Private hospitals will see an increase fee of about 5%

Malaysians will have to pay at least 5% more for private healthcare once the Goods and Services Tax kicks off  on 1 April 2015, according to an estimate by the Association of Private Hospitals of Malaysia (APHM).

APHM president Datuk Dr Jacob Thomas warned that the costs would increase even though the Government announced that healthcare services were exempted from the GST.

He said this was due to certain details on the implementation of the 6% GST, including deeming the work of doctors operating as independent consultants as “outsourced service” that can be taxed.

“About 99% of doctors in private hospitals are not employees, but operate as independent contractors,” said Dr Jacob.

“This means that the burden of the GST will be borne by the rakyat for the services of such healthcare professionals,” he said.

Dr Jacob said the hospital operating costs were also expected to increase from other outsourced services, which are taxable like security, laundry and housekeeping.

“To say that healthcare costs will not go up is not true. The costs will definitely increase,” he warned.
“It is not viable for private hospitals to absorb the extra charges.”

Dr Jacob said the 120-member APHM understood the Government’s good intentions of exempting healthcare from the GST.

“But as it is implemented, there is going to be an increase in costs,” he said. “I disagree with the Health Minister who said that the increase will only be about 1%.”

Dr Jacob urged the Government to regard healthcare services as an “exempt supply” in the true sense of the word and not have hidden costs that could implicate the private healthcare sector.

“If it insists on imposing the tax on us, our plea to the Government is to explain to the people about this,” he added.

“The increase in private healthcare costs may also see more patients switching to public hospitals, which may further clog up the sector.

“About 30% of hospital beds in Malaysia are in the private sector and our country’s healthcare boasts of being ranked the third best in the world because of its excellent and affordable care,” he said.

There are 220 private hospitals in the country.

Health Minister Datuk Seri Dr S. Subramaniam was reported to have said that medical costs might increase by between 1% and 2% when the GST is imposed.

/theSTAR 16-12-2014
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