Minister’s Speech at the APHM International Healthcare Conference and Exhibition 2016

Opening speech at the APHM International Conference 2016


OPENING CEREMONY – Kuala Lumpur – 2 June 2016

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Extending a warm welcome to the Minister, Dato’ Dr Jacob was appreciative to the Minister and the Ministry of Health for the understanding and support given to the private hospitals in enabling them to provide affordable, sustainable and quality healthcare to the people of Malaysia.


Key points brought forward by Dato’ Dr Jacob in his welcome address were:

  1. The need for public-private partnership to do much more for the healthcare industry in Malaysia.
  2. The need for collaboration to solve the problems for better delivery of care and be a force to be recon with. Case in point is the public hospitals which are over utilised, crowded and with long waiting lines; and at the same time we have many of the private hospitals underutilised, have high-end medical technologies and doctors who are able to handle more patients.
  3. That the current economic constraints have resulted in the private hospitals experiencing a 20% reduction in the number of patients in their hospitals while it is congested in the public hospitals.
  4. The current shift of patients from the private to public hospitals due to the higher charges which could be possibly due to the introduction of GST in 2015.
  5. Cited countries like Australia which have successfully implemented the PPP model, where the public and private hospitals co-exist side-by-side whilst benefiting patients and hospitals, making healthcare affordable and all hospitals accessible. Suggested that private hospitals management can even help manage some public hospitals.
  6. That APHM is concerned and has engaged a consultant to find a workable model that would benefit both the sectors and the patients.
  7. Raised the issue on undue delays in getting approvals from the Ministry of Health for new healthcare facilities and those undergoing renovations. Suggested as in some countries where the processes are made much faster by approved panel of architects appointed by the Ministry of Health; who would scan through the plans and give recommendations to the Ministry of Health for speedy approvals.
  8. That APHM encourages its member hospitals constantly to monitor and improve the outcomes of all patients who pass through their facilities. Dato’ Dr. Jacob said, “Quality care and excellent patient experience creates value for our patients and sets us apart”.
  9. Mentioned that in 2015 Malaysia received more than 850,000 medical tourists generating total revenue of more than RM900 million which is a testimony to all the combined efforts.
  10. That the APHM conference has become a much awaited event in the region and internationally. In 2017 it will be the 25th silver anniversary for APHM conference and exhibition and expects a bigger and grander event, hopefully in a closer partnership with the Ministry of Health.
  11. Next year’s conference is from 25 – 27 July 2017.

Minister of Health Malaysia – DATUK SERI DR S. SUBRAMANIAM


In his opening address the minister congratulated APHM for organising the 24th APHM conference and expo and is looking forward to next year’s 25th anniversary which is a major milestone for the private hospitals in Malaysia and for the contributions they have done towards healthcare as a whole.

The minister said that Malaysia has progressed well in the delivery of healthcare and has been well recognised by the international community as having one of the best healthcare systems in this part of the world; having good outcomes which is a great achievement.  According to Datuk Dr. Subramaniam, Malaysia has solved most of the fundamental aspects of healthcare; have reduced the infant and maternal mortality rate to a very low level, have very strong child health facilities in the public sector; and every Malaysian has got a public health facility within 5 km even in the remotest villages.

The minister spoke of the challenges faced by the health sector and he raised some key issues that are of concern and requires attention:

