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Why is govt helping private hospitals?

 | July 24, 2011

If government hospitals can cater effectively to patient needs, then private hospitals will be forced to lower prices to compete and attract patients.

KUALA LUMPUR: Local doctors have slammed a proposed government medical insurance plan which ‘sought to profit’ from the sick.

According to them since the government derived its revenue from all tax-payers “it must not seek to profit from its activities.”

“The government must develop a system to protect the health of all, especially those unable to pay for their own needs,” they said.

According to them hospitalisation cost accounts for the bulk of a country’s medical expenditure.

Noting this, former Penang Medical Practitioners’ Society (PMS) presidents Dr Ong Hean Teik and Dr Haniffah Abdul Gafoor said that in 2008, the government was responsible for 78% of total hospital beds in the country and accounted for 74% of total admissions.

“But the government spends only 44% of the total healthcare expenditure in the country.

“The private hospitals which see only 26% of total admissions however use up 56% of total healthcare spending,” they said in a letter obtained by FMT.

Noting these details in the letter, which was jointly signed by their colleague, former president of the Malaysian Medical Association (Penang branch), the doctors said “under-funding and excessive work has led to unsatisfactory patient service in government hospitals, forcing patients to seek attention from private healthcare.

“If efficiency and service in the government hospitals improve, patients will not have to seek treatment from the expensive private sector.

“The government must improve service in their hospitals.

“If government hospitals can cater effectively to patient needs, the private hospitals will be forced to lower prices to compete and attract patients, as has happened in Singapore,” they said.

Escalating cost of private care

They argued that a national healthcare financing scheme that increased investment in public hospitals will thus automatically lead to a lowering of fees in the private hospitals thus greatly reducing total healthcare spending for the whole country.

To seriously reduce national healthcare spending, the government must develop a financing scheme to increase public hospital investment and improve its service, they said.

“How can the setting up of a private corporation to act as an insurance company cum MCO (Managed Care Organisation) reduce overall health spending?

“Have not hospital bills in the private sector escalated with increasing health insurance and middle-man MCOs?

“In no other country in the world has the government started a financing scheme for outpatient clinics before dealing with the more expensive and more important problem of hospitalisation cost,” they added.

They said workers would take home a smaller income since an increasing portion of their salary would be deducted, while business costs would rise since employers would be forced to contribute to the operation of the private insuring company.

“The poor must not end up the big loser as we saw recently when the Private Healthcare Act was used to close down charity dialysis centres.

“It is our duty as responsible citizens to try to look after the sick irrespective of income level.

“Since the government derives its revenue from all tax-payers, it must not seek to profit from its activities, but develop a system to protect the health of all, especially those unable to pay for their own needs,” they said.

It is understood that the Health Ministry has been quietly consulting those in the industry, including the Malaysian Medical Association on the scheme.


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