Four reasons why Malaysia’s healthcare system is ailing

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Patients waiting even during the lunch hour at the BM General Hospital

Privatisation has not led to any appreciable savings but has worsened problems like the brain drain from government hospitals, says Jeyakumar Devaraj.

Health, which is a state of complete physical, mental and social wellbeing, and not merely the absence of disease or infirmity, is a fundamental human right. The attainment of the highest possible level of health is a most important world-wide social goal. There is a need for urgent action by all governments, all health and development workers, and the world community to protect and promote the health of all the people of the world.

– Declaration of Alma-Ata, September 1978

Malaysia has a fairly well developed health care delivery system.

[I am not detailing the improvements in infant mortality rates, maternal mortality rates or life expectancy to support this assertion as one cannot conclude that the improvement in Malaysia’s health indices is due primarily to the quality of healthcare our citizens enjoyed. Other factors such as improving income, better nutrition, sanitation, clean water supply and others have played a role as well.]

About 2,860 government-run health clinics are distributed throughout the nation (Health Facts 2014, Ministry of Health).

Of these, 1,039 are health clinics which have the post for a doctor, while 1,821 are community clinics which are manned by paramedics. Over 86.2% of the population are within 5km of a health clinic (Household Income and Basic Amenities Survey 2016).

In addition, 6,800 private general practitioner (GP) clinics in small and big towns provide primary care (Health Facts 2014).

The Ministry of Health maintains 141 hospitals that provide in-patient treatment. (Health Facts 2014). [The Ministries of Education and Defence also maintain hospitals.]

In 2017, 2.37 million patients were admitted to government hospitals compared to 1.05 million admissions to private hospitals (Health Facts 2018).

The smaller district hospitals do not have hitech facilities for investigation or treatment – eg they have no CT scanners, and most do not have the capacity to conduct operations under general anaesthesia. But the larger government hospitals are quite well equipped with diagnostic modalities and a number of specialist departments.

And then we have the private hospitals which in 2016 provided 14,620 out of the total of 60,300 hospital beds in the country. These private hospitals are concentrated in the larger towns mainly in the West Coast of Peninsular Malaysia. They have the services of more than 70% of the specialists aged above 50 years.

Childhood immunisation is nearly universal. BCG, DPT and polio immunisation was administered to 98 – 99% of infants born in 2017 (Health Facts 2018).

Shortcomings of current healthcare delivery system

Most Malaysians will agree that we have a fairly good public healthcare system. Any Malaysian who needs medical treatment can access care at a government clinic or hospital at affordable rates. However there are several shortcomings.

Incompetence of ‘gatekeepers

A wide variation exists in the competency of junior doctors manning the health clinics and the out-patient departments of the district hospitals. Some senior specialists in the government sector have confided that up to 30% of the junior doctors in service are dangerously incompetent! This leads to misdiagnoses and delays in diagnosis.

It also contributes to the phenomenon of patients by-passing the health clinics and the district hospitals to go directly to the general hospitals for assessment and treatment. Those who can afford it go directly to the private hospitals.

Breakdown of primary healthcare system

The government hospitals still require screening by the out-patient departments before patients can access specialist clinics thus keeping to the primary healthcare approach.

But this is not observed in the private hospitals, where patients can choose which specialist to see for initial assessment of their symptoms. Most Malaysians do not have a primary care physician but “shop” around going to government out-patient department clinics, private general practitioners and private specialists.

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Continuity of care is affected, and this inhibits interventions to promote health and prevent disease. Our system is too treatment-oriented. This results in poorer outcomes for non-communicable diseases – reflected in the not-so-impressive figures for life expectancy at 30 years – and is less cost-effective.

Overcrowded government clinics and hospitals

The general hospitals are terribly overcrowded.

Wards routinely have more than double the number of patients they were built for. Patients sometimes have to wait in the accidents-and-emergency department for over a day for a bed in the ward. Sometimes patients have to be discharged before they are quite ready.

The overcrowding not only stresses the medical personnel and adds to the discomfort of patients but also could lead to nosocomial (hospital-acquired) infections.

Shortage of government specialists

The government sector has a shortage of specialists. In 2013, 40% of the specialists in the country aged 50-60 were in public hospitals (Human Resources for Health, Country Profiles 2015 Malaysia, Ministry of Health) but they were managing 70% of the in-patient load and the training of a new generation of doctors.

The development of sub-specialty services in the government sector is continually undermined by the tendency of the trained sub-specialty doctors to migrate to the private sector within a few years of sub-specialty training.

This lack of specialists has several adverse consequences.

