Health care for ALL, not just the rich
http://www.aliran.com/content/view/250/10/
Wednesday, 06 June 2007

Toh Kin Woon traces the history of the health system in Malaysia, and notes with concern the current mismatch of resources between the public and private health care system. It is a situation that allows the rich to obtain quality health care of their choice while the poor have to put up with an overstretched public health care system.
As you are all aware, the government is in the midst of restructuring the country’s health care system, particularly the financing and delivery of health services. A consultant has already been appointed and the interim report is ready. Soon the final report will be out.
People's struggle for more equitable health care
Since the government’s announcement of its’ intention to restructure the country’s health system, many non-governmental organisations have pressed the government to be open, transparent and consultative during the entire process of reforming and restructuring the health system. These NGOs, largely representative of workers, consumers and low-income groups, have even come together to form a Coalition Against Health Care Privatisation in the hope that mass support can be mobilised to press for a health system that is both equitable and efficient.

I understand that many activities have been organised to raise awareness of consumers to the dire consequences, particularly to the poor, that will follow should there be greater privatisation and marketisation of health care services, a trend, which given the current ideological inclination of the State, is highly likely. I have to say I am indeed impressed by the good work you all have done so far. I hope this struggle for a more equitable system of health care, where the principle of equitable access to health care services is honoured, will continue till victory is achieved.


Access to health care a human right

Any humane society must adopt the principle that health care is a right of all its citizens. The International Covenant on Economic, Social and Cultural Rights, one of the two core covenants adopted under the Universal Declaration of Human Rights, recognises “the right of everyone to the enjoyment of the highest attainable standard of physical and mental health”. This implies two corollaries.

• Any financial impediments restricting the individual patient’s access to health care services must be removed.

• Any maldistribution of health resources, such as health care personnel and facilities, which limits patients’ ability to obtain needed services must be rectified.

For all citizens to enjoy this right of access to health care, a system that provides for universal and comprehensive health benefits for all must be put in place. Access to health care should be based on need and not ability to pay.


Relatively equitable system of the past
For a long time till around the mid-eighties, the Malaysian government did a reasonably good job of providing satisfactory health care services to all, irrespective of geographical location, gender and even class. This was achieved through the setting up of rural health clinics, including maternity clinics, hospitals - which were all publicly funded except for a few not-for-profit private ones - private clinics in urban areas, as well as the government’s stress on primary health care. There was also an effective public health system. Public health activities include disease control, family health, school health programmes, food quality control and health education.

Health standards of Malaysians no doubt improved over the years, as are shown by various health indicators. Even the World Health Organisation recognised Malaysia’s achievements in this regard and held it out as a model for other developing countries to emulate. What was impressive was that we were able to keep costs down, while at the same time providing relatively equitable and adequate health care.

Although there were some private sector health services’ providers, which charged user fees or fees for services, the government was the main health services provider. Services rendered were financed out of general taxation so that for the bulk of patients, health services were obtained for almost free. Over-utilisation of specialists was averted through general practitioners playing their role as gatekeepers effectively.

Partial privatisation and attendant problems

Since the mid-eighties, however, problems and challenges began to emerge as a result of increasing privatisation and marketisation of health services. The provision of health services is to be shared with the private sector. Likewise, the burden of financing the total costs of health services through the co-payment of certain services by the general public has now been introduced - instead of the government financing it all through general taxation Without a doubt, such increasing reliance on the private sector in health care provision and financing has been very much influenced by the neo-liberal economic ideology advocated by the International Monetary Fund and the World Bank. As a result of this shift, hospital services such as cleaning, laundry, clinical waste management, facility engineering management and bio-medical engineering management have been outsourced to the private sector. Such privatisation has increased the cost of servicing the health system.

Under the principle of co-payments, patients are now required to pay high collateral payments for the treatment of several conditions such as orthopaedic procedures which require plates and nails, lens for cataracts, clips for surgical procedures, drug-coated stents for angioplasties and certain anti-cancer drugs. This has in turn jeopardised the principle of equitable access to health services for all Malaysians, some of whom, especially the poor, may not be able to afford these payments and hence may have to forego these treatments. Private hospitals have proliferated during the last two decades, adding to the supply capacity of private health care delivery, which now comprises general practitioners (GPs), specialist clinics, hospitals, diagnostic and dialysis centres, dental clinics and pharmacies.

While most of these are for-profit, there are some that are run on a voluntary, charitable and not-for profit basis. The contributions of these not-for profit private health care services providers towards helping improve access, especially by the poor, to critical life-saving services, have been immense, thanks to altruistic, caring and compassionate workers and donors. But the establishment and operation of these not-for profit health centres also manifests a need for critical life saving services that has been largely unmet by the public sector health care system.


