Thursday, December 9, 2010

malaysiakini letter: Escalating medical costs not due to doctors' fees

Escalating medical costs not due to doctors' fees
Dr David KL Quek
Dec 8, 2010

I'm writing in regards to recent news reports about the healthcare industry not being a business industry.

On behalf of the Malaysian Medical Association (MMA), I would like to further elaborate on the matter in hand.

Hospital fees have remained unregulated and have been going up without much scrutiny and checks and balances - the reasons are given below.

Medical professional fees have not changed
We agree that health care costs should not run away to become unaffordable to most Malaysians, and perhaps there should be some form of scrutiny on the rising costs of medical charges.

However, from our perspective, the rising cost is not due to the doctors' professional fees, which strictly follows the regulations of the Ministry of Health (MOH).

These fees have been in place since 2000 when the MMA prepared a fees schedule as a guide, and was subsequently adopted by the MOH in 2006 under the Private Healthcare Services and Facilities Act and Regulations.

In fact, the MOH, with all medical professional societies are working on a revision to appropriately increase this time-frozen fees upwards, but we believe that this revision is reasonable and according to the inflationary indexes.

Hospital charges are not regulated so far

What is disturbing is that private hospital charges have increased due to inflationary and manpower costs.

Private hospitals therefore are facing the bottom line profit motive vs. their touted social responsibility.

We are also alarmed that the costs of drugs, supportive and allied services, modern testing or therapeutic amenities have also risen.

But we understand that there is no mechanism to check these upward trends as hospital charges are not regulated, and also cannot be uniform depending on the location and costs of service.

But we agree that there should not be profiteering, and that there should be greater transparency in these charges, also with a list of chargeable disposables, medications, tests, etc.

Why are GLCs buying all major private hospitals?
Khazanah, KPJ and Sime Darby (SDMC) now own almost all the major private hospitals.

We understand that because of such major conglomerates foraying into this healthcare market, the owners have been demanding greater bottom line profits.

We hear that many hospital CEOs have been told to have a net profit income of 20 percent or more. Previously, most of these doctor-owned hospitals only function on a marginal 5 to 10 percent of profit. So these high costs have been driven in the past few years mainly from hospital charges, and not doctors' fees alone.

The business nature has already become firmly embedded in the private health care sector. With heavy investments into these centres of excellence and luxury, the expected Return Of Investments necessarily goes up.

Can the MOH tap down the moves of such private investments in private health care?

Therefore the public must understand that these are the mechanisms that will invariably escalate healthcare costs.

Private insurers and third party payers must understand these dynamics and not simply harp on the easiest target of professional fees.

For example, if the hospital charges are increased by 50 to as much as 200 percent, corporate discounts of 10 or even 15 percent is nothing substantial, but which may seemingly assuage the third party or the insurer. Most doctors see this as a mismatched sleight of hand.

So what can the doctor working in such an environment do? Reduce their earnings for corporate profits of the owners and stakeholders?

This is unfair as all the medical legal risks and the actual work and efforts in the healthcare service are borne almost entirely by the medical professionals. Doctors must be able to earn their keep for their professional quality and skills.

Most doctors do give discounts or waive their fees for the truly poor or those who have incurred catastrophic illness, whose medical bills have exceeded unforeseen complications. However, there is a limit as to how much the doctors can be generous.

Branded vs generic drugs

In private hospitals and establishments, doctors use branded drugs as compared to generic drugs, mostly because patients expect greater surety that these drugs would work fast and appropriately.

There is expected to be a smaller margin for error. We cannot afford to make an ineffective decision when it comes to treating our patients who demand quicker and better treatment responses.

There are unfortunately some reservations regarding generic drugs unless these are from very reputable companies and have been well tested.

Also by the time many of these patients need to be hospitalised, and as such many doctors feel great sense of responsibility to ensure that the medications are as up-to-date and as efficacious as possible, hence the tendency towards using newer and more branded drugs, which costs higher.

Role of the public vis-à-vis private healthcare

Finally, we urge the public to understand that private healthcare is not subsidised at all, and therefore the public too have a duty to understand the cost constraints of these private entities.

We fully understand the constraints of health care costs and how they can affect the financial security of Malaysians. We urge the government to establish a mechanism to ensure that the young and the elderly have some form of subsidised care (Medicare, Medicaid, CHIPS, etc).

We also urge employers to do their duties to ensure that their employees are fully covered for major illnesses.

Buying appropriate medical insurances from reputable companies and not just health management organisations (HMOs) or managed care organisations (MCOs) are important.

Some of the smaller MCOs may appear to be cheaper solutions but their coverage is also very small, inadequate, unrealistic, and has limited access.

You cannot expect to pay a premium of RM500 per year and then expect to check into hospital for every minor ailment a few times a year or even once a year.

Please learn to reserve hospitalisations for the most serious ailments. Medical and health insurance is meant to share the costs among the contributing community, so that the costs can be spread over time and space - it is a hedging exercise but not an entitlement to every demanded test and admission.

In comparison to Thailand, Indonesia, Philippines and Singapore, private health care costs here are still relatively affordable and reasonable. Most importantly, our medical standards have remained consistent and of high quality to attract medical tourists.

Kenneth after Khazanah bought up Singapore's Parkway group, now our Malaysian government directly or indirectly own 80% of all private hospitals in Malaysia, so when you seek treatment in government hospital, they subsidize you, but when you go private, they maximize your bill to cover for the subsidy. Make yourself feel better this way - the amount of money you pay in private hospitals "might" go to subsidize some poor people in government hospitals! Perhaps that will make your day : )

The Penquin Quite agreeable with Dr.Quek. A big portion of what you pay when you visit a specialist in a hospital actually goes to the hospital.
5 hours ago · Report
SusahKes Thanks Dr Quek, for the eye opening letter. I doubt MOH will be able to do anything other than the usual lip-service that we have come to expect from the UMNO/BN cadre. Why, the minister in charge (another MCA eunuch) may even form a "committee" to "study" the matter. Yes - we need all these "good news" cos the GE is just round the corner.....GLCs own most of the major hospitals, right? In other words, this appears to be where the UMNO/BN coterie is digging for gold next la.....sigh....

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