This article first appeared in The Edge Malaysia Weekly on January 27, 2025 - February 2, 2025

TO those following developments in the country’s healthcare sector, it may appear that the Ministry of Health (MoH) has been under siege recently, having been bombarded by complaints and criticism from all sides, as it grapples with deep-rooted systemic issues in the public as well as private healthcare system.

Datuk Seri Dr Dzulkefly Ahmad has had to deal with a relentless stream of problems since he was reappointed to helm the ministry,  following a cabinet reshuffle in December 2023. These ranged from the recognition of specialists, an insulin shortage scare and the resignation of more than 6,000 doctors — although this happened over the last five years — to surging private healthcare costs that have led to an unprecedented jump in medical insurance premiums.

In short, there has been little respite for him.

Some of the proposals that the ministry has come up with to resolve or alleviate these issues, such as the Waktu Bekerja Berlainan (WBB) or Staggered Working Hours system, have also been heavily criticised. Some doctors are reportedly threatening a strike to protest against this system that MoH wanted to implement on Feb 1 to overcome the issue of overworked healthcare staff, claiming unfair compensation for long hours and an exploitation of the graveyard shift.

Key concerns revolve around a potential loss of income due to changes in on-call allowances, with the weekday on-call pay potentially reduced or eliminated as the night shift is incorporated into the standard 45-hour work week. No allowance is provided for working after 5pm on weekdays.  

Under WBB, the maximum on-call hours are reduced from 33 straight hours to 18, and only weekend or public holiday work is considered on-call duty. And certain shifts are only eligible for passive call allowance, a lower rate than active call allowance. In response to criticisms on the issue, the ministry says WBB is just a pilot project at this stage, and applicable to only certain departments (see “The issue of manpower shortage is complex” on Page 60).

In the midst of this, during a forum on the proposed diagnosis-related group (DRG) billing system two weeks ago, Tan Sri Dr Abu Bakar Suleiman slammed MoH as being a “disaster”, saying the ministry works in silos and has got its priorities wrong. The 80-year-old former director-general of health also panned the country’s healthcare system as being stuck in the last century.

The complex web of challenges that the ministry faces had made it difficult to directly engage with Dzulkefly. After repeated attempts to secure an interview since May last year, The Edge finally managed to sit down with him recently.

Unsurprisingly, one of the first things the health minister shares with us is how he has been “bombarded” and “overwhelmed” by some issues since his return to the ministry that he first helmed from May 2018 to February 2020. But he stresses that this was why he came back to the ministry “with a vengeance” — to put in place all the healthcare reforms that he wanted to effect but did not have the opportunity to previously.

And he takes Abu Bakar’s comments about the country’s healthcare system seriously.

“As one might well know, he is my clinical governance adviser. Of course, I take his comments seriously, which were conveyed to me much earlier on. That was the reason why I engaged him to begin with,” says Dzulkefly.

“We must begin with an honest assessment of the situation for us to be able to treat the root causes of our ailments. This is also the reason why the first law that I amended was the Medical Act 1971 (Act 50), which defined the role of the minister, established the DG post and others. Act 50 was never [just] about [recognition of medical specialists trained through] parallel pathway programme. It was about reforming the governance of the medical system in Malaysia.”

At the core of the parallel pathway issue lies the recognition of medical specialist qualifications obtained through alternative training routes, primarily involving collaborations with international institutions. The long-standing issue came to a head at end-2023, when the Malaysian Medical Council (MMC) rejected several cardiothoracic surgeons’ application to be listed on the National Specialist Register as their qualifications from the Royal College of Surgeons in Edinburgh were no longer on MMC’s recognised list. 

The issue culminated in amendments to Act 50, to streamline the recognition of qualified spcialists, with the list of recognised qualifications entered into the Fourth Schedule of the Act itself, to ensure greater transparency and consistency in its administration.

“I did not shy away from it. I took the bull by the horns, bit the bullet and got it [the legal amendments] done in six to seven months. But the work is not done,” says Dzulkefly, adding that follow-up policies and regulations are needed.

“Hopefully, by the first quarter of 2025, we can get it done. At this stage, those who are still waiting [to be registered] will finally get their names on the National Specialist Register of Malaysia, or NSR.”

