health covering water treatment and reimbursements expenditure for state government employees, mainly for curative care. VI. Ministry of Defence (MOD) The MOD provides health services through its Army Hospitals and Armed Forces Medical and Dental Centres (Rumah Sakit Angkatan Tentera dan Pusat Pergigian Angkatan Tentera). Details on MOD health expenditure are captured through MNHA annual survey and are mainly for curative care services. VII. Social Security Funds There are two major organisations providing social security funds; the Employees Provident Fund (EPF) and the Social Security Organisation (SOCSO), both of which are mandated by the government. MNHA annual survey captures total health expenditure by state for both of these organisations. Further breakdown to disaggregate expenditure to providers and functions are based on previous field surveys that collected details based on samplings of the medical bill claims. VIII. Other State Agencies (including Statutory Bodies) Other state agencies consist of statutory bodies and Zakat Collection Centre (MAIN). MNHA survey for MAIN captures data on curative care reimbursement, retail sales & medical goods reimbursement and various other services provided to the community. MNHA survey for statutory bodies is carried out to collect health expenditure data which includes total health expenditure, data for provider and function dimensions. Information on the number of employees obtained from Public Service Department (JPA) and disaggregated proportions of provider and function is used to estimate the health expenditure of statutory bodies with incomplete or no data. 3.3.2 Private Sector I. 3.3.2.1 Household Out-of-Pocket (OOP) Health Expenditure Internationally, there are several methods to estimate household out-of-pocket (OOP) health expenditure. MNHA uses the Integrative approach to estimate OOP expenditure. The integrative approach involves examining expenditure flows from the perspective of all agents in the system. This approach comprises several different health expenditures flows in the system from different perspectives: (i) from the source of financing or consumption [example: Household Expenditure Survey (HES) or Household Income and Expenditure Survey (HIES)] and (ii) from the provider side (example: private hospital and clinic survey). This combination approach is the best method and is highly recommended by NHA international standards. a. Integrative Approach In the integrative approach, the gross of direct spending from the consumption, provision and financing perspective is estimated after deduction of the third-party source of financing payer reimbursements. This deduction is made to avoid double counting and overestimation of the OOP expenditure. The integrative approach under the MNHA Framework uses the formula below to derive the estimated OOP expenditure: OOP Health Expenditure = (Gross OOP Health Expenditure – Third Party Payer Reimbursement)
- OOP Expenditure for Health Education & Training 8 MALAYSIA NATIONAL HEALTH ACCOUNTS HEALTH EXPENDITURE REPORT 2011-2022
GROSS OOP EXPENDITURE NON-RESIDUAL ITEMS RESIDUAL ITEMS • Ministry of Health User Charges • University Hospitals User Charges • National Heart Institute User Charges • Private Hospitals Gross Revenues • Private Medical Clinics Gross Revenues • Private Dental Clinics Gross Revenues • Private Pharmacy Sales • Private Haemodialysis Centre • Medical durables / prosthesis / equipment • Medical Supplies • Ancillary Services • Traditional and Complementary Medicine (TCM) • TCM Provider b. OOP Data Sources i. Gross OOP Expenditure
The gross OOP expenditure is the net reconciliation of various datasets using the consumption and provider approaches. It consists of two groups, namely Residual Items (RI) and Non-Residual Items (NRI), as shown below. ii. Third-Party Payer Reimbursement
T h e t h i r d - p a r t y p a y e r reimbursements are the finances claimed from the various agencies such as private insurance enterprises, private corporations, Employees Provident Fund (EPF), Social Security Organisation (SOCSO), and federal and state statutory agencies by the OOP payee after the OOP payment is made. Each item in the gross spending and third-party payer data can be obtained from several data sources (Appendix Table A1.1 and A1.2). The group above is subsequently reassigned to the below categories after considering data captured from IQVIA (pharmaceuticals, supplies and TCM). c. Deduction of Third-Party Payers The summation of all gross revenues is considered as OOP and non-OOP health expenditure. The non-OOP health expenditure has to be deducted as the refundable payments (private insurance, private corporations, SOCSO, EPF and statutory bodies) to estimate the net OOP expenditure. This deduction is made to avoid double counting and overestimation of the OOP expenditure. d. Training Expenditure Estimation The data were obtained from public universities, private universities and training institutions conducting training in the field of health. Data from each respondent are assigned MP, MF and state codes. Data gaps are addressed using the linear interpolation method. Data on health personnel in-service training expenditure is currently not included due to the resource intensiveness needed to capture or extract this expenditure, which is embedded in other expenditures, such as expenditure for administration at each hospital and health department. 9 MALAYSIA NATIONAL HEALTH ACCOUNTS HEALTH EXPENDITURE REPORT 2011-2022
ii. Private Corporations/Private
Companies
The labour force within the private
sector may gain medical benefits
through the private employer medical
benefits scheme. The average
per capita health expenditure was
calculated based on the various
industrial surveys conducted by the
Department of Statistic Malaysia
(DOSM) and excluded group health
insurance purchases for employees.
