Hospitals, insurers unlikely to be impacted by higher GP fees

PETALING JAYA: Hospital operators and insurance companies are unlikely to be significantly impacted by the government’s move to raise private general practitioner (GP) fees.

“We believe this fee adjustment will not have a financial impact on the hospital players under our coverage, as the consultation fees of private hospitals and GPs fall under two separate sets of regulations.

“For the insurers we cover, the impact should be minimal, as medical claims from private clinics would likely form only a small portion of their total medical claims,” RHB Research said.

Recently, Health Minister Datuk Seri Dzulkefly Ahmad said the government is in the final stages of discussions with the Department of Statistics Malaysia to determine the new consultation fees,  which have been unchanged for over 10 years.

The outcome of the discussions will be announced by April – ahead of the scheduled enforcement of price displays on medicine, which will take effect on May 1.

The rationale for the price increase came into focus following concerns that many GPs are struggling with the surge in operating costs, which in turn pose challenges across the industry

“We are not entirely surprised by the news, as such matters were brought up even before the Covid-19 pandemic, since private GP fees (RM30-RM125 per visit) had remained unchanged for more than 10 years,” the research house said.

It believed the move will not have any material financial impact on hospital players under its coverage, as they do not operate private clinics in Malaysia.

RHB Research said a revision of private GP consultation fees will be inflationary for claims but this should be manageable for insurance players.

It pointed out that medical claims from private clinics form a very small portion (single-digit percentage) of overall medical claims.

However, the research house highlighted that healthcare players with significant overseas exposure may still face headwinds, predominantly from inflationary and geopolitical uncertainties.

“Although the regulatory overhang arising from the diagnosis-related group (DRG) mechanism could affect investor sentiment in the near term, we are of the view that investor appetite for good-quality healthcare assets remain intact, in view of the permanent, structural shift driven by an ageing population,” it added.

The research house maintained an “overweight” call on the healthcare sector with KPJ Healthcare Bhd as its top pick as it favours domestic-centric names.

For the insurers, RHB Research preferred Syarikat Takaful Malaysia Keluarga Bhd over Allianz Malaysia as it should be less impacted by Bank Negara’s premium repricing cap due to its smaller direct exposure to medical takaful.