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System: A Review Article ·July2014 CITATIONS 2 1author: DavidQuek PantaiHoldingsBerhad 34 PUBLICATIONS 33






The Malaysian Health Care System: A Review

Dr. David K. L. Quek, MBBS (Mal), MRCP (UK), FRCP (London), FAMM (Mal), FACC (USA)

President-Elect, Malaysian Medical Association, MMA House, 4 th Floor, Jalan Pahang, 53000 Kuala Lumpur, MALAYSIA Email:

Abstract. Malaysia has a dual-tiered system of healthcare services: a government-led and funded public sector, and a thriving private sector creating a dichotomous yet synergistic public-private model. As yet, we don’t have a unified system of universal access to healthcare for every citizen. The public sector caters to the bulk of the population (~65%), but is served by just 45% of all registered doctors, and even fewer specialists (25-30%). The heavily subsidised public sector is almost entirely borne by budget allocations, with patients paying only nominal fees for access to both outpatients and hospitalisations. The private sector on the other hand, has grown tremendously over the past 25 years. However, this two-tiered system with quite different goals may be unsustainable in the longer term. There appears to be ambivalence as to whether to adopt a market-driven healthcare system or to resort to single-payer National Health Service model where universal access to health care is guaranteed. Closer partnership, collaboration and sharing of services and personnel may be the way forward. An integrated system of medical information and expertise access may lead to greater cohesion and efficiency of healthcare services. More cross-purchases of services should be facilitated where there are shortages. Information exchange can be made efficient through the use of a unified system of health information portability mechanisms, while safeguarding and ensuring patient confidentiality and privacy. Full integration of private-public healthcare sectors appears unlikely, but better partnership and collaboration of services can be aspired to, where the best of each system can be harnessed for the healthcare betterment of our citizens. We should aim for a more cost-effective system. A single or easily portable system of reimbursement should also be considered.

Keywords: Malaysian Healthcare System, Healthcare Services Sharing, Public-Private Integration, Corporatisation, Single Payer Initiative,



Malaysia currently has a dichotomous public-private system of health care services. From what was largely a government-led and funded public service enterprise since the time of independence, our healthcare service has over the decades (since the 1980s), transformed into a buoyant dual-tiered parallel system, with a sizable and thriving private sector. But, we have not approached a unified system that is a declared national healthcare policy of offering universal access to every citizen. There appears to be strong ambivalence as to whether to fully tap into the free market system for healthcare

provision and funding or to resort to a single payer publicly controlled system where universal healthcare access is assured. Some mix of these two disparate systems seems to be in play at the current moment. On the one hand, there has always been an overarching concern for the common citizen, especially the poorer segment of Malaysian society, where there is an implied social contract and acknowledged ‘right’. There is

a deep-seated commitment of the Malaysian government to eradicate poverty and develop human capital. 1 It is

: Corresponding Author

expected that the government guarantees a comprehensive provider function at greatly subsidised rates or at token sums—that taxes and other contributions should provide adequately for most if not all its citizens, with the government taking up the shortfalls for unexpected costs due to catastrophic or chronic ailments. On the other hand however, there appears to be a covert if unannounced shift in thinking that eventual corporatization of the public sector facilities and services should be allowed to unfold, where market forces dictates the price, extent and quality of the services offered. The ultimate aim is that the government should play only a regulatory, monitoring and facilitator role to safeguard the welfare of its citizens, while at the same time encouraging growth of the less-bureaucratic, better-run and more competitive private sector. 2 Thus, despite public dissent, over the past 20 years or so, there have been sporadic if partially successful attempts to privatize or corporatize various components of the public health sector, e.g. the government’s drug procurement and distribution centre (to UEM’s subsidiary Southern Task, later renamed as Remedi Pharmaceuticals, then as Pharmaniaga); and the divestment of its support services

