As part of its vision of the ‘‘Caring Society’’, the Malaysian government has intensified its appeals to both the corporate sector and philanthropic bodies to assist with certain health services which it is unable or unwilling to fully fund or
provide. For example, in the view of the government a liver research and treatment institute should be established in Malaysia but should be done so by the private sector [19]. Similar appeals have been made for the private sector to assist with the task of meeting the growing demand for haemodialysis. In 1995 the Ministry of Health established a register of social and non-government organizations which were willing to volunteer their services to government hospitals and for home nursing support. In the 1998 Budget, provision was made for RM 308 million to be allocated to a Social Action Plan as well as for RM 98 million to be distributed to some 51 welfare institutions in furtherance of the ‘‘Caring Society’’ policy. In addition, new taxation policies were introduced granting individuals tax relief on contributions of up to RM 20 000 made to approved welfare and community projects in the field of health [20]. In the early years of implementing the Privatization Policy, the government commissioned a master plan to identify state-owned enterprises and assets which could undergo privatization. Although public hospitals were listed in the plan, they were classified as being of low priority for privatization [21]. Rather than privatizing (in the sense of divesting the government of ownership) hospitals, the Malaysian
government has indicated that it will employ the device of corporatization for a number of hospitals. along the lines followed by the Singapore government. Through corporatization the government hopes to bring about a change in the
management culture by severing the links with the hierarchical and cumbersome bureaucracy of the civil service and freeing hospital administrators to employ staff on a more competitive financial basis. However, corporatization will also have the effect of re-classifying such hospitals as operating in the private sector, although they are still state-owned and their treatment policies are set by the government. Given that corporatized hospitals will be run along commercial lines and that higher salaries will be paid, it is inevitable that the cost of running corporatized hospitals will rise substantially. These costs will be partially offset by charging higher fees for patients, although the government is committed to continuing to subsidize treatment for the poor and maintaining the outpatient divisions of government hospitals as a public service [22]. Perhaps the most notable example of a hospital owned by the government yet operating as a corporation is the Institut Jantung Negara (National Heart Institute). The rationale for corporatizing the Institute in 1992 was that it would be able attract medical specialists by offering competitive salaries and would offer better services to the public. However, tensions have been evident in the Institute’s role as a publicly owned private corporation,and in 1996 the Health Ministry asked it to respond to complaints of long waiting lists for poor patients and the movement of a number of specialists to the private sector [23]. A former President of the Malaysian Medical Association has questioned the increased cost of treatment in the corporatized National Heart Institute suggesting that they reinforce ‘‘the perception that the corporatization of health care is being driven by entrepreneurial and commercial considerations’’ [24]. The Malaysian government has given strong encouragement to the private health sector and there has been a strong growth in the number of private hospitals in Malaysia, many of which are owned by large industrial conglomerate companies. In
the decade 1985 – 1995 the number of private beds in Malaysia grew from 3666 to
7511 [25]. This growth has not been without its problems for the government since
many highly qualified medical and nursing staff left the public sector for higher pay
and improved conditions in the private sector. There has also been concern, even
amongst government ministers, that commercial private hospitals were charging
excessively high fees. For example, in 1996 the Chief Minister of the state of
Malacca called on the Federal Government to standardize charges in order to
protect consumers from being victimized by profit-orientated private hospitals [26].
Another concern is that Malaysia’s charitable hospitals are curtailing their philanthropic mission since they must compete in a commercial market which leaves little
margin for cross-subsidizing the poor by charging higher fees for those who are
better off.
The contradictions posed by the government’s encouragement of profit-orientated commercial hospitals is evident in the somewhat incongruous appeal to these
hospitals, many of which are owned by leading corporations, to perform a welfare
role. For example, the former Deputy Prime Minister and Finance Minister Anwar
Ibrahim asked that private hospitals ‘‘which attend the rich groups should also do
their part in having space to treat the poor’’ [27]. However, the need to rely upon
regulation, rather than appeals to charity, was evident in the 1997 Budget in which
Anwar Ibrahim indicted that the government was considering requiring private
hospitals to provide funds and medical facilities, including special low-cost wards
‘‘so that assistance to the lower income group is not neglected’’ [28]. Even this
policy demonstrated the difficulty of extricating the state from a welfare role, and
in the 1998 Budget it was announced that private hospitals would receive an
investment allowance of 60% from the government for establishing wards for
lower-income earners [29]. Once more, the government was playing an active, albeit
shared, welfare role.
At the tabling of the Seventh Malaysia Plan (covering the period 1996 – 2001),
Prime Minister Mahathir reiterated a number of policy shifts and signalled future
public policy in the field of health care. As part of the Seventh Malaysia Plan the
public health care sector would be expanded and improved but the government
could no longer afford to provide treatment for free or at a nominal charge.
Treatment in government hospitals would therefore have to be paid for through
insurance or private treatment schemes. Subsidies would be provided to those
Malaysians who could not afford private insurance or whose employers were
unable to cover their health care. Larger companies would be expected to include
health cover as part of the terms of employment for their workers. Appeals to the
private sector to fulfil a charitable role were repeated, while at the same time the
Prime Minister indicated that the provision of low-cost hospital care should be
financially lucrative for investors. Private medical specialists were reminded that
‘‘there must always be gratefulness and charity in our hearts’’. The Prime Minister
also stated that the government intended to ‘‘privatize many of the health facilities,
including hospitals and specialist units’’ [30]