Monthly Archives: August 2017


Paying for Care: Can Malaysians Afford it?

The retirement lifestyle is all the rage these days. Based on The Star’s “Yes to villages, no if it’s expensive” report on 9th July 2017, people are beginning to view the idea of moving into retirement villages and communities that have aged care facilities – such as senior day care centres – as an acceptable lifestyle option, so long as it is affordable.

While choosing either to age in your own home or move into a retirement village is a matter of lifestyle choices – the fact is: receiving care isn’t a lifestyle, it is a need and it becomes greater as we move further along in age.

In the same report, many Malaysians express concern about whether these facilities and services are affordable as not all Malaysians will have enough savings for their old age. The general consensus being to forgo these facilities and services if they are too expensive.

However, the need for care still remains despite the lack of finances. A person with a debilitating condition – either with no family members or ones that aren’t able to care for him/her – would need to check into a nursing home.

Hence, while the retirement lifestyle is nice to have, ensuring you can receive care is a must. So the real question is: how can Malaysians afford to pay for their long-term care when they need it.

In the previous issue on “Paying for Aged Care: The Trends & Challenges”, it was identified that the major hindrance of care delivery is the existing payment options within Malaysia’s infrastructure. In defining that, we now examine the opposite spectrum that looks into the factors that impede Malaysians from being able to pay for long-term care. This is specifically in the context of nursing homes where one’s need for long-term care is at its greatest.

Financial Capability & Long Term-Care
While the infrastructure to pay for long-term care has its challenges, Malaysians also need to be proactive. We need to review our financial capability, learn to save and invest our money for old, and identify the factors that could hinder our ability to pay for long-term care.

In a recent study on “Provision of Long-Term Care and Payment Options for Elderly People Living in Kuala Lumpur and Selangor, Malaysia” (*Yip, 2017), a research on the financial capabilities of Malaysian seniors to pay for long-term care was conducted.

With a sample size of 419 seniors whose age ranged between 65 – 84 years old and living in nursing homes, care centres and at home, the outcome of the study indicated:

• 75.5% were unable to pay for their care needs,
• 10.6% have just enough money to pay for care if their needs are prolonged,
• 7.2% have savings but need financial assistance if care needs are prolonged, whilst
• 6.5% indicated they have more than enough money to last for as long as necessary.

The 75.5% were unable to pay for their care is because they did not have savings in the bank to pay for the required services. Regardless of ethnicity, there are 4 factors that contribute to the inability of this significant percentage of the senior participants to finance their long-term care needs on their own. These factors are namely:

1. The Gender Factor
Gender is one of the variables that may affect one’s ability to save and pay for care. It is possible that women – be it for traditional reasons or otherwise – may be more financially dependent on their spouses and family members. For example, if a woman undertakes motherhood they may stay at home to take care of their children instead of retaining employment. Thus, affecting their future ability to pay for care in their golden years.

Further evidence to substantiate the gender factor was in terms of percentage more senior males seem to have more than enough money to pay for care needs as compared to female elderly. The ratio being 10.14% versus 5.33%.

2. Age Defining Factor that Affects Payment Ability
There is a strong correlation between the senior’s age and their ability to pay for their long-term care needs. The study revealed that as a person ages, their ability to pay for their care decreases. The number of seniors who don’t have savings at all increases significantly to more than 80% after age 75.

Furthermore, the small number of seniors who have more than sufficient funds to pay for care needs decreases as the age group rises. These results affirm the fact that longer life spans does increase financial risks due to age.

3. Previous Occupation
The third factor lies in the senior’s previous occupation – depending on whether they worked in the public sector, private sector, or are self-employed. Where the individual worked or what was his/her previous employment prior to retirement matters as it determines the senior’s ability to save and make money in preparation for their golden years. This will undermine the impact on how long can their funds last to pay for their long-term care needs.

According to the findings, seniors who used to be employees (73.87%), self-employed (80.95%) and housewives (80.19%) are found to have the greatest risk of not having any savings at all to pay for their care needs. Meanwhile, those who owned a business (10.71%) and worked for the government as civil servants (11.76%) have a relatively better ability to pay for their care needs.

4. Children
Within a typical traditional family setting, having many children is a blessing. As such, parents need to have a high financial capability to accumulate and grow their wealth in order to provide for their children during their developmental years.

The study’s results showed that more than 90% of seniors in need of care depend on family members for financial support. Filial piety is a deeply rooted value in Malaysian culture, so some would expect children to eventually take care of their parents in old age. However, there is no guarantee that they would or could do so – financially or otherwise – for various reasons.

Out of the group of seniors without children, 91.30% still needed financial support from family members. Only 34.78% of this grouping has their own savings to pay for care, while 32.61% possess other income sources to pay it. Hence, the assumption that people without children are more financially well-off to pay for their long-term care doesn’t appear to be true either.

