Home 2006: 1 The People’s Proposal

The People’s Proposal

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The Coalition Against Health Care Privatisation, comprising 81 NGOs, has come up with a People’s Proposal for health care financing that would not burden ordinary Malaysians especially those least able to afford higher health care costs.


In reviewing the Health Ministry’s proposal and coming out with our people’s proposal, it is important for all of us to bear in mind the following:

The provision of health care in any country is very much conditioned by the dominant economic, political and social environment. In the 1960s and 1970s, the prevalent view in our country was that the government should play the key role in the provision of health care. The private sector’s role was largely limited to GP services in the main urban areas. Since the 1980s, the government has been shifting the burden of financing many essential social services directly to the rakyat due to the neo-liberal ideas that were (and still are) being advocated by international financial institutions such as the International Monetary Fund (IMF) and the World Bank. Thisneo liberal ideology also coincided with that  of the Mahathir government. As a result, we have ended up with our current dysfunctional public/private dual system.

We must also recognise that a health care system cannot be effective and financially viable if citizens at large do not accept personal responsibility for maintaining healthy lifestyles in terms of nutrition and physical activities. We must also have some safeguards built in to the system so that both patients and providers of health care will find it difficult to abuse the system.

As mentioned above, the Ministry is now looking for a consultant to help them with the blueprint and operational details and expect that this consultant will start work in early 2006. (Karol Consulting of Australia has since been appointed as the main consultant.) It is worrying that the Government has chosen to accept United Nations Development Programme (UNDP) money to finance this consultant. Does this mean it is the UNDP and not the government that is responsible for the appointment of the consultant?  Does this imply that the consultant will be a foreign consultant who may reflect the current donor agency’s bias in favour of privatisation. There are also few details  about how the consultant will actually consult Malaysians. This has to be made clear from the beginning, and full opportunity for consultation with any interested parties must be mapped out both before the consultant writes the report as well as after. The new health scheme is far too big a change in the lives of all Malaysians for it to be introduced without an open, extensive and accountable consultation processes.

At present about 75 per cent of all admissions in Malaysia are to government hospitals, but only 25– 30 per cent of Malaysian medical specialists work in these hospitals. This mismatch of resources to need leads to poorer quality of care in the public sector for certain conditions such as Ischaemic heart disease, renal failure and cancers.

Experienced government doctors and other para-medical professionals are still leaving for the private sector.

Patients in government hospitals already have to pay exorbitantly high collateral payments for the treatment of several conditions such as orthopaedic procedures that require plates and nails, lens for cataracts, clips for surgical procedures, drug-coated stents for angioplasties and certain anti-cancer drugs.

The Health Ministry is already implementing neo-liberal policies, albeit in a piece-meal fashion which are eroding the resilience of the public sector. Examples include:

  • private dispensaries in certain government hospitals
  • private wings in government hospitals
  • promotion of health tourism in several private hospitals
  • raising the fees for foreign workers

 Main components

Need for consultation 

A comprehensive overhaul of the health care system such as that being proposed by the Ministry must be undertaken with great care. Nothing should be rushed. Full and prior consultation with the rakyat, unions, consumer groups and health personnel as mentioned above is absolutely fundamental; nothing should be done without this process being carried out first. This consultation will also mean paying close attention to our proposals and, if these are rejected, the Ministry needs to explain why.  Piece-meal poorly thought-out schemes announced by the Health Minister from time to time must stop. The plan must be comprehensive and deliberate.

READ MORE:  Has Mahathir's privatisation agenda failed the nation?

A recent incident, however, has confirmed our fears that transparency and open consultation is not going to be there in this process. Given our concerns above, in our forum held on 11 December 2005, there were requests from the floor that the government must release the terms of reference for the appointment of the consultant. Accordingly, we wrote to the Economic Planning Unit (EPU) and we were told that the terms of reference are confidential! This is why we are insisting on consultation before things are decided.

Need for equitalbe change 

We agree that changes are needed in the financing and running of our health care system. Because of past government policies, a two-tier system has been allowed to develop which works in favour of those with money and against those who are poor. It has seen the growth of the private sector at the expense of the (far more used) public sector; and it has also seen the introduction of privatisation into certain health care services. There are issues of equity, inefficiency and absence of accountability.  These need to be tackled.