iii. Private Health Insurance
The health expenditure of private
health insurance was calculated
based on the Medical Health
Insurance data from the Central
Bank of Malaysia. The data includes
individual and grouped insurance
data. The proportions for providers
and functions of health care were
obtained via the MNHA survey of
insurance companies.
iv. Non-Governmental Organisations
(NGOs)
Non-Governmental Organisations
(NGOs) are also involved in health-
related activities. Health expenditure
incurred by the NGOs was obtained
through the MNHA survey of
these organisations. The survey
also enables this expenditure’s
disaggregation to providers and
functions of health care.
v . Managed Care Organisations
(MCOs)
Under the MNHA analysis, only data
related to health administration of health
insurance was obtained from MCO.
vi. Rest of the world (ROW)
Rest of the world (ROW) are
arrangements involving or managed
by institutional units that are resident
abroad who not only purchase but
may also provide health care goods
and services on behalf of residents.
It includes health-related activities.
3.4 MNHA ESTIMATION OF CONSTANT
VALUE
Current or Nominal value of health expenditure
refers to expenditures reported for a particular
year, unadjusted for inflation. Constant value
estimates indicate what expenditure would have
been when anchored to a particular year value,
such as 2018 values applied to all years. As a
result, expenditures in different years can be
compared on a Ringgit-for- Ringgit basis, using
this as a measure of changes in the volume of
health goods and services. When making health
expenditure comparisons over a time series, it is
more meaningful to use constant values rather
than current or nominal values.
G D P D e fl a t o r = ––––––––––––––––––– x 1 0 0GDP Current
GDP Constant
In health expenditure estimations under NHA, the
constant value is usually estimated using GDP
deflator. The GDP deflator measures the level of
prices of all-new, domestically produced, final
goods and services in an economy. It is a price
index that measures price inflation or deflation.
GDP deflator can be calculated using the above
formula. GDP current and GDP constant time series
data is published every year by the Department of
Statistics Malaysia (DOSM).
The constant value estimation requires a two-
step method whereby the first step involves the
estimation of a set of GDP deflators. Based on advice
from NHA experts, the splicing method on series in
different base years, can be used to get a series of
GDP deflators, as shown in Table 3.4a. The second
step involves the application of this estimated GDP
deflator to nominal values for the estimation of
constant values.
10
MALAYSIA NATIONAL HEALTH ACCOUNTS HEALTH EXPENDITURE REPORT 2011-2022
Example of splicing method using base year 2010
to derive at new GDP deflator for year 2009:
= (100/118) x 113
= 96 For year 2008:
= (100/118) x 120
= 102 Constant value estimates can be obtained by calculating GDP deflator base year 2016 from the derived values of GDP deflator base year 2010, which then can be applied to the nominal value of health expenditure. As a result, the nominal value increases when expressed as a constant value at a particular base year. This estimation can be demonstrated using the 2016 base year and a set of GDP deflator values, as shown in Table 3.4b. Monetary values expressed in current values can be converted to constant values base year 2016 using the formula: Vcox = Vcurx * (Di / Dx) TABLE 3.4a: Example of Splicing Method with Different Base Year Year 2005 2006 2007 2008 2009 2010 2011 Deflators Base Year 2005 100 104 109 120 113 118 na Deflators Base Year 2010 na na na na na 100 105 GDP Deflator Base Year 2010 (Splicing Method) 85 88 92 102 96 100 105 Note: Derived values in bold TABLE 3.4b: Example of Calculating Total Expenditure on Health in Constant Value Base Year 2016 Year 2009 2010 2011 2012 2013 2014 2015 2016 GDP Deflator Base Year 2010 (Splicing Method) 96 100 105 106 107 108 109 111 TEH Nominal (RM Million) na 32,000 35,000 39,000 41,000 46,000 49,000 51,000 TEH Constant (RM Million) na 35,520 37,000 40,840 42,533 47,278 49,899 51,000 Where: - • Vcox is the value expressed in constant values for the year for which constant prices are to be calculated (Year x) • Vcurx is the value expressed in the current values applying in Year x • D refers to the GDP deflator applying in Years x and i, with i being the base year For example, using the above formula to calculate TEH 2015 in constant value:- • Vcurx = RM49,000 • Di = 111 • Dx = 109 Then: Vcox = RM49,000 X (111/109)
= RM49,899 Thus the value to be used, expressed as constant values at the base year 2016, is RM49,899 rather than the current value of RM49,000. 11 MALAYSIA NATIONAL HEALTH ACCOUNTS HEALTH EXPENDITURE REPORT 2011-2022
TOTAL EXPENDITURE ON HEALTH
4. 1 TOTAL EXPENDITURE ON HEAL TH
(TEH)
T
he total expenditure on health (TEH) is the
sum of aggregate public and private health
expenditure in a given year, calculated in Ringgit
Malaysia. TEH mentioned in this report is based
on the MNHA Framework, which consists of core
functions and health-related functions, as shown
in Figure 2.1. In 2022, Malaysia spent RM78,945
million on health or 4.4% of Gross Domestic
Product (GDP).
