Privatisation of Msian Public Healthcare Part 3

Due to higher public health expenditure btwn 1990-95 which was to compensate for lack of public investment in new hospitals in the 5 years prior to 1990. Public bed per 1000 populations improve from 1.7 to 1.8 as indicated below

Source : RMK 7

Health inequality continue to worsen. Public sector that served more than 85% of Malaysians had 40% of medical specialists(as of 1994) . Instead of advocating for more robust public healthcare, govt was more keen in using the exodus of talent from public to private as part of a narrative for a more comprehensive privatization of public health via a public insurance/health fund that cover both public & private hospitals. The issue is of course the price of treatment in private hospital which was so much higher than public hospital.

Private hospital saw 34% increase in bed from 4675 beds in 1990 to 6492 beds in 1994. As of 1994, private beds comprised 15% of total hospital beds in the country (RMK 7)


Partial Privatization of Public Healthcare 

1) Privatization of General Medicine Store(medicine procurement unit) in 1993.

Govt claim it ensures efficiency of in provision of medical supply. In a preliminary study cited here. Izham et al reported increase in drug price by 3.3x without any justification.  Privatisation of GMS was first identified in 1991 privatization master plan. Initially the privatized GMS was given to Southern Task Sdn Bhd(later known as Remedi) which was subsidiary of Renong. Later , remedi was acquired by Pharmaniaga . Based on this 2005 article(above) , Pharmaniaga is just mere intermediary & received 17% service charge.

2) Privatization of Hospital Support Service.

The hospital support service consist of laundry, biomedical equipment & facility engineering maintenance services. It was privatized in 1995. It was a 15 year concession given to 3 consortium. Kasturi Sen cited MoH(right) in claiming that price increase 3.2 folk without justification.


The above example of partial privatization provides compelling case that privatization of healthcare probably has little to do with cost efficiency.  There are few announcement recently esp on provision for hospital maintenance that on a cursory glance indicate little has changed