a much higher price compared to Thailand due to the lack of regulations and the presence of monopolies here.

“We are aware that the costs of medicines has not been controlled, and that there have been monopolies in drug procurements for decades.

“Therefore we will be cancelling several commitments to one or two companies, and we would ask the health ministry to reach out to other countries producing generic drugs that are cheaper and affordable.”

He also said this was why the government encouraged the purchase of drugs in bulk. 

“Why can’t private (hospitals) emulate the Health Ministry, the Higher Education Ministry and the army which procure drugs in bulk so that the cost can be reduced by 20% to 25%?,” Anwar asked.

Additionally, the health ministry is also studying models in Western countries where hospitals partially or fully bear medical costs for patients who return for similar treatment despite having undergone it previously. – December 10, 2024