1Care outpatient scheme – middlemen didahulukan?

Joint letter by Drs Ong, Haniffah & Palaniappan | Apr 19, 11

The government is introducing a new financing scheme for primary care (1Care for 1Malaysia) by forming a private company/corporation to act as an insurance company and managed-care organisation (MCO). We believe this company will:

i) collect funds from all working adults and employers

ii) pay for all primary care expenses ie. for outpatient visit, test and medication at both private and government clinics

In theory this scheme will save consumers from having to pay out-of-pocket for their primary care and thus protect them from excessive healthcare expenses. In reality the new company may become a middle man profiting from patients and their caregivers, with the result that healthcare costs go up, standard of treatment may drop and the public is burdened with a new healthcare tax.

We foresee these problems may arise:

i) Doctors will be paid an annual fee to look after a designated number of patients on their list. This fee is for medical consultation and service only, excludes drugs and tests, and is fixed annually.

If the needed medical attention exceeds the capitation amount, patients have to pay out-of-pocket. At the same time, doctors can continue seeing other fully paying patients.

The experience world-wide is that a fixed capitation fee per patient will lead to inadequate and under-treatment since physicians tend to conserve resources to prevent financial loss. Although patients do not directly pay for their treatment, they are still indirectly paying since a portion of their income will automatically be deducted and given to the insurance company running this program. Instead of spending only for their healthcare, patients are actually contributing to finance the operation of a private insurance corporation

ii) To qualify for the scheme, doctors may have to buy computers and programs from a designated supplier. Doctors also may have to pay an educational provider who will then certify them fit to enter and continue in the scheme. The educational provider may have a monopoly on assessment. No other form of present activity such as journal reading, conference attendance or presentation, will be considered appropriately educational for participation in this scheme.

This appears to be a business model guaranteeing profit for the computer/program seller and the body providing education/certification of doctors.

iii) Patients do not pay for drugs, which will be prescribed by doctors only from a standard list, and can also be dispensed at participating designated pharmacies. Clinics and pharmacies will then collect payment from the insurance corporation. Patient treatment will be limited to only these approved drugs, and any other drugs used will be paid fully by the patient out-of-pocket.

Patients need not pay, but quality of treatment will drop since range of drugs available is limited. There is a monopoly in deciding which drugs get onto the approved list and profit will be guaranteed for the company supplying and manufacturing these drugs.

iv) Patients will be registered with a particular doctor, and treatment must be only from this doctor. If patient chooses to see another primary care doctor, or if specialist treatment or hospitalisation is needed, patients will again pay out-of-pocket.

Patients can no longer seek a different primary care doctor, even if they travel to another town or if the initial treatment is ineffective. Since the scheme does not cover specialist and hospital costs which are far higher than primary care charges, patients may actually end up paying large out-of-pocket fees despite contributing to the new insuring company.

v) Hospitalisation cost actually accounts for the bulk of a country’s medical expenditure. In Malaysia, in 2008, the government is responsible for 78 percent of total hospital beds in the country and accounts for 74 percent of total admissions.

Yet the government spends only 44 percent of the total healthcare expenditure in the country; private hospitals see only 26 percent of total admissions, yet use up 56 percent of total healthcare spending. Under-funding and excessive work has led to unsatisfactory patient service in government hospitals, forcing patients to seek attention from private healthcare. If efficiency and service in the government hospitals improve, patients will not have to seek treatment from the expensive private sector.

The government must improve service in their hospitals. If government hospitals can cater effectively to patient needs, the private hospitals will be forced to lower prices to compete and attract patients, as has happened in Singapore.

A national healthcare financing scheme that increases investment in public hospitals will thus automatically lead to a lowering of fees in the private hospitals. This will then greatly reduce total healthcare spending for the whole country since hospitalisation accounts for the bulk of healthcare expenses.

To seriously reduce national healthcare spending, the government must develop a financing scheme to increase public hospital investment and improve its service. How can the setting up of a private corporation to act as an insurance company cum MCO reduce overall health spending? Have not hospital bills in the private sector escalated with increasing health insurance and middle-man MCOs?

In no other country in the world has the government started a financing scheme for outpatient clinics before dealing with the more expensive and more important problem of hospitalisation cost.

Suspicion is thus raised that this scheme may be to benefit a few private companies at the expense of patients and their medical caregivers. When healthcare expenses go up, everyone suffers.

Workers take home a smaller income since an increasing portion of the salary will be deducted, while business costs will rise since employers will also be forced to contribute to the operation of the private insuring company.

Details of the 1Care scheme have not been fully revealed but we list above our concerns and urge the government to engage all parties, including patients and the public, to respond to valid questions.

The poor must not end up the big loser as we saw recently when the Private Healthcare Act was used to close down charity dialysis centres. It is our duty as responsible citizens to try to look after the sick irrespective of income level. Since the government derives its revenue from all tax-payers, it must not seek to profit from its activities, but develop a system to protect the health of all, especially those unable to pay for their own needs.

This is a joint letter by Dr Ong Hean Teik and Dr Haji Haniffah b Haji Abdul Gafoor, former presidents of PMPS (Penang Medical Practitioners’ Society), and Dr SP Palaniappan, former chairman of MMA (Penang branch).

