DRG Based Pricing Seen Causing Minimal Impact On Healthcare Sector

RHB Investment Bank Bhd (RHB Research) maintained its OVERWEIGHT call on the healthcare sector, with KPJ Healthcare Bhd, Duopharma Biotech Bhd and LAC Med as its top picks, following developments from Bank Negara Malaysia’s Sasana Symposium that introduced a softer transition approach towards Diagnosis-Related Groups (DRG)-based pricing.

RHB Research said the introduction of a DRG-FFS hybrid adjustment mechanism would help prevent sudden margin pressure on private healthcare operators as the industry moves away from traditional fee-for-service billing. The research house noted that while DRG rates could limit revenue growth from itemised billing such as medicines, laboratory services and consumables, the near-term financial impact is expected to remain minimal.

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