Malaise in Malaysian Health Care Services Development & Procurement

Anti-Corruption Summit: Zero Tolerance for Corruption
30-31, March 2009, Sime Darby Convention Centre, Bukit Kiara, KL

Dr David KL Quek, drquek@gmail.com
Hon. Gen. Secretary, Physicians for Peace & Social Responsibility (PPSR),
President-elect, Malaysian Medial Association (MMA)

Healthcare Development in Malaysia while laudable is still Suboptimal
The right to health is increasingly seen as an inclusive human right, which includes safe drinking water, adequate sanitation, food, nutrition, housing, healthy working conditions, education, information and gender equality.

Thus, this right encompasses certain freedoms as well as entitlements, such as the right to choose non-consensual medical treatment, freedom from torture or other inhuman cruel or degrading treatment or punishment; as well as the right to health protection with equal opportunity to attain the highest possible level of health. This includes the right to prevention, control and treatment of disease and access to essential medicines, maternal, child and reproductive health, at reasonable and affordable costs.

In many respects, Malaysia has done relatively well in ensuring that most Malaysians have fairly decent access to some form of basic as well as some excellent tertiary level health care. However, quality access is still sporadic and not enjoyed by every single citizen. Malaysia is still not a nation that professes to offer universal access to health care for all its citizens.

Malaysia spends just around RM13 billion on health care per year, as of 2006. This amounts to 3.8% of the GDP, with the government (public sector) contributing some 2.2%, and the private sector the other 1.6%. In terms of the national budget expenditure however, this amounts to 6.9%. This expenditure of just 3.8% is significantly below the recommendations of W.H.O., which has advocated an allocation of around 8% of the GDP for sustainable and accessible health care for all.

Opaque Mechanisms of Procurement/Divestment Processes
In Malaysia, many local and international economists (such as Jagdish N. Bhagwati , K. S. Jomo , Edmund T. Gomez , Rajah Rasiah , Ismail Md. Salleh ) have pointedly raised concerns that many developing nations’ government procurement practices, divestment of state interests, assets or services had been opaque and should be made more transparent to improve cost-efficiency and benefits. For example, many instances on the planning, procurement, development, divestment and allocation of public services and infrastructure, are troubling and obscure.

There is that lack of transparency in awarding of contracts, and the seeming arbitrary dispersal of public services to preferred parties, dependent on whom one knows, on who are politically- or personally-connected, or who are in the ‘official’ loop of often closely guarded ‘secret’ negotiations or plans. Therefore, these are parceled out to many intermediary or third parties (concessionaires), without the necessary open tenders to vet the cost-benefits or expertise to carry out these services to the best of their capabilities. In short, we are not getting the “best bang for the buck”, so to speak.

These privileged concessionaires then enjoy protected monopolies for decades, ensuring circumscribed profits, which no other private company can ever hope to attain. Worse, these are made with guarantees of subsidies by the government or its agencies should there be shortfalls in expectations of lowered profits or losses. It appears that this system of favoured patronage (more often along political and possibly business connections) exists for many of these allocations and options, and appears to be fully ensconced in the Malaysian landscape.

I will discuss some of the more publicly known examples in the health care service, which serve as worrisome opaque exercises of government authority, and which to my mind, borders on wastage and profligacy—escalating the already high costs of health care spending, without the necessary return of investments or benefits to the general public, the tax payers and citizens.

Ambivalence on Free-Market Forces vs. Universal Coverage or Subsidy
Malaysia currently has a dichotomous public-private system of health care services. From what was largely a government-led and funded public service enterprise since the time of independence, our healthcare service has over the decades (since the 1980s), transformed into a buoyant dual-tiered parallel system, with a sizable and thriving private sector. But, we have not approached a unified system that is a declared national healthcare policy of offering universal access to every citizen.

There appears to be strong ambivalence as to whether to fully tap into the free market system for healthcare provision and funding or to resort to a single payer publicly controlled system where universal healthcare access is assured. Some mix of these two disparate systems seems to be in play at the current moment.

To be fair, for the past 50 years or so, there has always been an overarching concern for the common citizen, especially the poorer segment of Malaysian society, where there is an implied social contract and acknowledged ‘right’. There is a deep-seated commitment of the Malaysian government to eradicate poverty and develop human capital.

