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1115 c APHM - Anusha Thavarajah

Slide 19 shows that private insurance companies will design, administer and underwrite 1Care's Social Health Insurance (SHI).

This will create a similar situation as America where insurance decides what healthcare citizens will get.

Watch the movie "Sicko" to see the result of such a system.

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1115 c APHM - Anusha Thavarajah

  1. 1. Copyright in the materialcontained in this document belongs to third parties. Ithas been published by kindpermission of the owner(s) and provided for review only. This document may not be reproduced, amended or redistributed without prior writtenpermission of the copyright owner(s).
  2. 2. Role of Private Medical InsuranceAnusha ThavarajahDeputy CEO / CFOING Insurance Malaysia, July 2011
  3. 3. Presentation Outline• Malaysia’s Changing Healthcare Landscape• Private Medical Insurance Gaining Prominence• The Role of Private Medical Insurance• Final Thought• Q&A 2
  4. 4. Malaysia’s Changing Healthcare LandscapeING 3
  5. 5. Current Conditions in Malaysia’s Healthcare System i. Rising healthcareCurrent issues in healthcare system expenditure – 5% of GDP Countries Indicators 2000 2001 2002 2003 2004 Total 11,330.93 12,287.152 13,339.608 19,478.917 21,200.439 expenditure Malaysia on health 2005 2006 2007 2008 2009 (in RM millions) 21,574.5 24,778.67 28,021.895 31,140.871 32,648.524 4
  6. 6. Current Conditions in Malaysia’s Healthcare System ii. Highly subsidized services &Current issues in healthcare system overdependence on government health facilities iii. Gaps in present healthcare delivery system – i.e. equity, efficiency, accessibility iv. Inadequate integration between public & private sectors v. Increasing trend of private health expenditure – 41% Out-of pocket (OOP) spending vi. Globalization & liberalisation Increased deficit in Malaysia’s budget if these remained unsolved 5
  7. 7. What’s Driving the Change? Healthcare has grown to become a much bigger part of the Malaysian economy owing to four major drivers Wealth Longevity Medical advances and When people can afford it, improvements in living they will spend almost any standards are contributing to amount on health growing life expectancies Lifestyles Technology Rising affluence is altering New therapies, products, lifestyle patterns and diets, medical procedures are driving thus leading to higher up patients’ expectations; prevalence of chronic diseases pulling up demand which are costly to treat 6
  8. 8. Demographic trends – Higher Population GrowthRates & People are Living Longer Population Pyramids for Malaysia (1980, 2000, Malaysia Life Expectancy by Gender: 1980-2025 Projected 2025) 85 80 75 70 65 60 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 M a le F e m a le i. Aging Population • Extended longevity • The % of ageing people (60 years+) is projected to increase to 3.4 million in 2020 (9.9% of total population). ii. Population Growth • Increased 17% from 2000-2010 • Projected to increase to 34.3 millions in 2020. 24.3% growth rate from year 2010. Source: International Database, US Census Bureau, Population Division ( 7
  9. 9. Affluence Effect – Standards of Living Are Higher Source: World Bank, WHO 8
  10. 10. Lifestyle Diseases – From Communicable to Non-Communicable Changing Disease Patterns • Cardiovascular diseases (such as coronary heart disease) • Hypertension • Stroke • Diabetes • Cancer • Mental health conditions (mostly dementia and depression) 9
  11. 11. Private Medical Insurance Gaining ProminenceING 10
  12. 12. What’s Triggering the Need for Private MedicalInsurance? • It is estimated that 40% of the country’s population or 10.8 million Malaysian are medically insured. 16.2 million people are without health insurance. 60% out of the 40% healthcare spending is supported by the Government • Demographic Changes • Increases in medical bills are outpacing the general inflation rate each year Average inflation rate for the past 10 years = 2.2% each year Medical inflation is escalating at between 13% - 15% annually due to rise of investments in research and adoption of new technologies to deal with new illnesses • Increasing demand for Private Healthcare 11
  13. 13. How can we as a nationaddress these needs? 12