  1. The long term financial sustainability of the healthcare system, particularly in the private sector.
  2. The total healthcare expenditure for Malaysia is 4.5% of the GDP, which is more or less the same as in other ASEAN countries. However, when compared with the more developed countries it is low and believes it should be raised to 6% of GDP to ensure the financial sustainability of the system in the long-term.
  3. The public sector contributes 55% of the total expenditure for healthcare and the 45% by the private sector. The unfortunate part of the expenditure in the private sector is that the bulk of it is out-of-pocket expenditure. According to the minister any health economist would say that out-of-pocket payments are not good ingredients for the long term sustainability of the healthcare system. Malaysia’s figures for 2015 shows that 35% to 36% of the total expenditure is out-of-pocket payment and that leads to potential health catastrophes. Because this leads to a situation where the people are ill but they do not have enough savings to meet the expenditure they need and is a challenge we face. According to reports from WHO and other agencies, any country where the out-of-pocket expenditure is more than 15% to 20% has a greater risk of leading to health financial catastrophe. Thus Malaysia got to find the solution on how to reduce this out-of-pocket expenditure.
  4. Another challenge is the demographic changes of the Malaysian population which is slowly becoming an ageing population. Life span of Malaysians is now averaging about 74 to 75 years; men about 73 years and more for women about 78 years. This has its challenges as people get older they tend to spend more on healthcare. And studies shows that the bulk of private health insurance expenditure actually goes towards the last 15 years of your life. This means that the expenditure for healthcare peaks when the person’s capacity of generating income is the least.
  5. The burden of disease too shows unfortunate statistics. The 2015 national health morbidity survey shows that the prevalence of diabetes is 17.5% (9% diagnosed and 8% undiagnosed), more than 30% who are hypertensive above the age of 18 years, nearly 47% above the age of 18 years who have high cholesterol and nearly 17.8% of Malaysians who are obese. Another 30% of Malaysians who are overweight. These figures are not good for the demography of the country considering the repercussions and challenges for the country.
  6. All evidence shows that the management of chronic diseases in the private sector as compared to the public sector is not satisfactory. According to the minister, the reason is when the model of payment is out-of-pocket; the tendency for the patients to use the facility is when they have money and not on a regular continuous basis. “Because of this singular set-back, our study shows that the continuity of healthcare to allow optimum management of chronic diseases in the private sector is still far from satisfactory. Whereas in the public sector you don’t have the burden of payment on your shoulder, there is a greater compliant and the field results shows that there is better outputs and better results in the public sector”, said the minister. “So long as the mode of payment continues to be out-of-pocket in the private sector then we will always be faced with inefficient management of chronic diseases in the private sector which will lead to great complications.”
  7. On the question of how to synergise the private and public sector, the minister mentioned that the government is working on a major transformation to optimise the facilities of both the sectors and would be making an announcement soon.
  8. Requested the private sector to consider the possibility of changing the style of management of hospitals. For example very few private hospitals are designed on speciality unit basis as in the public hospitals. The medical unit in the public sector has a team of people working in it supporting, synergising and helping each other. Whereas in Malaysia the private sector has evolved on individual basis and we have a multiple individual companies practicing under a set-up. The synergy which they can get out of cooperation amongst each other as a team is not there. Thus in moving forward the private sector should think of a different kind of model where this teamwork between members of similar specialities can be augmented to produce better results and allows greater efficiency and degree of utility of the facilities.
  9. Another sensitive issue the minister brought forward was regarding the model of care in the private hospitals which results in increase cost due to multidisciplinary management of a single patient. This is the way the system has evolved in the private sector; for example a cardiologist who sees a patient with diabetes will refer the patient to an endocrinologist; if the patient has asthma then would be referred to a respiratory physician. Thus the patient could end up seeing multiple doctors eventually and this adds up to the cost. This is the way the system has evolved; is not that the cardiologist cannot manage the diabetes. Unlike he said in a public hospital the consulting doctor will try and manage the patient for the multiple conditions and that is how the doctor has been trained. This, the minister believes is a thorny issue and would be a challenge but are areas that the private hospitals might want to transform in managing the cost.
  10. The minister also believes that there is a need for private hospitals to audit the unnecessary utilisation of facilities and prescriptions and he agrees it will be a very big challenge to implement. These are challenges he says needs to be done on a regular basis as is done in the public sector. An audit ensures that there is no abuse of the system and it should not be subject to any kind of scrutiny by peers or any other person.
  11. The minister mentioned that in 2015 he has started at the Ministry of Health evidence backed practices where the National Institute of Health collates evidences on all aspects of medical practice. This means any decisions the departments or ministry makes should be based on these evidences. These are made possible now with the tremendous amount of data, tools and technology available to analyse information, producing evidence as a guide and to make sure the current practices we follow are backed by evidence from peers all over the world.
  12. Regarding the request by Dato’ Dr. Jacob on the approval of designs using the pre-prescribed architects who have got the knowledge the minister mentioned that he is open to the idea and requested APHM to take this up with the Medical Practice Division at the Ministry of Health. He does not want the ministry to be restrictive in its approach which could delay in time and increase the costs.
  13. Touching on the interaction between the insurers and managed care organisations, the minister said that this is a very important issue which requires objectivity in the management of insured patients. The concern which is also with the insurers is that there is a differential in cost on how the private hospitals manage insured patients and those out-of-pocket patients. Just because the payment is by an insurance company does not mean that it is an opportunity to charge more and do unnecessary procedures which contributes to the overall increase in the cost of healthcare and would have a repercussion on the entire management of healthcare system.
  14. On a related note the minister brought to attention the practice of some managed care organisation who through negotiated deal with the GPs, fix a very low fee such as RM10.00 for a consultation which is ridiculously low and the net results would be the delivery of very poor care and unfair competition among those who are practicing good medicine.
  15. On his final note on the public-private partnership, he believes eventually the cost between the public and private sector should be more or less similar. Therefore he stressed the importance of managing all these challenges as some of the health transformation eventually would shift a lot of the patients from the public to the private sector to share the resources and he believes the determining factors would be the efficiency and in doing the right thing.