6. Factors limiting any retreat from a welfare function for the state
A fundamental challenge in reorientating the Malaysian health care system is the nature of any compulsory contributory scheme. This policy problem has occupied Malaysian health system planners for more than a decade and has been the subject of a number of studies conducted by the Malaysian government with support from the Asia Development Bank.
The National Health Security Fund (NHSF) which was proposed as a result of these studies was to take the form of a national health insurance programme requiring premiums and co-payments from those able to pay. The poor and
government employees would continue to receive subsidized services. The proposal also included a partnership between public and private health care providers, enabling members of the fund to use private facilities. The actual administration of the scheme could be handled either by a government agency or by a private organization [31]. Such a scheme might help reduce the cost burden of providing health care to all Malaysians at a heavily subsidized rate. However, it would still involve considerable subsidies to those Malaysians who were not regular wage earners (such as those engaged in the subsistence economy or in seasonal work) or those simply not earning any income. According to official estimates, the incidence of poverty in Malaysia in 1995 was 16.1% of rural households and 4.1% of urban households.Thus, despite Malaysia’s considerable economic growth, some 4.3 million households were still below the poverty line [32]. Few Malaysians have taken out private health care insurance. Moreover, the task of administering a system involving different levels of entitlements, straddling both the public and private sectors, would be formidable. There would also be the issue
of financially guaranteeing any scheme operated by the private sector. At the time of the launching of the Seventh Malaysia Plan the Malaysian government had still not decided upon the form of any national health insurance scheme, although it has indicated a preference for a system implemented by the
private, rather than public, sector.The health care needs of special groups in the Malaysian population, such as the
aged, immigrants, plantation workers, those requiring special treatment and the mentally ill, pose serious obstacles to disengagement from a welfare approach to health care provision. Moreover, any disengagement which is seen to harm the
interests of the predominantly Malay rural population has the potential to cause political problems for Malaysia’s
multi-party, multi-ethnic, coalition government. As Malaysia’s population both increases and ages it will be correspondingly
difficult for the government to retreat from a degree of responsibility for providing health care, despite its desire to see a family-based welfare system. Many older Malaysians, especially those from rural areas, will not have any accrued pension
benefits. Moreover, as Wan Abdul Manam has warned, the increased rates of degenerative diseases as the middle aged and elderly groups in the population increase, will place greater burdens on the health care system [33]. Despite the government’s articulated preference for a family-based welfare system, the Malaysian Budget for 1997 allocated some RM 52 million over 3 years for health programmes for senior citizens. The programmes will include health services at the community and institutional level [34]. Immigrant workers and their families are another group likely to need special
assistance from the government. In part, Malaysia’s spectacular economic growth has been due to the availability of cheap labour from poorer neighbouring countries. While some workers came under legal schemes, many took their chances
and entered Malaysia without a work pass. In order to satisfy the demand for labour in a rapidly growing economy, the authorities were originally willing to allow illegal immigrants to remain. In 1991 the government granted a temporary
amnesty to illegal immigrants pending the normalization of their status. Demographic projections under the Seventh Malaysia Plan suggest that by the year 2000, some 7.5% of Malaysia’s population will be made up of non-citizens [35].
The presence of a large body of immigrant workers, who are often accompanied by their families, has posed two major, and related, health problems for the government. There is considerable concern that foreigners are introducing and spreading contagious diseases (in particular tuberculosis, malaria and HIV) and also that they are putting an unacceptable burden on the public health care system. For some years now the Malaysian government has required foreigners wishing to obtain work passes to undergo a medical examination and to be covered by a health insurance scheme.
The government has required higher charges to be imposed for hospital services provided for foreigners and has demanded that employers issue letters to guarantee payment before foreign workers can be treated in public facilities. However, aside from humanitarian concerns, this response to the financial burden of extra usage of the public hospital system must be weighed against the risk that foreigners with infectious conditions will be deterred from seeking treatment and will therefore pose a serious risk to public health. Many foreign workers are poorly paid, work in dangerous occupations and live in squatter settlements. It is unlikely, therefore, that they will be able to afford costly private hospital care. Moreover, in the case of those working in rural areas, private hospitals will rarely be available. Problems with foreign workers were further exacerbated by the Asian currency crisis which hit Malaysia in 1997 and led to a marked slowing of economic activity and the laying-off of many thousands of foreign workers who were left without an income
and without employment-based health care entitlements. It is therefore unlikely that, much as the Malaysian government might wish to do so, it will be able to avoid responsibility for the health care of the several hundred thousand legal and
illegal foreign workers in Malaysia. The problem of the health care needs of workers in the plantation sector has
provided a salient example of the difficulty of state disengagement from responsibility for health care for the poorer sections of society in Malaysia. For many years the government had been criticized for the poor health services provided for workers in the rubber and palm oil estates. The main ethnic group which had traditionally worked in this sector was the Indians, but in recent years immigran workers from other countries have increasingly been employed. Estate workers are among the poorest paid in the country.