It is expected that the government guarantees a comprehensive provider function at greatly subsidised rates or at token sums—that taxes and other contributions should provide adequately for most if not all its citizens, with the government taking up the shortfalls for unexpected costs due to catastrophic or chronic ailments.

On the other hand however, there appears to be a covert if unannounced shift in thinking that eventual corporatization or privatisation of the public sector facilities and services should be allowed to unfold, where market forces dictate the price, extent and quality of the services offered.

The ultimate aim is that the government should play only a regulatory, monitoring and facilitator role to safeguard the welfare of its citizens, while at the same time encouraging growth of the less-bureaucratic, better-run and more competitive private sector. This thus appears to be in tandem with a globalised world, with free trade looming and all trade barriers lifted in due course.

However, what are the realities on the ground regarding our health care services?

Structural Problems remain
What is still inherently unpalatable is that while we have a relatively enviable primary health care system, there remain many questions on the uncertain and inconsistent delivery of medical care options in the expertise or tertiary level. Many of our health officials boast of our world-acclaimed excellent network of primary health care facilities—these allow for a reasonable reach to any public healthcare facility within a radius of 5 km for any citizen.

But not every of these amenities are adequately staffed, and certainly not with a doctor in every instance, thus there are still potential gaps when more serious illness arise. Delays and lapses in diagnosis and treatment are possible but real issues, which can affect many of the less fortunate and the poor.

Yet despite such shortcomings, our life expectancy at birth has risen from 55.8 years and 58.2 years for men and women, respectively in 1957, to 71.8 and 76.3 years, respectively for 2006; which places us near the middle rung of human development goals.2,

Hospitals Built at Huge Costs without proper assessment as to need, manpower planning
From an infrastructure point of view, the modernisation of our health care facilities and hospitals has been impressive.

Tertiary health care facilities have been built in most major towns in the country, but with more concentrated in the Klang Valley. But most of these have been built at huge costs, but whose performance as public utilities has been less than stellar.

Over the past decade or so, half a dozen new hospitals had been built, each costing upwards of 350 million ringgit, with one reported to cost nearly one billion ringgit! We have at least 5 tertiary hospitals within the vicinity of KL: Selayang, Serdang, Ampang, Sungei Buloh, and Putrajaya, excluding IJN, UMMC, HUKM and HKL. However, despite these huge expenses, which were due in part to turn-key B-O-T or B-O-O arrangements, facility or equipment maintenance and inconsistent expertise staffing remain mired in serious recurrent inadequacies.

Poor Maintenance of Healthcare facilities
Recent years had also seen hospital facilities (new hospital in Johor Bahru, KL hospital, etc.) beset with scandalous structural failures such as roof/air-conditioning leakages, moldy infiltration of wards, operating rooms, including the recent sudden closure (because of failure to pass fitness inspection) of the tower wing of the Queen Elizabeth Hospital in Kota Kinabalu, Sabah, which has caused untold hardships on the citizens of Sabah. In the latter case, expensive purchases of private health care services have to be made at ‘non-negotiable’ prices, which further burden the limited coffers of the government and the tax-payers.

Such snafus in construction and maintenance reflect shoddy or shortchanged work and/or careless management and oversight. They buttress the suspicion of possible corrupt or totally inept control of personnel and misplaced distribution of funds at systemic or local-regional levels.

Therefore, while many new state-of-the-art health facilities have been constructed in most major towns, these have been expensive, and not necessarily the most efficiently equipped or staffed.
With changes in leadership i.e. ministers of health, haphazard rather than a systematic structured planning appears to be the disjointed results of individual whims or persuasions. , Very short-term planning appears to be the hallmark of our healthcare system restructuring, despite the many reports which have been generated all these years.

We appear to be more engrossed with new modern structures rather than up-keeping and maintaining existing ones to become exemplary centres of excellence, maybe because there is little money to be made in this! Former PM Mahathir Mohamed had gone on to lament the fact that we appear to have “first world infrastructure, but third world mentality!” The Star newspaper managing editor, P. Gunasegaram, had only recently begged to differ when he asserted that even our infrastructure is “third rate and getting worse”.

