The government is introducing a new financing scheme for primary care (1Care for 1Malaysia) by forming a private company/corporation to act as an insurance company and managed-care organisation (MCO). We believe this company will:
i) collect funds from all working adults and employers
ii) pay for all primary care expenses ie. for outpatient visit, test and medication at both private and government clinics
In theory this scheme will save consumers from having to pay out-of-pocket for their primary care and thus protect them from excessive healthcare expenses. In reality the new company may become a middle man profiting from patients and their caregivers, with the result that healthcare costs go up, standard of treatment may drop and the public is burdened with a new healthcare tax.
We foresee these problems may arise:
i) Doctors will be paid an annual fee to look after a designated number of patients on their list. This fee is for medical consultation and service only, excludes drugs and tests, and is fixed annually.
If the needed medical attention exceeds the capitation amount, patients have to pay out-of-pocket. At the same time, doctors can continue seeing other fully paying patients.
The experience world-wide is that a fixed capitation fee per patient will lead to inadequate and under-treatment since physicians tend to conserve resources to prevent financial loss. Although patients do not directly pay for their treatment, they are still indirectly paying since a portion of their income will automatically be deducted and given to the insurance company running this program. Instead of spending only for their healthcare, patients are actually contributing to finance the operation of a private insurance corporation
ii) To qualify for the scheme, doctors may have to buy computers and programs from a designated supplier. Doctors also may have to pay an educational provider who will then certify them fit to enter and continue in the scheme. The educational provider may have a monopoly on assessment. No other form of present activity such as journal reading, conference attendance or presentation, will be considered appropriately educational for participation in this scheme.
This appears to be a business model guaranteeing profit for the computer/program seller and the body providing education/certification of doctors.
iii) Patients do not pay for drugs, which will be prescribed by doctors only from a standard list, and can also be dispensed at participating designated pharmacies. Clinics and pharmacies will then collect payment from the insurance corporation. Patient treatment will be limited to only these approved drugs, and any other drugs used will be paid fully by the patient out-of-pocket.
Patients need not pay, but quality of treatment will drop since range of drugs available is limited. There is a monopoly in deciding which drugs get onto the approved list and profit will be guaranteed for the company supplying and manufacturing these drugs.
iv) Patients will be registered with a particular doctor, and treatment must be only from this doctor. If patient chooses to see another primary care doctor, or if specialist treatment or hospitalisation is needed, patients will again pay out-of-pocket.
Patients can no longer seek a different primary care doctor, even if they travel to another town or if the initial treatment is ineffective. Since the scheme does not cover specialist and hospital costs which are far higher than primary care charges, patients may actually end up paying large out-of-pocket fees despite contributing to the new insuring company.
v) Hospitalisation cost actually accounts for the bulk of a country’s medical expenditure. In Malaysia, in 2008, the government is responsible for 78 percent of total hospital beds in the country and accounts for 74 percent of total admissions.
Yet the government spends only 44 percent of the total healthcare expenditure in the country; private hospitals see only 26 percent of total admissions, yet use up 56 percent of total healthcare spending. Under-funding and excessive work has led to unsatisfactory patient service in government hospitals, forcing patients to seek attention from private healthcare. If efficiency and service in the government hospitals improve, patients will not have to seek treatment from the expensive private sector.
The government must improve service in their hospitals. If government hospitals can cater effectively to patient needs, the private hospitals will be forced to lower prices to compete and attract patients, as has happened in Singapore.
A national healthcare financing scheme that increases investment in public hospitals will thus automatically lead to a lowering of fees in the private hospitals. This will then greatly reduce total healthcare spending for the whole country since hospitalisation accounts for the bulk of healthcare expenses.
To seriously reduce national healthcare spending, the government must develop a financing scheme to increase public hospital investment and improve its service. How can the setting up of a private corporation to act as an insurance company cum MCO reduce overall health spending? Have not hospital bills in the private sector escalated with increasing health insurance and middle-man MCOs?
In no other country in the world has the government started a financing scheme for outpatient clinics before dealing with the more expensive and more important problem of hospitalisation cost.
Suspicion is thus raised that this scheme may be to benefit a few private companies at the expense of patients and their medical caregivers. When healthcare expenses go up, everyone suffers.
Workers take home a smaller income since an increasing portion of the salary will be deducted, while business costs will rise since employers will also be forced to contribute to the operation of the private insuring company.
Details of the 1Care scheme have not been fully revealed but we list above our concerns and urge the government to engage all parties, including patients and the public, to respond to valid questions.
The poor must not end up the big loser as we saw recently when the Private Healthcare Act was used to close down charity dialysis centres. It is our duty as responsible citizens to try to look after the sick irrespective of income level. Since the government derives its revenue from all tax-payers, it must not seek to profit from its activities, but develop a system to protect the health of all, especially those unable to pay for their own needs.
This is a joint letter by Dr Ong Hean Teik and Dr Haji Haniffah b Haji Abdul Gafoor, former presidents of PMPS (Penang Medical Practitioners’ Society), and Dr SP Palaniappan, former chairman of MMA (Penang branch).