A Response to DG Health NST frontpage article on "healthcare not a business"
Here is my feedback regarding the NST front page that Healthcare is not a business and that healthcare costs have been alluded to be predominantly because of high doctors' fees, which is furthest from the truth. Hospital fees have remained unregulated and have been going up without much scrutiny and checks and balances--the reasons are given below. This is MMA's response.
Medical Professional Fees have not changed
The MMA agrees that health care costs should not run away to become unaffordable to most Malaysians, and that perhaps there should be some better scrutiny on the rising costs of medical charges.
However, from our perspectives and our feedback from our doctors and some patients, most of the rising cost is not so much that of the doctors' professional fees, which nowadays follow strictly the schedule of the MOH, and which has been 'frozen' in time for the past 8 to 10 years. There have been some disputes in fees charged (possibly less than 1% of all fees charged) but these have almost always been worked out by or with the third party payers (TPPs) and/or the MOH.
These fees have been in place since around 2000 when the MMA prepared this fee schedule as a guide (as our 4th MMA fees schedule published in 2002), but which has been adopted by the MOH wholesale in 2006 in the Private Healthcare Services and Facilities Act and Regulations.) In fact right now 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 inflationary indexes.
Hospital Charges are not Regulated so far
What is disturbing is that private hospital charges have gone up even more of late due to inflationary and manpower costs. The private hospitals therefore are faced with the bottom line profit motive vs. their touted social responsibility. We also are alarmed that costs of drugs, supportive and allied services, modern testing or therapeutic amenities have 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 the MMA agrees that there should not be profiteering, and that there should be greater transparency in the charges and listing of chargeable disposables, medications, tests, etc.
Why are GLCs buying all major private hospitals?
Almost all the major private hospitals are now owned by Khazanah (Pantai and Gleneagles group), and KPJ (e.g. Damansara, Ampang specialist, Tawarkal, Ipoh Specialist, Johor Specialist, etc), Sime Darby Medical Centres (SDMC), and Columbia Asia Hospitals (CCM). We understand that because of such huge conglomerates entering into this healthcare market, the owners have been demanding a greater bottom line of higher profits.
We hear that many hospital CEOs have been told to have KPIs of at least a net profit income of 20% or more. Previously, most of these doctor-owned hospitals only function on a margin of between 5 to 10 % profit. So these high costs have been driven in the past few years mainly from hospital charges, and not doctors' fees alone.
So although DG of Health means very well, the business of healthcare 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 go up. But contrary to some public dismay, the MMA is not trying to rationalize the high costs of private medical care for these enterprises. We are merely expressing our views on how and why costs have been going up this past decade or so. Can the MOH tamp down the moves of such private investments in private health care?
Therefore the public must understand that these are the mechanisms, which 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.
E.g. if the hospital charges have been bumped up some 50 to as much as 200%, then giving corporate discounts of 10 even 15% is nothing substantial, but which may seemingly assuage the TPP or insurer! Most doctors see this as a mismatched business sleight of hand. But for the doctor, the professional fee (which is now regulated and quite fixed) is his/her only manner of income and that is why we do not subscribe to any professional fee discount, much like the legal professionals and the Bar Council.
Medical professionalism and Fees
Here is my feedback regarding the NST front page that Healthcare is not a business and that healthcare costs have been alluded to be predominantly because of high doctors' fees, which is furthest from the truth. Hospital fees have remained unregulated and have been going up without much scrutiny and checks and balances--the reasons are given below. This is MMA's response.
Medical Professional Fees have not changed
The MMA agrees that health care costs should not run away to become unaffordable to most Malaysians, and that perhaps there should be some better scrutiny on the rising costs of medical charges.
However, from our perspectives and our feedback from our doctors and some patients, most of the rising cost is not so much that of the doctors' professional fees, which nowadays follow strictly the schedule of the MOH, and which has been 'frozen' in time for the past 8 to 10 years. There have been some disputes in fees charged (possibly less than 1% of all fees charged) but these have almost always been worked out by or with the third party payers (TPPs) and/or the MOH.
