12 January 2025
Dr Musa Mohd Nordin
Chan Li Jin
Dr Ahmad Faizal Mohd Perdaus
Dr Rajeentheran Suntheralingam
This 5-part series was initiated as the result of current discussions on medical inflation. Our earlier essays had captured the major contributors of rising medical costs, which include the laissez-faire, sky-rocketing insurance premiums that is planned for increase by a whopping 40-70%, and unregulated, hefty private hospital bills.1
Others include investments in new technologies, new expensive medicines, expectations of increasingly informed patients, star quality hospital ambience, branding and the frills of comfort and premium private hospital services.2
Examples include options in the brave new world of medicine such as radical resection, targeted radiotherapy and/or chemotherapy, and new monoclonal antibodies that form personalized medicine.
Our conclusion is DRG is not the be-all and end-all nor the panacea for rising medical inflation. It, however, has its appropriate and specific role in the overall transformation towards a sustainable health financing scheme.3
Getting priorities right
Every Malaysian on the street acknowledges that the Unity Government inherited a broken public healthcare system. The burgeoning healthcare issues we face today are primarily due to irresponsible and immoral previous political policies and governance.
Yet, it makes no sense for the PH government to come down hard on a flourishing and profitable healthcare industry when many pivotal “reformasi promises” have yet to be realised, let alone gestated.4
Therefore, we urge the Prime Minister and his Unity government not to act impulsively, or issue rash statements, on matters that have been beleaguering Malaysians for decades, such as medical inflation.5
They need to stay calm, reflect, analyze and accurately diagnose the primary tumor/problem in our unique, dual, separate, polarized, public and private healthcare ecosystems, before jumping on what appears to be a quick fix.
Pinning down the problem
With any major health reform programs, we must endeavor to find a win-win engagement. This demands a lot of training and change management in ensuring quality care and patient safety are not affected in the transition.
Any drastic changes with major ramifications to the present healthcare ecosystem that affects clinical practice is surely going to cause a different set of issues at the expense of best patient care if done without proper engagement, agreement, and training of the main players (private hospitals and private specialist) and without getting more hands-on support.
Unfortunately, the recent Townhall conducted by MOH on DRG had unearthed more questions than answers. Health policy experts are not specialists nor surgeons, and they may not understand the complexities of diagnosing, treatment and decision making.
Eighteen (18) countries in the OECD, piloted the DRG system, ranging from a 1-year DRG pilot program in Poland, up to 18 years in Chile. The average pilot DRG period was 7.4 years.5
In Malaysia, we are still struggling with DRG case-mix to comply to a passable grade after many years. There are just not enough clerks/clinic assistants, or good ones enough around. Eventually, the data entry falls back to the doctors to fill it up correctly. And guess what, they too don’t do a good job and they hate it.
We need to refine the system until it covers virtually every diagnosis, every severity and every situation. This is quite clearly a tall order, because clinical medicine is neither precise nor certain all the time.
While the main objective of DRG is to manage costs, it may instead lead to supplier-induced demand, where volume of services goes beyond what is medically necessary.
It is potentially open to abuse, when unscrupulous hospital operators can modify treatment decisions to fit the DRG category, which can compromise patient care and outcomes.
Similarly, patients may be upcoded sicker than they actually are for hospitals to increase payments, putting patients and families through unnecessary distress and anxiety.5
Stepwise approach
MOH must recognise that the pushbacks from private hospitals and private specialists is real and not unwarranted. One can think of many points of systems failure and potential unethical practices from major shifts like this be-all and end-all DRG mindset of the political governance.
Therefore, the MOH must not rush DRG implementation due to pressure from the highest in political office. In bad hands, even a good system will churn out bad outcomes.
We recommend a stepwise approach of gradual implementation of the DRG into the healthcare ecosystem, a plausible roadmap towards addressing medical inflation.
In our opinion, the DRG is best piloted in select MOH hospitals and university hospitals under the Rakan KKM programme, and/or a few voluntary private hospitals. Each major hospital group may volunteer 1-2 of their hospitals for this DRG pilot programme.7
DRG may be a good tool to manage rising medical costs. But it requires further analysis for practical implementation involving the people, process and technology.
Hybridisation may be necessary, a combination of different tools including value-based care, for a healthcare system that truly leaves no one behind.
- https://codeblue.galencentre.org/2025/01/drg-one-step-forward-or-two-steps-back-part-1-dr-musa-mohd-nordin-dr-ahmad-faizal-mohd-perdaus-dr-rajeentheran-suntheralingam/
- https://youtu.be/W0RpwYrRi7o?feature=shared
- https://drmusanordin.com/wp-content/uploads/2023/10/Sihat-Bersama-2030-eBook-Version-Final.pdf
- https://www.csis.org/analysis/death-reformasi-anwar-ibrahim-umno-and-betrayal-movement
- https://www.sciencedirect.com/science/article/pii/S0168851023002750
- https://www.freemalaysiatoday.com/category/nation/2025/01/11/no-tolerance-for-unjustified-medical-price-increases-says-anwar/
- https://rakankkm.moh.gov.my/en/