(cleaning, linen, laundry, clinical waste management, biomedical engineering maintenance) to Pantai Medivest, Radicare and Faber Mediverse. 3 Furthermore, there has been full and implicit encouragement of the private sector to flourish with differing modes of financing and capital injection. Government-linked corporations (GLCs) such as the KPJ (Kumpulan Pelaburan Johor) and Sime Darby groups and latterly the Ministry of Finance investment arm, Khazanah, have been pushed to become major players in modernizing and extending the reach of the private health care services in Malaysia and beyond. A UNDP Human Development Report (2006) 4 paper determined that in 2005, the Malaysian government spent just 2.2% of its gross domestic product as its contribution to the public sector healthcare funding, while some 1.6% of our health care expenditure came from the private sector. The World Health Report 2006 stated that the Malaysian government spends some 6.9% of its total expenditure, on health care. 5 Yet despite such a low level of national investment on healthcare (just 3.8% of GDP), we have achieved quite laudable health outcomes results. Our life expectancy at birth has risen from 55.8 years and 58.2 years for men and women, respectively in 1957, to 71.8 and 76.3 years, respectively for 2006. 6 The tax-funded public healthcare sector caters for the bulk of the population (~65%), but is served by just about 45% of all registered doctors, and even fewer specialists ((25-30%). 7 The cost of these services is almost entirely borne by budget allocations from the central treasury, with patients paying paltry nominal sums for access both to outpatient clinics or admissions to hospitals. These are offered at unrealistically cheap but clearly cost-effective if heavily subsidised rates. However, this is questionably sustainable in the longer term, if we allow market forces to prevail. 8


2.1 Rural Health Service

This is one of the largest sectors in the services department whereby the government provides almost all the infrastructure and the human resources. Doctors, nurses, pharmacists, dentists and other allied healthcare workers are employed and deployed by the Minister of Health to various healthcare centres: from rural clinics to district hospitals to tertiary specialist hospitals throughout the country. The distribution of these resources to various parts of the nation is arguably based on the size, need and population of the various districts and states. However, the

reality is that in the rural and more mountainous or remote (less accessible river-bound or jungle/forest) regions, the deployment of facilities as well as manpower is uneven and there remains great disparity and inequitable distribution of health care personnel, especially doctors. Nevertheless, Malaysia boasts of having a healthcare facility within every 5 km radius, which, renders especially for the rural folk, relatively easy access to these clinics whenever the need arises. However, not all are manned with adequately trained staff—most are under the charge of a jururawat desa (or rural health nurse), with sporadic visits by a medical assistant or a doctor, ranging from weekly to monthly schedules. 3 Deployment of medical personnel to such rural sites remains very unpopular with the better-trained and educated staff, that views the remoteness of such postings, unrewarding. There should be greater monetary and even promotional/seniority incentives such as hardship allowances or tax breaks, (such have been offered to teachers) promised preferential selection for training and development protocols and career development, to attract more doctors and personnel to such areas. 9 The MMA (Malaysian Medical Association), through its Section Concerning House Officers, Medical Officers and Specialists (SCHOMOS) has been arguing for more structured deployment planning, such that even with these incentives, there should be detailed contractual undertakings that these personnel would be re-deployed to bigger centres of their choice, (for clearer career development programmes or pathway) once they have completed their ‘hardship’ service in the interior. 10 Failure to appreciate these doctors in particular, have led to many younger doctors complaining that the government is not concerned about their welfare and their future. Thus after such remote postings which they view with some discomfort, many are ready to throw in the towel and leave once their service contracts in compulsory service is over. By showing more concern and offering more incentives, we may be able to hold on to more of our public service staff, rather than losing them immediately after these postings.

2.2 Tertiary Healthcare Services

Notwithstanding these problems, the past 5 decades have seen the Malaysian healthcare structure remaining quite well integrated. The rural health service provides effective primary healthcare coverage, which is connected to large hospitals in each state and the capital city through a unique system of referral. For medical and surgical emergencies, these are adequately provided for, with a government-managed fleet of ambulances, including airlift capacities for more interior remote sites. Tertiary Care Hospitals have recently made its

