KUALA LUMPUR, Oct 11 — The National Heart Institute (IJN) is targeting to raise fees by between 10 per cent and 40 per cent for public patients covered by the government, amid escalating health care costs.
IJN Holdings group chief executive officer Prof Dr Mohamed Ezani Md Taib, who was recently appointed to the top position last September 1, pointed out that the cardiac centre’s charges for public patients, whose treatments are paid for by the government, have been fixed for more than two decades since 2003. IJN is owned by the Minister of Finance (MOF) Incorporated (MOF Inc.).
IJN’s patient load predominantly comprises those from the government at nearly 85 per cent: 67.8 per cent consisting of referrals from the Ministry of Health (MOH) and 16.9 per cent non-MOH. Non-MOH public referrals comprise patients referred by other federal agencies like the Public Service Department (JPA) or state governments.
IJN charges the same rates to MOH and non-MOH public patients. Only 15 per cent of the top cardiovascular and thoracic care hospital’s patients are not covered by the government and are charged higher fees, though still much less than private hospitals: 14.9 per cent private and 0.4 per cent foreign.
“We’re pushing for a fee review – that will go up to 10 per cent to 40 per cent, depending on the procedure,” Dr Ezani told a media luncheon for senior news editors at IJN here yesterday.
“We cannot charge the government more than what was agreed 20 years ago. What we can charge more is just some of the consumables that we use, but in terms of the fee, it’s fixed 20 years ago.
“Our costs have increased – salaries have gone up and facilities are better. Trying to work within that ecosystem is not easy. Mergers and acquisitions are happening in IHH, KPJ, and Asia OneHealthcare, so this is putting a lot of strain on us,” he added, referring to major private hospital groups.
Dr Ezani explained that IJN’s fees for the government are fixed based on facility costs and the minimal number of staff it had back in 2003, but costs have gone up over the years with the expansion of the cardiac hospital and its workforce.
“For example, if I have an additional doctor in the team, that’s not charged; we have to bear the cost.”
He also highlighted other large expenses, such as the ongoing digitalisation exercise for IJN services, which went live yesterday, that has cost nearly RM40 million this year alone in facilities, upgrading equipment and software, and staffing.
“It’s very expensive to digitalise a hospital,” said Dr Ezani. “These expenses, we cannot recoup directly; there’s no way to recoup except for efficiency.”
IJN’s demand for a fee raise comes amid Putrajaya’s ongoing exercise to discharge patients from IJN who are covered by the government, notably pensioners, due to cost-cutting measures. The MOH says that government patients are discharged from IJN only when their condition is “stable”.
IJN Seeks To Double Private Patient Load, Increase Foreign Patients
The new IJN CEO stressed, however, that even with a fee hike, the rates charged to the government would remain lower than the fees for private patients.
He said a heart bypass surgery, for example, costs about RM120,000 in private hospitals, but is half the price for private patients at IJN at about RM55,000 to RM60,000. The government is currently charged even lower fees for public patients at RM30,000.
When asked if a fee review would see the rate for the government for a coronary artery bypass graft (CABG) procedure go up to RM40,000 (a 33 per cent increase), Dr Ezani replied: “That would be nice.”
IJN is also seeking to double its private patient load from 15 per cent to 30 per cent, as its CEO expects the 68 per cent portion consisting of MOH referrals to drop to 65 per cent, besides another reduction of its 17 per cent non-MOH public referrals. With a Malaysia Healthcare Travel Council (MHTC) flagship status, IJN further targets to bring in more foreign patients.
“We are already one of the top ranking hospitals within the APAC region, so these are all steps that we have taken and the previous management has taken to ensure that we remain competitive. We remain up to the standards that we want and we remain a big player in the market force.”
IJN’s Facility Expansion And Diversification Plans Beyond Cardiovascular
IJN plans to expand its services both within Kuala Lumpur and outside the capital city by establishing a network of partner hospitals, having entered strategic discussions with certain hospitals over the past month.
“As we look at KPJ’s, IHH’s, and Sunway’s expansion, how do we enter a market that is already saturated? So we think that we’ve found a way,” Dr Ezani said.
IJN’s existing facility at Jalan Tun Razak is undergoing expansion in two phases: the first phase comprises a new kitchen, a child care centre, parking for about 650 cars, and surau that is estimated to complete by the middle of next year. IJN’s second phase of expansion is a new building that will have about 120 beds, including 20 critical care beds; two operating theatres; two invasive cardiac labs; new clinics; a wellness centre; an upgraded cardiac imaging centre; and a rehabilitation centre. IJN will begin tendering for the new block in early 2025.
The largest heart hospital in Malaysia even plans to diversify beyond cardiovascular care into multiple specialty areas – covering nephrology, pulmonology, endocrinology, vascular, physiotherapy, and family medicine, among others – to create an integrated disease centre, as patients today increasingly present complex conditions.
IJN already has a new RM10 million dialysis centre for kidney patients; its plans include a stroke centre, as well as a sports clinic and occupational rehabilitation centre. IJN also wants to expand its respiratory unit to provide a full range of respiratory surgery, from minimally invasive procedures to lung transplantation.
“If you have a heart problem, you’ll come to IJN or a centre known for its cardiac services. But if you have a lung problem, where do you go to? That’s not very clear cut. So we want to penetrate that market,” said Dr Ezani.
As for entering endocrinology, the IJN CEO noted that cardiometabolic diseases are increasingly common. “Those with diabetes or thyroid problems, they also have concomitant cardiac problems. You can’t have a specialist that deals with cardiac alone, so we’re trying to combine these specialties so that patients will have better service.”
IJN has big plans for an IJN Health Metropolis in Kuala Lumpur that will host its research centre and IJN University College. “We’re looking at our other partners around here to see if we have the same ideas and direction. If we do, then the whole area can be developed into a new IJN Health Metropolis. That’s the mission of our new direction for IJN.”
IJN Keeps Fees Low With Cost Efficiency, Economies Of Scale
“If you look at our fees, we’re very, very attractive, almost 40 per cent lower (than private hospitals),” Dr Ezani said, adding that the key to IJN’s low prices is cost efficiency.
“If you play the game like how the industry wants you to play, we will not be profitable. We need to be very cost-efficient – discharges, less expensive medication, quicker service, our turnover rate is high. The slower the turnover rate, the less patients we can treat.”
The IJN CEO expressed surprise at the “high” rates in private hospitals, pointing out that IJN could maintain its CABG fees for public patients in the last two decades at RM30,000, compared to RM100,000 or RM120,000 in private hospitals, due to cost efficiency and economies of scale.
“When we do the costing, it doesn’t cost that much to do a procedure. Consumables, yes, because that is dependent on the vendor. But the procedure itself should not cost that much.”
When asked if IJN would, in an ideal world, like to be free from the government to run its business as it saw fit, Dr Ezani said IJN’s first priority is to serve the government and the Malaysian people, as its building was funded by taxpayers.
“We’re built based on public funds. After the building, there were no more public funds; everything was our own money. But when we were first built, it was based on public funds,” he said.
“Our main priority and corporatisation agreement is for IJN to serve the Malaysian public because we think we’re the best in the market to serve the Malaysian public.”