  • Delays in specialist assessment
  • Delays in diagnosis and misdiagnoses
  • Inadequate supervision of junior doctors
  • Treatment errors
  • Loss of faith in government hospitals

Long waiting times

The waiting time to get certain investigations done – eg MRI scans, CT scans, treadmill (stress) tests, echocardiograms, angiograms – can be months. This sometimes puts the patient at risk of suffering a further deterioration of their condition before they are fully investigated.

Two-tier healthcare system

Malaysia now has a de-facto two-tier healthcare system.

Those who can afford it go directly to the private sector where they are assessed and treated quite promptly. (There is evidence that sometimes patients with third-party payers tend to get over-admitted, over-investigated and over-treated. The tendency is for a fee-for-service system to lead to this.)

Those who cannot afford the charges in the private sector go to the government hospitals, where sometimes, delays in investigation, diagnosis and treatment lead to poorer outcomes.

Rising costs of ‘co-payments’

Newer devices and treatment modalities are not provided free by the government hospitals. They have to be bought by patients.

For example, cataract lenses, plates and screws for fractures, coronary artery stents, oesophageal stents and surgical staplers for colon anastomoses have to be bought. Some of these devices are expensive eg RM7,000 for a drug-eluting stent.

The number of implants and devices that now have to be paid for by patients is large and is expanding.

Catastrophic expenditure

The families of patients with critical illnesses such as a heart attacks, strokes, cancer and several others ailments are often under severe financial stress as they struggle to obtain the best treatment for their loved ones.

Healthcare system shortcomings: Main causes

1) Insufficient funds given increasing sophistication of modern medicine

The federal allocation for the Ministry of Health has gone up in tandem with gross domestic product from RM14.8bn in 2010 to RM26.5bn in 2018 (Federal budget estimates, Ministry of Finance).

This represents a 49% increase in real terms (ie after discounting for inflation) between 2010 and 2018. [The inflation rate from 2010 -2017 was 1.7% (2010), 3.2%, 1.7%, 2.1%, 3.1%, 2.1%, 2.1% and 3.1% (2017) respectively. Therefore the cumulative inflation rate 2010 to 2018 was 20.76%.]

However, the advancements in the modalities of investigation and treatment have inflated the costs of treatment at an even faster pace.

As a result, the Ministry of Health has not had sufficient funds to expand its services to provide the newer modalities of treatment in a comprehensive manner despite the fact that 9.5% of the federal budget was allocated to the Ministry of Health in 2018.

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2) Replacement of welfarist ideology by neoliberal approach

The Malaysian healthcare system was developed in the 1950s and 1960s at a time when the governments of Britain and Malaya subscribed to the social-democratic goals of expanding the welfare net for the population.

The Cold War was at its height and there was a real need to win over the “hearts and minds” of ordinary people both in Europe and in newly independent Malaya.

However the victory of Western capitalism over the Soviet Union and the Warsaw Pact led to a realignment of priorities. A new ideology – neoliberalism – began to gain credence from the 1980s onwards.

Liberalism was the ideology of the European bourgeoisie of the 19th Century. It had to enlist the support of the masses to fight against the privileges of the feudal lords and aristocracy that obstructed the further development of the market economy that the bourgeoisie depended on. It was overall a progressive ideology as it freed the masses from the yoke of feudalism and introduced the concepts of political democracy, universal suffrage including for women, rule of law and the universality of human rights.

Neo-liberalism is quite different. It has it roots in the critique of the totalitarian states that developed in Germany and Eastern Europe in the mid-20th Century. But it was co-opted by the bourgeoisie to push back against the social democratic state that sought to curb the power of the capitalist class and redistribute the wealth of the nation more equitably through taxing the rich and creating a welfare net for all.

These were the major tenets of neoliberalism

  • The market is much better in allocating scarce resources than any bureaucracy
  • Governments should withdraw from the provision of goods and services. These should be left to the private sector as then, the competition between the different companies will result in more efficiency and cheaper services
  • Even social goods such as education, healthcare and public transport can be provided more efficiently by the private sector
  • The government should reduce its role in the economy to that of a regulator and not a major player.
  • Inequality in society is beneficial for it drives people to improve themselves so as to move up the ladder. Too much welfare provision inhibits human initiative and makes the population lazy
  • Charging people for healthcare is also a good thing as it will encourage them to follow a more healthy lifestyle

3) Privatisation

The interplay of the above two factors led to the policies that have greatly augmented the role of commercial interests in healthcare delivery in Malaysia as is set out in the table below.


Policies

Benefits to the
Malaysian
people

Adverse effects

Allowing for-profit private
hospitals
Reduced the emigration of Malaysian
specialists to other countries.

Is a major cause of the brain drain that
has eroded the number of specialists in government service.

The involvement of government-linked companies in private hospitals has created a conflict of interest between the Ministry of Health and the Ministry of Finance.

Privatisation of
procurement of
medicines in 1993
?Increase in the costs of medicines.