presence felt in the Malaysian public healthcare sector, beginning in the 1980s, with the expansion and privatisation of the University of Malaya Specialist Centre (Petaling Jaya), and the building of the Universiti Kebangsaan Malaysia Medical Centre (Bandar Tun Razak, Kuala Lumpur), and the renowned National Heart Institute (Institut Jantung Negara, IJN), along Jalan Tun Razak. These have provided excellent specialist care for several highly specialized medical disciplines such as cardiology, cardiothoracic surgery, nephrology, cancer care, neurology and some infectious diseases. These however cater predominantly to our Malaysian civil servants, pensioners and their dependents (including many of our VVIPs), but due to facility constraints, long waiting times are now the norm. In the past decade or so, several other public hospitals with tertiary specialist facilities have been developed in most major cities in the country, in Penang, Melaka, Johor Bahru, Kuching, Serdang, Selayang, Ampang, Sungai Buluh, Kota Bharu, Kuantan and Kota Kinabalu. Although these have added to the capacity to cater to the growing demands for tertiary specialist medical care, the problems of understaffing and staff poaching continue. We seem to be unable to adequately provide enough manpower and skills development to sustain better than average care at these centres. Poor planning and maintenance has led to infrastructure failures such as has been recently highlighted in KK’s Queen Elizabeth General Hospital, where an entire wing has been condemned, shutting down essential services such as intensive care and surgical operating units. This ad hoc approach has in the past few years, forced the heavy- handed expensive purchase of the former Sabah Medical Centre to be converted to the Likas’ Maternity Hospital. Now, there are plans to purchase of the newer just completed 171-bed SMC at Luyang, to replace the condemned section of the main hospital in KK for the public! 11

2.3 Purchasing Private/Corporate Sector Expertise

Migration of trained staff especially medical specialists to the private sector continues to bug the system, which then causes the expert service to stall, because the requisite expertise had been lost. In critically short-staffed services such as neurosurgery, the public sector has to occasionally buy the services of private neurosurgeons to attend to their patients, especially during emergencies. Currently, in Kota Kinabalu, Sabah, cardiology and cardiac surgical services are purchased with weekly rotations of specialists from the corporatized IJN, at hefty prices. Also being a corporatized medical centre, the IJN has been billing the government to take care of its public servants, pensioners and referrals from its MOH hospitals

and clinics. This comes at a premium, with the government reimbursing some RM 31.3 to 144.5 million per year, from 1993 through 2004, respectively, for these services. 12 However, because of higher wages and better work conditions/benefits, specialists at the IJN appear to have less rapid turnover (3% annually), and thus enjoy greater consistency and continuity of services. 13 This also makes continuing manpower and specialist training possible, too, to enable it to maintain its reputation as a centre of excellence. But obviously this comes at a higher cost— perhaps this expenditure is more realistic in terms of healthcare economics. This successful model has now made it an object for takeover by a GLC, Sime Darby Bhd. 2 So this model of public-private partnership appears to be successful and beneficial and attempts have been made to have it emulated. However, there have been serious misgivings about this concept of healthcare reform because of its wider socio-economic implications; the Coalition Against Health Care Privatisation has been most vocal against any development toward the passing of any extra cost to the public. 14,15, 16

2.4 Full Paying Patient

In 2005, another patient fee-paying system was introduced i.e. Full Paying Patient (FPP) scheme, where part of the fees were used for physicians’ reimbursement to supplement their income/allowance. Thus, this scheme provides those who are willing to pay more, quicker access and shorter waiting times for elective surgeries and other therapies. While this is one mechanism to recover some costs for the healthcare system, it is only a minor fraction of what the system truly costs. There has been great unhappiness that this will only encourage queue jumping from those who are well-to-do, and therefore penalise the poor and less-financially endowed, and consumer pressure groups have called for their abandonment. 15,16 Still, the sporadic but unending attrition of losing specialist to the private sector has long been the problem of the public healthcare sector, and staff and expertise retention is a perennial problem, which has yet to be resolved or tackled sensibly and judiciously. Some 300 doctors and 50 specialists leave the public sector annually. 7,15, 16


The private sector on the other hand, has always attracted both general and family physicians who had opted out by opening individual clinics or by joining more established group practices; while specialists join the better-paying more personalised care practices in urban private medical centres. Private healthcare expansion began in earnest during

the Mahathir premiership in the 1980s, where private hospital beds increased nearly 10-fold (from 1171 to 10405 between 1980 to 2003), and the private sector’s share of hospital beds increased from 3.9-5.8% to 23.4-26.7%. 17,18 On average over the years depending on the economic circumstances, this private sector constitutes around 55% of all registered doctors, who look after some 25% of the population, most on a self-paying fee-for-service arrangement, and increasingly through some third party paying (e.g. health insurance) mechanisms. 19