These fees have been in place since around 2000 when the MMA prepared this fee schedule as a guide (as our 4th MMA fees schedule published in 2002), but which has been adopted by the MOH wholesale in 2006 in the Private Healthcare Services and Facilities Act and Regulations.) In fact right now 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 inflationary indexes.
Hospital Charges are not Regulated so far
What is disturbing is that private hospital charges have gone up even more of late due to inflationary and manpower costs. The private hospitals therefore are faced with the bottom line profit motive vs. their touted social responsibility. We also are alarmed that costs of drugs, supportive and allied services, modern testing or therapeutic amenities have 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 the MMA agrees that there should not be profiteering, and that there should be greater transparency in the charges and listing of chargeable disposables, medications, tests, etc.
Why are GLCs buying all major private hospitals?
Almost all the major private hospitals are now owned by Khazanah (Pantai and Gleneagles group), and KPJ (e.g. Damansara, Ampang specialist, Tawarkal, Ipoh Specialist, Johor Specialist, etc), Sime Darby Medical Centres (SDMC), and Columbia Asia Hospitals (CCM). We understand that because of such huge conglomerates entering into this healthcare market, the owners have been demanding a greater bottom line of higher profits.
We hear that many hospital CEOs have been told to have KPIs of at least a net profit income of 20% or more. Previously, most of these doctor-owned hospitals only function on a margin of between 5 to 10 % profit. So these high costs have been driven in the past few years mainly from hospital charges, and not doctors' fees alone.
So although DG of Health means very well, the business of healthcare 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 go up. But contrary to some public dismay, the MMA is not trying to rationalize the high costs of private medical care for these enterprises. We are merely expressing our views on how and why costs have been going up this past decade or so. Can the MOH tamp down the moves of such private investments in private health care?
Therefore the public must understand that these are the mechanisms, which 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.
E.g. if the hospital charges have been bumped up some 50 to as much as 200%, then giving corporate discounts of 10 even 15% is nothing substantial, but which may seemingly assuage the TPP or insurer! Most doctors see this as a mismatched business sleight of hand. But for the doctor, the professional fee (which is now regulated and quite fixed) is his/her only manner of income and that is why we do not subscribe to any professional fee discount, much like the legal professionals and the Bar Council.
Medical professionalism and Fees
So what can the poor doctor working in such an environment do, simply reduce their earnings for the corporate profits of the owners and stakeholders? This is unfair as all the medicolegal risks and the actual work and effort of healthcare service is borne almost entirely by the medical professional! Doctors must be able to earn their keep for their professional quality and skills.
Of course most doctors do give discounts or waive their fees for the truly poor or those who have incurred catastrophic illness and whose medical bills have exceeded unforeseen complications, but there is a limit as to how much, the doctors can be generous.
Of course most doctors do give discounts or waive their fees for the truly poor or those who have incurred catastrophic illness and whose medical bills have exceeded unforeseen complications, but there is a limit as to how much, the doctors can be generous.
Many doctors have called on me to express that they have always been at the giving ends of discounts or fee waivers whenever, there are any cost overruns due to unexpected illness or treatment outcomes. Some have spent many hours and days, trying to save the lives of patients, with very little to gain financially, but this is taken in good stride always, as part of our altruism in-built in our medical professionalism.
At the same time, the public must recognize the fact that under the current practice of fee-for-service model of healthcare in this country, that is the only mechanism that the private doctors can earn their keep. While we should not profiteer from the suffering of our patients, we cannot always be waiving fees or giving the lowest cost of service for every instance, which would be economically unviable for ourselves and our families, as well as for our professional standing. Hence we do have to rely on a reasonable fee schedule to ensure that such a system is fair and just for all—the public as well as the healthcare provider.