He is aware that the matter is urgent. “Many of them [specialists who have yet to be registered] have received very lucrative offers from abroad, including from across the Causeway. I do not want to lose even one of them. The investments that we have poured into our people are not cheap. Hence, all the more reason we must get this expedited,” he says.

“To sum it up, reforms are underway, and the Act 50 amendment was just the first step of many more to come. To this end, the Health Transformation Office (HTO) and Digital Health Division (DHD) that I conceived are helping me in this regard.”

Dzulkefly announced the setting up of the HTO last year to lead and coordinate the implementation of the Health White Paper, a comprehensive blueprint for healthcare reform in Malaysia.

“I do not intend to be unkind to my predecessor, but I found that many health reform efforts were put on the back burner of sorts, such as the health digitalisation and health financing reforms,” he says.

“The Health White Paper is a noble vision, but we must also come up with the mechanics on how to translate that into reality. We cannot just stop at having motherhood statements, right? How do we address the long waiting time to get a doctor’s or specialist’s appointment, access to elective surgery, the manpower shortage, the maldistribution? Those are problems that require robust solutions, which will be neither easy nor fast.”

As for the DHD, it was tasked to drive the digital transformation of the healthcare system, which is expected to take the next four or five years, to improve efficiency, accessibility and quality of care.

A key goal is to implement a “One Individual, One Record” system, to create a comprehensive and unified electronic health record for every Malaysian. This will enable seamless sharing of patient information between different healthcare facilities, thereby improving care coordination and reducing duplication of efforts.

Another key initiative MoH has proposed is the so-called expansion of the private wing in public hospitals under the RakanKKM programme to provide “premium economy” healthcare services in selected public hospitals. Designed to offer patients personalised care, specialist choice and enhanced comfort and privacy for elective in- and outpatient procedures — while still being more affordable than private hospitals — RakanKKM is expected to see its first patient in the middle of this year.

The “private wing” usually refers to the premium services offered at public university teaching hospitals, while hospitals under MoH operate something called the “full paying patient” (FPP) scheme, where patients pay full price for the services they get.

However, the FPP has certain drawbacks, including the fact that the revenue it generates goes to the government and not back to the hospitals, and only specialists benefit from the significant additional income while other healthcare workers are not formally paid. This has contributed to an unpleasant working environment and brewed resentment among healthcare staff.

There was also criticism that allowing specialists to do locum work at private hospitals or attend to FPP diverts manpower away from public facilities. The latest RakanKKM initiative has elicited similar concerns.

“I can understand the anxiety. ‘Hey, the public facilities are already congested, so how are you going to do it?’ But you know that [some public hospitals are already catering to] full-paying patients. That alone is evidence that there is room for this,” says Dzulkefly.

RakanKKM will only utilise spare capacity, and will not be at the expense of public healthcare patients, he says. Some hospitals, such as the one in Cyberjaya, “have a lot of excess or underutilised facilities” and the right ambience to cater to the crowd that RakanKKM wants to target.

“If 30% of the patients that go to public healthcare opt for RakanKKM services, it would free up those resources for the other 70%. This will lead to shorter waiting times and better focus on the rest. In other words, we raise the floor to create more space for others,” says Dzulkefly.

Unlike previous initiatives, RakanKKM’s income support model is not just for lead specialists, but the entire healthcare team. Excess revenue will be reinvested to improve public healthcare services for all patients, according to the ministry.

It has secured RM25 million in seed capital from the Ministry of Finance (MoF) for the project, which it would like to kick-start at five hospitals. The four shortlisted ones are Hospital Cyberjaya, Hospital Sultan Idris Shah in Serdang, Institut Kanser Negara and Hospital Putrajaya. The fifth one is being identified.

“Cyberjaya has about 100-plus beds. So, we are taking only 20 beds that are not currently used. We’ll prove to them that it is viable, sustainable and can generate good, modest income. We hope to grow to about 500 beds in the course of two years,” says the minister.

MoH is also getting investments from government-linked investment companies (GLICs) for the project. There will be a revenue-sharing model to ensure that investors get an adequate return on investment, according to the ministry.

“We are getting an encouraging response from GLICs. Since the investors are not the private sector, any allegation that this is an attempt at backdoor privatisation is unfounded,” says Dzulkefly.

The move is part of the ministry’s efforts to retain talent. MoH produces some of the best talents who are sought after internationally, he points out.

