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Transformation of healthcare delivery? A critical look at the health white paper

Let's ensure that large commercial interests that stand to gain financially from the 'marketisation' of the healthcare sector do not hijack the efforts to improve this sector

A long queue waiting at the crowded Penang General Hospital - FILE PHOTO: ANIL NETTO/ALIRAN

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The white paper on health that was tabled in Parliament in June 2023 is an important document that merits attention.

Though short on specific details, it does give an indication of how the government intends to handle the problems facing the national healthcare system. 

There are several positive aspects to the white paper.

First, it is good to have a national health plan. And it is commendable that the government is inviting civil society and the public to take part in the planning of our healthcare needs.

The stated aspirations are matters that most people would agree to –

  • the intention to build a healthy nation— for all of society, health in all policies
  • a healthcare system which is equitable and affordable to the public
  • a healthcare system that is resilient, affordable to the nation and has sustainable financing
  • a system that makes use of the advances in digital technology and is innovative
  • a system that optimises the use of all the healthcare resources in the country, both in the public and the private sectors

The white paper outlines its vision for the healthcare system under four “pillars”:

  • Transformation of healthcare delivery
  • Prioritisation of health promotion and disease prevention
  • Implementation of healthcare financing that is sustainable and equitable
  • Improvement to the administration of the healthcare sector

This paper will focus on the first pillar, the transformation of healthcare delivery, the topic assigned to me by the Peoples Health Forum for the roundtable discussion on 7 November.

Transformation of healthcare delivery

This pillar is further divided into five components.

The first is to anchor healthcare delivery in primary care. Every individual will be required to choose a primary healthcare unit – which would comprise at least one doctor, one nurse and one dispenser of medicines.

This unit is responsible for:

  • The monitoring of the health status of all persons registered under it
  • The promotion of healthy living habits in these patients – diet, weight control, exercise, etc
  • Screening for common non-communicable diseases
  • Treatment of minor ailments at the primary healthcare level itself
  • Referral of patients to hospital for further investigation and treatment as necessary
  • Follow-up of patients upon discharge from hospital

It is envisaged that the existing GPs – who now number about 7,500 – will be co-opted into this system of primary healthcare units to provide the above services to their own set of patients.

The second and third components of the first pillar aim to optimise the use of the hospitals in the country. This will be achieved by:

  • Reducing unnecessary admissions to hospitals. Conditions that can be handled at the primary healthcare level should be handled there. Patients will require a referral from their primary healthcare unit to be eligible for free treatment at the hospital level – for all the conditions specified in the “health benefits package” (as yet unspecified)
  • Integrating private hospitals into a national healthcare system. This will be done in stages, starting with the purchase of certain services from the private hospitals. At a certain stage of integration, the primary healthcare clinics will have the freedom to refer their patients to private hospitals, and a significant part of the charges of the private hospitals will be borne by the “strategic buyer”, a separate institution that will manage the health sector budget
  • Providing for electronic records to become the norm so that patients can move seamlessly through the system – from the primary healthcare unit to a government or private hospital and then back to the unit. The immediate availability of records of investigations already done, diagnoses made and treatments given will enable the attending doctor to provide optimum care
  • Organising hospitals, both public and private, into “clusters” so that they can share their resources including specialised diagnostic facilities, subspeciality experts and beds to provide good quality care in the most cost-efficient manner possible  
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The fourth component of the first pillar focuses on using the advances in IT to create electronic records so that the treatment of any patient at any point in the health system will be informed by all the information available for that patient.

Patients will also be given a copy of their electronic records. Teleconsulting will also be enabled so that specialist opinion can be sought even from rural and remote clinics.

Finally, the data in the system can be used to assess whether specific services need to be expanded and whether new services are required.  

The fifth component of the first pillar emphasises equitable access for all sectors and strata of society. The elderly, the Orang Asli, people with disabilities, HIV-positive people, migrants, the stateless and refugees are specifically identified as groups that may have difficulty in accessing healthcare. It also recognises the social determinants of health.

Chart One: Overview of the healthcare system proposed in the health white paper 

Main features

  • The primary healthcare team emphasises health promotion and treats milder complaints. It also serves as the gateway to hospital care
  • The team can refer patients to either public or private hospitals (depending on criteria that have yet to be specified
  • The “strategic buyer” will reimburse the primary healthcare team and the hospitals for treatment of conditions listed in the health benefits package (yet to be specified)

People’s Health Forum’s concerns

The objectives defined by the white paper on health are on the whole good. But we are concerned that the massive changes proposed to the manner healthcare is provided and paid for might create significant problems that are not anticipated by the planners.

Some specific concerns:

In the model outlined by the white paper, the primary health clinics play a pivotal role in arranging care at the secondary and tertiary levels. Only patients who are referred by the primary healthcare team will get free healthcare at the next level.

The exact mechanism of the referral system is not as yet specified but is very important. If there are features – financial or otherwise – that penalise the primary healthcare team for referring too many patients to secondary or tertiary care, that would create a conflict of interest between the primary healthcare team and the patients under their care.

