We need to be careful with fee deregulation

THE Consumers Association of Penang (CAP) is concerned by the announcement made on Dec 6 by Health Minister Datuk Seri Dr Dzulkefly Ahmad on the deregulation of consultation fees in all registered and licensed private healthcare facilities (“Private clinics to set their own fees”, The Star, Dec 7; online at bit.ly/star_doctors).

The government’s intention is to abolish the consultation fee control under the Seventh and 13th Schedules of the Private Healthcare Facilities and Services (Private Medical Clinics and Private Dental Clinics) Regulations 2006.

CAP considers this a rational move if it is meant to allow GPs, dentists and specialists to adjust their professional fees to reasonable rates; this applies especially to GPs, since their consultation fee rate has not been adjusted for 27 years. Often, this has been used as an excuse to mark up the drugs dispensed and sold in private clinics, sometimes outrageously, purportedly just to make the private business viable.

Just by taking into account inflation since 1992, the rates in the fee schedule should have been adjusted accordingly, fairly close to a 100% increase, in CAP’s calculations.

However, while fee deregulation is taking care of health practitioners’ economic welfare, CAP is concerned that the policy could have negative consequences because healthcare services and products are not ordinary consumer goods.

Information asymmetry between healthcare practitioners and patients is often severe; usually the doctor (service seller) is in a dominant position in proposing further treatment or diagnosis, indirectly suggesting “what to sell” to patients. Just displaying the fees does not mean consumers are empowered or patients are given more choices. Besides the most basic consultation fee, treatment fees can vary greatly (especially in private hospitals), and often patients do not know what to expect after the first consultation.

CAP urges the government not to deregulate the procedural fee schedule so soon, and to instead monitor and study the effect of the deregulation of consultation fees first.

CAP is also concerned that GPs or chain clinics might engage in cartel, or anti-competitive, practices that could indirectly result in increasing expenditure for healthcare treatment.

Before the fee deregulation, Malaysia was already among the countries with the highest medical inflation rate in the region. In fact, according to insurance multinational Aon’s 2020 Global Medical Trend Rates Report, Malaysia is looking at a gross 14% medical inflation in the coming year, forecast to be greater than five times the general inflation rate.

Therefore, CAP urges the government to monitor private medical fees closely and intervene when-

ever necessary if deregulation has negative impacts on the people’s welfare and erodes instead of empowers consumers’ rights.

If this proposed policy proceeds, private healthcare practitioners and hospitals should not oppose the government’s rational policy for drug price regulation as well as separation of pharmacy dispensary from doctors’ consultation/prescription.


President, Consumers Association of Penang (CAP)

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