Personnel and Staffing Development still wanting
Sadly, after so many years, we are still incapable of having a robust sustainable programme of producing or developing sufficient trained specialists, who can adequately staff our public facilities, in all the necessary disciplines. We are losing well-trained experienced specialist physicians and surgeons to the private sector at such alarming rates that we are almost always perennially understaffed!

We then resort to hiring questionably qualified or possibly substandard overseas doctors, who speak little or no local language, which undermines their competence and communication with our citizens. Furthermore, various ministers have been dangling carrots and offering unfair exemption rulings aimed at luring back foreign-trained specialists to fill in the vacancies at less popular remote centres. Many public sector doctors who have loyally stayed within the service feel unjustly discriminated against. Why should those who have followed the system and sacrifice their remuneration advantage be penalized?

Physician Discontent Continues
We’ve had countless debates and discussions on the whys and wherefores of such a predicament, yet we’ve never had the courage or the conviction to do what is necessary to keep our experts. We still get bogged down with bureaucratic impossibilities and narrow-minded constricts of what can or can’t be done. Numerous national health plans have been made but problematic issues remain.

The MMA (Malaysian Medical Association), through its Section Concerning House Officers, Medical Officers and Specialists (SCHOMOS) has been arguing for more structured deployment planning, such that even with these incentives, there should be detailed contractual undertakings that these personnel would be re-deployed to bigger centres of their choice, (for clearer career development programmes or pathway) once they have completed their ‘hardship’ service in the interior.

Failure to appreciate these doctors in particular, have led to many younger doctors complaining that the government is not concerned about their welfare and their future. Thus after such remote postings which they view with some discomfort, many are ready to throw in the towel and leave once their service contracts in compulsory service is over. By showing more concern and offering more incentives, we may be able to hold on to more of our public service staff, rather than losing them immediately after these postings.

The medical profession has been clamouring for an independent Commission and scheme, which can then truly address the concerns and special needs of our profession, not because we demand exceptional benefits, but because the realities demand so. Singapore has managed to keep most of their healthcare expertise by providing a special remuneration scheme and benefits which cuts down the disparity between the public sector physician and those of the private sector—it is not foolproof, but it works.

Public sector medical care inconsistent, overstretched
Except for some tertiary quasi-corporatised medical centres, such as the IJN, Selayang, Putrajaya, Kuching, Penang and Serdang Hospitals, more sophisticated tertiary care appears to be still lacking, and are often piecemeal and associated with inconsistent quality and unreasonable waiting times, or excessive cost sharing. Importantly as our citizens gain more empowerment and knowledge, their demands and their expectations too escalate, but on many an occasion, are not met.

Notwithstanding these unreliable deliveries of health care, Malaysian health care costs are still very affordable and heavily subsidised by the government, so much so that nearly free access is almost guaranteed of emergency or primary care for everyone. Of course, for more sophisticated care, due to shortage and maldistribution of expertise in the public sector physicians, these still have to be rationed and triaged according to needs, which have caused some to wait in inordinately long queues.

Paradoxically, nearly free healthcare from public facilities is not always appreciated. There is that perception that free care may not be up to the mark. Medical errors have been highlighted particularly with rushed prescription mistakes often made due to very short interaction times with over-stretched overworked doctors.

In busy public outpatient clinics, endless queues of up to 150 patients per doctor on duty per session, can exert severe stresses on the hapless doctor. The doctor is pressured to quickly see through each patient in as quickly a manner as possible, often with little thinking or proper analysis of each individual complaint. Such cursory 2-to-3-minute attention makes a mockery of the patient-doctor encounter, which then creates tension, fosters poor communication, and unleashes unsatisfactory, unhappy patient experiences.

Although the majority of civil servants and the lower income citizens are not necessarily unhappy with the services of the public sector, many in the urban/suburban areas still frequent the many GP clinics for more convenient access, on a fee-for-service or employer-provided or insurance-covered arrangements. Compared to many of our neighbouring countries, GP care is still very affordable and relatively cheap. Nevertheless, Malaysia does not have a declared universal access to health care for all its citizens.

