Asia-Pacific, Development & Aid, Global Governance, Globalisation, Headlines, Health, Human Rights, Poverty & SDGs

HEALTH-MALAYSIA: Privatisation of Health Care Feared

Anil Netto

PENANG, Apr 12 2007 (IPS) - Civil society activists worry that a plan to fund health care in Malaysia through private initiatives is about to be put into place and in such a way that the poor will end up being disproportionately burdened.

A final report, prepared by a consultant from Australia, has not yet been publicly released. But civil society activists who have glimpsed earlier versions say that it is likely to adopt a neo-liberal approach that would place excessive reliance on market forces to integrate state-run general hospitals, private hospitals and private general practitioners.

The consultant, Karl Karol, had come up with an interim report last August and a revised interim report in February. Neither of those reports was made public.

It is believed that the recommendations include a proposal for a new goods and services tax to raise funds for a new national health fund, to be managed by a national health financing authority. The market, pricing mechanisms and the profit motive will be the main drivers of the scheme.

‘‘The direction of the study confirms our worst fears because the entire approach is neo-liberal based on the conception of the human being as a purely economic entity who will respond to market forces,” laments Jeyakumar Devaraj, who is secretary of the Coalition Against Health Care Privatisation (CAHP).

Devaraj, an award-winning physician, said evidence of such neo-liberal thinking could be seen in the approach of treating health care like a commodity and in the belief that ‘corporatising’ government hospitals will result in greater efficiency. General practitioners, for their part, are expected to be the ‘gatekeepers’ to specialist services and they could receive a bonus if they make fewer referrals than expected.

Karol’s work has largely escaped scrutiny from Malaysia’s docile media. When contacted by IPS, he declined comment once again, saying that all queries should be referred to “the client” – the Malaysian government.

The proposed health financing scheme is also aimed at narrowing the wide gulf between under-funded, over-stretched public hospitals and lucrative private hospitals, which have lured government doctors and specialists to their fold.

State-run general hospitals, now staffed by just around a third of the medical and surgical specialists in Malaysia, have to cope with three quarters of all hospital admissions. Those who can afford it opt for treatment at private hospitals, where there are fewer patients, easier access to specialists and speedier medical tests.

Toh Kin Woon, a senior ruling coalition official in the Penang state government known for his independent views, told IPS, ‘‘Firstly, no part of the health system should have been privatised in the first place.”

He pointed out that private hospitals now have excess capacity and are promoting health tourism to attract patients from abroad. At the same time, state-run general hospitals are struggling to cope with the demand from those who cannot afford private treatment.

The supply of health care services is being driven by the profit motive while those who cannot afford private health care have to put up with longer waits at state-run hospitals, putting their health at risk, he added.

‘‘This goes against the principle that everyone’s life is equal,” said Toh, who holds the portfolio for economic planning in Penang; ‘‘health care should be based on need.”

Critics worry that the new national health fund will be used to subsidise treatment at private hospitals. ‘‘This will aggravate the brain drain and might lead to the collapse of the public hospitals,” warns Devaraj.

It is learnt that there have been meetings of a steering committee with key ‘‘stakeholders” comprising representatives from doctors associations, the insurance industry, the private hospitals association and others.

Civil society groups are miffed that they have not been privy to such discussions. ‘‘Sadly, the government has not seen it necessary to invite any of the consumer bodies in the country to sit on this committee,” observed Devaraj. Neither have health advocacy groups such as the CAHP, a network of some 80 civil society groups concerned about the issues at stake, been invited.

The Malaysian government spends just 2 per cent of Gross Domestic Product (10 billion ringgit 0r 2.8 billion US dollars) on health care – well short of World Health Organisation recommendations of 5 per cent – to maintain an impressive network of general hospitals and district clinics.

Although fees at state-run general hospitals have been minimal, in recent years patients have often been billed for collateral costs incurred on orthopaedic plates and nails, lens for cataract procedures, surgical clips, and drug-coated stents for angioplasties.

Civil society activists argue that the government should boost spending to at least 3 per cent (16 billion ringgit), instead of expecting Malaysians, including the low-income group, to stump out more.

The government is faced with a tough choice in raising funds. Introducing a new regressive tax on consumer spending would be a deeply unpopular move ahead of a looming general election.

The alternative would be to ask Malaysians to make health insurance contributions to a national health fund through payroll deductions – but the snag is that many Malaysians are self-employed or work in the informal sector. It is also not clear exactly what ailments would be covered in the proposed basic essential health care benefits package and to what extent additional private insurance will be required to top up coverage.

There are simpler solutions to the financing dilemma, though these may not be to the liking of the neo-liberalists. Civil society activists for instance have advocated a more progressive tax system, which would tax the rich at a higher rate. This would run counter to the current trend towards an increasingly regressive tax structure, which has seen corporation tax and income tax rates periodically cut and, more recently, the tax on profits from property sales abolished.

The CAHP is proposing that some 5 billion ringgit (1.45 dollars) could be channelled annually to the new national health fund from national oil corporation Petronas’ massive profits.

There’s not much time for such views to be considered by Karol the consultant as his work draws to a close. When contacted, Health Ministry Parliamentary Secretary Lee Kah Choon said, ‘‘As far as I know his contract runs until June 2007.” For now, Malaysians wait with bated breath.