Reset Plan Timely But Must Be Managed Holistically

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Healthcare reform involves many stakeholders, making it complex but necessary. Experts call for steps to be taken to deal with the high cost and accessibility, and the need for transparency.
Rising healthcare costs and high insurance premiums have driven many to seek treatment at public hospitals. (Bernama pic)PETALING JAYA: Falling ill today can be costly — not only in terms of time but also money, as healthcare expenses continue to rise due to medical cost inflation which has significantly increased the financial burden on consumers, especially those who rely on private healthcare
This is driven by factors such as advancements in medical technology, unregulated hospital supplies and services, increasing prevalence of non-communicable diseases, and an ageing population that requires more complex and frequent care.
As costs escalate, insurance premiums have risen too, forcing some to terminate their policies for public healthcare services. For others, what they have now is no longer sufficient to cover costs of treatment. This shift adds strain on already congested public healthcare facilities, resulting in longer waiting times for treatment.
To address this challenge, the government has introduced a strategy to address rising medical inflation and to reform the country’s private healthcare system. The goal is to make it more accessible for everyone, while ensuring that it remains sustainable in the long term.
As economist Samirul Ariff Othman pointed out to FMT, this would be an opportunity to get all stakeholders together to look at the issue holistically rather than continue to work in silos.The strategy, which comes with the very apt acronym RESET, is a joint effort by the ministries of health and finance, Bank Negara Malaysia as well as the insurance and the medical industries.
Misconceptions and preconceptions
What we assume about the healthcare system and what the reality is may be very different and complex. For instance, many blame insurance and takaful operators (ITOs), accusing them of chalking up huge profits by raising the medical and health insurance/takaful (MHIT) premiums.
The reality is that ITOs are only allowed to raise or reprice premiums in instances when there are continued increases in claims but not for the purpose of increasing their profit. The premium increases we see today reflect medical claims increases.
This periodic repricing of premiums is necessary to ensure that ITOs can continue to meet their obligations to policyholders. In other words, to pay their claims.
This is especially so when the cost of healthcare continues to increase.
While ITOs may remain profitable overall due to gains in other business lines, some argue these profits should “cross-subsidise” or offset losses in MHIT.
However, this would require other products to be priced higher, making it unfair for consumers who rely on them. What many may not realise is that cross-subsidisation is not a fair nor sustainable solution and does not address the root causes of rising medical cost inflation.
If we do not address the underlying cause of these premium increases — which is medical cost inflation — it will ultimately affect the availability and access to MHIT products for Malaysians, given that ITOs may withdraw their MHIT products if it is no longer sustainable, leaving people without coverage.
In recent months, Malaysian doctors have raised alarm over cost containment measures imposed by insurers and third-party administrators. These measures, aimed at managing claims costs, are sometimes perceived as interfering with clinical decisions.
On the ground, doctors report cases where prior approvals and restrictive guidelines slow down care, leaving patients caught in the middle.
Doctors emphasise that clinical judgment remains their professional responsibility. However, the reality is that insurance policies may exclude certain items or services, and patients or healthcare providers are not always aware of these limitations.
Notwithstanding, when treatments involve excluded items, doctors can still go ahead with the recommended treatment if agreed upon by both the patient and doctor, but these costs are considered non-claimable under the policy — meaning patients must bear the non-claimable charges.
This highlights the importance of policyholders understanding their coverage terms and insurers communicating them clearly to avoid unexpected costs or delays in treatment.
The plan
The RESET initiatives, established to address medical inflation and strengthen Malaysia’s private healthcare system for greater accessibility and long-term sustainability, will be guided and monitored by a joint ministerial-level committee for private healthcare costs, or Jawatankuasa Bersama Peringkat Menteri Mengenai Kos Penjagaan Kesihatan Swasta (JBMKKS). The task force will be led by the health and finance ministries.
The 11 initiatives under the RESET strategy will be gleaned from the perspectives of the patients, the service providers, and those who foot the bill. It will emphasise value-based healthcare by focusing on overall patient outcomes, optimising cost-effective healthcare services and enhancing access to quality care.
These initiatives will be grouped under five strategic thrusts.
Value-based outcomes
Samirul noted that by changing the focus to overall patient health outcomes under the RESET strategy, the government’s emphasis is now on optimising cost-effectiveness and access to quality care.
“This approach shows that the government recognises that the healthcare ecosystem operates within a complex value chain, with varying incentives across multiple stakeholders and industries,” he said.
“By fostering collaboration, the RESET plan should also ensure that healthcare remains accessible, affordable, and sustainable for all Malaysians,” he added.
Right direction
Dr James Jeremiah, founding president of the Association of Private Practitioners Sabah, said the RESET programme was an important and timely initiative to curb rising medical inflation and strengthen Malaysia’s private healthcare system.
“By fostering collaboration across ministries, regulators, insurers, and healthcare providers, RESET has the potential to deliver meaningful improvements in affordability, accessibility, and sustainability of care,” he told FMT.
Jeremiah said that for these policies to achieve their intended impact and bring maximum benefits to the public, it is essential that the authorities entrusted with the implementation of RESET do so with the highest level of transparency and accountability.
“Transparent governance not only builds trust but also ensures that measures under RESET translate into real relief for patients and the long-term stability of the healthcare sector,” he said.
“By ensuring that both the private and public systems operate with openness and integrity, Malaysia can maximise the impact of RESET,” Jeremiah said.
“This, in turn, will create a more affordable, equitable, and sustainable healthcare system for all,” he added.
Bridging the Gap: GMC
MHIT policyholders who believe that claims have been unfairly rejected should contact their respective ITO. If not satisfied by the explanation or resolution, they may bring their case to the Financial Markets Ombudsman Service, Malaysia’s dispute resolution centre for financial consumers.
More generally, to improve the communications between doctors and insurers, the Grievance Mechanism Committee (GMC) — an industry-led platform first established in July 2022 to address operational issues between ITOs, healthcare professionals, and private hospitals — has been reestablished, with MOH and BNM participating as observers in these discussions.
It offers a structured platform to address issues stemming from delayed guarantee letters, disputed claims, and unclear claims processes by establishing clear guidelines and improving transparency in medical claim processes.
By streamlining processes among insurers, hospitals, healthcare providers and third-party administrators, GMC helps protect doctors’ autonomy, uphold patient rights, and reduce administrative bottlenecks that compromise timely care.
GMC is a critical step toward restoring trust in the private healthcare ecosystem. As deputy finance minister Lim Hui Ying notes, GMC reflects a “whole-of-nation approach” to strengthen fairness and accountability.
Ultimately, GMC is not just a regulatory measure — it is a collaborative solution to safeguard quality care and patient confidence.
The road ahead
Rising medical costs have created pressure on both the private and public healthcare sectors, leaving patients caught in the middle.
The RESET strategy represents more than policy changes. It is a collaborative effort to make private healthcare fairer, more transparent, and sustainable for everyone.
By focusing on value-based care, improving communication and transparency among various stakeholders, and curbing medical inflation, the objective of these initiatives is to restore trust and ensure that Malaysians can access quality healthcare without financial hardship.
The success of these reforms will depend on transparency, accountability, and the willingness of all parties — government, insurers, healthcare providers, and patients — to work together. If implemented effectively, RESET could mark a turning point towards a private healthcare system that is more affordable, equitable, and built for the future. - FMT

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