3.1 General Practitioner Clinics

Importantly nationwide, private clinics cater to most of the fee-for-service self-paying public, which include:

private sector employees through panel doctor contract/insurance arrangement; thus relieving the already overloaded Ministry of Health’s public clinics. In general, the choice for such private clinic consultations and treatment is due to easier access, simpler registration and appointment, and shorter waiting times. There is also possibly greater continuity of care with better personal attention from one’s own family physician or general practitioner—i.e. superior personal touches and closer encounters are the added values in private clinic visits, despite greater fees for consultation and medicines, which are frequently bundled together. Some crossover of services however exists. Depending on patients’ demands or choices, these generally complement each other for the greater benefit of the patients concerned. Dissatisfaction or uncertainty with services from either sector has on many occasions led to patients seeking second opinions and/or therapies from the opposite sector, and vice-versa. Although there have been counter-accusations of poor and/or unprofessional care, or mismanagement issues, each sector does cater to the differing demands and expectations of the public. In economic terms there is some duplication of services, and possibly over-utilisation and wastage of resources, but patient choice is preserved as a right. Thus, urban GP clinics provide easy care for common ailments and simple trauma/injury management, at very reasonable costs, especially for areas outside the main capital city—Kuala Lumpur-Klang Valley, and complement the public sector in helping alleviate the patient crush on their severely overloaded outpatient clinics. However, of late, with the mushrooming of many GP clinics in close proximity to one another, competition for patients has become keener, and many clinics are simply eking out a living, struggling to keep afloat. Some have resorted to creative complementary alternative medicine or aesthetic/beauty health care shifts to supplement or even revamp their practices. Still the MMA continues to receive

complaints of there being too little work and income for a sizable number of clinics in larger urban centres. This underutilisation of many urban clinics is wasteful, and could perhaps be one mechanism to help out the overcrowded public sector outpatient clinics. Redistributing public sector patients who sometimes have to wait several hours, to a panel of urban or suburban private clinics nearer their home, can be a real option for better patient care and attention. A payment mechanism can be worked out to address this purchasing of services, which will generate a win-win scenario for all concerned. However, logistics and bureaucratic red tape and registration exercises have made this approach of sharing of services impossible to carry out at the present moment.

3.2 Private Medical Centres & Hospitals

For more serious illness and injuries, hospital care through well-equipped emergency departments (EDs) is now the expected practice. These medical emergencies are previously offered only at larger public sector general or district hospitals. These days however, most private medical centres boast of state-of-the-art emergency care at more luxurious settings and costs. Personal and more attentive specialist care are now demanded and offered at many of these private EDs, where many orthopaedic surgeons and neurosurgeons now practice privately. However, private medical centres are not simply for emergency and/or trauma care. Most are now developed as competitive consumer-driven full-fledged healthcare facilities to cater for the more discerning public who would pay more to obtain perhaps better (perceptibly), more personalised, faster (less or no waiting time) and possibly more comfortable and/or luxurious medical care. Health insurance or maintenance organisations have also bought into this system to offer more premium benefits to their clients, particularly those of the corporate world, where risk-averse and delay-averse market-driven results are expected. Executives and staff are offered contracted quicker and direct access to possibly more expert specialised care, with faster turnaround times and earlier return to work expectations. Of late, the entry of different national and transnational capital flow into the private healthcare system has further developed the service capacities of this sector. Healthcare industry players such as the state-owned KPJ group (Johor State Development Board), Parkway Holdings (Singapore- based, American-invested), and latterly Khazanah National Berhad (a Ministry of Finance Malaysian GLC) have greatly influenced the direction and expansion of these private services, while at the same time inflating the cost of private health care services by offering more sophisticated amenities and newer technology-driven expert care. Together with the Association of Private Hospitals

(APHM), there has been a move to expand the services

toward attracting foreign medical tourists, which is targeted to grow to 30% in 2008, and nearly 1 billion ringgit as of

