Kuala Lumpur, 18 October 2024 — “The health allocation under the Federal Budget 2025 tabled in Parliament by the Finance Minister today sets a tone of consolidation and investment in key areas, particularly human resources. This is a critical issue which affects the public healthcare system’s sustainability and resiliency,” said Azrul Mohd Khalib, Chief Executive of the Galen Centre for Health & Social Policy, when commenting on the tabling of the budget bill this evening. “However, it falls short in several areas.”

“Five years ago under Pakatan Harapan’s first Budget, the 2019 health allocation was almost RM 29 billion. Today, health under the proposed 2025 budget is at RM 45.27 billion. It is 9.9 percent higher than 2024’s allocation. MOH will have RM38.53 billion for its operating expenditure and RM6.74 billion for development expenditure. Health is 10.7 percent of the total Federal Budget of RM 423 billion. It is the second largest budget item after Education.”

“With an increase of RM 2.36 billion in emoluments, a decrease of RM 50 million for contract workers and more investment in skills building and training, it is clear that the Government is making a serious effort to recruit, retain and invest in its skilled healthcare workers within the workforce, including nurses, doctors and pharmacists. Many are leaving for the private sector, other countries or leaving the health sector altogether for other jobs,” said Azrul.

“The announcement of an increase in tax relief for those making health and education insurance premium payments up to RM 4,000 is certainly welcomed. Health insurance has changed significantly of late with plans moving towards higher premiums and copayments. The RM 10,000 individual tax relief for medical expenditure is equally welcomed, particularly for those caring for or living with chronic and rare diseases.”

“Rare diseases and rheumatoid arthritis were newly included in the existing coverage provided by the mySalam Health Protection Scheme. However, there was no indication whether MySalam would continue beyond 2025 when it is scheduled to end. The scheme is under the Ministry of Health and managed by Great Eastern Takaful Berhad. If mySalam ends next year, the newly announced benefits will be limited,” Azrul pointed out.

We continue to recommend to the Government that the best way forward is to introduce national health and social insurance.

“The announcement of an increase in sugar-sweetened beverages (SSB) tax to 40 sen per litre to support the Government’s War on Sugar campaign is tempered by the fact that subsidies or incentive payments are still being paid to sugar manufacturers up to RM 500 million to RM 600 million yearly. On the other hand, the tax increase will likely collect around RM 400 million, falling far short of the cost of subsidising sugar. The revenue collected could have been used to invest in improving health education, preventive health interventions, and healthy breakfast programmes for school children as was originally intended when the tax was first imposed in 2019. We need to invest more in this area if we are to seriously commit to moving from sick care to health care.”

“The partnership with government-linked investment companies (GLICs) to invest in improving and strengthening the public health services is extremely welcomed and should be encouraged. However, we believe that the funds involved should have instead been allocated to modernise and future-proof MOH’s existing health information systems such as electronic medical records.”

“Investments in digital health can increase efficiency, quality, and effectiveness of health services as well as yield hundreds of millions of ringgit in savings. However, governments are often reluctant to allocate funds for such purposes despite recognising its importance. The money from GLICs could act like seed funds or venture capital to modernise MOH’s health systems.”

“It was also mentioned that those of higher incomes should pay more or have fewer subsidies for health services in public healthcare facilities. While this intent of solidarity is certainly supported as a form of increasing sources of funding for healthcare, we are concerned that there was no indication of how this should be done or look like.”

“We continue to recommend to the Government that the best way forward is to introduce national health and social insurance. The pooling of funds will go towards investing in both health and aged care. It will complement the existing annual budgetary allocation, and not replace it,” Azrul highlighted.

“In order to ensure that Malaysia’s healthcare system is able to continue to provide quality, affordable and accessible health services for all in the decades to come and tackle the challenges of preventing and treating NCDs, of mental health and an aging population, the government must summon the will and boldness to invest now in a new sustainable approach to funding health. We did not hear that commitment today.”

“More than ever before we need to invest in future-proofing and increasing the resilience and sustainability of the public healthcare system. We cannot take it for granted,” Azrul emphasised.