I refer to the recent BFM interview with Shahril Ridza Ridzuan, the co-chair of the Health White Paper Advisory Council, as reported by CodeBlue on May 23, 2023.
In the interview, Shahril said that there may be a need to consider a more targeted approach to public health services. This is in line with the unity government’s consideration of targeted subsidies on domestic electricity and fuel subsidies.
However, I do not think that comparing the subsidies on electricity and fuel with a targeted public health service is the correct approach.
According to the 2021 Malaysia National Health Accounts (MNHA), Malaysians spent RM78.2 billion on health, which is 5.1 per cent of GDP.
The Ministry of Health (MOH) spent RM38.5 billion (49.3 per cent), with other public agencies spending another RM6.6 billion on health. Private sources spent a total of RM32.9 billion, with the bulk going to private out-of-pocket (OOP) payments of RM24.6 billion (31.5 per cent) and RM5.5 billion (7.1 per cent) on private insurance for health services and goods.
Therefore, the public and private mix of sources of financing was 58:42 in 2021, where the public mix increased by 3.4 per cent compared to 2020 because of the Covid-19 pandemic.
Ordinary Malaysians have already contributed to about half the expenditure on health care in the country. Many of these people also pay income tax, corporate tax, and other taxes to the government.
Many of them do not use the public health care system, but instead pay out-of-pocket and insurance premiums to access private GPs and private hospitals for health services.
About RM11.4 billion of the OOP was spent in private hospitals and RM9.9 billion for outpatient services. Therefore, the government should appreciate that Malaysians are already paying from their own pockets for health services in private facilities built by corporate Malaysia, including government-linked corporations (GLCs).
I cannot imagine if all of these facilities were built and funded by the government. Where will the funding come from? It is wishful thinking for the people to ask the government to fund 5 per cent of GDP on health, which will be another RM40.0 billion in 2021!
Services in public facilities are not free, as they are governed by the Fees Act (Medical) 1982. In 2021, MOH collected a total revenue of RM1.2 billion, with RM404 million from both Malaysians (47 per cent) and non-Malaysians (53 per cent) in medical fees.
The fees for Malaysians have not been revised since 1983, except for First-Class patients, and Second-Class ward charges and a few services like physiotherapy, radiotherapy, oncology, and TCM services in 2017. The fees for non-Malaysians were revised in 2015 and 2017.
The medical fees collected comprised only 1.0 per cent of MOH’s expenditure in 2021.
Most of the patients in public facilities are ordinary Malaysians, public servants and their families, and retirees, like those who received treatment at the National heart Institute (IJN), funded by MOH to the tune of RM553 million in 2021.
Those who can afford and use public facilities and services are charged as Full Paying Patients or as First-Class patients, and pay for some selected services and implants that are provided.
Many of these patients are eligible for such services, being members of the legislature, public sector employees and their families, and federal service retirees. Many others who can afford has already shifted to private health care by themselves or as employees of companies.
Therefore, even if there is a targeted approach to these services, there will not be a significant increase in revenue for the government based on the existing patient profiles (I doubt there is a millionaire who will walk into a public hospital and get free health care).
The MOH has not much fiscal space to manoeuvre because the emolument component is about 63 per cent of the operating budget in 2023. A total of RM11.2 billion is allocated for services and supplies, and a large portion is earmarked for pharmaceutical supplies, contractual supplies and services, utilities, and payments for contract personnel.
The Treasury has shifted the hospital support services to be funded under the development budget for the past couple of years. The lack of fiscal space and limited new revenue source (unless GST is implemented) makes it difficult for the MOH to receive much larger yearly increase in their budget.
The MOH should focus on being more efficient in the usage of existing resources, instead of asking for more with federal fiscal constraints. There should be better and more collaborations with private health care providers, in terms of treatment of patients, secondment of personnel, usage of equipment, and facilities, like what has happened during the Covid-19 pandemic.
If this public-private partnership (PPP) could work and assist the country in overcoming the pandemic, I see this as a major step in overcoming the pain point of the lack of resources in public facilities. But unfortunately, I do not see the continuation of such collaborations after the pandemic.
This is a better alternative than a targeted approach to free public health services.
Chua Hong Teck is a senior public policy and health care counsellor with Vriens & Partners Sdn Bhd. He also does independent work on his own.
- This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.