This includes foreign workers (whether legal or otherwise), although this had bred unhappiness and occasional discrimination to try and ensure that these illegal immigrant peoples pay in full. Some citizen groups have even urged for these people to barred from accessing our public health care facilities, because in many cases, public hospital beds have been over-utilised by these immigrants to the crowding out of locals. These occurrences have been particularly acute in Sabah, where southern Filipino migrants have dominated the use of healthcare facilities to the point of angering locals. Labelled PTIs (Pengdatang Tanpa Izin), these ‘displaced peoples are unwelcome, although they do provide and have provided some services at very low cost which have served the needs of the lower economies of the underclass.

Heavily Subsidised health care: Public Aversion to Paying More
Because of the ingrained norm of having to pay so little or not at all in public hospitals and clinics (which are almost totally subsidised), the Malaysian public does not feel that it has to budget for health or medical care, and this is reflected in many of our pensioners complaining of costly unplanned-for medical care. This is also reflected in our government’s paltry allocation of importance toward healthcare spending in our national budget.

There has been flip-flopping ambiguity from the MOH, as whether to allow market forces to dictate healthcare costs, but overall, there has been no public will to enact what could be unpopular.2 Suggestions to end free treatment at public hospitals and highlighting that rising healthcare cost is too heavy a burden for the government, had not been too well-received by the citizens.

This strategy seemed to have disappeared following the recent electoral setbacks of the incumbent government. In a recent interview for internet media Malaysiakini, the new health minister Dato’ Liow admitted that the public hospital services are heavily subsidised by the government: RM12.9 billion or 98% of the entire budget, while patients paid only 2%!

But, Dato’ Liow reiterated his views that government subsidies for patients utilising public healthcare facilities would continue (RM1 for outpatients clinic visits, RM5 for specialist clinic visits, and maximum RM50 for third-class ward hospitalisation costs), and pledged the populist view that such a quantum would continue, despite this being unchanged since the 1970s!

There is great expectation that the government of the day should not jeopardise this by instituting any mechanism, which can change this status quo—hence there is relatively very little public or open debate on these issues.

Access Failure & Medical Assistance Fund
But concerns as to failures in access continue to pop up sporadically in the mass media. Poorer patients have resorted to the mass media appealing for financial assistance to help defray medical costs, especially for some costly or tertiary specialist care—e.g. in one week alone in October 2007, there were at least 3 appeals for help.

Thus, this has prompted some stopgap measures such as setting up a Medical Assistance Fund (MAF) of RM 25 million, by the Ministry of Health. However, this fund can only be utilised at public or quasi-governmental healthcare facilities, and appeals have to be vetted stringently to ensure need and priority, which had drawn sharp criticisms of this being too bureaucratic and slow, even unfair.

Yet another Emergency Fund (D’tik, an acronym for Dana Talian Insan Kritikal Yayasan Kebajikan Negara) has been set up. This fund of RM5 million, provides critically ill patients access to treatment within 24 to 72 hours, but is currently only available at Kuala Lumpur Hospital as its pilot medical facility to kick-start the programme.

Clearly, such setbacks and failure of access implied that the public healthcare sector needed a revamp to enhance its capacities. Providing such services at huge or near-total subsidy appears untenable and unsustainable, and still left gaps, which had to be filled by creation of some extra mechanism to expedite access (predominantly by offering extraneous funds and/or donations).

Thus, this explains in some way the government’s overt encouragement for the private sector to flourish and develop, in order to cater to the more willing, discerning, paying citizens, and leaving the public sector to look after the less endowed.

Corporatisation / Privatisation Controversy
Earlier hints that the public sector health services should be restructured into a government-owned non-profit entity, made economic sense in its first offering. This ‘corporatisation’ model implied converting most of the larger public hospitals into operating as quasi-private entities. This would avoid creating a two-tier system, and would facilitate disbursement of funds when a single payer health insurance scheme was introduced.

At least that is what had been planned. However, many are still quite in the dark as to when or if these would be enacted, and serious doubts and anxiety have been raised. This ambivalence is now quite understandable because earlier attempts to corporatize these public hospitals and facilities were scuttled after news leaks prompted severe backlashes from some consumer and pressure groups and opposition politicians.