Regardless if you have children or none, it is imperative for you to plan and accumulate enough wealth for your long-term care.

Whilst there are reports and research findings which are complementary to the idea and development of retirement villages, the income security of seniors needs to be addressed given the higher cost of living coupled with the increased number of seniors left to fend for themselves due to an ageing demographic.

Hence, industry players must be pragmatic and proactive in their approach when undertaking the task to develop a financially affordable aged care ecosystem in Malaysia. Meanwhile, Malaysians must reflect on the factors that hinder their financial capability to pay for long-term care and then arm themselves with the necessary financial knowledge and money management skills to save money and invest in assets that generate income for their long-term care.



Source: Smart Investor, August 2017

Written By: Aged Care Group

*Quotation Source:
Yip, C. (2017). Provision of Long-Term Care and Payment Options for Elderly People Living in Kuala Lumpur and Selangor, Malaysia (Doctoral dissertation). Retrieved from Figshare Database. (MD5: 27fe2fa9e373fd58476ef48896a524c1)

Managedcare & ReGen Rehabilitation International Signs MoU – Providing Greater Accessibility to Care

Kuala Lumpur, 15 August 2017:- In a joint initiative to provide members of the public with greater accessibility to care, Aged Care Group’s wholly owned subsidiary Managedcare Sdn Bhd (“Managedcare”) signed a Memorandum of Understanding today with ReGen Rehabilitation International Sdn Bhd (“ReGen Rehabilitation International”).

The MOU is a cooperative endeavour to achieve specific objectives that enables public to easily find the appropriate care services they may require and offering greater outreach to those needing care.

The collaboration firstly is to increase accessibility of services such as rehabilitation, care administration and other various care services through mutual referrals of relevant services and products of both Parties. Secondly, is to grant exposure and increase accessibility to a wide range of care products and services. Thirdly, is to provide patients and their caregivers with choices on the continuity of care. Last but not least, for respective parties to leverage on opportunities to develop and manage rehabilitation through the provision of step-down care facilities.

Signing the MoU on behalf of ReGen Rehabilitation International is its Chief Executive Officer, Ms Sue Lee Tsui Ling, and Dr Carol Yip representing Managedcare. The witnesses for the signing are Dato’ Frank Choo Chuo Siong J.P, Managing Director of Managedcare and David Smith, VP Clinical Services from Select Medical International.

This collaboration between Managedcare and ReGen Rehabilitation International came forth from their respective mission that complemented each other. With the vision to meet the growing demand for care at a price, quality and locality that is sustainable for different income levels, synchronising both companies’ aspirations to provide world-class rehabilitation care to patients who have suffered from debilitating injury or illness so they may live an independent, high-quality of life.

Payment Options

Paying For Aged Care: Trends & Challenges

Flip open the newspaper and you will likely find an article related to seniors – the care required, their living condition, struggles, healthcare, etc. Recently, The Star published an article on the need for laws that protect the rights of seniors in Malaysia as various social dilemmas – such as abandonment – have arisen from the lack of it. These social tensions are signs that our aged care system is being stretched by the growing needs of an ageing population.

Malaysia need laws that not only covers senior citizen’s rights, but also define the roles of stakeholders; from the state, the community, family members and service providers – such as long term residential and care homes, day care centres, housing developments, transportation, commercial outlets, etc. – alike. This requires all parties to be on the same page. It is clear our aged care system cannot sustain our needs. Hence, we must understand current aged care trends to determine what types of care services are needed and how to sustainably deliver it.

Trends & Payment Modes
As we age, the possibility of needing some form of long-term care is evident. Beyond the initial stages of care during hospitalisation, long-term care (also known as LTC) comprises a variety of services with the purpose of meeting both medical and non-medical needs of people with chronic illnesses/disabilities and are unable to care for themselves for long periods of time. It can be provided at home, in the community and in assisted living facilities like nursing homes and care centres.

As far as trends go, there is an increasing need for expertise by professionals to address multiple chronic conditions often associated with seniors in the provision of long-term care. Likewise, the need for non-medical care such as Activities of Daily Living (or ADL) – which involves activities such as feeding, bathing, dressing and handling of ‘nature call’ issues – is increasing. However, unlike medical care, funding options for non-medical care is not easily available.

In Malaysia, the care that is needed and provided to seniors are delivered through government welfare homes, private nursing homes & day-care centres, voluntary aged-care centres, or by families at home. Naturally, this mix of delivery channels and agents would result in each option having very different funding bases.

