Curing the healthcare system

Curing the healthcare system

(From Penang Monthly, February 2013)



Previous articles in this column have elaborated at length on the highly centralised system of government in Malaysia where, despite being a federation, the “federated states” of the country are left with very limited areas of responsibility. Healthcare is one such example. 

As a matter of fact, public health and sanitation are included in the so-called Concurrent List, which theoretically means that that area of administration involves shared powers between the federal and state governments. However, in reality, healthcare policies are determined by the central government under its various departments, namely the Ministry of Health, the Malaysian Medical Council and public healthcare administered by state health departments. State governments of the day have very little say over these policies or their implementation.

Nevertheless, it is worth examining the programmes that have been run by the Penang and Selangor state governments over the last five years, despite their limitations. In the coming year, the Penang CAT Dialysis Centre will be one of the major programmes, where, with the help of a private company, a license application is being made to the Ministry of Health. It is expected that patients receiving dialysis treatment at this centre will only pay RM30 instead of the RM50-RM60 they would pay at other dialysis centres run by NGOs. Another will be Penbar, or Program Pulau Pinang Bebas Asap Rokok, an anti-smoking initiative.

Similarly, Selangor has also initiated several healthcare programmes such as anti-dengue squads, which is an important scheme given the fact that the state has one of the highest percentages of dengue infections in Malaysia. Health awareness programmes amongst civil servants as well as financial contributions are other examples of the once-off activities that are run by the state.

However, these state efforts are rather meagre considering the dismal conditions facing healthcare in the country today. The current situation is not sustainable in ensuring a good majority of the nation’s citizens are kept healthy and productive, which begs the question of what alternative solutions there may be.

A major problem is the increasing disparity between public and private healthcare provision.

According to figures from 2000, 54% of doctors (who are in the public system) have to care for 80% of patients nationwide. The remaining 46% of doctors are in the private sector, but only care for 20% of patients in the country. In addition, 60% of specialists in the country are in the private sector, but they only look after 25% of the most complicated cases. Selangor, for example, has 65 private hospitals but only 11 public hospitals.

Table: Expenditure on health services as percentage of GDP. Source: WHO, 2009. Illustration: Lau Su Lin

Table: Expenditure on health services as percentage of GDP.
Source: WHO, 2009.
Illustration: Lau Su Lin

Herein lies the problem. No doubt, total expenditure on health increased from RM8.21bil to RM24.79bil between 1997 and 2006. But as a percentage of GDP, this amounted only to a small increase, from three per cent to 4.3% (whereas WHO recommends an allocation of at least six per cent of GDP). Second and more importantly, when broken down into public and private spending, government expenditure on health as of 2006 was 1.94% of GDP, compared to private expenditure on health making up 2.36% of GDP, or RM4.2bil to RM13.7bil over the same period. WHO placed Malaysia in 151st position out of 193 countries in healthcare expenditure between 2000 and 2005.

Added to this is the attrition of medical personnel from the public to the private healthcare sector, which the chart below shows. This is hardly surprising given the better pay and working conditions on offer in the private sector. This is in turn an indirect effect of government policy – as the government increasingly viewed healthcare through the lens of investment, it began providing more incentives (such as tax breaks and subsidies) to private hospitals.

Figure: Trends of doctors leaving government service. Source: Ministry of Health, 2009; Ministry of Health Economic Planning Unit and UNDP, 2006. Illustration: Lau Su Lin

Figure: Trends of doctors leaving government service.
Source: Ministry of Health, 2009; Ministry of Health Economic Planning Unit and UNDP, 2006.
Illustration: Lau Su Lin

One solution proposed by the government that received harsh criticism when its working paper was released in 2009 is its 1Care policy, a national healthcare financing scheme which essentially requires all Malaysians to contribute a proportion (the proposal states 10%) of their monthly income, and in return be given certain medical privileges. Opponents of this feel that the priority should be for the government to increase its expenditure on healthcare gradually over time to five or six per cent of GDP before transferring the burden of paying for increasing medical costs to the rakyat. More troubling is that since only about 10% of Malaysians currently contribute income tax, these would be the same people supporting the medical bill of the country, also effectively and simultaneously reducing their disposable income.

One direct result of the insufficient government spending on healthcare is the lack of funds to upgrade and build public hospitals. The bustling city of Petaling Jaya only has one public hospital (Universiti Malaya Medical Centre), whilst Shah Alam, the state capital of Selangor, has none; its hospital construction is severely delayed due to a lack of funds (some allege a crony contractor). Originally slated to be completed in 2011, it is now postponed till the end of 2013. There is a long list of other hospitals still waiting to be built and upgraded.

The government continues to embark on its “health tourism” campaign, which, from an investment perspective, may be thoroughly attractive. There is also the argument that this allows people a greater array of medical options. Health Minister Liow Tiong Lai, in his explanation of the 1Care proposal, states that the insurance would ensure basic access to primary care and patients would then pay the difference for any secondary care thereafter.

However, the lack of transparency and consultation with NGOs, state governments and other stakeholders is of great concern – the details and contents of such a far-reaching policy ought to be discussed publicly before any decision is made. For example, WHO has estimated that between 20% and 40% of healthcare expenditure are regularly wasted due to corruption and inefficiency. For this reason, the Selangor government deeply opposed the initial proposal; its Permanent Committee for Health organised a seminar in 2009 themed “The Future of the Malaysian Healthcare System” to discuss this with representatives of the private and public healthcare sector and other concerned NGOs.

Second, it is crucial for the government to keep in mind that whilst private healthcare entrants may boost investment statistics, this is equally damaging to the public healthcare sector. On the one hand, Putrajaya laments the pallid conditions of public hospitals, but on the other hand it continues to lavishly attract private hospitals in. One may agree with private healthcare in urban regions where people can afford to live, but priority must be given to ensuring an equitable distribution across the country – between cities and rural areas.

Finally, decentralisation must be mentioned as another potential solution. State and local governments could be given greater responsibilities along with fiscal decentralisation, i.e. revenue collection and disbursement powers. Other countries such as Canada, the US, South Africa and Sweden allow state and provincial governments the authority of healthcare management. States could then ensure greater representation, perhaps in both private and public hospital boards and committees, with oversight over selected matters. It could also provide infrastructure and coordinate the placement of local doctors to health clinics (klinik kesihatan), instead of the existing 1Malaysia clinics which have no doctors (the latter has been the focus of Prime Minister Datuk Seri Najib Tun Razak). Of course, all of the above must be carried out through efficient coordination, congruence between federal and state policy, and sufficient tax funds.

What is certain is that reforms must involve all key stakeholders and adopt a holistic approach to national development. A wealthy Malaysia must also be a healthy one.

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