The mid 1980 recession meant healthcare privatization esp the setting up of NSHF was put on hold. The mid 1980 recession was particularly damning one because its largely induced by domestic policy. Mahathir adopted selective austerity measures prior to 1985/86 recession. The recession was pretty damning. Probably gave a lot of traction in Ku Li almost unseating Mahathir's UMNO Presidency.
Anyway , the proposed National Health Security Fund(NHSF) did not take off as expected despite the 1989 $450mil loan by Asian Development Bank for that fund. The govt contended that viability of the fund need to be further reviewed.
A new study, National Health Plan study was undertaken in 1990. It basically wanted to help identify areas of public healthcare that can be privatized. Govt was still adamant in under-spending on public healthcare. Adamant in fixing something that is not broken, exacerbating healthcare inequality. The govt also begin looking into privatizing the National Health Institute in KL despite the fact there won't be a govt Cardio unit to cater for entire klang valley if IJN was privatized.
Public bed per 1000 population plummeted from 1.7 in 1985 to 1.5 1990 due to sever under-investment in new hospitals. We fail to keep up with population growth. However , Mahathir proposed to increase spending to build new hospital from $319million(btwn 1985-90) to $1352million(1990-95). Govt also expanded manpower capacity of Ministry of health by expanding nursing college, building teaching hospital like HUKM etc.
Clearly , the recession which culminated in the 1987 UMNO presidential challenge which lead to 1988 constitutional crisis all provided the political impetus for expansion of public healthcare service relative to late 1980s.
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