Thursday, July 29, 2010

malaysiakini: Health: Is government abandoning justice? - by Josie Fernandez

Health: Is gov't abandoning justice?
Josie M Fernandez
malaysiakini, Jul 29, 10

A quarter century of privatisation in Malaysia may result in the government abandoning justice and equity in healthcare in pursuit of profits that benefit the connected and the political elite, not the people.

Recently, Health Minister Liow Tiong Lai announced that the government plans to implement the National Health Financing Scheme (NHFS) in stages over a ten year period. The funds would be managed, according to the minister, by the National Health Financing Authority, a statutory body under the Health Ministry. The minister said this body will manage the funds from fees paid by all Malaysians.

But very little information on the fund is available to us, ordinary Malaysians.

No access to studies

Despite the many studies and millions of ringgit spent on consultants and experts in the last 25 years on privatisation of the public health sector, we have no access to these studies and the recommendations of the experts. Many questions on the NHFS have been raised by activists, academics and the opposition parties.

For example, will funds from this proposed scheme replace the government health budget? Will employers stop providing health insurance coverage to employees and instead contribute to the NHFS? Do individual employees make additional contributions? Is it compulsory for every Malaysian to contribute to this scheme? Are the 1-Care Clinics a hint of what is in store for the future of healthcare in the country?

Has there been a stakeholders consultation before the health minister announced the tentative scheme? If so, what was the process? Who were the stakeholders invited to the consultation? I understand the Health Ministry has made presentations to the cabinet on a NHFS for Malaysia. These presentations should be made public to encourage wider public debate on government plans to replace the current equitable healthcare system.

Who will manage the NHFS as a statutory body? Will we see cronyism which has blighted other privatisation ventures of social goods like public utilities? Studies on privatisation of public enterprises by Jomo KS and Terence Gomez have concluded that privatisation has benefitted those who have connections to the political elite.

More recently, Barry Wain in his book 'Malaysian Maverick: Mahathir Mohamad in Turbulent Times' states those who receive lucrative privatisation contracts are actually proxies acting for powerful politicians.

As long as money politics dominates the political landscape in the country, privatisation is likely to be used as a source for political funding.

'Rising healthcare costs' argument

The justification to reduce government involvement in the health sector has been the claims by the government that public sector health costs are rising.

But the statistics tell a different story. The “rising healthcare costs” argument has been used in the last 25 years to move ahead with corporatisation and privatisation of various facilities.

However, an examination of health financing costs borne by the government and the impact of 25 years of privatisation clearly shows that a just healthcare system, once praised by the World Health Organisation, is being taken over by profits and politics.

When Mahathir became prime minister, he was smitten by Margaret Thatcher's drive for privatisation of public services. So a central plank of the fourth Malaysia Plan (1981-1985) was the privatisation of the healthcare system. In the Seventh Malaysia Plan (1996), the government introduced plans to corporatise and privatise public hospitals and medical services.

The figures speak for themselves. Government annual expenditure on health care has decreased. Malaysia spends only 4.4 % of Gross Domestic Product while Argentina spends 10% and Chile (6.2%).

'Unintended' consequences

In his recent paper on 'A Strange Thing Happened on the Way to the Market: A Quarter Century of Privatisation in Malaysia and its Effects on the Healthcare System', Dr Kai-Lit Phua of Monash University underscores some of the “unintended” consequences of the privatisation drive:

  • Astronomical increase in drug prices for the Health Ministry (MOH) after the privatisation of the Government Medical Store. A private company - Pharmaniaga - is currently the main supplier of drugs and medical products to the MOH
  • The emergence of a two-class healthcare system - A public sector system that lack specialists and an expensive private sector staffed by specialists who will treat even minor ailments. 
  • The promotion of medical tourism will worsen the situation of healthcare in the country when experienced specialists leave public sector hospitals for the lucrative private sector.
  • Quality of services will be affected in public hospitals.
  • Proliferation of private medical schools in Malaysia. In 2009, there were about 10 public and 13 private medical schools. But are there sufficiently qualified professors in these schools?

The healthcare situation in the country is worrying. Withdrawals of pension funds like the EPF for medical treatment was raised in Parliament this week. Seventy-one percent of the applications for the EPF withdrawals for medical treatment come from those earning less than RM 2,500. Withdrawing funds from the EPF for medical treatment is a risky remedy as it will increase the rate of poverty among pensioners in the future.

The government must not abandon a just healthcare system which has guaranteed access to health for all.

JOSIE M FERNANDEZ is currently an Asian Public Intellectual Fellow, director of Philanthropy Asia, researcher and engages with Transparency International Malaysia in anti-corruption measures. She holds a master's degree in development management from the Asian Institute of Management, Philippines. Josie has been an active participant in citizens advocacy, leading national and international organisations. 


Good and important questions asked by a social activist. Health care certainly is too important to relegate its entire system and future to the 'wisdom' of the government of the day! Legitimate questions and issues need to be debated with greater transparency to all stakeholders including the public, to buy in or to reject. There are too many unknown variables with too many possibilities for wastage and careless implementation to simply foist onto the unknowing public! 

Government bureaucrats must wake up to the current reality that its paternalistic approach is passe and over--that simplistic arrogated statements that it 'knows best' and that the authorities will decide best for the 'national' good, just won't be good enough to persuade an increasingly skeptical public wary of its venal excesses, corruption and cronyistic tendencies!

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