Apart from these exceptions, private health providers are funded either through direct payments of fees for services by the patients themselves or by private insurance. Private health insurance policies generally cover hospital care while a lot of employers provide health care coverage as one of the terms of employment. Still, the proportion of the total population covered either by private health insurance or health benefits provided by employers is still relatively small.

Meanwhile, the government continues to subject the provision of more and more health services to market forces. Examples are the setting up of private dispensaries and private wings in government hospitals, promotion of health tourism in several private hospitals and raising the fees for foreign workers. Part of the capacity in the Putrajaya and Selayang hospitals will be used for the provision of services to patients who will be charged according to what they can bear.

Mismatch of resources

All these measures in the privatisation and marketisation of health services, no doubt implemented in ever larger doses over recent years and likely to be done so with increasing vigour in the future, have given rise to concerns.

As already noted, equitable access to health care is no longer assured as health resources and services are increasingly being rationed on the ability-to-pay principle rather than on the basis of need. Increasingly, the government plans to shift part of the burden of financing the costs of health services to the general public. The excuse is that costs have been escalating and may reach levels beyond the means of the government, unless controlled. This is despite the Federal Government spending only about 2 per cent of the country’s Gross Domestic Product (GDP) on health. This is 3 per cent less than what the World Health Organisation (WHO) has proposed as the target for spending on health care in developing countries.

The continued expansion of private for-profit health care, where funding is largely by user fees or fees for services, has led to a distortion in the allocation of resources. Under the two-tier system, which has come to characterise our country’s health care system, allocation of resources, especially health care personnel, is now increasingly driven by the profit motive rather than on the basis of need. Medical specialists and other para-medical staff continue to leave the public for the private sector, at the same time as more and more patients seek treatment and care in the public sector.

This movement of health care seekers and providers in opposite directions has led to a mismatch of supply and demand. Currently, it is estimated that 75 per cent of all admissions in our country are to government hospitals but only 25–30 per cent of the total number of medical specialists work in these hospitals. This mismatch has led to relatively poorer quality of health care as the capacity to treat critical illnesses such as renal failure, cancers and heart diseases in public hospitals is unable to match the demand for it. The victims of this increasingly distorted system are of course the poor, irrespective of race and gender.

Meanwhile, the richer segment of our society enjoy better treatment in private hospitals, suggesting that their lives are more valuable than that of the poor. This has no doubt further widened the divide between rich and poor in our society, a divide already widened by the unequal distribution of income, and unequal access to basic needs such as housing, transport and education. The life chances of the rich are clearly so much better than the poor in our class-stratified society.

This situation is exacerbated by specialists and other senior and experienced para-medical personnel continuing to leave the public for the private sector, thereby further reducing the capacity of the former.

A burgeoning private health care system also suggests that there is a high likelihood of under treatment in the public sector, while there may be over treatment in the private sector. This is because of the difference in the basis of access to health services between the two. In the private sector, where services are rationed on the ability to pay, consumers who can afford can get access to costly medical check-ups and treatments using the most advanced and sophisticated high-technology equipment and drugs, without first having to be screened by general practitioners performing the role of gatekeepers.

At the same time as this is happening in the private sector, patients have to be screened and filtered a few rounds by medical officers before they can get to see a specialist in the public hospitals. Even then, the waiting list can be long. Long waiting is but a manifestation of unmet needs. To obviate this need for waiting, I have known of patients with suspected critical illnesses, borrowing and even seeking donations from friends and relatives to pay for their treatment at for-profit private hospitals.


Equity in access a primary concern

In the midst of all these concerns by those who are committed to struggling for a more humane, just and equitable health care system, the Government announced in 2005 that a consultant will be hired to review the entire health care system and to come out with proposals to restructure the system, especially pertaining to its financing and delivery. The consultant started work last year. An interim report is out while the final report is expected out soon.

We can only hope for now that whatever proposals suggested by the consultant, the principle that there must be equity in access to health care will be of primary concern. I suspect that both the government and consultant will accept this as a goal but probably not the only one. The government is likely to insist that another goal be to curb the rising costs of health care to be borne by the government. Still others are likely to be the provision of greater freedom of choice to consumers and increasing market competition in the provision of health services.

What little we have heard so far of the reforms is that a National Health Financing Scheme (NHFS) may be introduced and a National Health Financing Authority (NHFA) will be set up to regulate the implementation of this scheme.