  14. 14. Government’s Proposal on Healthcare Reforms Vision 2020Vision High income and high productivity nation Healthcare is 1 of 12 NKEAs Sectors with potential to generate high incomeETP 1Care 1Malaysia EPPs NKEA Labs • Restructured integrated • Foreign workers insurance • Seniors Living Coverage health system • Health tourismHealthcare Sector Powerful engine of Highest historical growth economic growth. Creating more than rate of 8.8% between 2000 Potentially grow to 180,000 jobs. & 2009 among all sectors. RM35.1b to GNI by 2020. 13
  15. 15. Private Sector to spur Growth in HealthcareService Industry What role can private Health expenditure: sector play in health system reforms? The most predominant expense factor in government’s spending – 5% of GDP • Need for private medical insurance - Increasing role of • Access to private health care the private sector • Help alleviate government’s burden • To reduce OOP and therefore reduce Health system financial indebtedness reforms NB: OOP in developed nations is only 14%. Increasing pressure on public health •Vast growth opportunities in private health expenditures insurance – • Only 14% penetration • Private insurance spending is only 8%, Total health expenditure where high income nations recorded 20%. growthSource: OECD health data (2008), Munich RE 14
  16. 16. Healthcare system in Canada: Role of Private Health InsuranceTotal Healthcare Expenditure • 10.9% of GDP in 2009 • Many choose to rely on the Public • Public healthcare being • Private Health System (1st tier) administered on a provincial health • Primary health coverage given to all basis (2nd tier) insurance citizens (irrespective of medical • Additional services provided at (3rd tier) history & personal income) provincial level Characteristics of the • Publicly funded (taxation from • Physiotherapy, dental & Healthcare System personal & corporate income taxes) prescriptive medicine • Type of healthcare services provided • Funded by sales tax & cash (Preventive care / primary care, contribution (health premiums access to hospitals, dental surgery, for individuals) some additional medical services) • Supplementary role in the healthcare system • To cover what is not covered in the public / provincial health insurance Role of Private Health • Corrective lenses, medication, home care Insurance (PHI) • Not so much to gain access to quality care • Usually offered as part of employee benefits packages Total PHI Expenditure • 11.4% of total healthcare expenditure Population covered by PHI • 65% 15
  17. 17. Healthcare system in France: Role of Private Health InsuranceTotal Healthcare Expenditure • 11.7% of GDP in 2009 • Dominated by Public Health Insurance • Complementary health Private health Characteristics of the System insurance covers other insurance Healthcare System • All citizens are covered benefits not covered under the • Funding – employee and employer National Health Insurance. contributions and personal taxes Covers those • Covers outpatient, hospital care, • Whose health expenditures prescription drugs, home nursing have been exceeded care, certain alternative therapies. • With chronic illnesses • No gate-keepers regulating access to • Whose incomes are low specialists & hospitals • Finances 12.5% of total • Finances 70-75% of total personal personal care expenditure care expenditure • Supplementary role. Role of Private Health • To reduce out-of-pocket expenses which could be quite substantial Insurance (PHI) • Not so much to gain access to quality care. Total PHI Expenditure • 12.7% of total healthcare expenditure Population covered by PHI • > 90% of population covered by complementary & supplementary insurance 16
  18. 18. The Role of Private Medical InsuranceING 17
  19. 19. Private Insurers: Vital Link in Healthcare System Insurers Providers (Clinics/ Regulator Hospitals) 3rd Party Administrators 18 18
  20. 20. What’s the Role of Private Medical Insurance? Part of health financing scheme to ease the government’s burden by alleviating the increasing healthcare cost Healthcare FinancingNew product innovation under Healthcare NKEA Working with • Foreign workers insurance Product 3rd Party Offer expertise to public • Seniors living Design Administrators health financing scheme • Portable health insurance (TPA) 19
