Choking from high medical fees


  • Nation
  • Sunday, 13 Oct 2013

While patients complain of high medical fees, private hospitals and managed care organisations deny that they are responsible for the ballooning bills and doctors claim they are struggling to survive.

READING newspaper reports about doctors asking for higher fees, retiree P. S. Teh feels a sense of dismay. Her particular beef is with private healthcare where, she feels, high prices are already being charged.

And she should know. Recently, her family had to fork out almost RM60,000 for medical expenses for their 87-year-old mother who was hospitalised at a private hospital in the Klang Valley.

She was warded in the Critical Care Unit (CCU) for a week and then transferred to a single-bed room. In total, she spent 35 days in the hospital.

“My mother did not have surgery, yet the bill came up to a whopping RM59,000 and the bill was very vague,” Teh complains, adding that the bill covered, among others, the charges for a nutritionist, physiotherapist, general physician, cardiologist, gastroenterologist and respirologist.

“I didn’t mind the physiotherapist so much because at least he did something but the nutritionist was unnecessary and charged RM85 per visit.

“Each specialist came by twice a day, with the same greeting: ‘Hello aunty, how are you?’ and left after less than five minutes. And they all charged for each visit.

“In the end, I told the general physician to keep them all away unless they were absolutely necessary,” she says.

Even a nurse’s visit was added to the bill, she says in disbelief.

“If you rang the nurse’s bell after 9.30pm, the hospital charged,” she gripes.

Cheok: ‘TPAs scrutinise the medical claims to ensure that there’s no abuse or fraud and we are paid a fixed fee by insurance companies’

With doctors asking for higher fees, consumers are worried that private healthcare might soon be out of reach of working class Malaysians, who tend to view public healthcare as a last resort. This is mainly because despite its lower cost, there’s normally a long waiting list for treatment in public medical facilities.

To illustrate, kindergarten teacher Wendy Yeoh, 28, from Penang says her father’s medical bill to treat a brain tumour was only RM800 in a public hospital.

“My father had a brain tumour and friends recommended a private hospital neurologist. We had a brief meeting with the specialist who quickly flipped through my father’s medical records and said it would cost RM40,000 to treat him.

“He (specialist) looked so disinterested and business-like that we decided to take our chances at the general hospital. It was the best decision we made,” she recalls.

As middle income Malaysians strive to get the best medical care they can for their hard-earned money, stakeholders are pointing fingers at each other for the high cost in private healthcare.

Private hospitals, among others, have been identified as one of those responsible for high fees. However, Association of Private Hospitals of Malaysia (APHM) chairman Datuk Dr Jacob Thomas says it is a “very unfair perception” that private hospitals are at fault.

While he admits that 70% of a patient’s bill charges goes to the hospital, he strongly denies that private hospitals are “capitalising on patient’s misery.”

He insists that it’s a challenge to make a reasonable profit, saying: “We constantly need to upgrade existing facilities and costs of construction, land, medicine, utilities and staffing are rising. There are also many unseen expenses that we cannot bill patients for.

“For example, our cost is about RM800 if you take into account unseen services like infection control, air conditioning and security personnel. The cost of maintaining a hospital room is definitely more than a hotel room.”

He adds that calls to regulate private hospital charges are not feasible because there are too many variables.

“Private hospital charges in Ampang cannot be the same as in Gua Musang or Tanjong Malim because different costs are involved,” he cites.

The best way to control healthcare costs in the country lies in a strategic partnership between the private and public sectors, he opines.

“We need to share and maximise our resources to benefit the patients. In private hospitals, we have financial counsellors who can advise patients on estimated fees so that they can shop around.

“Those who really cannot afford private hospital rates have the option of public hospitals which also offer excellent care,” he suggests.

Commenting on the issue, Health Department director-general Datuk Dr Noor Hisham Abdullah assures consumers that the Health Ministry (MoH) has taken appropriate measures to control the high cost of treatment in private hospitals.

“Professional fees charged by medical practitioners in private hospitals are controlled by a system developed by their respective employers,” he says.

“This is to ensure adherence to the 13th Schedule of the Private Healthcare Facilities and Services (Private Hospitals and Other Private Healthcare Facilities) Regulations 2006.

“Private hospitals should take reasonable steps to inform patients of possible treatment cost and procedures to be performed. To ensure transparency, the APHM has agreed to encourage its members to display the treatment cost on their websites.”

Dr Noor Hisham adds that the MoH will continue to engage with all stakeholders to stress that registered medical practitioners treat patients to the best of their ability instead of just raking up profits.

According to Malaysian Medical Association (MMA) president Datuk Dr N.K.S. Tharmaseelan, determining the cost of healthcare involves multiple factors, among them the drugs and equipment industry, private insurers and private hospitals.

Recently, this paper reported on Dr Tharmaseelan asking for doctors in the country to be allowed to charge higher fees.

