The United Nations Universal Declaration of Human Rights (United Nations General Assembly, Paris, December 10, 1948) states that health is a fundamental human right.
In a society, it is the government responsible to ensure a healthy environment that embraces decent housing, a safe water supply and constant electricity. That society should provide an equitable (fair), good quality and affordable healthcare as social determinants in mobilising resources in eradicating rakyat2 impoverishment and enabling employment.
Simply, the more an allocation of funds for health and education, the more incremental benefits for both the government and rakyat2 in ensuring a healthy, educated and productive population who will contribute wholesomely to the nation’s economy and overall wellbeing.
The past forty years, however, our healthcare policies have reduced health services as part of financialization capitalism, see John Bellamy Foster, “The Financialization of Capitalism,” Monthly Review 58, no. 11 (April 2007).
Financialization causes a capitalist economy to move from production of physical goods to accumulate capital under a finance mode with the circuitry of money generating extracted values in the form of interests, rents and deferred payments from loans, bonds, hire purchases or through leasings.
With an excess of money capital flowing into the financial sector, not to accumulate production outputs, but to look for quick returns, this circuitry of financial flow further creates a massive financial superstructure on top of a possibly weakening capitalist economic base. This type of speculative finance as a wealth-generation approach induces huge artificial profits (and capital gains) seemingly plucking out of thin air without any relation to the real commodity production economy.
A resultant outcome of this excessive money splurging around is that a small class faction controls increasingly large portions of social wealth. Indeed, it is stated that rich economies are now so top heavy on wealth possession and income distribution that they are best described as “plutonomies”, see “Revisiting Plutonomy: The Rich Get Richer,” Citigroup Research, March 5, 2006.
Noam Chomsky elaborates further with “what you find is that $47 trillion were taken from the bottom 90%, the middle class and the working class, and put in the hands of the top 10%. But if you look closely, it’s a fraction of the top 10% which takes the greatest wealth. Since Reagan, they have doubled their ownership of society’s wealth from 10% to 20%.”
The other term needs to be explained is equity.
Equity is a question of values associated with the idea of social justice. To reduce inequity is to undo unfair and unjust discrimination. Whereas health inequalities are defined as disparities in health status (for example, variations in mortality rates between people of different income groups), health inequities are produced by social norms, policies, and practices that tolerate and even promote unfair access to power, wealth. and social resources, see Meredeth Turshen and Annie Thébaud-Mony, “The Inequities of Financialized Health Care“
Therefore, a sturdy and robust public health system – both within and among nations – is essential to health equity.
2] HEALTHCARE PRIVATIZATION IN MALAYSIA
In 1983, premier Mahathir introduced policies allowing private sector to encroach upon the public healthcare and public education sectors. The encouragement to privatization leads to an unrestrained incorporation in healthcare, including medical and pharmaceutical supplies, that cause healthcare costs rising considerably. This lead to a widening in social inequalities not only in healthcare service provision but impact upon widening gaps between different classes on their working and living conditions.
In the beginning, the total expenditure on healthcare, both public and private, was at RM$50.3 billion, where operational costs took 93% of the pie and development only 7%. Typically, Malaysians go to public healthcare facilities; 75% of Malaysians seek in-patient treatment and 90% of Malaysians seek out-patient treatment at public facilities. Despite that large access to public hospital, the government spent only 52.4% for total healthcare expenses, compared to Japan where 80% of her expenditure is government-funded. These facts underline two main points: that the higher cost of private facilities and the affordability for the public majority.
Presently, there are 1,821 area 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). Incidently, 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 other salient fact is that a majority of medical specialists in Malaysia are concentrated in the private sector. Philip Alston, then the United Nations Special Rapporteur on extreme poverty and human rights, found that an estimated 70 per cent of specialists were working in the private sector, but they only treated 30 per cent of complicated cases, leading to an overburdened public health care system. This discovery further
exhibited inequities as the effect of pro-rich utilisation in the private sector negated the pro-poor utilisation in the public sector and where strategies are called to improve equity so that there is an increasing accessibility to the private sectors which has been primarily dominated by the richest population, see Nurul Salwana Abu Bakar, Adilius Manual, and Jabrullah Ab Hamid, “Socioeconomic Status Affecting Inequity of Healthcare Utilisation in Malaysia“
Also confirmed by another study on Projek Perumahan Rakyat (PPR) among a low-income community in suburban Kuala Lumpur on which an analysis across ranked monthly household income reveals that in government-led public healthcare facilities, inequalities in outpatient attendances and inpatient admission to be in favor of the lower socioeconomic groups, refer to Nithiah Thangiah, Hazreen Abdul Majid & Tin Tin Su in BMC Health Services Research volume 14, Article number: P144 (2014).
