KUALA LUMPUR (July 29): Malaysia’s biggest hospital operator IHH Healthcare Bhd (KL:IHH) said on Monday it is ready to explore the feasibility of outcome-based payment models, citing results from its recent initiatives.

Under the group's value-driven outcomes (VDO) initiatives — which track the patient journey to measure, identify gaps, and improve clinical process — colonoscopy procedures resulted in higher-than-benchmark detection of polyps that could develop into colon cancer, IHH Healthcare said in a statement.

Surveys before and after total knee replacement, meanwhile, show significant improvements in areas that matter most to patients, such as pain relief, better physical function and enhanced quality of life, IHH Healthcare said.

“With the positive results of our VDO initiatives and the maturity of our data, we are now ready to explore the feasibility of outcome-based payment models,” said Jean-François Naa, the chief executive officer of IHH Healthcare’s Malaysian operations.

The statement follows Health Minister Datuk Seri Dr Dzulkefly Ahmad's call on private hospitals in Malaysia to introduce pay-for-outcome fees and shift away from the “pay-for-service” model to curb medical inflation and improve the outcome of healthcare treatments.

The Association of Private Hospitals of Malaysia supports the minister’s proposal, said the association's president Dr Kuljit Singh. Under the outcome-based model, pricing of healthcare is determined by clinical results rather than a cost agreed beforehand.

IHH Healthcare’s VDO initiatives currently cover around 15% of its procedures such as colonoscopy and hysterectomy. The initiative spans its network in Malaysia, including Gleneagles Hospitals, Pantai Hospitals and the Prince Court Medical Centre.

The goal is to expand it to 50% in the “near future”, IHH Healthcare said.

Medical claims payout increased 26% in 2023, following a 34% surge a year earlier, according to the Life Insurance Association of Malaysia that represents 16 foreign and local life insurers.

Policyholders have sought or resumed medical consultations as Malaysia recovers from the Covid-19 pandemic, leading to a sharp rise in medical claims in 2022 and 2023.

Shares in IHH Healthcare settled one sen or 0.16% higher at RM6.27 on Monday, valuing the company at RM55.22 billion.