2005. 17,20



Currently, the Private Health Care Facilities and Services Act (PHCFSA) 21 and Regulations (PHCFSR) 22 have prodded the private sector to transform for the better, purportedly for safeguarding the safety of patients. But forced administrative micro-management, stiff fines and restrictions have angered many private medical practitioners. 23 Many are unhappy with the highhanded tone and manner of the regulations, inspections and implementation, which have been construed as trying to criminalise doctors. 24 At least one physician had been jailed for technical non-registration, and a few have been fined heavily because of technical breaches of these new regulations. Some clinics have been inspected with disdain and rudeness. 25












Healthcare spending is still suboptimum in Malaysia, the government spending just 6.9% of its total expenditure on health care services (i.e. 2.2% of the GDP). In 2003, Malaysians spend just USD 374 in total (Purchasing Power Parity) per person per year on healthcare expenditure, with the government contributing USD 218. 5 This compares with USD 1156 for Singapore, USD 260 for Thailand, USD 2244 for Japan, USD 1074 for South Korea, USD 2874 for Australia, USD 2389 for the United Kingdom and USD 5711 for the United States of America. 5 As can be seen, although we pride ourselves as becoming more developed than many other nations around us, we have yet to emulate those with better and arguably more advanced healthcare services. Out-of-pocket spending as a percentage of private expenditure on health takes up about 75% of the total costs, with some form of private prepaid plans (e.g. insurance) contributing 11.9 to 14.2% over the years from 1999 to 2003. Social security expenditure as a percentage of general government spending on health hovers around 0.8% only, mostly from requested withdrawals from the specific allowable account within the Employee Providence Fund savings (EPF). 5

4.1 Public Aversion to Paying More

Because of the ingrained norm of having to pay so little or not at all in public hospitals and clinics (which are almost totally subsidised), the Malaysian public does not

feel that it has to budget for health or medical care, and this is reflected in many of our pensioners complaining of costly unplanned-for medical care. This is also reflected in our government’s paltry allocation of importance toward healthcare spending in our national budget. There has been flip-flopping ambiguity from the MOH, as whether to allow market forces to dictate healthcare costs, but overall, there has been no public will to enact what could be unpopular. 2 Suggestions to end free treatment at public hospitals and highlighting that rising healthcare cost is too heavy a burden for the government, had not been too well-received by the citizens. 26,27 This strategy seemed to have disappeared following the recent electoral setbacks of the incumbent government. In a recent interview for internet media Malaysiakini, the new health minister Dato’ Liow admitted that the public hospital services are heavily subsidised by the government:

RM12.9 billion or 98% of the entire budget, while patients paid only 2%! But, Dato’ Liow reiterated his views that government subsidies for patients utilising public healthcare facilities would continue (RM1 for outpatients clinic visits, RM5 for specialist clinic visits, and maximum RM50 for third-class ward hospitalisation costs), and pledged the populist view that such a quantum would continue, despite this being unchanged since the 1970s! 28 There is great expectation that the government of the day should not jeopardise this by instituting any mechanism, which can change this status quo—hence there is relatively very little public or open debate on these issues.

4.2 Access Failure & Medical Assistance Fund

But concerns as to failures in access continue to pop up sporadically in the mass media. 29 Poorer patients have resorted to the mass media appealing for financial assistance to help defray medical costs, especially for some costly or tertiary specialist care—e.g. in one week alone in October 2007, there were at least 3 appeals for help. 30,31,32 Thus, this has prompted some stopgap measures such as setting up a Medical Assistance Fund (MAF) of RM 25 million, by the Ministry of Health. However, this fund can only be utilised at public or quasi-governmental healthcare facilities, and appeals have to be vetted stringently to ensure need and priority, which had drawn sharp criticisms of this being too bureaucratic and slow, even unfair. 33 Yet another Emergency Fund (D’tik, an acronym for Dana Talian Insan Kritikal Yayasan Kebajikan Negara) has been set up. This fund of RM5 million, provides critically ill patients access to treatment within 24 to 72 hours, but is currently only available at Kuala Lumpur Hospital as its pilot medical facility to kick-start the programme. 8,26 Clearly, such setbacks and failure of access implied that the public healthcare sector needed a revamp to

enhance its capacities. Providing such services at huge or near-total subsidy appears untenable and unsustainable, and still left gaps, which had to be filled by creation of some extra mechanism to expedite access (predominantly by offering extraneous funds and/or donations). Thus, this explains in some way the government’s overt encouragement for the private sector to flourish and develop, in order to cater to the more willing, discerning, paying citizens, and leaving the public sector to look after the less endowed.