The finance options available to seniors to pay for long-term care services include: the individual’s own savings, their Employees Provident Fund (EPF) accounts, pension scheme, investments, government welfare and other sources of income like investments and business income. However, unlike developed countries such as Japan, there are no risk-pooling arrangements such as social insurance and tax-based funding for long-term care available in Malaysia.

As can be inferred by the nature of our available options (apart from government welfare), Malaysians generally make out-of-pocket payments to finance their own or a family member’s long-term care needs.

As a result of financing their care support, there is a noticeable trend in the growth of self-directed (or consumer-directed) services. Despite the obvious challenges inherent with an aged care system largely reliant on individuals making self-funded payments for care, the results of self-directed services grants seniors greater independence and control over their lifestyle choices.

However, while the trend of these self-directed purchases of services are believed to improve the quality of care while simultaneously being cost effective due to the supply and demand economic model, we need to work out the kinks and flaws in Malaysia’s aged care infrastructure – namely our payment options – to fully capitalise on its strengths and minus the weaknesses. The specific challenges inherent in our payment options lie in these four areas:

1. Lack of Representation When Impaired
The benefits of the self-directed payment approach are appealing. It not only provides consumers with greater lifestyle choices and higher accountability in the services supplied, it’s also attractive to some governments due to its links with market-oriented mechanisms.

However, the drawbacks lie in monitoring and purchasing of services, which hinges on the purchaser’s health and mental condition. If the purchaser is frail or mentally impaired and without family support, their bargaining power relative to service providers is compromised and may risk exploitation by service providers as well. Furthermore, this approach does not offer a guaranteed care provision “until end of life” for all individuals.

2. Education & Employment
One of the main factors affecting our Malaysian seniors’ financial resources is due to the low educational attainment, which impacts their ability to save for old age. It is compounded further when their chances of improving their economic conditions become increasingly limited as they get older and their capacity to work diminishes.

3. Insufficient Savings & The Sandwich Generation

Constant reports from the EPF stated that Malaysians aren’t saving enough for retirement and old age. When funds from their EPF accounts are exhausted, family members often become the main welfare provider – both financially and in providing social support to the senior.

Furthermore, the “Sandwich Generation” trend are also linked with the senior’s inability to accumulate sufficient savings or for the savings to last throughout retirement. Due to changes in family size and economic conditions such as higher cost of living (e.g. high prices for housing), Adult children find themselves taking care of their aged parents expenses in addition to raising their own children. In some cases, the senior parents also providing financial support to adult children.

4. Too New To Collect Results
In 2012, the Malaysian government introduced the Private Retirement Scheme (PRS). The objective was to improve living standards for retired Malaysians through additional fund savings. However, as the PRS was implemented six years ago, the effectiveness of this initiative is still too early to assess as an avenue of long-term care funding for elderly Malaysians.

What Lies Beneath
Regardless of overcoming the abovementioned challenges, developing better payment options would be mooted if the practice of inappropriate allocation of care is not addressed. As a senior’s care needs intensifies as they age and medical inflation rises, the appropriate placement of seniors is all the more paramount. When they are accorded the right level of care – which meets the minimum standards required by the regulators – the senior’s financial resources are more likely to be utilised optimally.

This is especially important in managing long-term care costs as it can be difficult to measure due to the nature of the care required by the senior. When costs are not properly managed, the quality of long-term care services may be significantly affected. Additionally, inefficient delivery of long-term care may also affect the price of services delivered and this could lead to the senior being unable to pay for the care needed on a sustained basis.

In Taiwan for example, it is found that care at home was cost-effective for people with “medium” physical disability, but became expensive for people with higher levels of disability when compared with nursing home care. Such findings raise issues about the relationship link between needs and actual care received.

Ultimately, the changing climate in Malaysia’s ageing needs dictates that our current infrastructure and practices cannot remain at status quo. New payment options for long-term care (or at the very least, a revision of our old ones) and the environment required for these options to flourish needs to be investigated, deliberated and developed.

Much of the efforts by the Malaysian government to implement avenues for retirement, and by extension aged care, are still relatively new and time will tell if these efforts are effective. However, for the foreseeable future the challenges that lies ahead for Malaysia is firstly a pension reform. We need a review of social protection for the purpose of preventing poverty for our ageing population and develop a plan that provides adequate benefits that includes long-term care.

This is because a full replacement of income for retirement cannot be obtained purely from one single source or scheme but different tiers must be incorporated so that full replacement can be achieved.

Secondly, we need a total structural adjustment of the economy to cater to Malaysia’s ageing needs. As industry players, we need to ensure that future developments in ageing policies should include the provision of better care services with more uptake to enable cost-effectiveness.

Finally, greater efforts to evenly distribute aged care services and facilities between cities and country areas to ensure no one is neglected.



Source: Smart Investor, July 2017

Written By: Aged Care Group

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