The allocation, announced by the central bank in a statement today, will fund the implementation of the diagnosis-related group pricing system and the publication of common medical procedure costs.

“In addition, part of the fund will also be used to facilitate the development of a base MHIT (medical and health insurance/takaful) product that covers essential healthcare needs,” it said.

BNM said that once available, the product will be offered to policyholders aged 60 and above, providing a more affordable and comprehensive insurance option.

It said these broader efforts will complement the interim measures announced to mitigate a 40% to 70% hike in medical insurance premiums.

The central bank said it and all stakeholders are committed to strengthening efforts to contain medical cost inflation effectively.

“These efforts include greater transparency in drug prices, advancement of digitalisation to enable sharing of electronic medical records that would reduce the need for repeated tests for patients, and strategic purchasing by both public and private sectors to reduce cost,” it said.

It also said it will periodically review progress on these efforts, alongside healthcare reforms.

“This will be important to transition to more sustainable provision of MHIT products going forward,” it said.