Ensuring greater transparency in MOH decisions and planning
The health minister Dato’ Liow has said that “Government and private sectors should work together. Because the doctors that we train are for the nation, irrespective of (whether they work for the) government or private. Doctors are serving the people. In Malaysia, 41 percent of our population go to private hospitals and clinics and 59 percent go to public health institutions. Therefore, the private sector is playing an important role to ease the burden and also the workload in government hospitals.”

It is heartening that the current health minister is enlightened and positive about this private sector contribution. Therefore, this is an opportune time to ensure that the mechanisms for better partnership between public and private healthcare sectors be forged to facilitate closer and more meaningful collaboration.

Purchasing Private/Corporate Sector Expertise
Migration of trained staff especially medical specialists to the private sector continues to bug the system, which then causes the expert service to stall, because the requisite expertise had been lost. In critically short-staffed services such as neurosurgery, the public sector has to occasionally buy the services of private neurosurgeons to attend to their patients, especially during emergencies.

Currently, in Kota Kinabalu, Sabah, cardiology and cardiac surgical services are purchased with weekly rotations of specialists from the corporatized IJN, at hefty prices. Also being a corporatized medical centre, the IJN has been billing the government to take care of its public servants, pensioners and referrals from its MOH hospitals and clinics. This comes at a premium, with the government reimbursing some RM 31.3 to 144.5 million per year, from 1993 through 2004, respectively, for these services. Last year, the MOF subsidy to IJN is reported to be around RM250 million.

However, because of higher wages and better work conditions/benefits, specialists at the IJN appear to have less rapid turnover (3% annually), and thus enjoy greater consistency and continuity of services. This also makes continuing manpower and specialist training possible, too, to enable it to maintain its reputation as a centre of excellence. But obviously this comes at a higher cost—perhaps this expenditure is more realistic in terms of healthcare economics. This successful model has now made it an object for takeover by a GLC, Sime Darby Bhd.

So this model of public-private partnership appears to be successful and beneficial and attempts have been made to have it emulated. However, there have been serious misgivings about this concept of healthcare reform because of its wider socio-economic implications; the Coalition Against Health Care Privatisation has been most vocal against any development toward the passing of any extra cost to the public. , ,

Health Support Services – Divestment through Patronage System (‘Rentier’ Capitalism?)
Earlier examples of unpopular and expensive divestment of public services to several concessionaires have left many with mistrust, and had generated debate as to the fairness or opportunity-costs of some of these practices.

Despite public dissent, over the past 20 years or so, there have been sporadic if partially successful attempts to privatize or corporatize various components of the public health sector, e.g. the government’s drug procurement and distribution centre (to UEM’s subsidiary Southern Task, later renamed as Remedi Pharmaceuticals, then as Pharmaniaga); and the divestment of its support services (cleaning, linen, laundry, clinical waste management, biomedical engineering maintenance) to Pantai Medivest, Radicare and Faber Mediverse.

In the former case, the cost of critical drugs rose several fold upon divestment of the government medical store, e.g. drugs such as morphine and pethidine for pain relief, used routinely post-operatively by most if not all hospitals! Even after public hue and cry, the prices of some of these essential drugs were reduced but remained higher than before or even from alternate private sources!

Thus, this sort of divestment of critical services to private entities, appears to enrich the favoured party which had close links and ties to the government. And because such profits are assured, without the necessary business risks of true free market forces, economists have labelled this sort of practice as ‘rentier’ or rent-seeking capitalism.

‘Rentier capital’ economics applies when state assets are divested to politically well-connected private entities through a system of political patronage, perpetuating mutual dependence between the business elite and the political rulers, i.e. the ‘crony capitalist’ model that supervenes the true nature of this form of take-over.

Most economists believe that this form of rent-seeking capitalist model unfairly enriches these business elites at the expense of costlier services and goods to the public at large, and is therefore, wasteful and counterintuitive toward better productivity.

