Time To Deregulate Doctors’ Professional Fees

The fee schedules under the PHFSA controlling GPs’ and specialists’ consultation fees should be abolished.

It’s strange that doctors are the only professionals whose fees are set by law, rather than by market forces.

Lawyers’ litigation fees aren’t regulated, except conveyancing transactions in property that have scale fees. Bankers, engineers, accountants, software developers, and financial managers are all free to charge whatever they like.

If we insist on regulation, then, if anything, we should be controlling the fees of bankers since they contribute less to society than health professionals like doctors. Bankers just help the wealthy get richer, whereas doctors work in the profession of care. Goldman Sachs earned an obscene fee of almost US$600 million (RM2.5 billion) for three bond sales of nearly US$6.5 billion (RM27 billion) that the US bank arranged for 1MDB from 2012 to 2013.

Perhaps the regulation of physicians’ consultation fees in Malaysia comes from the misplaced idea that doctors are doing charity to “help” the sick, even though a medical degree in Malaysia reportedly costs between RM250,000 and RM650,000.

The previous Barisan Nasional government failed to raise private clinic general practitioners’ (GP) consultation fees, which have stagnated at RM10 to RM35 under Schedule 7 of the Private Healthcare Facilities and Services Act (PHFSA) 1998 that legislated a 1992 rate. Hospital GPs’ consultation fees under Schedule 13 were raised in 2013 to RM30 to RM125.

Pakatan Harapan (PH), unfortunately, can’t seem to stomach clinic GPs’ tiny request of charging the same fees as their hospital-based counterparts either, since participants at a recent National Cost of Living Action Council (NACCOL) meeting suggested rather bizarre alternatives to cut family physicians’ costs, like moving them to government offices with cheaper rent. Primary care clinics need to be widespread throughout communities for easy access, not be concentrated in certain locations.

People at the NACCOL meeting, which was attended by representatives from various ministries, also claimed that raising clinic GPs’ consultation fees will drive people to congested public hospitals, even though patients may actually be fine with paying more at private clinics to save time, especially informal workers who are paid based on time spent at work.

With impending regulations on medicine prices, GPs are understandably afraid that they may be forced out of business since they’ll be squeezed on both ends, with no avenue to make money.

It’s the closure of small private clinics, not higher consultation fees, that will push people to overcrowded public clinics and hospitals, or for the rich, expensive private hospitals, depriving everyone of fast, quality, and affordable primary care.

The government needs to understand that businesses must make profit to be sustainable. Whether we like it or not, this includes health care. Opening a clinic is a business, not a charity.

In fact, it’s even more important to ensure that people with jobs that benefit society, like health care providers, are adequately compensated, and not exploited for their willingness to serve patients at a loss.

Forcing family doctors to sell medicines to sustain their business cannot continue, since this incentivises physicians to prescribe drugs that may not be necessary. As it is, Malaysia, like other countries, faces the threat of antimicrobial resistance, where germs can increasingly defeat medicines designed to kill them.

The fee schedules under the PHFSA controlling GPs’ and specialists’ consultation fees should be abolished. Like other professionals, doctors must be allowed to charge whatever they like.

This is especially crucial for GPs who essentially operate sole proprietorships, unlike specialists in private hospitals who purportedly get benefits like commissions and company shares. Specialists, however, mostly derive their income from consultation and procedure fees, although some hospitals may pay specialists recruited from the public sector a regular salary for a few years while they build up their practice.

Because fee schedules haven’t been updated for such a long time, some new procedures, like robotic surgery, aren’t regulated under the PHFSA, in which case their fees are discussed between doctor and hospital. Specialists generally rent their clinics in hospitals and make administrative payments to the hospital for collecting their fees for them.

Former Malaysian Medical Association (MMA) president Dr Milton Lum points out that controlling doctors’ professional fees did nothing to contain the significant increase in private hospital bills.

Just because GPs are free to impose whatever charges that they consider suitable for their service doesn’t necessarily mean that primary care will be made unaffordable. Patients can always choose cheaper clinics, or more expensive ones with better quality doctors. The market always rights itself.

Laws, by their static nature, can never keep up with a rapidly changing economy. People should have the freedom to decide how much they’re willing to buy or sell a product or service for.

It’s things like price fixing, where businesses cooperate to set certain prices, that hurts consumers. Both the private sector and government should not engage in such anti-competitive practices; arguably, capped professional fees, as well as price floors and ceilings (which the Health Ministry is considering for the sale of medicines), are tantamount to price fixing.

After all, people don’t blanche at the litigation fees of some lawyers. My friend charges at least RM5,000 just to open a file. A lawyer told me that lawyers with 25 years in practice and above charge RM1,200 minimum hourly; one told me his rate is RM2,800 per hour. But billable hours aren’t common nowadays, with lawyers saying that their fees depend on the complexity of the case and time estimated to be spent, possibly running into hundreds of thousands of ringgit.

These are huge legal fees for what is arguably a less essential service than health care. Meanwhile, a GP is prohibited by law from charging above RM35 for treating the sick.

If the government is afraid that the lack of clinics in villages and small towns means that family doctors can charge sky-high professional fees in the absence of legislated caps, then cut regulatory costs to enable more GPs to set up clinics outside the city.

PH should do right by middle class professionals like family physicians and allow them to make a decent living, especially since the Health Ministry repeatedly touts GPs as the gatekeepers in health care to prevent the occurrence of more serious diseases.

If the government insists on regulating professional fees in health care, then perhaps it can start with capping CEOs’ million-ringgit salaries at huge hospital corporations owned by the government itself, rather than family doctors serving their community.

Boo Su-Lyn is CodeBlue editor-in-chief. She is a libertarian, or classical liberal, who believes in minimal state intervention in the economy and socio-political issues.

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