Loss of technical expertise in assessing the efficacy of generic drugs.
Privatisation of five support services in 1997
Helped provide an “incubator” for developing bumiputera entrepreneurs.
Increase in costs for the Ministry of Health.

Pushed the lowest level of staff in the Ministry of Health deeper into poverty. Precarious employment. Perpetually at minimum wage.
No pension benefits.

Privatisation of hospital construction
?Increase in costs.

Poor quality of work.

Many technical problems.

Delays in completion of projects.
Full-Paying Patients scheme
Might have played a role in retaining some specialists in the government sector.
Creates conflict of interest in senior specialists.

Distracts government specialists from caring for the normal non-paying patients.
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Privatisation has not proven to be the panacea it was touted to be. Initially promoted as an approach to give better value for our tax dollar, privatisation has not led to any appreciable savings but has worsened problems like the brain drain from government hospitals and the plight of the bottom level of workers in the healthcare sector.

4) Liberalisation of global economy

The liberalisation of the financial sector has made it much more difficult for the government to collect taxes from the top 0.01% of society.

These gentlemen are able to, with the help of their lawyers and accountants, avoid paying taxes by employing a slew of tactics that have been made “legal” by changes in the financial regulations.

These tactics include transfer pricing so that profits made in a particular country are repatriated to a tax haven through grossly exaggerated fees, royalty payments and payments for technical services.

The fear of governments that their wealthiest business people might shift their operations (or at least their headquarters) has led to a race to the bottom in corporate tax rates. Malaysia had a corporate tax rate of 40% up till 1988. It has plummeted to 24% now and the government has already indicated that it will be brought down further. (Singapore’s corporate tax rate is at 18%!)

But this is not a problem that is peculiar to Malaysia. The majority of nations are facing budgetary constraints because they too, are unable to get their super-rich to pay reasonable taxes.

Consequently many countries have chalked up huge sovereign debts ranging in 2017 from 87% in the case of the UK to 224% for Japan (World Factbook, CIA US-CIA. Incidentally, the Malaysian government debt as a percentage of GDP in 2017 was recorded as 52.5%.)

There is therefore a world-wide trend to keep budget deficits to below 3% of GDP. Governments try to compensate for their inability to deal with their super-rich by instituting consumption taxes (like the Goods and Services Tax) and/or by reducing social spending for the population).

Only recently are we hearing calls among civil society groups in the West for the loopholes that allow the super-rich to avoid paying taxes to be closed. The issue is being framed by some as a discussion of how the wealth generated in our societies needs to be distributed. This discourse is still in its infancy in Malaysia.

So-called experts

In the first three decades after independence, Malaysia developed a fairly comprehensive public healthcare system that provides healthcare that is virtually free at the point of delivery to all Malaysian citizens.

Apart from responding to the health needs of the Malaysian population, the system has played an important role in sharing the wealth of the country with the poorer sectors of the population, thus reinforcing social solidarity, building a sense of inclusivity and making our society more harmonious and stable.

However, rising costs engendered by technological advances and new modalities of treatment have put our healthcare system under serious financial stress.

One of the responses of the previous Barisan Nasional government has been to involve the private sector in the provision of healthcare services. But this has had unwanted consequences such as the out-migration of government specialists and the creation of a two-tier healthcare system.

Another response of the BN government was to look to alternative sources of funds. A national health fund deriving its funds from insurance premiums paid for by the public has long been on the drawing board.

Health system “experts” from agencies such as the World Bank are happy to provide advice – and they generally recommend neoliberal solutions. A recently concluded Harvard study recommends that our government should devolve more of its healthcare functions to market players and concentrate mainly on regulation.

None of these external “experts” advise how developing countries could strategise to retain a larger share of the wealth that we are producing, but which is expropriated by the huge multinational corporations that dominate the global supply chains.

The current distribution of wealth is treated as a natural (God-given) phenomenon by the learned men from the World Bank and Harvard – something that we all have to accept and live with. Unfortunately for us, a significant portion of our current ministers are enamoured by the learned men from Western institutions.

It would thus be apt to conclude by quoting the “Inverse Care Law” by Dr Julian Tudor Hart (1927 – 2018).

The availability of good medical care tends to vary inversely with the need for it in the population served. This inverse care law operates more completely where medical care is most exposed to market forces, and less so when such exposure is reduced (Lancet 1971).

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Phua Kai Lit
Phua Kai Lit

Neoliberalism is one of the biggest intellectual and economic scams of the last four decades. Right-wing intellectuals and the rise of neoliberalism — James Buchanan is an important but relatively unknown (outside the world of economics) figure in its rise. The Social Choice/Public Choice school of economics focuses strongly on “government failure” in its promotion of marketisation. Marketisation is a better way to think about the phenomenon than privatisation.