KUALA LUMPUR, Sept 18 — Health Minister Dzulkefly Ahmad has proposed expanding “private wings” in government hospitals to raise revenue for the country’s underfunded public health care system.
Speaking at the World Cancer Congress (WCC) 2024 in Geneva, Switzerland, Dzulkefly said that establishing full-paying patient (FPP) services within Ministry of Health (MOH) hospitals would help boost revenue by offering private services through existing infrastructure.
“I would believe that as a tax-based health financing system, I’ve got to be moving into things like having private health facilities within a public hospital. That would be like a full-paying patient wing in a public hospital where you could actually generate income,” Dzulkefly told a plenary session yesterday at WCC 2024 that was open to virtual media coverage.
“In this sense, I now could generate a special-purpose vehicle (SPV) kind of thing – where it’s part of MOH – where we could actually deliver a kind of a private wing that you could charge.
“You must understand now, in our system, to see a doctor, you only pay RM1, which is only about 20 cents, and to see a specialist, you are paying RM5, which is about US$1 and that, going forward, is certainly not sustainable.”
This new programme expanding private wings in government hospitals via an SPV is called Rakan MOH. CodeBlue understands that prior to the international WCC conference in Geneva yesterday, Dzulkefly had briefly touched on Rakan MOH in his speeches at the MOH’s Budget 2025 dialogue session with stakeholders in Putrajaya last September 9, as well as at the Family Medicine Scientific Conference 2024 in Johor Bahru last September 5.
Currently, FPP services are available in 10 MOH hospitals, offering patients an option to choose their specialist doctors, access to first class or executive wards, and services at more competitive rates than private hospitals. However, these services are limited by the availability of resources, expertise, and facilities.
The 10 hospitals providing FPP services include five in the Klang Valley – Putrajaya Hospital, Ampang Hospital, Selayang Hospital, Sultan Idris Shah Serdang Hospital, and Sungai Buloh Hospital – as well as five more in other states, namely Pulau Pinang Hospital, Sultanah Aminah Hospital Johor Bahru, Sultan Ismail Hospital (Johor Bahru, Johor), Queen Elizabeth II Hospital (Kota Kinabalu, Sabah) and Sarawak Heart Centre (Kuching).
Former Health director-general Dr Noor Hisham Abdullah wrote in 2019 that the government collected RM22 million in revenue in 2018 from the FPP service in the 10 MOH hospitals.
RM22 million is just a fraction (0.05 per cent) of MOH’s RM41.2 billion budget for this year. At the WCC, Dzulkefly did not provide an estimate as to how much revenue Rakan MOH is expected to generate.
Dzulkefly highlighted the potential to generate more funds from private wings in MOH hospitals by utilising excess capacities, such as MRI and CT scan equipment, while allowing specialist doctors to perform additional work for higher compensation to curb specialist attrition from the public health service.
“I particularly would want to innovate, to get to have more funding where I could generate income from my private wing in my public health facilities, where I see there are excess capacities, by way of MRI, by way of CT scans, by way of specialists who are willing to do more so that they get a bit more, and they retain in our public sector,” he said.
“Besides, I’m doing outsourcing, meaning now, I have nephrology, cardiothoracic services, cardiology, radiology, and imaging, where I get to outsource. I can’t be building more and more brick and mortar. So I get them to come and I engage the private sector, but be paid at our cost.
“Public-private partnership is so very vital for us to get to something that at the end, you get to address the B40 group in your public hospital, you get to address your M40 through our kind of private wings where it’s not as expensive as the private sector, and then the T20, you get to innovate through private health insurance.”
Dzulkefly did not specify at the WCC if the middle class (M40) and the top 20 per cent (T20) of income earners seeking treatment in MOH hospitals would be restricted to the private wing, leaving the “public” wing accessible only to the bottom 40 per cent (B40).
Neither did he specify if Rakan MOH, through an unnamed SPV, would extend the operational hours of FPP services to regular business hours and provide the latest drugs and treatments that aren’t available in the “public” wing to attract more customers, beyond just better room and board or choice of specialists.
For more than six decades, MOH, the largest health care provider in the country, has provided universal health care to all Malaysians, charging patients RM1 outpatient and RM5 specialist fees to access treatment, irrespective of their socioeconomic background.
University hospitals under the Ministry of Higher Education, which receive far less funding, charge more than MOH hospitals (but less than private hospitals) as facilities like Universiti Malaya Medical Centre (UMMC) provide advanced cancer therapies, for example, that aren’t available in other government hospitals.
Malaysia currently spends just 4.4 per cent of its gross domestic product (GDP) on health care, with 2.3 per cent contributed by the public sector and 2.1 per cent by the private sector. Dzulkefly said the MOH has struggled to secure larger budget allocations and is looking for new ways to generate revenue.
“Health finance transformation, to me, is the greatest challenge, being an upper middle-income economy and predominantly a health system that is financed by a tax base, as opposed to SHI (social health insurance) or insurance base,” Dzulkefly said at WCC 2024.
“I told the Prime Minister, ‘if you can’t give me the resource, allow me to be resourceful and innovative’.”
The Galen Centre for Health and Social Policy previously estimated that a payroll-funded social health insurance scheme could add an estimated RM31.1 billion to the health budget. This is many times higher than the tens of millions of ringgit that may be collected from expanding private wings in government hospitals under Rakan MOH.