Choice of branded vs. generic drugs
In private hospitals and establishment, most doctors use more branded than generic drugs, mostly because patients expect greater surety that these would work fast and appropriately. There is expected to be fewer margins for error. WE cannot afford to make a less effective decision when it comes to treating our patients who demand quicker and better treatment responses.
There is unfortunately some reservations regarding generics unless these are from very reputable companies and have been well tested. Also by the time many of these patients need to be hospitalised, many doctors feel the great responsibility to ensure that the medications are as up-to-date and as efficacious as possible, hence the tendency toward using newer and more branded drugs, thus the slightly higher cost. This contrasts with the possibly lesser time needed to bring about a good effect, compared with the uncertainty and the lower and slower effect of older drugs, sometimes.
Role of Public vis-a-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. There is always that public sector hospital which will be the fall back safety net as of now.
The MMA fully understands 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 very young (children) 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 insurance from reputable companies and not just health management organisations (HMOs) or managed care organisations (MCOs) are important. Some of the smaller MCOs may appear cheap but their coverage is also very small, limited access, inadequate and unrealistic.
You cannot expect to pay around RM500 per year of premium 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 out the costs in the contributing community, so that the cost can be spread over time and space--it is a hedging exercise but not an entitlement to every demanded test and admission!
There is no free lunch in healthcare, someone has to pay for it--either the government from allocations from tax revenues, social health insurance, or privately from contracted third party payers, shared co-payments, or private insurances. Thus, please do not game or abuse the system, someone else will lose out and in turn, you might be the one being caught out.
After comparing around the region including Thailand, Indonesia, Philippines and Singapore, private health care cost here is still relatively affordable and reasonable. Most importantly, our medical standards have remained sufficiently consistent and of high quality to attract foreign medical tourists! So perhaps in Malaysia, we must have been doing something right, although obviously not perfectly. Obviously, our healthcare system should not be solely driven by medical tourism; our delivery to our own people is paramount and our own rakyat should always take precedence and priority.
Dr David KL Quek
President, MMA
Choice of branded vs. generic drugs
In private hospitals and establishment, most doctors use more branded than generic drugs, mostly because patients expect greater surety that these would work fast and appropriately. There is expected to be fewer margins for error. WE cannot afford to make a less effective decision when it comes to treating our patients who demand quicker and better treatment responses.
There is unfortunately some reservations regarding generics unless these are from very reputable companies and have been well tested. Also by the time many of these patients need to be hospitalised, many doctors feel the great responsibility to ensure that the medications are as up-to-date and as efficacious as possible, hence the tendency toward using newer and more branded drugs, thus the slightly higher cost. This contrasts with the possibly lesser time needed to bring about a good effect, compared with the uncertainty and the lower and slower effect of older drugs, sometimes.
Role of Public vis-a-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. There is always that public sector hospital which will be the fall back safety net as of now.
The MMA fully understands 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 very young (children) 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 insurance from reputable companies and not just health management organisations (HMOs) or managed care organisations (MCOs) are important. Some of the smaller MCOs may appear cheap but their coverage is also very small, limited access, inadequate and unrealistic.
You cannot expect to pay around RM500 per year of premium 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 out the costs in the contributing community, so that the cost can be spread over time and space--it is a hedging exercise but not an entitlement to every demanded test and admission!
There is no free lunch in healthcare, someone has to pay for it--either the government from allocations from tax revenues, social health insurance, or privately from contracted third party payers, shared co-payments, or private insurances. Thus, please do not game or abuse the system, someone else will lose out and in turn, you might be the one being caught out.
After comparing around the region including Thailand, Indonesia, Philippines and Singapore, private health care cost here is still relatively affordable and reasonable. Most importantly, our medical standards have remained sufficiently consistent and of high quality to attract foreign medical tourists! So perhaps in Malaysia, we must have been doing something right, although obviously not perfectly. Obviously, our healthcare system should not be solely driven by medical tourism; our delivery to our own people is paramount and our own rakyat should always take precedence and priority.
Dr David KL Quek
President, MMA
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