3] PRIVATE HOSPITALS AND GLCs
Not only the private sector is allowed to shoulder some of the government’s responsibilities, but private hospitals that were run by non-profit organisations and religious organisations are also now increasingly run as profit-motivated private hospitals.
In 2018, there were around 144 governmental hospitals and 240 private hospitals in Malaysia.
It was justified that since the rich could afford private hospitals, inadvertably this would reduce demands on government hospitals and make more bed-space for the poor.
It can be seen that large health conglomerates and Government Linked Companies (GLC) such as Sime Darby, Pantai, Khazanah, KPJ Healthcare Berhad and others had accounted more than 40% of the private hospital beds.
4] MoH MALFEASANCE ACTIVITIES
Under the Ministry of Health (MoH), the pharmaceutical services were privatised in1993, for example, the Renong company was awarded an exclusive long-term contract for providing medicines and medical supplies, which subsequently doubled government expenditure for such purchases. Instead of discontinuing privatisation, the Ministry of Health extended the privatisation of other support services such as laundry and linen, clinical waste management, cleaning services, facility engineering and maintenance in 1996, three years later. Within a year, the cost of these services tripled from RM140 million to RM450 million.
A) Depletion of Staff in Public Hospitals
Privatization, however, pivots from the aspired goals of comprehensive, universal, primary health care and has somewhat withered public health infrastructure and siphoned off talented personnel. Inadvertently, healthcare shifted from government-run and public-funded health services to private hospitals, private pharmacies, and private medical practices.
In Malaysia, as a result of such privatisation positioning, highly qualified and experienced doctors flocked to the private sector, including migrating to foreign countries. Within twenty years, two-thirds of the total number of specialists and consultants resigned from government hospitals to enter the private sector. This brain drain inevitably increased the waiting times of patients in government hospitals and led to a deterioration in the quality of patient care, which sometimes resulted in delays in diagnosis and treatment and inevitably in deaths.
B) Cronyism and Profiteering
As a result of this privatisation initiative, there was an insurgence of cronyism in governance-clientship and the consequences of profit-taking by cronies, and even corrupted practices, from healthcare providers and civil servants. The many large multinational corporations in the country spend a lot of resources to marketize the provision of healthcare products in a competitive environment inducing under-the-table transactions to seal deals.
It was alluded that an Approved Permit (AP) is required to obtain a contract for medicines. This practice of granting APs had caused tremendous trouble for those in the car import industry, and it was seaming into a professional body, now, too.
C) The Consequences:
There was the unavoidable conflict of interest when the government, in effect, is wearing three hats – as a public healthcare provider, as a regulator, and as an investor in a profiteering healthcare sector.
Further, in the confluence of a pandemic and consequently the economic performance of nation which is sinking on her economic growth rates for the last 20 years, the medical professionals on the country are confronted with job tenancy problems, too.
MoH had informed interested contract medical officers to finance their own specialist study and go abroad as they are now henceforth not eligible for a government scholarship that is only available for permanent doctors. MoH also stated that the existing 23,928 permanent medical officers who have not yet pursued specialist study is sufficient for the number of extra specialists it presently needs.
“In other sectors, we can adopt privatisation. But in health care, a doctor has to be trained for many years and we cannot do that on a contract basis. So, the government must make an exemption for doctors to be allotted permanent posts,” a Dr Kuljit had said.
“If the government continues providing contracts, many doctors may not be able to do specialisation. So in ten years’ time, we will have very few trained specialists in government and private health care facilities, as well as in universities, because these specialists later might serve in the universities as our educators to teach the younger generation. Of course, in the private sector in the future, we will not have good and competent specialists,” Dr Kuljit added.
Already, junior doctors have echoed their dissatisfaction with the contract system, which came into force under the Barisan Nasional (BN) administration in December 2016, as it would leave many jobless after completing their two-year compulsory service. This scenario would cause insufficient time for doctors to complete their specialisation training that takes at least four years post-housemanship.