The white paper is advocating a major change in the financing of public sector hospitals. Currently, financial considerations are not the main drivers of clinical and administrative decisions in public hospitals. Switching to the strategic purchaser system, where all hospitals are paid for the clinical services they provide, will alter the way healthcare is delivered, in a fundamental way, and not necessarily for the better.

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Medicine is not an exact science – the threshold for doing an appendectomy or a Caesarean section or a cardiac angiogram can be altered by financial considerations. The fee-for-services-provided system will create a tendency to over-investigate and to resort to surgery as these modalities will increase the revenue of the hospital.

The overall cost of healthcare will then go up, because there will be financial incentives for hospitals to overdiagnose and overtreat. The strategic purchaser will also need to have a large army of employees to process claims from the various hospitals to ensure they are not over-claiming. The incidence of complications arising from medical interventions will also go up.

The white paper talks about “financial and operational autonomy for public sector providers”. It is important to know what this means.

For example, would public sector hospitals be allowed to charge co-payments or to open private wards and offer services to health tourists to increase their incomes? Would public hospitals in poorer regions of the country have less revenue as they will not be able to charge much co-payments compared to hospitals in large urban centres? Will the richer public sector hospitals be able to attract and retain more qualified staff compared to the poorer public sector hospitals in rural areas or poorer states?

The dedicated health fund (strategic purchaser) will procure services in both the public and private sectors. This will essentially mean that a channel is provided for the public financing of the private healthcare sector. Will the diversion of public funds to private hospitals lead to the undermining of the public hospital system?

It is important to remember the weaknesses of the private hospitals, which either were not able to (or did not want to?) manage Covid patients. In fact, amid the pandemic, certain private hospital spokespersons were seen to place their own financial position in front of everything else. At least one high-end private hospital chartered planes to bring in medical tourists from Indonesia even before the country had fully opened up, no doubt with their bottom line in mind.

The Covid pandemic showed clearly how vital it is to have a public healthcare sector that is strong and well-resourced in these times of emerging and re-emerging communicable diseases. It also showed that the private hospitals cannot be relied on to put national and public interest ahead of their own financial interests.

The white paper gives no details about the conditions and treatments that will be listed in the “health benefits package”. That list is crucial because these are the treatments that the strategic purchaser will pay for.

What happens to the individual with the rare complaint which is not listed in the benefits package? What happens when a new but effective modality of treatment is developed? How long will it take before it is considered for adoption into the benefits package?

With advances in technology, medical imaging and treatment is going to get increasingly expensive. Every healthcare system will require instituting some form of rationing. The question is how open and democratic that process of rationing is going to be.

There is no in-depth discussion of how weaknesses in the monitoring and regulation of the private medical education sector resulted in an oversupply of doctors and paramedics, some of whom are not adequately trained.

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The issue of ‘regulatory capture’ of the regulatory bodies by large corporations providing medical education is not identified. A discussion of how regulatory capture can be minimised is crucial if we want to ensure that a similar ‘capture’ of the proposed “national health fund” by the private hospitals and the pharmaceutical industry does not take place.

Electronic records and the question of confidentiality. Will commercial interests be able to buy access to patient records to be able to advertise particular products to particular people? How about insurance companies using this information to risk-stratify the individuals applying for health or life insurance?

There are strong hints within the white paper that the public would have to pay more for healthcare, though the mechanism is not specified – whether it is via a payroll tax, social health insurance or goods and services tax.

The Peoples’ Health Forum is against this idea, as there is significant wage suppression in Malaysia. Our wages are a sixth that of the advanced countries.

Stunting among five-year-olds is about 20% – this means that the poorest 20% of families in Malaysia are already unable to provide for the basic nutritional needs of their children. It would not be fair to add to their economic burden by incurring an extra tax on them.

Also, the positive externalities of subsidised healthcare should not be underestimated. It enhances social solidarity and a sense of belonging to the nation.

The take-home message

The reason why the Peoples Health Forum is organising this roundtable discussion is because we believe that the health white paper is an important milestone in the development of the Malaysian healthcare system. It has many admirable aspirations.

However, some of the suggested methods to attain these aspirations might actually lead to serious problems, as sketched out in the section above.

So, it is crucially important that civil society groups participate in any future consultations organized by the Ministry of Health to ask for details on the various proposals in the white paper and to give feedback.

Suggestions

Go for incremental changes – eg start a pilot project for some GPs to be allocated patients with non-communicable diseases on a capitation basis. This will help decongest government clinics and also personalise and improve care for such patients. This can be gradually expanded to other areas and more GPs. 

Start or further develop the cluster hospital concept in a few areas and fine-tune the exercise.

Reduce wastage in the procurement of goods and services. Is there a need for bumiputra middlemen? If there still is, what are the margins that they can charge?

Increase the federal health budget to 4% of gross domestic product (GDP) in stages over five years. That will give the Ministry of Health the necessary time to upgrade its programmes.

Make medium-term and long-term plans to increase federal government revenue from its current 15% of GDP.

Ensure that large commercial interests and professional groups that stand to gain financially from the further ‘marketisation’ of the Malaysian healthcare sector do not hijack the efforts to improve this sector.

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.

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