Is a single-payer National Healthcare Insurance/Financing Scheme the best way forward? Skim Insurans Kesihatan Kebangsaan (SIKK)
This brings us to the question of having a single payer system, which has been earlier mooted as the preferred system for encouraging or implementing universal access to health for all.7
The much-awaited National Healthcare Financing Scheme, now rebranded as the National Health Insurance Scheme (Skim Insurans Kesihatan Kebangsaan, or SIKK), appears to be a political deadweight.

Following the formation of the new government, this has once again been deferred for fears of public disavowal and protests. Perhaps, there are just too many variables inherent in the Malaysian system, which renders such a scheme too politically incorrect, too inexpedient to implement.

Interestingly, when it was raised earlier, the MOH tried to allay public fears by announcing that civil servants (which number 1.2 million people, including military and police personnel) and their dependants, 200,000 disabled persons, 435,000 pensioners, 250,000 hardcore poor and an unknown number of unemployed individuals, would be exempt from the SIKK. What is not clear is whether the government would pay the premiums for these people or that they will continue under the present system of healthcare. The latter option would defeat the purpose, because this would undermine the community-rated concept of the SIKK.

Also considering the fact that only 1.2 million Malaysians pay any taxes, collection of such a mandatory ‘health tax’ would be a struggle and challenge. It has been calculated that based on an estimated 4.63 million families in Malaysia (25 million population, average family size 5.4), this sharing of the burden (RM13 billion as of 2003) would encumber each family household around RM2,808 per year or RM235 per month.

Clearly, many would not be able to pay, because more than 58% of Malaysians earn less than RM2000 per month, per family; and paying more than 10% of the salary on healthcare premiums would be too high! Besides, the government would still have to cough up possibly billions of ringgit to sustain the shortfalls and other preventive health care measures. This scheme has been criticised and rejected by the Coalition Against Healthcare Privatisation, as putting the onus of premium paying on the lower- and middle-income private sector employees and citizens.

So, for the foreseeable future into the next 4-5 years at least, it is very unlikely that there will be any attempts to resurrect such a tendentious issue as a national health insurance mechanism. Our current system which has been described by Chee H. L. as segmented, polarising and eventually untenable, is therefore likely to be the status quo for the time being, and making this work better for our citizens should be the way forward, at least for the interim.

EPU-dominance, Political Patronage and Rentier Capitalist methods fraught with problems: FOMEMA
When this agency was initiated in the late 1990s, it was met with lots of objections from medical practitioners and the MMA, who felt that every doctor should be empowered to conduct these tests, and not just some panels of registered doctors.

FOMEMA, is an agency mooted by the EPU and certain officers of the Health ministry, to monitor the screening of foreign workers in Malaysia, especially the initial examination and testing to help isolate infectious diseases from entering the country, and thus pose a threat to the health of Malaysians. Unfortunately it had morphed into a patronage-endowed profit-making concession, which appeared to have exceeded its terms of reference.

Worse, it appeared not to have curbed the timely detection of infections, which was its main mandate. Its aggressive business-like tactics to squeeze greater profits from its subsidiary partners such as pathology laboratories, may actually undermine the quality and accuracy of the testing. It has been reported that instead of the earlier agreement of RM65-75 for testing, FOMEMA has been coercing laboratories to accept a discounted fee of as little as RM25 per patient. This means that there is greater profit to be made on top of its management service fee, which had been pegged at RM25.

Incidentally, Fomema had filed with the Companies Commission of Malaysia that, for the 18 months to June 30, 2002, it had a turnover of RM127.2 million, while its profit-after-tax was RM387,496. Adding carry-forward retained earnings of RM842,714 from 2000, profits available for appropriation were RM1.23 million. Add to that ordinary dividends (paid and proposed) of RM456,711, Fomema retained a profit of RM773,499.

Despite this assured profitability, many problems beset such an agency. Because many shortcomings have been complained about, there has been suggestions that the MOH takes over the screening process as has been done by the Singapore health ministry. In view of the repeated shortfalls associated with the screening procedures for foreign workers, Consumer Association of Penang, CAP, calls on the Health Ministry to halt the use of Fomema’s services and let the medical screening of foreign workers come under the direct control of the ministry itself.

e-Kesihatan
Another covert but highly controversial attempt by the government to allow a private company to run its medical check-up scheme for commercial vehicle drivers, has run into huge objections, by the public, as well as the Malaysian Medical Association. The scheme, called e-Kesihatan, will instead be handled by the Road Transport Department (JPJ).