4.3 Corporatisation / Privatisation Controversy

Earlier hints that the public sector health services should be restructured into a government-owned non-profit entity, made economic sense in its first offering. This ‘corporatisation’ model implied converting most of the larger public hospitals into operating as quasi-private entities. This would avoid creating a two-tier system, and would facilitate disbursement of funds when a single payer health insurance scheme was introduced. 34 At least that is what had been planned. However, many are still quite in the dark as to when or if these would be enacted, and serious doubts and anxiety have been raised. This ambivalence is now quite understandable because earlier attempts to corporatize these public hospitals and facilities were scuttled after news leaks prompted severe backlashes from some consumer and pressure groups and opposition politicians. 15,16,17,35

4.4 Skim Insurans Kesihatan Kebangsaan (SIKK)

This brings us to the question of having a single payer system, which has been earlier mooted as the preferred system for encouraging or implementing universal access to health for all. 7 The much-awaited National Healthcare Financing Scheme, now rebranded as the National Health Insurance Scheme (Skim Insurans Kesihatan Kebangsaan, or SIKK), appears to be a political deadweight. Following the formation of the new government, this has once again been deferred for fears of public disavowal and protests. Perhaps, there are just too many variables inherent in the Malaysian system, which renders such a scheme too politically incorrect, too inexpedient to implement. 36,37,38 Interestingly, when it was raised earlier, the MOH tried to allay public fears by announcing that civil servants (which number 1.2 million people, including military and police personnel) and their dependants, 200,000 disabled persons, 435,000 pensioners, 250,000 hardcore poor and an unknown number of unemployed individuals, would be exempt from the SIKK. What is not clear is whether the government would pay the premiums for these people or that they will continue under the present system of healthcare. The latter option would defeat the purpose,

because this would undermine the community-rated concept of the SIKK. 15 Also considering the fact that only 1.2 million Malaysians pay any taxes, collection of such a mandatory ‘health tax’ would be a struggle and challenge. It has been calculated that based on an estimated 4.63 million families in Malaysia (25 million population, average family size 5.4), this sharing of the burden (RM13 billion as of 2003) would encumber each family household around RM2,808 per year or RM235 per month. 15 Clearly, many would not be able to pay, because more than 58% of Malaysians earn less than RM2000 per month, per family; and paying more than 10% of the salary on healthcare premiums would be too high! Besides, the government would still have to cough up possibly billions of ringgit to sustain the shortfalls and other preventive health care measures. This scheme has been criticised and rejected by the Coalition Against Healthcare Privatisation, as putting the onus of premium paying on the lower- and middle-income private sector employees and citizens. 15, 16 So, for the foreseeable future into the next 4-5 years at least, it is very unlikely that there will be any attempts to resurrect such a tendentious issue as a national health insurance mechanism. Our current system which has been described by Chee H. L. 19 as segmented, polarising and eventually untenable, is therefore likely to be the status quo for the time being, and making this work better for our citizens should be the way forward, at least for the interim.


The health minister Dato’ Liow has said that “Government and private sectors should work together. Because the doctors that we train are for the nation, irrespective of (whether they work for the) government or private. Doctors are serving the people. In Malaysia, 41 percent of our population go to private hospitals and clinics and 59 percent go to public health institutions. Therefore, the private sector is playing an important role to ease the burden and also the workload in government hospitals.” 26 It is heartening that the current health minister is enlightened and positive about this private sector contribution. Therefore, this is an opportune time to ensure that the mechanisms for better partnership between public and private healthcare sectors be forged to facilitate closer and more meaningful collaboration.

