THE Cabinet’s decision to waive
the current professional fee regulation for doctors last month must be viewed as a positive first step towards a meaningful healthcare policy for the public in the long run. The general practitioner’s (GP) fees of between RM10 and RM35 was in use since 1992. Initially seen as a guideline, it became a regulation with the implementation of the Private Healthcare Facilities and Services Act (PHFSA) in 2006.
There were two separate sets of fee schedules under the PHFSA – Schedule 7 for out-patient GPs and Schedule 13 for hospital services.
There was one adjustment of 14.5% for the Schedule 13 fee for hospitals in 2013, but nothing was gazetted for Schedule 7. Thus, the capping of GP fees was never adjusted for the past 27 years.
In June last year, over a thousand GPs closed their clinics in support of 850 who attended a town hall meeting in Putrajaya with the Health Minister to protest the meagre payment of RM10 per consultation and the unethical practices of managed care organisations (MCOs) and third-party administrators (TPA).
The Cabinet then redirected the Health Minister to submit their claims to the National Cost of Living Council for consideration. The Cabinet’s decision to abolish the cap on doctors’ fees reflects its willingness to bypass bureaucratic processes and abolish clearly unfair and burdensome regulations.
Fees capping and the grossly unjust schedule of payment in the last 27 years (16 years for hospital doctors) resulted in serious adverse effects on the public. With the meagre fee of RM10 per consultation, our doctors were literally begging for a living. Some were forced to, among others, lower the standard of care, increase the number of visits, sell medicines, promote poorly evidenced supplements and procedures, unbundle charges, abuse the power of information asymmetry and sometimes accept kickbacks from pharmaceutical and equipment suppliers.
As a result, medical professionalism and ethics were seriously eroded, standard of care deteriorated, and the traditional benevolent and trusted local GP practically disappeared.
With diminishing public trust and dwindling income, there was no possibility for further investment and development to meet the needs of the country. Hundreds of clinics were closed over the past few years and our GP network, once the best in Asia in terms of primary care affordability and accessibility, stagnated for more than 25 years while those in the rest of the world invested heavily in primary care as part of national efforts in universal health coverage. The effect of this unadjusted fee control is akin to the post-war wage and rent control with only one result – decay.
Not unexpectedly, employers’ unions, consumer associations, the insurance industry, MCOs and TPAs all voiced their objection to the fee deregulation. For 16 years now, private hospitals and insurers had enjoyed double-digit growths and huge profit margins with the world’s lowest medical claims ratio at the expense of the public and medical profession.
The lowest clerk in an MCO determines whether the senior- most medical consultant should be paid and by how much. MCOs and insurers paid whatever they deemed fit, with no explanation or negotiation needed. There was no avenue for discussion, let alone negotiating on the needs of the patient. Even the Financial Services ombudsman and Bank Negara were unable to resolve these issues. In 2018, for example, the insurance medical claims ratio (amount paid out for patient’s medical claims) increased from between 41% and 51% for the last 10 years to a high of 73.5%, a rise of about 15% to 20%. As a result, insurance companies raised their medical coverage premium by 40% to 50% or more, amounting to increase in earned premium in the order of hundreds of millions of ringgit.
Much of this increase can be ascribed to the commercialisation of medical care, which resulted in over-consumption. While the professional fees were capped for more than 16 years, and the pharmaceuticals and equipment cost are not much different from market inflation rate, medical cost for even the most common procedure such as appendectomy had risen by more than six- to eight-fold (i.e about 600% to 800%).
The public was forced into paying ever-rising “runaway” cost of care and premium for diminishing returns. Thus, this unhappy rivalry among the medical profession, businesses and insurers resulted in very little benefit to the public, and in some instances even harm.
It is clear that the misdirected fees control has not served its original purpose. In fact, it was driving our medical services faster into a tragedy of the commons, leading to destruction for all.
The solution is to attain a meaningful public-private cooperation of all stakeholders. As medical care provision today is an exceedingly broad and complex subject, there is a need for a constant platform of communication and collaboration, clearly defined boundaries and responsibility and a common objective in solving the problem as best we can.
“Healthcare is not a commodity” has been loudly uttered in all literature on financing and health policies. Worldwide experience in implementation of various systems over the last 80 years has clearly demonstrated that collaborative efforts across various sectors is the only sustainable solution to meet the needs of society.
The deregulation of the current fees schedule is a clear statement from the government of its intention to be an impartial regulator on behalf of the people; a first step in the journey towards building a just and fair national healthcare financing system. But there is still a long way to go.
DATUK DR S. H. LEE , Kuala Lumpur
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