During the Covid19 pandemic, a sum of RM81 million allocation for the latest contract extension for the 2,070 government doctors, dentists, and pharmacists was funded through the Covid-19 Tabung. The Covid-19 Fund launched by the government in March 11 – which had received donations from the public and companies, too – was meant as financial assistance for people affected by the coronavirus outbreak, such as Covid-19 patients and people who lost their jobs. Thus, private donations were wrongly rechanneled to public activities.
Bandar Kuching MP Dr Kelvin Yii had already raised his concerns about hiring government health care professionals through donations channeled to the Covid-19 Fund.
5] FINANCIALIZATION THROUGH INSURANCE
People who bought private insurance policies had enough money to avoid the increasingly underfunded and understaffed public facilities that still served the poor. The shift in decision-making away from legitimate public policy processes is one of the detrimental effects of private health insurance; another is governments’ lost ability to advance disease prevention and public health programs.
It is estimated that the total cost that would insure every Malaysian would be around RM30 billion per year with a minimum premium that will cover the cost of hospitalisation.
Over the years, the number of insurance policy holders has increased and more private hospitals have been built. With the creation of such supply versus demand, the cost of healthcare should have been reduced. However, this has not been the case. Recent years have seen a sharp rise in the cost of healthcare services and medicines. New artificial demands have been created. For instance, patients in private hospitals are often over-investigated and over-treated.
It is evidently clear that there is a need to review the high fees charged by specialists. On average, in a standard hospitalisation bill, hospital fees, including the cost of medical equipment, disposables and nursing, come to 60% of the total bill, while specialist fees amount to 40%. These fees are governed by the 13th Fee Schedule which should be reviewed.
Malaysia will increase health insurance premium to reduce financial deficit because most other national health insurance schemes have also raised health insurance premiums amid Covid-19 pandemic (Fitch Solutions: Healthcare 11/11/2020).
6] FINANCIALIZATION INTERMEDIARIES
Manipulating concerns about cost effectiveness and efficiency, nongovernmental, philanthropic, and international development organizations led the way to the second phase – commercialization – focusing on targeted health interventions.
These ventures are variously known as vertical program or selective health strategies, targeted health interventions narrowly limited projects to individual diseases that could be eliminated or controlled with commercial products such as immunization or medication. Once again, many organizations sidestepped the goals of comprehensive, universal, primary health care. It is amazing how these failed strategies persist – the same approach is being applied today to COVID-19.
To embrace public–private alliances, understood as “partnerships,” that bring private sector efficiency and innovation to public facilities and programs, a typical public-private partnership might involve contracting a private company to finance, construct, and maintain a hospital in exchange for an annual payment from the public authority. Public-private partnerships range from product-development partnerships (new drugs or vaccines) to regulation and quality-assurance partnerships to “improve” the regulatory environment and product quality.
Public-private partnerships foreshadowed a larger role for private financial markets in public service provision and financing. The critical shift was from direct public ownership in which governments paid for and provided utilities (such as water) and services (such as education and health care) to a system of indirect public provision in which governments partnered with private, for-profit providers.
The cost of healthcare has been increasing unnecessarily in many parts of the world because of the activities of the so-called ‘middle-man,’ also known as Third Party Administrators (TPA) or Managed Care Organisations (MCO).
Even in this country, they provide interface administration between medical providers, corporations and insurance companies and assist in processing claims and administering corporate and retail policies and financial procedures. They charge fees or commissions which are standardised by the Insurance Regulatory Development Authority (IRDA). Most Malaysians are unaware of the extra premium charged by insurance companies for TPA services.
Regulations can be enforced by amending and including such provisions in existing Acts, such as the Private Healthcare Facilities and Services Act 1998 (PHFSA). It should be noted that there are at least 30 TPAs/MCOs currently operating in Malaysia.
7] FINANCIALISATION – after Privatization and Commercialisation- is the third and most confounding phase, and the one in which we currently find ourselves. It leverages private sources of capital and turns exchanges of goods and services into financial instruments, see
Benjamin Hunter and Susan Murray had also claimed that public funds are used to facilitate private investment in health care companies through equity investments and loans, thereby transforming health care into salable and tradable assets for global investors, see Benjamin M. Hunter and Susan F. Murray, “Deconstructing the Financialization of Healthcare,” Development and Change 50, no. 5 (2019): 1263–87.
It needs to be noted that investment banks like Goldman Sachs, Merrill Lynch, and Credit Suisse, which stand at the apex of global finance, all have health investment departments to cobble these financial instruments for client companies.
