A basic concept in microeconomics is the law of supply and demand. In the language of economics, this concept is explained as such: the price of certain goods will vary until it settles at a point where the quantity demanded is equal to the quantity supplied, resulting in an economic equilibrium for price and quantity.
In simple terms, the price will be fixed when supply equals demand.
If there is one person selling 10 packets of nasi lemak with 100 people wanting to buy, the seller is free to set any price he thinks those wanting the nasi lemak are willing to pay.
On the other hand, if there are 10 nasi lemak sellers, each with 10 packets of nasi lemak but only five buyers, the sellers are going to be desperately selling their nasi lemak at the lowest price.
Now, most economists will tell you that the law of supply and demand makes sense for a lot of goods, but not for healthcare.
In fact, one of the core things you study as a health economist is the idea of market failure in healthcare.
Unfortunately, no one consulted the right economists when decisions were made about attempting to bring market forces into play by creating a larger supply of doctors in Malaysia to satisfy the demand for doctors.
This is what has led us into this nightmare situation where everyone is unhappy and there is seemingly no end in sight.
A long time ago, certain parties decided that the demand for doctors was high and that the supply was low (enter the mythical WHO ratio of doctor to patient).
In 2012, for example, then-health minister Liow Tiong Lai said the doctor to patient ratio was 1 to 600, and that it would be 1:400 by 2020, exceeding what WHO wanted.
To cope with the need for more doctors, there were two strategies:
1. Opening private medical schools; or
2. Recognising more overseas medical schools to enable more Malaysians to pursue medicine.
As one friend puts it, “many shophouses became medical universities overnight”.
Today, it looks simple: A glut in doctors, to the extent that the public sector is unable to provide critical training and internship so that they are legally registered to work in Malaysia.
This leads to cost-containment measures, including resorting to short-term contract jobs for fresh doctors.
Many people think that having more doctors makes it more convenient and cheaper to see doctors.
Many people have the idea that once there is an abundant supply to satisfy demand, prices i.e. salaries and other costs related to doctors will come down.
Unfortunately, this is not a case of “market forces” acting freely. This is due to one large stumbling block called government regulation.
For example, if a student studies marketing at any university in the world, comes back to Malaysia and applies for a job, any employer can employ him or her as long as they feel that the candidate is suitable for their establishment. It doesn’t work that way for doctors.
Doctors, like other professional vocations, need to be certified as competent. In Malaysia, the path to this is the two-year internship period, followed by a compulsory service period, and subsequently full registration from the Malaysian Medical Council.
Only with this can one work as a doctor anywhere in Malaysia for whichever establishment.
Creating such a large supply of new doctors as is the case now actually yields no tangible benefit. Even when they have graduated, they cannot get into the job market before attaining full registration and undergoing the competency assessment process.
This leads to a bottleneck due to limited training posts for training interns or “house officers”. Despite the government and the health ministry trying to create more posts for them, the demand appears unable to be met. Keep in mind that these are government posts at a time when governments around the world are trying to cut down on public service jobs.
A solution that the government has proposed is to move new, fully registered medical officers to contract jobs, with a lower pay compared to those who have permanent jobs. While this also looks to be a strategy in line with the rule of microeconomics as outlined above (since supply is abundant, prices or salaries come down), there are huge questions of equity and efficiency involved here as well, as has been raised by many stakeholders.
All these moves were put in place to resolve the issue of the demand for doctors. Has that been resolved? Is there really an oversupply? The answer, unfortunately, is no.
Doctors still remain in short supply throughout the public sector. In some localities as well as in multiple specialist services throughout the country, there are acute shortages.
As with most problems, there is no direct solution. A multi-pronged solution looking at both demand-side factors and supply-side factors and requiring the sustained commitment of all stakeholders concerned needs to be put in place.
The views expressed are those of the author and do not necessarily reflect those of FMT.