PROJECTED FINANCIAL IMPACT OF AN ALTERNATIVE HEALTH FINANCING MECHANISM FOR BREAST CANCER PHARMACOTHERAPY IN MALAYSIA
Author(s)
Jing Sheng Lim, BPharm1, Kenneth Kc Lee, PhD2, Renukha Sellappans, PhD1.
1School of Pharmacy, Faculty of Health and Medical Sciences, Taylor’s University, Subang Jaya, Selangor, Malaysia, 2School of Medicine and Health Sciences, Monash University Malaysia, Petaling Jaya, Malaysia.
1School of Pharmacy, Faculty of Health and Medical Sciences, Taylor’s University, Subang Jaya, Selangor, Malaysia, 2School of Medicine and Health Sciences, Monash University Malaysia, Petaling Jaya, Malaysia.
OBJECTIVES: Malaysia’s tax-funded public healthcare system provides equitable access to care but operates within finite fiscal constraints, which may limit timely access to high-cost and newer treatment options. Consequently, uninsured patients who seek treatment in the private sector face high out-of-pocket expenditure that frequently culminate in financial toxicity. In response, the Ministry of Health (MOH) introduced Rakan KKM, an alternative public hospital financing mechanism, offering selected services through regulated payment arrangements as an affordable “premium economy” option. This study evaluated the fiscal implications of Rakan KKM from the national healthcare system perspective.
METHODS: A System Dynamics model was developed to simulate disease progression and patient movement across public, private and Rakan KKM facilities over a 10-year horizon. The model incorporated national registries, procurement costs and structured expert elicitation. The Rakan KMM scenario was compared with the baseline with a compounding annual health inflation rate of 1.90%. Extended scenario analyses, guided by the Diffusion of Innovation framework, examined varying uptake rates and capacity constraints, while deterministic and probabilistic sensitivity analyses assessed parameter uncertainty.
RESULTS: The simulations suggest Rakan KKM could reduce pharmacotherapy expenditure by leveraging the MOH’s centralised medicine procurement and purchasing power within a regulated payment structure. Over the 10-year period, the model projected cumulative pharmacotherapy savings of RM 709.59 million (USD 181.34 million; 1 USD = RM 3.91) relative to the baseline. By 2035, annual public sector expenditure is projected to decrease by 40.3% within that year alone. The model also projected cumulative gross programme revenue of RM 248.43 million (USD 63.49 million), with a net systemic return of RM37.26 million potentially available for reinvestment.
CONCLUSIONS: This modelling study provides early evidence to inform policy discussion on the potential role of Rakan KKM, as an alternative public hospital financing option, in supporting access to high-cost cancer pharmacotherapy while contributing to public-sector financial sustainability.
METHODS: A System Dynamics model was developed to simulate disease progression and patient movement across public, private and Rakan KKM facilities over a 10-year horizon. The model incorporated national registries, procurement costs and structured expert elicitation. The Rakan KMM scenario was compared with the baseline with a compounding annual health inflation rate of 1.90%. Extended scenario analyses, guided by the Diffusion of Innovation framework, examined varying uptake rates and capacity constraints, while deterministic and probabilistic sensitivity analyses assessed parameter uncertainty.
RESULTS: The simulations suggest Rakan KKM could reduce pharmacotherapy expenditure by leveraging the MOH’s centralised medicine procurement and purchasing power within a regulated payment structure. Over the 10-year period, the model projected cumulative pharmacotherapy savings of RM 709.59 million (USD 181.34 million; 1 USD = RM 3.91) relative to the baseline. By 2035, annual public sector expenditure is projected to decrease by 40.3% within that year alone. The model also projected cumulative gross programme revenue of RM 248.43 million (USD 63.49 million), with a net systemic return of RM37.26 million potentially available for reinvestment.
CONCLUSIONS: This modelling study provides early evidence to inform policy discussion on the potential role of Rakan KKM, as an alternative public hospital financing option, in supporting access to high-cost cancer pharmacotherapy while contributing to public-sector financial sustainability.
Conference/Value in Health Info
2026-09, ISPOR Asia Pacific 2026, Bangkok, Thailand
Value in Health, Volume 55, Issue S1
Code
HPR42
Topic
Health Policy & Regulatory
Topic Subcategory
Public Spending & National Health Expenditures
Disease
SDC: Oncology