The e-Kesihatan scheme was originally proposed to curb fraud in commercial vehicle driver medical check-ups where medical approvals were said to be “sold”. However, while the concept is good, many felt that this should not be another attempt to pass off some public asset-services to a monopoly to act as third party manager, with nearly assured profits.

Under pressure from the then Health Minister Datuk Chua Soi Lek, the Transport Minister Datuk Ong Tee Keat held discussions with various parties including the Economic Planning Unit (EPU), Health Ministry, industry players and the medical fraternity to help revamp the schemes. Fees for medical check-ups would be renegotiated, the tests would only cover relevant ones, and more doctors and not just a selected panel would be allowed to conduct the medical check-ups.

The move to appoint Supremme Systems as well as the limited number of panel clinics and the high fees for check-ups drew criticism from the Malaysian Medical Association and associations representing the commercial vehicle drivers.

The strong opposition resulted in the ministry shelving the scheme. Ong said with the revocation of the private company’s role in the scheme may lead to legal problems. The programme would now be expanded to accommodate any doctor registered with the Health Ministry. “We want to do it in a way where it is not monopolised by groups or cartels,” he said.

Sadly, now the company that claimed to have been given the contract has demanded compensation for breach of contract. Supremme Systems Sdn. Bhd. is demanding huge compensation for the aborted concession, which it claims to have had planned and partially implemented, and RM 70 million for loss of reputation! This was disclosed by Deputy Transport Minister Lajim Ukim at the Dewan Rakyat, who said that: "On Sept 19 last year, SSSB cancelled the (e-Kesihatan) agreement with the government and demanded that we pay them RM103 million in compensation."

Even Khazanah is making a foray into Private Hospital Services
Of late, there has been full and implicit encouragement of the private sector to flourish with differing modes of financing and capital injection. Government-linked corporations (GLCs) such as the KPJ (Kumpulan Pelaburan Johor) and Sime Darby groups and latterly the Ministry of Finance investment arm, Khazanah, have been pushed to become major players in modernizing and extending the reach of the private health care services in Malaysia and beyond.

Is More Privatisation acceptable to the Rakyat? Aborted Sale of IJN Debacle…
One way to further this is by privatising more of the public healthcare facilities, but this is fraught with uncertainties, although such exercises might make administrative and economic sense and offer greater balance sheet accountability. One inevitable problem will be the almost inescapable escalation of the cost of services to ‘real’ terms, with progressively less subsidies. The poor unfortunately, could be left out of the loop with uncertain safety nets to cushion their plight.

The recent application to the EPU by Sime Darby Healthcare S/B to acquire a stake in IJN (now a corporatized entity 99.99% owned by the Ministry of Finance) has already brought a swift and negative dissident response from a newspaper editor. Gunasegaram P. has stated his dismay that “for large sections of the Malaysian public, the very idea of privatising IJN is shocking because charges will rise to astronomical levels.”

He questioned whether there is any net benefit to the public or government, and that if there were any reasonable doubt, this privatisation should not be undertaken. He alluded to past experiences that previous privatisation exercise of other services had not brought down costs for the public or government. He concluded that “(t)here are some things that should not be up for sale at any price. Affordable health care for the general public is one of them.”

In another article in The Edge Daily, it was reported that the health minister and his ministry is not too happy with this divestment, either. However, the Prime Minster and his deputy appears to have already endorsed the plan, just cautioning the GLC against forgetting its social responsibility to the poor, and they seem to imply that this exercise would allow the private healthcare sector to grow even more.

Latest reports suggest that this takeover bid by Sime Darby has been deferred indefinitely due to public outcry, and possible political fallout. The former Health Minister Datuk Seri Chua Soi Lek has also condemned this sell-off bid, which he said has put paid the good will of the government, despite it costing the government just a ‘paltry’ RM 200 million a year (about 2.5% of the national health budget) to run the IJN. Thus, there is this incessant tussle for public need/good versus free-trade market-driven practices from administrative or financial/budgetary realities points of view.

References

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