Latest news with #MedicalandHealthTakafulInsurance


BusinessToday
4 days ago
- Business
- BusinessToday
Insurance Sector Poised For Healthy Gain Despite Inflation Worries
MBSB Investment Bank Bhd (MBSB Research) has maintained a POSITIVE call on the insurance sector, citing attractive valuations, solid dividend yields, and signs of progress in tackling healthcare inflation despite persistent headwinds. Allianz and Syarikat Takaful Malaysia Bhd (STMB) remain top picks with 'buy' recommendations and target prices of RM21.59 and RM4.59, respectively. The optimism comes even as the government once again postponed the mandatory rollout of the diagnosis-related groups (DRG) payment system for private hospitals, pushing the implementation from mid-2025 to 2027. The DRG framework, widely used in countries such as Thailand and Indonesia, aims to standardise hospital reimbursement based on diagnosis and treatment rather than charging per service. An interim version will begin in selected private hospitals this year, alongside a basic Medical and Health Takaful Insurance platform scheduled for 2026. Insurers have been taking firmer steps to address medical cost inflation, though MBSB noted that increased healthcare spending remains unavoidable. Malaysia's healthcare tourism industry is under competitive pressure from regional players such as Thailand and Singapore, with private hospitals investing heavily in high-end facilities to attract overseas patients. The Association of Private Hospitals Malaysia (APHM) has pushed back against several insurer proposals, including freezing private hospital costs for three years and regulating pharmaceutical prices, arguing these could compromise care standards and limit access to new treatments. Rising claims have also been attributed by APHM to more severe patient cases, potentially linked to post-pandemic complications. Preventive care remains a weak spot, with just 6–7% of the Health Ministry's budget allocated to prevention, far below the treatment allocation. Still, MBSB highlighted recent progress. The Price Control and Anti-Profiteering Order 2025 will require private sector medicine price displays by 2026, promoting transparency and competition. The cost of active pharmaceutical ingredients has also retreated to pre-pandemic levels, easing some pressure on drug prices. Furthermore, co-pay uptake is gaining traction, with Allianz reporting encouraging adoption rates and insurers seeing lower health loss ratios in early 2025. MBSB Research emphasised that while healthcare inflation is unlikely to disappear, continued insurer initiatives, combined with a low sector price point and the potential for higher investment income, provide a case for a positive re-rating. The firm noted that companies under its coverage are market leaders, better positioned to navigate economic uncertainty and the structural challenges of rising reinsurance costs. However, risks remain, including the possibility of slower premium growth if the economy weakens and the threat of persistent healthcare inflation even after the DRG rollout.


The Sun
7 days ago
- Health
- The Sun
DRG system to launch with basic MHIT in Malaysia from next year
KUALA LUMPUR: The diagnosis-related group (DRG) system will be introduced alongside the basic Medical and Health Takaful Insurance (MHIT) starting next year. Deputy Health Minister Datuk Lukanisman Awang Sauni stated that the basic MHIT will act as a standard platform to ensure DRG-based payment efficiency. He explained that the private sector DRG is an interim measure to curb rising medical costs burdening the public. The private sector DRG differs slightly from the national DRG but will eventually integrate through system interoperability. Lukanisman shared these details during a Dewan Rakyat session in response to Suhaizan Kaiat's query on healthcare cost reforms. The national DRG was formulated in 2023 under a five-year plan for full implementation by 2027. A Joint Ministerial Committee on Private Healthcare Costs (JBMKKS) was formed to oversee cost-control initiatives, including DRG. The private sector DRG will support a more inclusive national system by improving data integration and analysis. Government and private agencies are collaborating on technical studies and ICT system development for the national DRG. This year, clinical coding workshops and system development will take place in both government and private hospitals. By 2026, the national DRG algorithm and coding model will be finalised before system testing begins. The official launch of the national DRG system is scheduled for 2027. Lukanisman confirmed no plans for a patient tribunal but noted existing complaint mechanisms under Act 586. Complaints against private hospitals are handled by the Private Medical Practice Control Section (CKAPS). Violations can lead to enforcement actions, including fines, suspensions, or licence revocations. - Bernama