National Health Fund 

We therefore propose a new funding formula to safeguard the health of all Malaysians. It could be called the National Health Fund, but it should not be financed from the pockets of individual Malaysians. There are plenty of viable and present alternatives.  They include:



Amount per year

The Federal Budget

At present the Federal Govt is only spending 1.8 per cent of the Gross Domestic Product (GDP) on health. The World Health Organisation (WHO) has advised that developing countries should spend 5 per cent of their GDP on health. We propose that the Malaysian Government increases allocation to health to 3 per cent of GDP effective next year. GDP = RM530 billion ;  so, 3 per cent = RM15.9 billion

RM15.9 billion

Taxes on alcohol and cigarettes

These lead to ill-health and require funds to treat. So the entire collection of taxes on these two items should go to finance health care

Petroleum profits

Petronas made a profit of more than RM30 billion in 2004. We propose that RM5 billion of Petronas’ profits be ploughed into health to benefit the entire population.

RM5 billion

These resources are not just readily available but will be ample to undertake necessary changes. We should reject any proposal to make Malaysians pay more. This should be rejected because:

  • It is unnecessary and will be an extra ‘tax’, which will penalise those least able to afford it. The Malaysian public is at present reeling from the effects of rising oil and other prices. People are already under considerable financial stress.
  • Collecting premiums from the public will involve a lot of effort, and distract us from the main aim of the exercise which is to improve the public health sector. The administrative cost of collection of premiums can be substantial in countries like Malaysia where a large segment of the population is self-employed and not salaried workers.
  • At the forum, representatives from the unions clearly made the point that payroll deductions for EPF, Socso, income tax and other items have already reduced workers’ take-home pay substantially. They do not want another “tax” on their pay.

The National Health Authority (NHA) 

A fund totalling more than RM20 billion per year can easily be plundered to enrich corporate cronies given the current crony culture in government. We must have an effective mechanism to prevent this from happening. Given the extent and pervasiveness of corruption, and given that it has taken away so much money from the services that could have benefited millions of ordinary Malaysians, any scheme which continues the tradition of unaccountable bodies in charge of massively large funds must be resisted. Accountability and proper representation is an essential element of any proposal, and here it is not good enough for the Government to offer bland reassurances. Health is the last major slice of the cake escaped the grasp of the cronies.

The NHA must be seen as fulfilling a constitutional requirement of the basic right of citizens for access to adequate health care. It should be established by an Act of Parliament as the single-payer initially for public sector health care (and eventually for all health care) with the responsibility to ensure effective and efficient care. There must be no intermediary to administer payment for care.

 The NHA should comprise representatives from a wide cross-section of Malaysians and needs to be fully accountable to all Malaysians. It cannot be selected by just the Prime Minister or by the Health Minister. An effective mechanism must be decided upon.One possible mechanism is to distribute the representation as follows:

  • 50 per cent from political parties based on their share of the total votes in the latest general election;
  • 20 per cent nominated by the government;
  • 10 per cent from unions;
  • 10 per cent from consumer groups and health NGOs;
  • 10 per cent from health provider associations.
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The NHA must have bite. It should have the power to review contracts before they are passed. It must have access to information. It should have a budget to employ sufficient staff to monitor the use of the National Health Fund throughout the country.

Perhaps the management of government health facilities could be devolved to a Primary Care Authority and a Hospitals Authority. This will create a new public sector that will drive training and research, be the benchmark for quality care, and keep the private sector honest. Only then can we dismantle the ‘iron curtain’ between public and private sectors and integrate care to the benefit and convenience of patients and their family. These new agencies must not be ‘corporatised’, which has always been a prelude to privatisation. Rather, they should be established as Trusts by Act of Parliament so that they remain under the scrutiny of Parliament with specified responsibilities and duties.

Such a move has also an added advantage of freeing the entire public sector health care system from the control of the Public Services Department (JPA). JPA’s control of health professionals has often been cited as one of the leading causes of dissatisfaction among health professionals. Their inability to understand the special features of managing health facilities and providing professional services has often been a major stumbling block in improving the terms and conditions of service in the health sector.

We may also need to consider setting up state-level community health bodies, which would help promote and support actions that will help ensure people’s control over decision-making about their health and health care.