  1. #1 by sheriff singh on Wednesday, 18 May 2011 - 11:14 am

    There are the lower middle men, middle, middle men and the upper middle men. Don’t forget their wives and mistresses as well. They all have to make a decent living.

  2. #2 by drngsc on Wednesday, 18 May 2011 - 11:49 am

    Yes, at every opportunity and forum that we have been engaged in, we have always told MOH that we do not need to transform the system. The present system has the best health outcome data for the money spend. We spend about 4.6% of GDP on healthcare. We have asked MOH repeatedly to do a study on the deficiencies on the current systems ( and there are ), and see how to improve upon it. They refused. They only wish to transform and socialise medical care. We argued strongly,
    1. That most of healthcare expenditure, is in private sector, while most of the inpatients are in government hospitals. You would need to control healthcare cost in private hospitals, the first step being a private hospital fees schedule
    2. Study the deficiencies in the present public healthcare system, long wait list, inadequate specialist etc, and find a solution. Most of the problems can be solve with injections of funds. Increasing healthcare expenditure to 7% GDP would go along way. A poor public healthcare system, is actually fueling a thriving private healthcare system, a so fueling the problem. We in private practice is doing well, because patients don’t like the public hospitals. A good public system will contain private hospital cost.
    3. The present system is good, if you are talking about medical standards of care, by WHO healthcare indices.
    4. Look around and see the problems with NHS ( the model that we are following ). Are we going to make the same mistakes as them??
    5. How can adding a middle-man lower cost. Are the a charitable organisation? They will have an admin cost, that will add to cost. The chances are that they must make money too, so cost can never be lower, then now.
    We agree totally with Dr Ong et all., what this government is transforming us into, in terms of healthcare, cannot be for the better, that is for patient care, I mean. It may be better for some others, maybe the entreprenuers.

    We do not need to transform healthcare. We need to change the tenant at Putrajaya, and soon.

  3. #3 by ablastine on Wednesday, 18 May 2011 - 12:31 pm

    Want to hassle a guess who will be owning this private company which is empowered to collect money from every working individual in the country? Without a doubt UMNO crony/ies of course. Frankly once money is out of the workers hand you can almost say bye-bye to it. Of course the pretext is to enforce savings like the Medi-save in Singapore but Medi-save is a national scheme for which the Singapore Government itself is accountable. Frankly in Malaysia even if the UMNO government is responsible I still have grave doubts where the money eventually goes. It is very simple here. If this comes through it will evolve into one of the biggest scam ever in country. When the owners of this company or party to it have sucked enough money from it by creative accounting, it will be declared bankrupt and become insolvent following the footsteps of most national companies. The money paid in by all the workers in the country will of course never be seen again.

    Most of the points above about middleman incurring extra cost in the dispensation of health care are correct. However, the point that public health service being good and cheap driving down cost of private health care in Singapore is not entirely correct. Private health care in Singapore is almost a completely different entity from public healthcare itself. Despite all the really fantastic infrastructure and subsidy by their government in Government/Restructured hospitals a significant portion of the Singapore patients still go for private health care for various reasons and cost consideration is way at the bottom. Some of the reasons are: private health care there is where the bulk of the software of health service in Singapore is based meaning, it is the place to find the most experienced, the most reputable and the most senior doctors ( the shortage of doctors in Singapore is a mirage because when doctors are fully trained they come out or gravitate to the private sector just like Malaysia – you will never have enough with such ‘leakages’. There is a surplus in private); Their health schemes like the medisave, medishield and medifunds are really fantastic and very helpful (especially the fully upgraded medishield with rider). They help to pay a great part of the medical bill even in private care making private health care affordable to many patients; Their private health care do not just provide for the locals but caters to the regional patients as well. In some hospitals foreign patients load can be as much as 30% to 40% of the admissions and the private hospitals are almost perpetually full with waiting list for admissions. So there is no shortage of patients and pressure on price; health pricing in Singapore is by market rates (unlike Malaysia where pricing is controlled) but must be fully transparent giving the practioneers more leeway to charge higher for service as it is difficult to gauge how much the service of a particular doctor is worth; the Singapore dollar is much stronger (2.35X more) and the population much richer (>5X) meaning a lot more of them can afford private health service.

    However, the good news is that the largest private health care provider in Sg is controlled and partially owned by Khanazah of Malaysia. It must be one of the smartest acquistion ever because with that Khanazah has the bulk of their best doctors earning money for it/us. Congratulations.

  4. #4 by mui kuai fa on Wednesday, 18 May 2011 - 12:36 pm

    Highly possible. Watch dog to report the loop holes. Check who are owners of this company. Taxi licences also given to companies/datins/datuks who rent them to taxi drivers! Should that be high lighted for action. Burdens the taxi drivers who work so hard!

  5. #5 by Godfather on Wednesday, 18 May 2011 - 1:26 pm

    Mesti satu lagi projek Barisan Nasional. Remember Ng Yen Yen stating that the latest tourism contracts were awarded at arms length basis to the contractors ? Even though one of them had been her friend and MCA supporter for the past 20 years ? Same case here. The middleman will be a crony of some UMNO or MCA heavyweight.

  6. #6 by raven77 on Thursday, 19 May 2011 - 1:18 am

    This entire rubbish started with the FOMEMA scheme…..then the hologram thingy….corporatisation of clinical waste…..etc etc etc…

    In Malaysia, robbing the rakyat by its government has become a way of life….

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