Willingness to pay for heart disease insurance: A case study of a university hospital in Malaysia

Abstract

According to National Health and Morbidity Survey data, heart disease is a one of the major diagnosis type under critical illness category in Malaysia. Heart disease also remains as a leading cause of death in Malaysia in year 2020. A prominent issue for patients in getting proper treatment for critical illness is the high associated hospitalization cost involved and the loss of income due to the incapability to continue working once diagnose with the disease. Thus, critical illness insurance coverage offers an ideal protection to insured should any unfortunate event related to critical illness diagnosis happen. Presently, awareness on the importance of health-related insurance is slowly progressing. Most people still opt to out of pocket expenses to pay for the medical treatment. Hence, further studies to understand the insurance cost is necessary to nurture a healthy community not only in physical but also financially. This paper calculates the willingness to pay (WTP) for heart disease related insurance as a main component of critical illness coverage from the perspective of potential customers. A multiple linear regression technique is applied to study the cost by age, gender and race groups. The incidence rate of heart disease is collected from the National Health and Morbidity Survey results. Whilst the hospitalization cost is based on the charges collected from a university hospital in Malaysia. Our WTP results are positive for all categories considered indicating that the insurance is worth for purchase given price of at most equal to the WTP value.