5.1 Is More Privatisation the Way Forward?

One way to further this is by privatising more of the public healthcare facilities, but this is fraught with uncertainties, although such exercises might make administrative and economic sense and offer greater

balance sheet accountability. One inevitable problem will be the almost inescapable escalation of the cost of services to ‘real’ terms, with progressively less subsidies. The poor unfortunately, could be left out of the loop with uncertain safety nets to cushion their plight. The recent suggestion by Sime Darby Healthcare to acquire a stake in IJN (now a corporatized entity 99.99% owned by the Ministry of Finance) has already brought a swift and negative dissident response from a newspaper editor. 39 Gunasegaram P. has stated his dismay that “for large sections of the Malaysian public, the very idea of privatising IJN is shocking because charges will rise to astronomical levels.” He questioned whether there is any net benefit to the public or government, and that if there were any reasonable doubt, this privatisation should not be undertaken. He alluded to past experiences that previous privatisation exercise of other services had not brought down costs for the public or government. He concluded that “(t)here are some things that should not be up for sale at any price. Affordable health care for the general public is one of them.” 40 In another article in The Edge Daily, it was reported that the health minister and his ministry is not too happy with this divestment, either. 41 However, the Prime Minster and his deputy appears to have already endorsed the plan, just cautioning the GLC against forgetting its social responsibility to the poor, and they seem to imply that this exercise would allow the private healthcare sector to grow even more. 42 Latest reports suggest that this takeover bid by Sime Darby has been deferred indefinitely due to public outcry, and possible political fallout. 43,44 The former Health Minister Datuk Seri Chua Soi Lek has also condemned this sell-off bid, which he said has put paid the good will of the government, despite it costing the government just a ‘paltry’ RM 200 million a year (about 2.5% of the national health budget) to run the IJN. 45 Thus, there is this incessant tussle for public need/good versus free-trade market-driven practices from administrative or financial/budgetary realities points of view.

5.2 ‘Rentier Capital’ Divestment Concerns

There are of course, also worries about ‘rentier capital’ economics where state assets are divested to politically well-connected private entities through a system of political patronage, perpetuating mutual dependence between the business elite and the political rulers, i.e. the ‘crony capitalist’ model that supervenes the true nature of this form of take-over. Most economists believe that this form of rentier capitalist model unfairly enriches these business elites at the expense of costlier services and goods to the public at large, and is therefore, wasteful and counterintuitive toward better productivity. 46

5.3 Toward a More Efficient System

In his book on ‘Good and Bad Power’, Geoff Mulgan (a British political scientist) discusses that while most governments provide the structure, it is the more comprehensive, well thought-of infrastructure provisions that lead to transformative services—that “much of the recent thinking about service… has adopted models from the private sector… largely drawn on industrial… models favouring speed, standardization, flow and efficiency.” He went on to describe: “(t)hese services are human, immediate, personalized and rich in communication, anticipating need rather than just meeting it and ‘going the extra step.’ In the case of therapeutic services the servant’s job is to change the master, to make him healthier, fitter, and happier.” 47 In a paper on the Singapore model of public-private partnership, Dr MK Lim identifies 3 key questions which should be answered: (a) how to raise revenues to pay for health care; (b) how to pool risks and resources; and (c) how to organise and deliver health care in the most efficient and cost-effective manner. It is clear that there is no foolproof system anywhere on the globe. Some of the more successful models involve a mix of safety nets with monitored privatization/corporatization of services and allowing ‘coopetition’ (competition and cooperation) to thrive. 48 He further argues that “even in Europe, the sustainability of health care systems founded on egalitarian welfarism is increasingly being challenged as growth in demand outstrips supply. The debate is no longer about ‘who should pay?’ or ‘who should provide?’ but ‘who can do the job more efficiently?’”