Broad principles for an equitable system

For now, I would like to put forward some of the broad principles governing a national health system that is serious in wanting to achieve universal access to good, efficient and cost effective health care for all, irrespective of class, race, gender and geographical location.

The first is that illnesses and health care should not be viewed as commodities and hence as a source of huge profits by the medical profession, drug companies, private insurance companies, medical equipment manufacturers and suppliers, hospitals and other health care providers. When health care is viewed as a commodity, there will be pressure for its rationing to be done via the price system, which tends to yield unequal access viz. the rich and those protected by private insurance or health care benefits by employers will get greater and better access while the poor will get lesser access and poorer quality of treatment.

Those in favour of increasing marketisation of health services will do doubt argue that consumers ought to have some freedom of choice as to whether to seek health care in the public or private sector. I find this argument to be rather class biased in that this freedom is clearly only enjoyed by those with the ability to pay while those who cannot afford - and they are the majority - obviously will find this freedom of choice to be bereft of any practical meaning. For those of us who want universal access to health care not just quantitatively but qualitatively as well, and I trust we all indeed want this, then we must respect that all Malaysian citizens and residents are equal and that greater wealth cannot buy more or better health.

This system can only come about through a national health care system that is financed out of general taxation. I have, however, to be quick to point out my opposition to the use of value-added tax (VAT), as a source of financing health care, if that is what some are suggesting, as the VAT is largely regressive and can be burdensome to the poor. It is very well for those advocating this measure that the poor can be exempted after passing a means test. Experiences in other countries, however, have shown that means tests lead to delays and more often than not exclude the poor from enjoying this exemption.

Alternatively, a social insurance scheme providing cover to everyone can be instituted but with the government being the sole payer. I agree with GMPPK that such a scheme should not entail the workers having to contribute to this insurance scheme. The workers and the poor are already very burdened with rising out-of-pocket expenses incurred in obtaining other services. They should not be burdened anymore.

The government has to remain the key provider of health care to be financed out of income tax. It has to assume the responsibility of ensuring that effective and equitable health care be delivered to the entire population. As such, allocations for health care can and must continue to rise until we achieve at least the standard set by WHO i.e. 5 per cent of GDP. The financing of this can be easily found both from income taxes, including income taxes from petroleum corporations and dividends from Petronas.

Health care must be regulated and administered so that it benefits equally all members of Malaysian society who are in need. The regulation of the national risk pool is a fundamental role of the government, as it is this facility which allows the social solidarity principles to function – the principles that the rich support the poor, the healthy support the sick and the young support the aged.

Progressive tax-funded system fosters solidarity
Developing countries, including our own, can learn one important lesson from the experiences of others. And that is controlling health expenditures, which seems to be the concern of the government, while hoping to provide universal coverage and equal access to health care cannot be achieved through market mechanisms.

The public insurance system, largely funded through general taxation, for the financing of health care services has not only improved access to health care but has also played an important role in ‘nation building’ and community solidarity, as it emphasises a fundamental equality among citizens. It is also a very efficient mechanism to redistribute income from the healthy or high income groups to the unhealthy or low income groups.

Greater wealth and/or position can buy many things, but they should not be allowed to buy more or better health, if we believe that all citizens are equal, as indeed we should.

Private health insurance has been found to be not a viable option for financing health care as it often engages in what is called “cream skimming”, that is it excludes the very people most in need of protection viz. the poor and the unhealthy while providing protection to the rich and healthy. It therefore provides coverage to only a limited proportion of society.

Earlier, I mentioned that the gap between the rich and poor classes of all communities in our society is yawning ever wider, with the life chances of the rich being so much better than the poor. In this context, sub-sectors within the larger economy providing essential social goods such as health care, housing, transport and education are but tools for the inter-generational transfer of socio-economic status rather than as mechanisms for effecting inter-generational upward social mobility.

If so, a key question related to health reforms is whether a country such as ours can modify its medical or health care system substantially, without a more general socio-economic-political reorganisation. This is because the institution of medicine, like education, is intimately tied to the broader and larger socio-economic political framework.

I am sure this is as key a question to discuss as the many other issues related to health reforms.

Finally, in the interest of the larger society, especially the poor, and not least in the interest of greater openness and transparency, the government ought to involve representative civil society groups such as the GMPPK, political parties and consumer groups representing the interest of the most important group of stakeholders, the poor and marginalized, in the current reformulation of the country’s health system. Only by taking their views seriously can there be a chance of a new health system that is just, equitable, efficient and cost effective emerging.
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