  21. 21. Role in Healthcare Financing Healthcare Financing Health Funds Social Health Insurance • Discipline & consistent savings • Mandatory medical savings scheme towards healthcare / medical regulated by the government – i.e. needs. healthcare financing in Singapore. • Reduce OOP spending. • Design & provide affordable medical • Increased affordability for better insurance plans tie-in with the EPF health services. account (auto-deductible mechanism). • Encourage the nation to contribute certain amount of premiums to purchase a health insurance plan. 20
  22. 22. Where are Insurers in the Current MalaysianHealthcare System? Primary Secondary Tertiary • General Practice • Specialist • Specialist consultation • Hospitalisation & Surgical In the future? 21
  23. 23. Health Product Evolution in Malaysia Without credible claims Identify Claims Start to gain Periodic review of data abuse market share claims experience First Non- Offer choice cashless First Non- Replace with of Cashless Plan sold cashless Cashless Plan & Non- through Plan (Medical Card) cashless Employee Individually Plan Benefits1995………......….1997……..……….…….2001………..………..2003……………………2004 • Inner Limits Premium • Premium increase • Slight change in Increase • Annual limit increase benefit designING 22
  24. 24. Health Product Evolution in Malaysia More Regulations/ Guidelines on Hospital & Surgical Business • Introduce • Revised Health deductible Regulation leads Risk Management • Disclosure & to change in Reporting for better Transparency product design claims and pricing • Breakdown of • Male/Female controls attained age group Premium Rate <21 2004…………….....................….2006………………………… 2007.................................. •Premium increase Annual limit increase •Annual limit increaseING 23
  25. 25. Health Product Evolution in Malaysia Extended Longevity & Rising Medical Cost • Extended entry age & expiry age • Higher annual • No Claim Bonus limit and lifetime • 2nd Medical Card limit • Major medical plan 2007……………..............2008……………………..2009..........................2010………. NOW •Premium increaseING 24
  26. 26. Moving Forward…Continuously Enhance & Innovate Health Insurance to Complement Government Proposed Initiatives Product enhancement New product innovation Extended coverage Foreign Workers Insurance • Extending maturity age or age of entry in view of • Only 75% of 1.8m foreign workers are covered by the improved longevity among Malaysians workmen’s compensation schemes • Increase annual and lifetime limit to meet the • 2005-2009, RM64m of unpaid healthcare bills increasing medical cost • Mandatory insurance on – • Juvenile medical plan with “Coverage before birth” • Workmen’s compensation features • Medical insurance Multiple-layers coverage Seniors Living • Provide coverage at different stages of illnesses • Malaysia is likely to reach ageing nation status by 2035 – to ensure the wellness of policyholders by # of elderly people reaching 15% of the population obtaining early treatment • LTC insurance – provide coverage for seniors living support Preventive healthcare / health management • Provide regular medical check-up to policyholders Healthcare Tourism help the policyholders keep track of their health • Grew at 25.3% every year since 1998* status • Malaysia attracted > 1m foreign patients with total medical receipts of RM800m • Possibility of influencing product design among Asian affiliates in providing portability feature of medical insurance?* Source: International Medical Travel Journal 25 25
  27. 27. Final ThoughtING 26
  28. 28. In conclusion…The future is all aboutachieving greater synergiesamong all parties for thebenefit of the public 27
  29. 29. Q&AING 28
  30. 30. THANK YOUDisclaimer: Any views or opinions expressed in this presentation are those of the presenter anddo not necessarily reflect the official stand, policy or position of ING Insurance Berhad. Examples,illustrations shared are based on the presenter’s views which may include information sourced frompublicly available information. They should not be taken as professional advice. 29

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Slide 19 shows that private insurance companies will design, administer and underwrite 1Care's Social Health Insurance (SHI). This will create a similar situation as America where insurance decides what healthcare citizens will get. Watch the movie "Sicko" to see the result of such a system.


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