5.4 Fine-Tuning Private-Public Partnership

Thus, as our two-tiered system is now so well entrenched, we should find ways and means to ensure that it works better and more efficiently, where we can synergise our efforts to provide good quality, safe, and cost-effective healthcare for our patients. However, this must not only be affordable but also be self-funding and self-sufficient. Where too much bureaucracy bogs down the better productivity and efficiency, these should be dismantled and restructured in ways that encourage best practices, and which empowers and benefits the patient ultimately. Practice issues such as difficulty in cross-referring patients between private and public sectors should be eliminated; data and medical information portability and sharing should be facilitated and unified. Where there is excess of amenities on either side, these should be shared with crossovers of public to private sector and vice-versa. Conversely, more cross-purchases of services should be facilitated where there are shortages. Arbitrary turf

protectionist methods to deny either patient or physician access to information or services of either sector should be removed. Information exchange can be made more efficient through the use of a unified system of health information portability mechanisms, e.g. MyKad or some other central access information systems, while safeguarding and ensuring patient confidentiality and privacy. Full integration of private-public healthcare sectors appears unlikely, but better partnership and collaboration of services can be aspired to, where the best of each system can be harnessed for the healthcare betterment of our citizens. We should aim for a more cost-effective system, although not necessarily a lower cost one. A single or easily portable system of reimbursement should also be considered. While corporatisation/privatisation is still much feared, as a model of divesting central control of unavoidable rising costs and developmental constraints, this might be the way to go, if the model for market-driven healthcare is adopted. This is the model practiced by Singapore, with its well-tried and tested schemes that can be tweaked to respond to the many diverse facets of healthcare peculiarities. 43 Or conversely, a single-payer (and/or single insurance) National Health Service mechanism could be introduced, learning from the examples of say, Taiwan, Canada or the UK. 48, 49 Whatever the decision, the government must make greater efforts to engage and explain to the public the policy directions that it wants the country to advance with regards healthcare services. This is especially urgent because by 2010, when trade and services liberalisation is set to take place in ASEAN (Association of South East Asian Nations), with the roll-out of the AFTA/WTO (ASEAN Free Trade Area/World Trade Organisation) agreements, there will be other considerations of foreign participation and entry into this economically important sector.


Thanks to the MMA secretariat for support in obtaining some references and research data.


1 Economic Planning Unit. Prime Minister’s Department. Malaysia: 30 years of poverty reduction, growth, and racial harmony. A case study report. Scaling Up Poverty Reduction:

A Global Learning Process and Conference, Shanghai, May 25-27, 2004. A World Bank report.

2 Teoh S. PM wants Sime Darby to guarantee treatment for poor if it takes over IJN. The Malaysian Insider, 18 Dec.




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Dr David KL Quek is President-Elect of the Malaysian Medical Association (MMA) Kuala Lumpur, Malaysia. He received his medical degree (MBBS) from the University

of Malaya, Kuala Lumpur in 1979, and underwent postgraduate medical and cardiology training in London, from the Royal College of Physicians of the United Kingdom (1984). He is currently fellow of the Royal College of Physicians of London, the Academy of Medicine of Malaysia, the National Heart Association of Malaysia, the ASEAN College of Cardiology, the Asian- Pacific College of Cardiology, The American College of Chest Physicians and the American College of Cardiology. He is actively engaged in teaching and lecturing, earlier at the Universiti Kebangsaan Malaysia (1985-1991), and now lectures on specialist topics in Cardiovascular Medicine for the National Heart Association of Malaysia, ASEAN and Asia-Pacific Colleges of Cardiology. He has published more than 40 medical and cardiology papers in national and international journals, and lectured more than 200 medically-related talks. He has been involved in medical professional issues for many years, being editor-in-chief of the MMA News (Berita MMA) from 1996 to 2007, and written more than 100 editorials/commentary articles on medical professional issues, medico-legal issues, medical ethics and education. He has been an invited participant in several Ministry of Health programmes such as National Health Policy Planning, 9 th Malaysia Plan mid-term review, National Use of Medicines Committee, National Seminar on Health Economics & Financing. He is also a 2-term elected member of the Malaysian Medical Council (2004-2010), a regulatory/disciplinary body of the Ministry of Health. He recently attended an INSEAD executive programme on leadership development in Fontainebleau, France. His email address is <>

(accessible from the internet:




[This paper was presented at the Intensive Workshop on Health Systems in Transition (April 29 & 30, 2009) Organised by the Women's Development Research Centre (KANITA) & the FEA of University of Malaya at Conference Room, Level 3, Postgraduate Building, Faculty of Economics and Administration, University of Malaya, Kuala Lumpur.]