Failing to understand the need for a rise with private healthcare already costing so much, consumer groups called for transparency in the billing process as healthcare stakeholders attempted to justify their respective charges.

The role and charges of third party medical claims administrators (TPAs) insurance companies were questioned.

Dr Tharmaseelan reiterates that in the past seven years, private medical care costs have “more than doubled, if not tripled” but doctors’ fees in the country have remained static.

Besides the high cost in private hospitals, he is concerned with TPAs.

Patients don’t benefit from the latter while the former is a profit-making industry, he says.

TPAs constantly pressure doctors to reduce their (doctors) fees knowing full well that “our fees only form a small portion of the healthcare bill”, he claims.

He also took the insurance industry to task for “blaming” the medical profession for the increase in healthcare costs.

“In Malaysia, insurers’ overall premium collection has been chalking double-digit growths each year from RM1.08bil in 2006 to RM2.03bil in 2012 while the claims ratio had fallen from 49.6% to 40.6%.

“In real nominal value, these figures represent a total gross profit margin of RM1.12bil a year,” he says, pointing out that in 2012, the gross profit forthe insurers was a whooping 59.4%!

“Have any of the profits been transmitted to the patient? Insurance premiums have not decreased. Instead, more and more exclusion policies, co-payments and deductibles are included,” he claims.

According to several insurance agents Sunday Star approached, a rise in new policy and premium prices is on the cards.

“We were informed that there will be a price hike, but not the percentage. I believe it will vary from plan to plan,” an agent, who declined to be named, shares.

Another agent, J. K. Chow, says he’s already using the speculated rise as a sales pitch.

“I tell prospective clients that it’s inevitable for prices to rise with doctors asking for more and the overall boom in healthcare costs. I was told that the premiums will be up before the year is out,” he says.

Tuscany Chen, 35, says her company has already increased the price of some of its products.

“We upped prices of certain products by less than 10% this year,” she admits, adding that insurance companies can increase premiums by notifying the policy holders in writing.

She feels that the demand by doctors for more money will lead to higher premiums.

Not at fault

Refuting the MMA’s claim, Association of Third Party Medical Claims Administrators Malaysia (TPA) vice-president Paul Cheok says its charges are absolutely unrelated to what patients pay.

He says TPAs are not health maintainance organisations (HMOs), which are illegal.

“In the 1990s, HMOs came into the scene when cashless payment in private hospitals was introduced.

“HMOs were making money by buying master insurance policies and reselling them to consumers yet private hospitals complained of not getting paid.

“The insurance companies then got together and decided to do away with HMOs,” he explains.

TPAs, together with insurance companies, are loosely defined as managed care organisations (MCO).

TPAs provide administrative and processing services for medical claims to insurance companies and more than 1,000 employers, mostly corporations.

“We have the medical network, IT systems and expertise to efficiently process claims on behalf of our clients.

“TPAs scrutinise the medical claims to ensure that there’s no abuse or fraud and we are paid a fixed fee by insurance companies.

“We don’t get a cut from the patient’s hospital bill nor do we receive any money from patients, so why would we interfere with treatment and charges?” Cheok argues.

Referring to outpatients, Cheok says TPAs are paid by employer companies to manage the panel clinics efficiently. And yes, TPAs levy “a very small charge” on GPs, he adds.

“TPAs make it very clear that GPs (on our panel) must not increase their medical charges because of this administrative cost. This is fair because the arrangement gives them greater access to patients.”

He also says claims that TPAs meddle with how doctors administer treatment or that they refer patients to specific clinics that are cheaper are completely unfounded.

“We scrutinise bills to make sure doctors charge according to the law and to prevent abuse,” he explains.

MCOs have a role to play but they must not squeeze doctors to reduce costs for their corporate employers, Qualitas Healthcare chairman and managing director Datuk Dr Noorul Ameen opines.

With its chain of over 200 clinics, dental clinics and pharmacies in Malaysia, India, Singapore, New Zealand and Australia, Qualitas is a big player in the healthcare industry.

Dr Noor Hisham from the Health Department says as there is no law to regulate the MCOs currently, the MoH is looking to draft a new MCO Bill which looks into MCO registration, the quality of services provided, management of grievances and enforcement.

“(Meanwhile) all MCO-related matters including registration, screening and application evaluation, services and complaints will be looked into by the National Committee of Managed Care together with three other sub-committees,” Dr Noor Hisham, who chairs the national committee, says.

Regulating the MCOs will make medical costs more transparent but as Health Minister Datuk Seri Dr S. Subramaniam recently pointed out, the increase in healthcare cost is a global phenomenon.

To protect consumers, the Government must continue to closely monitor private healthcare stakeholders by revising and giving more bite to existing laws while improving the country’s public healthcare system.

Related story:

When doctors cant even afford a Proton


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