Focus on public sector health system first

We propose that the purpose of this fund should be to improve health care for the rakyat – initially by rehabilitating and strengthening the government health sector. In other words, the first task of this fund is to upgrade the facilities, terms and conditions in the government hospitals and clinics because:

  • The majority (at least 75 per cent) of our population still relies on government clinics and hospitals for treatment.
  • Government health facilities are much more equitably distributed throughout the country compared to private sector facilities, which are largely concentrated in major urban centres.
  • The doctors and other health personnel in the government sector are salaried and not paid on a fee-for service basis. This will ensure that costs are curtailed. The fee-for-service private sector has the potential to quickly suck the NHF dry unless there is a strong and competent government sector to act as a counter-weight.
  • At present, only the government hospitals are playing the role of providing clinical experience for medical school students and for doctors who are training to be specialists. This very important function cannot be carried out effectively if we do not have sufficient senior medical and surgical consultants and sufficient facilities in our public sector hospitals. If we fail here, we may get more cases of newly qualified doctors who know the theory but do not know how to apply it as was highlighted in the NST recently.

Among other things the fund should work towards the retention of experienced health care personnel in the public sector:

  • This should be a crucial aspect of the new scheme. Pay and working conditions for all health personnel including nurses, para-medical staff, doctors, and specialists  must be improved.
  • Other perks such as funding for undertaking research and attending courses and seminars to upgrade skills should be made available to professional staff.
  • If the provision of pension is a major pull factor, perhaps this should remain a feature of the terms of service for government health personnel.
READ MORE:  Has Mahathir's privatisation agenda failed the nation?

A comprehensive essential package 

We agree with the government that there needs to be a basic health package available to all Malaysians. The government, however, seems a little unclear as to what this package will cover. To safeguard the health care of all Malaysians, this package needs to have the following:

  • It must consist of all the treatment options available in our government clinics and hospitals at present; it must include all the primary health care components such as immunisation and vector control, as well as all the currently offered tertiary care components such as ICU care, by-pass surgery and dialysis.
  • It must be available to all Malaysian residents including foreign workers for a small co-payment similar to what we now pay for out-patient treatment; the actual quantum of payment can be determined after discussion and consultation with all concerned groups; the co-payment is necessary to discourage the over use of health care facilities.
  • The treatment modalities in the essential package must be accessible to all Malaysians irrespective of location of residence.

We are unequivocally against any two-tier system based on the ability to pay. It is immoral to speak of two standards of care based on ability to pay. The professions of Medicine are ethically committed to care equally for all. Evidence-based quality and patient involvement are the same for all citizens. Private insurance may cover ‘hotel’ and fringe benefits as well as cosmetic and other privileges. Doctors must be paid the same whoever they treat, rich or poor.


Implementing the National Health Fund and the National Health Authority in the manner and with the task as outlined above will be a major step forward in protecting the health care of all Malaysians. We reiterate that Malaysians should be very worried about any proposals that:

  • Talk about Malaysians paying extra money into an unaccountable fund;
  • Talk about a new Body that is similarly unaccountable, full of government-appointees and a recipe for cronyism and corruption;
  • Talk about efficiency, if it is equated with privatisation. The scandal of privatisation, which has led to extra costs for our public sector health care system, has been exposed. We should take steps to rectify this;
  • Talk about a basic package without clarification of what is covered;
  • Lack any proactive plan to ensure that much needed investment into our public system actually happens. The huge worry is that the public sector will be allowed to deteriorate further and the private sector flourish, at the expense of ordinary Malaysians and their health. It is important for us to ask ourselves whether we can have a society where access to health care has become inequitable due to the rise of the two-tier system. Is it morally okay for the wealthy to get better health care than the poor? What do our religious faiths say about this?

When the National Health Service was introduced in the United Kingdom after the Second World War, the then health minister, Aneurin Bevan said, “No country can call itself civilised if an ill person is denied care because of lack of means.” If the Malaysian government is still hoping to achieve developed nation status by 2020, it is worth remembering these words!

If we can actually implement the six aspects of the People’s Proposal as sketched above properly, we would be in a much better position to plan for the ensuing phases, which will involve integrating the private sector health care system into the NHF and NHA. It would be extremely premature for us to talk about these in any detail at present.

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

AGENDA RAKYAT - Lima perkara utama
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