Materia Medica Malaysiana

Private hospital wings idea won’t fly

Some years back, as part of the government's corporatisation policy, government hospitals were directed to increase the rate of their cost recovery (at the time, patient charges at government hospitals contributed in toto to about 5-10 percent of the hospitals' actual operational costs, i.e. government medical services were being subsidised to the extent of 90-95 percent).

In preparation for corporatisation, government hospitals were instructed to increase their cost recovery, so that the government could reduce its health outlays which would be preferentially allocated to the low-income, while ‘those who could afford to pay more should become less dependent on government subsidies’, or better yet, look to the private sector for their healthcare needs.

(This is the World Bank's favoured ‘targeted approach’ for a rump public sector in healthcare, as privatisation proceeds to create markets for healthcare entrepreneurs, and more generally, a generic template for the privatisation of social services).

Well, in June 2002, the janitor responsible for my building at the Universiti Sains Malaysia in Penang underwent colorectal cancer surgery at the Penang General Hospital. She earns RM500 monthly (no overtime) and receives no hospitalisation benefits from her private concessionaire employer (outpatient treatment expenses are split 50:50 between her and her employer).

When she was discharged from her third-class ward, she was presented with a bill for RM1,662 (for a stapler device to re-join her colon after surgery), and RM141 in ward charges.

Some months later, I brought this up with the hospital director, who in turn replied that this was in line with a government directive to increase cost recovery to about 20 percent of the operational costs of the Health Ministry's hospitals.

It is clear that our underfinanced government healthcare will become even less available to the poor when private wings are set up in government hospitals as human and material resources are reallocated to serve the dictates of the healthcare market rather than the needs of the poor.

Any expectations that private wings will generate revenue for government hospitals for cross subsidies to poorer patients, have been disabused by the same article: "On MMA's complaints of ‘fee splitting’ (where doctors pass on part of their fees to the hospitals they serve), (Health Minister) Dr Chua asked doctors attached to private hospitals to lodge reports with the ministry if this happened. "It is regarded as unethical," he said.

Would it also be unethical for government hospitals to retain a substantial portion of the professional fees earned in private wings?

It is furthermore predictable that private wings will soon be encouraged to service the regional health tourism market as well.

Indeed, this is already the case. At a management conference organised by the Health Ministry in 2002 in Penang, Chow Sang Hoe, a consultant with Ernst & Young, reported on a survey of health tourism prospects commissioned by a group of private hospitals in conjunction with the ministry.

One of the salient points in his talk was that cardiological and cardiothoracic services constituted the largest clinical category (38 percent) of inpatient procedures performed for foreign nationals at the 28 hospitals surveyed (five public, 23 private), and that the Institut Jantung Negara (a corporatised government referral heart hospital) figured prominently in this.

The Citizens' Health Initiative has repeatedly voiced its concern over such developments. We are not against foreign nationals benefitting from our national healthcare capabilities, indeed we can take pride in this.

But we are much concerned when more and more of our local health resources are diverted to serving regional (and national) healthcare priorities as dictated by economic (market) demand, rather than on the basis of need.

The proposal to introduce private wings in government hospitals is an unworthy idea which should be definitively scrapped.

The writer is co-ordinator of the non-governmental organisation Citizens' Health Initiative.