1Care – a careless reform

1Care is a reform that will be hard to implement properly, that will burden the poor and needy and that tries to fix something that ain’t broke by making things more expensive, more complicated and more unfair.

Introduction

Aneurin Bevan (1897-1960), the UK’s Minister of Health immediately after the Second World War, once stressed that where medical needs exist, medical care should be provided and budgets should be of secondary importance. Based on this progressive and compassionate principle, he went on to establish the UK’s National Health System (NHS), which was then one of the most inclusive, comprehensive and equitable healthcare systems in the world.

Unfortunately, Bevan’s stand is not much supported by many policymakers today, especially in the aftermath of neoliberalism. The consequences are concern over costs rather than adequate healthcare coverage for the people, especially the poor and marginalised; and priority on profits for healthcare providers over good health for the general population, achieved largely through rationing of healthcare resources via the ability to pay rather than according to need.

This has led to continuous moves by governments to outsource the many aspects of healthcare provision, such as treatment, drug supply, non-medical services and financing, to private sector providers such as private hospitals and clinics, pharmacies, large contractors and insurance companies.

That health is a social good with large positive externalities is increasingly being forgotten. Similarly neglected is the recognition that access to adequate healthcare is a basic human right. Hence, the state should play a fundamental role in its provision in order to obviate under-consumption by the poor and sick, while at the same time preventing over-consumption by the rich and health.

Like many other countries, Malaysia has not been spared the onslaught of neo-liberal thinking. Such privatisation has sharply increased the costs of servicing the healthcare system. Alongside these measures, the state has introduced the system of co-payments by patients and private practice by doctors in publicly funded hospitals after working hours. Under the former, patients are now required to pay high collateral payments for the treatment of several conditions such as orthopaedic procedures which require plates and nails, lenses for cataracts, clips for surgical procedures, drug-coated stents for angioplasties and certain anti-cancer drugs, while under the latter, patients are required to pay much more if they wish to seek earlier and speedier treatment.

The financial burden borne by poor patients has gone up with the introduction of co-payments. At the same time, they are increasingly excluded from the much needed after office hours for-profit services. Added to these worrying trends is the planned introduction by the Ministry of Health of a new healthcare system that, according to sources familiar with the scheme, are likely to place a greater burden to the poor.

1Care – some salient points

The new healthcare scheme called 1Care - details have as yet to be officially announced - has the following broad features:

  • 1Care will be funded by a national health insurance system, which requires every household to contribute close to 10% of its gross household income to it. This amount is, however, to be shared among three parties - the individual, the employer and the government, though the proportions have as yet to be worked out. How the government plans to collect such premiums from the self-employed and the amount to be collected have not been worked out. The government is, however, likely to pay for the premiums of civil servants, pensioners and up to five of their dependents.
  • Contribution by every household is compulsory and payment has to be made upfront. The current practice of fee for service will be replaced by fee before service.
  • It will be managed by a National Healthcare Financing Authority (NHFA), which is likely to be a governmentlinked company (GLC).
  • The new 1Care healthcare system does not provide for all medical expenses and instead adopts only a prescribed basic list. The costs of seeking treatment for anything beyond this list will have to be borne by the patients.
  • Patients are not allowed to see doctors of their choice, but will have to see one allotted to them. Private practitioners will have to join the 1Care system if they wish to see patients covered under this scheme.
  • Patients can see specialists only after first being screened by general practitioners who will decide when they can do so. This is a practice called gate keeping. Such rationing of specialist care applies to healthcare by general practitioners as well as all cases under the proposed 1Care scheme. This means that patients cannot visit their doctors as and when they please, though how this is going to be regulated is as yet unclear. Those seeking specialist care without the requisite recommendation by their doctors will have to pay out of their own pockets as these visits will not be covered by national health insurance.
  • The proposed fee for seeing a general practitioner under the 1Care system is RM60, which is only for consultation and does not include medication. Compared to the present charges for treating common illnesses, including medication, these proposed fees work out to be three to four times higher. Although these charges may be covered by national health insurance, patients may still be asked to make certain co-payments.
  • Medicines prescribed for a particular illness will have to be from a standardised list of alternative medicines called the formulary. Under the scheme, doctors may be forced to choose an alternative that is the cheapest but not necessarily the most effective in curing a particular illness. The idea is to save costs for 1Care and maximise profits for the insurance companies, which will have a big say in deciding on this list and the prices of medicines. Needless to say, these companies are likely to approve the cheapest medicines.

Why worry?

Based on what we know, Malaysians have much to be concerned about where the proposed 1Care healthcare system is concerned. For a start, everyone, irrespective of his or her socio-economic status, will have to pay for healthcare. They will have to contribute to the national health insurance scheme. Presumably, anyone who is unable to contribute because of financial difficulties will not be covered and will hence not be treated, even in public hospitals which currently provide almost free medical treatment to all who cannot afford to seek treatment in private hospitals and clinics.

The introduction of a national health insurance scheme adds to the financial burden of the poor, who are already stressed by rising costs and declining real wages. The government can very well use the counter-argument that it will pay for the premiums of the poor, but only after they have passed a means test. We all know though that such tests are more often than not exclusionist in nature. It is not easy for the poor to prove that they are indeed poor.

The new practice of having to get medicine from a pharmacist will mean placing a great deal of inconvenience on rural and semi-urban residents who will have to travel a considerable distance to the nearest pharmacy. Placing the entire healthcare system under the NHFA will mean that erstwhile public healthcare providers will have to change their entire orientation from being social service providers to corporatised entities out to cut costs and seek profits.

The introduction of 1Care also opens up more profit opportunities for financial service providers, in particular insurance companies and pharmaceutical companies. Given the propensity of the present federal government to use state power to nurture crony capitalism, more crony capitalists are likely to emerge to exploit these new opportunities. Indeed, with declining opportunities in manufacturing, plantations and construction, services such as healthcare are fast emerging as new profit centres.

Conclusion

An analysis of 1Care and its social implications suggests that the overriding concerns of the government are controlling costs and availing more opportunities for appropriating profits to private healthcare-related service providers under the new healthcare system to be managed by a GLC called the NHFA.

Malaysians may rightly wonder why greater priority is placed on curbing costs over meeting healthcare needs, especially to the poor and needy in a resource rich country that until recently only spent roughly two per cent of gross domestic product (GDP) on healthcare. This is way below the minimum five per cent stipulated by the World Bank. While controlling costs is not undesirable in itself, using the need to curb costs as an excuse to deny access of the poor to basic healthcare or to introduce a new financing scheme that works against them is, however, clearly unacceptable and socially undesirable.

Priorities are thrown around when the state seeks additional finances to meet rising costs, instead of introducing additional payments to be borne by the poor. Wasteful spending can be curbed, if not eliminated, thereby freeing resources that can then be spent on basic healthcare. Spending on healthcare should also be further increased. Our current public health system funded by general taxation, has provided decent healthcare for the general public, and has thus played a key role in nation building. There is little reason for the system, especially its financing, to be overhauled.

This is not to suggest that the healthcare system is bereft of problems. But these should be tackled without requiring every Malaysian to contribute to a national health insurance scheme. Illnesses and healthcare should not be viewed as commodities to be allocated through the market, because such outsourcing invariably leads to over-consumption by those with financial resources and under-consumption by those who are indigent.

It bears repeating that healthcare services must be regulated and administered in such a way that it benefits all Malaysians. The regulation of the national risk pool is a fundamental role of the government, as it is this facility that allows social solidarity principles to function – the principles that the rich support the poor; the healthy support the sick and the young support the aged.

Toh Kin Woon is a senior research fellow at the Penang Institute.



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