FINANCIALIZATION CAPITALISM is known to increase inequality, slow investment in production, exacerbate the pressures of indebtedness, and quicken a decline in democratic accountability. Owing to insurgency of new technologies, like computerized trading or algorithms trading, global financial assets (as opposed to real assets in land, property, or commodities) grew from US$12 trillion in 1980 to US$379 trillion in 2018. Despite these alarming trends, the United Nations promotes financialization under the banner of sustainable development as the solution to the provision of universal health coverage.
Financialization furthers the restructuring of production both vertically and internationally, creating global production networks and enabling firms to raise prices (cost mark-ups), increase profits, and boost shareholder values. At the same time, financialization reduces investment to sanction higher dividend payments, share buybacks, mergers, and acquisitions, and other purchases of financial assets, see William Milberg, “Shifting Sources and Uses of Profits: Sustaining US Financialization with Global Value Chains,” Economy and Society 37, no. 3 (2008) 420–51.
The process of financializing firms supplying the health sector results in higher costs, as illustrated by trends in the U.S. pharmaceutical industry. Firms extract profit by accumulating excessive returns on assets (rent-generating intangibles like patents and trademarks), rather than by earning realistic revenues for socially useful products.
This trend harms public health by raising the prices of drugs and reducing investment in medicine research and development. Financialization of the major U.S. pharmaceutical companies has evolved at the expense of drug innovation, see Öner Tulum and William Lazonick, “Financialized Corporations in a National Innovation System: The U.S. Pharmaceutical Industry,” International Journal of Political Economy 4, no. 3–4 (2018): 281–316.
Financialization also aggravates health inequities. It introduces a new level of transnational corporate power, which facilitates tax evasion, shifts revenue to tax havens, and reduces the tax base available for comprehensive, universal, primary health care. The pharmaceutical industry is highly financialized, and Big Pharma routinely blocks initiatives to promote health through the flexible use of the Trade-Related Aspects of Intellectual Property Rights agreement, (Intellectual Property: Protection and Enforcement,” World Trade Organization, accessed September 28, 2020).
The pharmaceutical industry has remained near or at the top of the list for profitability for many decades, (Harriet Washington, Deadly Monopolies (New York: Anchor, 2011). The myth is that its profits come from producing and selling the many therapeutic advances that industry research has generated, but the reality is far different. In the first place, after tax deductions only about 1.3 percent of the money that the industry spends actually goes into basic research, the type of research that leads to new medications, see Donald W. Light and Joel Lexchin, “Foreign Free Riders and the High Price of US Medicines,” BMJ 331 (2005): 958–60.
Secondly, most of the new medicines that come from the pharmaceutical corporations offer little to nothing in the way of new therapeutic options. For the decade 2005 to 2014, among 1,032 new drugs and new uses for old drugs introduced into the French market, for example, only sixty-six offered a significant advantage, whereas more than half were rated as “nothing new,” and 177 were judged “unacceptable” because they came with serious safety issues and no benefits, (extracted from Prescrire Editorial Staff, “New Drugs and Indications in 2014,” Prescrire International 24 (2015): 107–10).
Under pressure from the economic South, the World Trade Organization adopted the language of flexibility to make essential medicines affordable; however, the very fact that its use would threaten their profits and reduce shareholder value, Big Pharma drug companies oppose it, see Susan K. Sell, “21st-Century Capitalism: Structural Challenges for Universal Health Care,” Globalization and Health 15 (2019): 76–85.
Exemplifying these trends is Gilead Sciences, which gave its new CEO, Daniel O’Day, a $31 million compensation package in 2018, his first year on the job. For its 2018 fiscal year, Gilead listed the CEO pay ratio as 158 to 1, with the firm’s employee median pay figure S$163,963. Gilead had US$34 billion on hand in 2017, 86 percent of which was held overseas where the company could avoid paying U.S. taxes, (“GILEAD SCIENCES INC,” Salary.com, accessed September 28, 2020).
Increasingly, Healthcare Professionals must build a common front with users of health services to demand that the health and human needs of patients, as well as the working and living conditions of caregivers, be placed at the heart of a reorganized public health system.
We firmly reiterated that pevention cannot depend solely on a vaccine; it also requires reducing social inequities in health and health care.
We firmly believe that there is only one possible solution to this all-encompassing planetary crisis, and that is the demise of capitalism.
This archaic governance has to be replaced with a new political economy geared to sustainable human development, ecological plenitude, and the cultivation of genuine human community.
The sooner we reconstruct this qualitatively new system through our mass struggles, the better the long-term prospects for humanity and the earth will be.
