Is the government privatising healthcare?

The Budget 2027 allocation for the health ministry (MOH) and public healthcare has been raised to RM47.7bil, only RM1.2 billion extra which is the smallest increase in five years.

This falls well short of the Pakatan Harapan election promise to target 5% of GDP for public sector health expenditure in terms of both money and percentage.

At 10.3% of the total federal budget and 2.1% of GDP, the budget for the MOH has hardly changed in the last five years.

This shows that it is still “business as usual” in terms of public sector health expenditure and the small increase in the ministry’s budget barely exceeds the general inflation rate let alone medical inflation.

The government has met its longstanding promise to solve the issue of contract doctors and must be given credit for that. Anwar claims that MOH will create more than 9,000 vacancies to absorb the current contract doctors and newly trained housemen.

The allocation for the number of positions shows this, and the promise that new batches of trained housemen will be appointed directly to permanent positions is likely to be kept.

This demonstrates that coordination with the public service department (JPA) and the political will to solve the position problem through planning can be effective. It has taken more than a decade, but better late than never.

The new medical officers looking to serve in the public sector are still looking for higher pay, flexibility in appointments and job security.

The increase to the incentives for nurses and paramedics is only RM100 per month and does little to address concerns about low pay compared to peers in the private sector and overseas, such as in Singapore and the Middle East.

Brain drain is considered severe; this budget policy announcement is only a small, welcome adjustment and does not address the systemic issue of staff retention.

The realisation that more ambulances are needed for effective emergency care and the decision to purchase additional ambulances is a welcome change in management.

Nonetheless, there still are too many gaps in the public healthcare system.

With this small budget increase and without complementary policies and the necessary political will, these issues will not be resolved.

Some of these issues are not about money at all. They are about management and changing old-style human resource processes.

On the other hand, spending for public-private healthcare has increased from RM144 million to RM200 million for next year. This is a substantial increase for the outsourcing of public sector patients to the private sector.

An earlier government report stated that RM66.5 million was spent on 24,000 outsourced patients. If the government can maintain this rate, it could free up more than 70,000 public sector patients next year.

While this would improve waiting times in public hospitals, it would probably have only a minimal impact compared to the estimated 19 million outpatient visits in 2024.

However, for certain medical treatments and procedures, this could have a meaningful impact on waiting times.

With the Hospital Services Outsourcing Programme now covering 14 specialty areas, the increase in allocation will be welcome news for public sector patients but it is a form of privatisation.

The policy announcement regarding MediAsas and price transparency in private healthcare is also a form of privatisation and likely to have a greater impact on access to care and help to keep medical inflation in check.

While these might not require significant budget allocation from the government, the government will certainly need to step up its regulatory efforts.

This is the real challenge. If healthcare is to be balanced between public and private providers, then regulation and management must improve.

The views expressed are those of the writer and do not necessarily reflect those of FMT.

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