TEH for Malaysia between 2011 till 2022 shows a
gradually increasing trend. TEH as a share of GDP
TABLE 4.1: Total Expenditure on Health, 2011-2022 (RM Million & Percent GDP)
Year TEH, Nominal
(RM Million)
TEH, Constant
(RM Million)*
Total GDP,
Nominal
(RM Million)**
MNHA Derived
GDP Deflator
TEH (Nominal)
as % GDP
2011 35,953 44,029 911,733 82 3.94
2012 39,448 47,831 971,252 82 4.06
2013 41,647 50,410 1,018,614 83 4.09
2014 46,780 55,259 1,106,443 85 4.23
2015 50,256 59,583 1,176,941 84 4.27
2016 51,756 60,360 1,249,698 86 4.14
2017 56,404 63,386 1,372,310 89 4.11
2018 60,528 67,598 1,447,760 90 4.18
2019 64,336 71,800 1,512,738 90 4.25
2020 67,051 75,447 1,418,491 89 4.73
2021 77,703 82,712 1,548,898 94 5.02
2022 78,945 78,945 1,791,358 100 4.41
Constant values estimated using MNHA derived GDP deflators calculated by splicing method
Source: Department of Statistics Malaysia (DOSM)
for the same period ranged from 3.9 percent to
5.0 percent of GDP. Despite the decrease in TEH
as % of GDP in 2022, compared to 2021 there is
actually a significant increase upon comparing
with pre-pandemic (2019) value (Table 4.1 and
Figure 4.1).
4.2 PER CAPITA HEAL TH EXPENDITURE
In nominal value, per capita expenditure on health
ranged from RM1,237 in 2011 to RM2,414 in 2022.
In comparison, per capita health expenditure as
constant values ranged from RM1,515 in 2011 to
RM2,414 in 2022 (Table 4.2 and Figure 4.2).
CHAPTER 4
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MALAYSIA NATIONAL HEALTH ACCOUNTS HEALTH EXPENDITURE REPORT 2011-2022
TABLE 4.2: Per Capita Expenditure on Health, 2011-2022 (Nominal & Constant, RM)
Year
TEH, Nominal
(RM Million)
TEH, Constant
(RM Million)
Per Capita
Expenditure
on Health,
Nominal (RM)
Per Capita
Expenditure
on Health,
Constant (RM)
Total
Population*
2011
35,953
44,029
1,237
1,515
29,062,000
2012
39,448
47,831
1,337
1,621
29,510,000
2013
41,647
50,410
1,378
1,668
30,213,700
2014
46,780
55,259
1,523
1,799
30,708,500
2015
50,256
59,583
1,611
1,911
31,186,100
2016
51,756
60,360
1,636
1,908
31,633,500
2017
56,404
63,386
1,761
1,979
32,022,600
2018
60,528
67,598
1,869
2,087
32,382,300
2019
64,336
71,800
1,978
2,208
32,523,000
2020
67,051
75,447
2,066
2,325
32,447,400
2021
77,703
82,712
2,385
2,539
32,576,300
2022
78,945
78,945
2,414
2,414
32,698,100
*Constant values estimated using MNHA derived GDP deflators calculated by splicing method
**Source: Department of Statistics Malaysia (DOSM)
FIGURE 4.1: Trend for Total Expenditure on Health, 2011-2022 (RM Million & Percent GDP)
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MALAYSIA NATIONAL HEALTH ACCOUNTS HEALTH EXPENDITURE REPORT 2011-2022