The following appendices are adopted and adapted from the article on Healthcare System in Malaysia.
Malaysia’s Healthcare Human Resources and Facilities
According to the Ministry of Health (2016), Malaysia has 46,491 doctors working in both public and private hospitals – a ratio of 1:656. The ratio for dentists is 1:4,775, pharmacists 1:2,900, opticians 1:9,578, and optometrists 1:19,053. The Eleventh Malaysia Plan (2016-2020) calls for a doctor ratio of 1:400, which translates to a target of 75,000 doctors by 2020. The question is whether there are enough training hospitals and future graduate doctors to achieve such goals. This translates to 28,509 newly qualified doctors within the next four years.
The Ministry of Health, however, is saying that the infrastructure needed for completing internship or housemanship training is inadequate and that new medical schools are being frozen, as a remedy. In other words, there is a shortage of hospitals and training posts; refer also Underdeveloping Sabah Healthcare and STORM, The Development of Underdevelopment in Sabah and Sarawak
At the moment, there are 143 public hospitals with 41,389 beds and 183 private hospitals with 12,963 beds. As 75% of the population use public hospitals, one public hospital would need to serve 157,342 Malaysians, while one private hospital would need to serve 40,983 Malaysians.
There are now only 44 training hospitals. This lack of training hospitals is a real problem and has led to the enforcement of an additional year of training for interns before they can be registered professionally. The other problem is that the heavy workload of doctors is having an impact on the quality of training of interns.
There could be a way out. More training hospitals should be built and training regulations can be revisited to allow interns to seek training overseas in training posts certified by the Ministry of Higher Education. Another possible solution could be the upgrading of rural clinics into mini hospitals with qualified doctors. All these measures could help to increase the placement of trainees and doctors, but they are far from ideal.
Affordable Care Act and Non-Profit Hospitals
The government of South Korea has found that promoting preventive medicine is cost-effective. This has been achieved by bearing all medical costs for its citizens, as long as they undergo annual medical examinations without fail.
There are also other options that can be explored, such as social hospitals where non-profits run hospitals in government-provided buildings. New legislation can also be drafted and can be literally labelled as the “Affordable Care Act,” which will obligate the government to provide affordable healthcare. A measure to correlate insurance premium costs to income can also be introduced to ensure that every Malaysian citizen will find such health insurance affordable.
Indonesia has a Muslim reformist organisation, Muhammadiyah, which is active mainly in matters of religion and education. Some of its 5,754 schools are open to non-Muslims and its latest venture is in running non-profit medical clinics and hospitals. Today, it owns several hundred clinics and hospitals in Indonesia.
Since 19.9% of hospital admissions in Malaysia are related to pregnancy, it would be feasible to start off with the establishment of a chain of maternity and paediatric hospitals, easily accessible and affordably priced, with no frills. A chain of such hospitals in shoplots is envisaged, operated by non-profit organisations or cooperatives.
Kamataka, a state in the southwestern region of India, has led the way in introducing the Yeshasvini Health Scheme for the rural masses, providing access to quality healthcare at only 5 Rupees (RM0.30) per month. The scheme provides for free outpatient consultation and 1,700 different types of operations entirely free of cost to the patient! Within seven months of its launch, more than 5,000 farmers had various types of operations and 23,500 farmers had outpatient medical consultations.
SALARIES OF GOVERNMENT DOCTORS
Despite the size of profit generated in healthcare, the salaries of doctors in the public sector have always remained proportionately small. The Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) over Revenue percentage for Malaysia’s private healthcare sector is approximately 35%, while its Wages/Revenue stands at 20%. By comparison, the benchmark in Australia, a developed country, stands at approximately 12% EBITDA/Revenue and at 45% Wages/Revenue.
THE CURRENT MALAYSIAN HEALTHCARE SYSTEM : STRENGTHS AND WEAKNESSES.
Lessons From The Ward: The Good and The Bad of Malaysian Healthcare
Health care delivery in Malaysia: changes, challenges and champions
Susan Thomas, LooSee Beh, and Rusli Bin Nordin
Healing Malaysia’s healthcare system
by STORIES CHRISTINA CHI Sunday, 11 Dec 2016
Resilient Health Care System For The Future — Mark Cheong, 21st October 2020
Malaysia’s Healthcare System Is In Jeopardy & Doctors Are Angry
The Rakyat Post, 19/11/2019 by Kirat Kaur