Public-Private Partnership for Healthcare transformation

MALAYSIA’s public healthcare needs are bursting at the seams and available tax funds are not enough to meet the growing demands as cost of care keeps increasing. Adding to the challenge is the country’s current high debt level and economic downturn.
Against this backdrop, the Health Minister Datuk Seri Dr Dzulkefly Ahmad announced in late March 1) the setting up of a seven-member Health Advisory Council to look into public-private partnership (PPP) initiatives to meet Malaysia’s healthcare needs 2) looking into a National Health Insurance scheme to get more funding. Some stakeholders, however, are urging the government 3) to plug the tax loopholes, so that more funds can be retained for the country’s healthcare needs 4)  examine the areas of conflict of interests affecting public healthcare delivery.
Noting that the World Bank and the International Monetary Fund have recommended the PPP approach to address the shortfall in healthcare funds, Dr Jeyakumar expressed concern that neo-liberal solutions are generally recommended, where charging people for healthcare is deemed good as it will encourage people to adopt a more healthy lifestyle.
He also pointed to a recent Harvard study funded by the World Bank, which recommended that the government devolves more of its healthcare functions to market players while it focuses on regulation.
In Malaysia, the corporate tax rate was 40% until 1988 but it was gradually reduced to the current 24%, and the government has indicated that it will be brought down further to compete with Singapore’s 18% and Thailand’s 19% rates.
“There is competition among countries to cut down corporate tax and attract investors and the tax collected is not enough to fund developmental projects for the people,” he says, noting that this has led to many countries, including Malaysia chalking up huge sovereign debts.
Contributing further to the fund shortage is the worldwide trend of keeping budget deficits to below 3% of the GDP.
Another issue is tax evasion by business owners who resort to various tactics to avoid paying taxes, including royalty payments and scheme transfer pricing - so that profits made in a particular country are repatriated to a tax haven through grossly exaggerated fees.
This is generally supported by the forum with some saying that the government should also look into a more progressive taxation system and review our taxation laws.
Conflicts of interest 
Health policy analyst Dr Chan Chee Khoon raised the issue of government agencies at the federal and state levels having controlling stakes in major for-profit healthcare enterprises.
While government-linked companies (GLCs) built up their stakes in the commercial healthcare sector, a succession of health ministers had argued that Malaysians who could afford it should seek private healthcare services as this would allow the government to target its limited healthcare resources on the “really deserving poorer citizens,” he says.
He cites the example of Kumpulan Perubatan Johor, a large diversified healthcare conglomerate which includes the largest chain of private hospitals (26) in the country, spawned by the Johor state government through its corporate arm the Johor Corporation.
Another is the IHH Healthcare Bhd, the healthcare subsidiary of Malaysian federal government’s sovereign wealth fund Khazanah. It emerged as the second largest listed private healthcare provider in the world - (by market capitalisation, US$8.06bil (RM33.5bil) – when it added Turkey’s largest private healthcare group Acibadem to its recently merged Parkway-Pantai chain of private hospitals in Malaysia and Singapore.
That means, the government, through GLCs at federal and state levels, own and operate three parallel systems; the Health Ministry facilities, corporatised hospitals (National Heart Institute, university hospitals) and IHH chains of commercial hospitals, says Dr Chan, calling it a conflict of interest affecting public healthcare delivery.
As he puts it, GLCs now control more than 40% of “private” hospital beds in Malaysia.
“How are conflicts of interests playing out, as the state juggles its multiple roles as funder and provider of public sector healthcare, as regulator of healthcare system and as pre-eminent investor in the private health services industry?” he says.
The attempted acquisition of the National Heart Institute by Sime Darby in 2008 is a revealing instance of disparate priorities, he says.
Dr Chan also notes the continuing poaching of staff from the public sector which exacerbates the already burdensome workload of its remaining staff.  
Hence, it is important for the government to scrutinise the PPP projects that it wants to take on, and consider the impact it has on public healthcare sector, adds Dr Jeyakumar.
Dr Chan says GLCs should be reoriented to become a source of high quality, no frills, medically necessary care at medium cost, to act as a price bulwark to rein in escalating, exorbitant charges in other commercial healthcare enterprises.
The crucial role for the government should include an oversight and regulation of an evolving system of healthcare provision and financing such that all Malaysians and other eligible beneficiaries continue to enjoy access to equitable healthcare on the basis of need, and not ability to pay.
Instead of a National Health Insurance, he says an alternative option which relies on a more progressive taxation regimes to improve universal access to quality care on the basis of need should be considered as it is notably absent from the options under consideration.
Reducing cost inefficiency
One way to manage healthcare cost better is to have a primary care physician to diagnose and treat patients at at the clinic level. But most Malaysians do not have one, and have to “shop” around by going to government clinics, private GPs and private specialists and this affects continuity of care and inhibits interventions to promote health and prevent disease, says Dr Jeyakumar.
Malaysia’s treatment oriented approach results in poorer outcomes and less cost effective treatment for non-communicable diseases (NCDs), he adds.
According to Malaysian Medical Association’s Private Practice Section chairman Dr R. Thirunavukarasu, the government can offload some of these patients who go for outpatient treatment in government hospitals to some of the underutilised 7,000 GPs nationwide who can monitor the patients’ NCDs.
Academy of Family Physicians of Malaysia president Assoc Prof Dr Mohammad Husni Jamal believes GPs must go through some courses to beef up their expertise as a generalists, like it is done in Britain, which then reduces unnecessary costly specialists’ attention.
Getting GPs to play a role in screening patients for NCDs is welcome as an acceptable form of PPP while the government can buy some services from the private sector depending on the price, he says.
Dr Chan cautions that in a profit-driven risk-rated insurance scheme, the people who need healthcare most, cannot access it.
The case of MySalam insurance for the B40 low income group excluded those with pre-existing conditions such as Alzheimer's, cardiomyopathy (heart disease), coma, if a patient is diagnosed before Jan 1, he says.
Dr Chan, who is also involved with Citizens’ Health Initiative, says that the Health Advisory Council should include laypersons and representatives of civil society organisations. 
Malaysian Pharmaceutical Society president Amrahi Buang agrees, sharing that in the community, pharmacists are among the first to respond to symptoms, with patients going to them first to purchase medicine to address their ailments.So it is important to also consider the role of pharmacists in healthcare, he says.
Besides careful adoption of PPP, some in the forum say more efforts have to be made to move Malaysians towards adopting a healthy lifestyle from a young age so that they grow old with less health problems that wipe out their life savings.
As Amrahi puts it, there is a need for a national health policy for the country to move forward - one that will push it towards preventive care, rather than curative.
/theSTAR 23-06-2019
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