On 15 June 2023, the Malaysia Parliament passed the Health White Paper prepared by the Ministry of Health. The Health White Paper highlights the need for reform towards a more equitable, sustainable, and resilient health system and proposes reforms covering key areas such as service delivery, promotive and preventive approaches, financing, human resources for health and system governance over a 15-year period.

Key Takeaways

Malaysia has a hybrid healthcare system, comprising a public healthcare system and the private healthcare system. The Health White Paper prepared by the Ministry of Health highlighted the highly imbalanced distribution of services, infrastructure, equipment, manpower and other resources across the public and private sectors, resulting in severely overstretched public healthcare facilities and workers. As an example, public sector clinics comprise 28% of total primary healthcare facilities but handle almost 64% of outpatient visits in 2020. This write-up seeks to focus on the health system reforms outlined in the Health White Paper that could signal opportunities for collaboration, partnerships, or investment in the country's healthcare sector between public and private sectors.

Health Reform Pillars and Strategies in the Health White Paper

Pillar 1: Transforming healthcare service delivery with a priority on transforming primary health care (PHC)

PHC providers will be the first point of contact where the population will receive a wide range of services. The PHC teams can be from both public or private sector health service providers. This will enable the nation's hospitals to focus on acute cases and shift ambulatory care and transitional care management to community settings for better efficiency and continuity. Referrals for specialist care or hospitalisation will be coordinated by the PHC team, enabled by electronic medical records (EMR). Digitalisation and sharing of an individual's health status, medical history and other relevant information via EMR and electronic lifetime health records (ELHR) will be central to coordination across healthcare sectors, which will be rolled out in stages. A comprehensive framework for public-private partnership in secondary (specialist treatment and specific expert care) and tertiary service provision (specialized, prolonged treatment or medical care with state-of-the-art facilities) will be drawn up. Public-private partnerships will also extend to the hospital care level. Public-private partnerships will also be enhanced for pre-hospital care and ambulance services, towards making these services more responsive.

(Source: Health White Paper For Malaysia: Strengthening people's health, future-proofing the nation's health system prepared by the Ministry of Health, Malaysia 2023)

Pillar 2: Advancing health promotion and disease prevention

Reforms will shifts focus from simply treating illness to preventive care and empowering people to maintain health. Emphasis will be placed on digital health tech for data-driven public health practices. Incentives and disincentives will be introduced or enhanced to promote healthy behaviours through rewards and taxes on unhealthy products, encouraging positive choices. Healthcare providers, particularly at the primary healthcare and community level, will also be incentivised to provide effective promotive and preventive services. Employers, companies, insurers, agencies, and ministries will be incentivized for improvements in staff health outcomes. Food and retail businesses will also be incentivised to promote healthier options.

Pillar 3: Ensuring sustainable and equitable health financing

Increase health funding under public sector management gradually to 5% of GDP. Options for the progressive contributory scheme, systematics subsidy and assistance mechanism involving funding sources such zakat, waqf, corporate foundations and private philanthropy will be explored as new ways to finance the public health system. A benefit package, affordable and accessible to all, will be financed by a dedicated health fund managed by a not-for-profit Strategic Purchaser. The health fund will be financed by government funding and may include individual contributions and large donations.

Pillar 4: Strengthening the health system's foundation and governance

The Ministry of Health will progressively relinquish its service provider and purchasing roles to prioritize governance, oversight, and policy-making. The service provider role will be devolved through granting of autonomy to public sector health facilities, while the Strategic Purchaser handles purchasing from the public and private sectors. The Strategic Purchaser will use innovative and value-based payment models to enable the procurement of healthcare services from both the public and private sectors.

Reform phases

The reforms target to take place in phases with the first phase (short-term horizon 1 to 5 years) focusing on laying the foundational building blocks and piloting the initiatives. The next phase (medium-term horizon 6 to 10 years) will see the next stage or fuller roll-out of initiatives. The final phase (long-term horizon 11 to 15 years) focuses on stabilization and refining earlier initiatives, as the fundamental shifts have already begun to shape the system. An independent body will be established to oversee the health system reforms.

Concluding remarks

Malaysia's health system urgently requires reform due to social, environmental, and current system-related challenges and gaps. Major and holistic health system reform is timely. Although the Health White Paper provides a broad overview of the strategies and plans for health system reforms, it lacks specific details about how these strategies and plans will be executed and implemented. The expectation is that more detailed plans for execution will be developed separately. We expect to see more detailed plans from the Ministry of Health to offer a clearer and more actionable approach in executing the proposed reforms, ensuring that stakeholders understand how to implement the changes effectively.

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