Hypothesized 1Care Scheme Anatomy
Care Scheme As The Utility Towards Managed Care
With the escalating rate of medical expenditure in the country, a cost containment approach has to be put in place to eradicate or replace an ailing healthcare system that burdens the economy. One such option would be the 1Care Scheme. Given the very sketchy information on how this would be implemented, one could only draw inferences from other similar healthcare systems.
Bearing that in mind, it would suffice to say that the scheme would promote the technique of ‘managed care’ (by managed care organizations or MCOs) where the autonomy of patients is sacrificed and replaced by a predetermined set of rules. These rules govern patient’s rights to which doctor, the type of care and the kind of medications he/she receives. Many of us are aware of this issue has been given much focus in the previous attempts to describe the proposed health system in the media.
This has, in the past, led to reprisals mainly arising from public dissatisfaction. This was due to denial of care stemming from government legislation and tight labour rules that restricts the access one has to healthcare options. Employers would then offer private health care plans (which are private insurance plans) to fill in this vacuum so that employees could afford all available treatments. Ultimately (and to the contrary of cost containment), this incident would give rise to the ballooning of medical expenditure in the country.
Free Treatment For All, Really?

Unless the full blueprint is made public, one could only hypothesize the magnitude or the process of financing involved in the 1Care Scheme which is the crux of understanding how the whole system functions.
The population might be divided up to two broad classes namely
1. The general public
2. Concessional patients (the ageing public, citizens below the poverty line, disabled/handicapped)
It will be compulsory for all working citizens of the general public, who have wages within the taxable bracket, to pay 10% of their earnings as contribution necessary for the funding of the scheme. Remember that this 10% tax does not mean that one is entitled to the type of care, it is just a contribution which is used to pay the wages of the physicians and other miscellaneous expenses (purchase of new equipments or subsidizing the concessional patients etc.). This will be collected as federal taxes.
Secondly, to be amenable to treatments within the system, the general public will have to take up an insurance policy (social health insurance). Treatments within this system will be closely regulated by MCOs which could mean that a patient might not be covered for a wide range of interventions (eg. optical surgeries, prosthesis, aesthetics etc.).
Just one burning question – Is the scheme really free in a manner that it provides universal healthcare in a similar vein to the current system? Will drugs be free now that payments have been made by contributing to taxes and insurance schemes? Read on carefully.
So much focus has been given to the taxable amount that we need to contribute but the society has become oblivious about other aspects of the mandatory payments that one has to make in order to get the full package of services available. In summary, this would be the likely formula for the 1Care Scheme :-
Social health insurance (SHI) + General taxation + minimal Co-payments for a defined Benefits Package
The fundamentals of SHIs and general taxation have been explained in detail earlier. What are Copayments and Benefit Packages that are also an inherent part of the formula though?
Of Copayments, Benefit Packages And Additional Private Health Insurances
Copayments are payments that have to be made by patients when their treatment has exceeded the threshold tolerated by the health scheme. Thus, a patient has to fork out a certain amount of money once the treatment requires more financial assistance due to the nature of their illness. Benefit packages seem define the type of insurance from which special group within the population will be stratified accordingly to separate those who deserve exemption from payments or their treatments costs partially subsidized.
Extrapolating from the statement above, even the casual layperson would demand an explanation by posing several questions below:
1. It was said that free treatment will be given to all. But what are these copayments then?
2. Will there be copayments for drugs? Is there a minimum pricing policy?
3. Which class of society will be eligible to total subsidy and exempted from all payments?
4. How will the general public gain access to other treatments that the SHI does not cover?
To minimize copayments, steps will be taken to provide cheap but ‘equally’ good quality drugs or services determined by the MCOs. This is called the minimum pricing policy, a key policy issue that has been very much in the shadows since the planning of 1Care policy.
MCOs will only allow more patient autonomy if they willing to endure an additional cost by purchasing an additional private insurance which will bestow certain benefits:
1. Patients will now be provided with the added benefits which are not covered by the SHI policy
2. Patients will be able to then choose doctors and types of procedures (dental/optical/physiotherapy that was previously not available in the SHI scheme)
Rise In Public Health Care Burden Secondary To Rise In Market Demand
The trend of an increase in purchase of additional private health insurance will influence the increase in demand of services as a whole. With the access to an affordable yearly insurance premium, the growing population will have a lowered out-of-the pocket price to pay when seeking medical treatment. This will directly lead to the increase in market demand for health care services for the medical needy and indirectly cause the sudden surge of prices for medical services.
With the increase in slow increase in inflation rates in Malaysia (upward trend towards the level of 3.3% in December 2011), larger spectrum of the working population would be pushed into the higher marginal tax brackets. This would often leave citizens with lesser disposal income for their utilization.
In line with this scenario, many tax payers would prefer out-of pocket medical expenses be paid before-tax ringgit than after-tax ringgit (which is subject to tax imposition) by purchasing health insurance. Thus this will inexorably increase market demand and simultaneously increase prices of medical services, especially if it is poorly regulated and unprepared.
——-> Continued (Part 3 – The Aftermath And The Remedy)