“It is also to nudge others [in the private sector] to understand that you can practise value-based healthcare delivery,” says Dzulkefly, referring to the healthcare delivery model that focuses on improving patient outcomes and experiences. It shifts the emphasis from the traditional “fee-for-service” model, where providers are paid for each service they deliver, to a system where they are rewarded for the quality of care they provide.

So, how much cheaper will RakanKKM be compared to the private sector? “I wouldn’t want to quote any numbers because it would be entangled in a never-ending imbroglio. But it’s certainly a lot cheaper,” he says.

But RakanKKM does not address the issue of public healthcare’s long-term financial sustainability.

“You are correct. I don’t pretend that it can. Our system is essentially a tax-based system. All our funding comes from the consolidated fund, which is taxpayers’ money, period,” says Dzulkefly.

“The good thing is our public facilities provide universal healthcare for all who cannot afford an alternative otherwise. The civil servants and low-income groups generally rely on our public facilities. Those who can afford to pay, like the M40 or T20, or perhaps the T30, are the ones who can access and sustain the private healthcare system. This ‘dual-construct’ kind of arrangement has been performing and delivering relatively well.”

He adds, “Ideally, yes, we want to have more funding. However, to say that it [our public healthcare system] is not sustainable, it has been sustained all this while anyway. And honestly, the Malaysian healthcare system is not about to crash, as compared to the NHS [the UK’s publicly funded National Health Service]. Every jurisdiction and every country is suffering, even the US.”

It has been widely reported that the NHS has been facing funding constraints, coupled with rising demand from an ageing population and the lingering effects of the Covid-19 pandemic, which have created a tremendous strain on resources. This is compounded by severe staffing shortages across all roles, which has led to widespread burnout and difficulties in retaining experienced healthcare professionals. Consequently, the waiting lists for routine procedures have reached record highs, while accident and emergency departments are frequently overcrowded and ambulance response times are dangerously delayed.

So, how much funding does Malaysia’s public healthcare system need?

“That’s a good question. We can go by certain metrics. As an upper middle income economy, we should be spending 5% to 6% of GDP (gross domestic product). Right now, we are spending only about 4.5% to be exact, which is 2.3% by the government and 2.1% to 2.2% by the private sector. But there is no way that I can ask for an additional huge quantum from the PM or MK2 (Minister of Finance II). I know it is always about opportunity cost,” says Dzulkefly.

While he had said that he would ask for more money for healthcare during his first term in office, he is hesitant to do so now because the country’s tax revenue to GDP ratio has remained in the low teens, making it one of the lowest tax collectors in Southeast Asia. “So, unless we get to have a more broad-based taxation system, we will not be able to enhance our tax revenue. In this scenario, I cannot be asking for more and more. Getting RM45.27 billion, the second highest [allocation to ministries under Budget 2025] is good enough,” he says.

In the meantime, Dzulkefly is trying to focus on the mantra: “If you can’t give me the resources, allow me to be resourceful”, which was what guided the idea behind RakanKKM as well as the Hospital Services Outsourcing Programme (HSOP), where the ministry made “a lot of savings”. 

So far, MoH has outsourced 22,773 cases to private healthcare facilities via HSOP, costing the government RM66.5 million. Launched in July last year, the programme has managed to reduce patient congestion, shorten waiting time and enhance healthcare service quality, he says. There are currently 94 registered hospitals under the programme, which provide services in four medical specialties: cardiology, cardiothoracic, nephrology and radiology and medical imaging.

The HSOP uses bundled payment, which Dzulkefly calls a “mini-DRG” as it is based on expected costs for a clinically defined episode of care.

“The way we do it is that we issue a request for proposal, or RFP, for a procedure. We go for the best value for money. For those who exceed our acceptable range, we give them a choice: if you want to get on board, your services have to be more affordable. You may not get a favourable margin, but you will get consistent volume,” he explains.

With the programme, the waiting time to correct an arterio-venous fistula (AVF — a situation where there is an abnormal connection between an artery and a vein, causing blood to flow directly from the artery to the vein, bypassing the capillaries) — was reduced by 75% from 16 weeks to just four weeks, while the waiting time for ultrasound and magnetic resonance imaging (MRI) was shortened by 20%, from 20 weeks to 16 weeks.

“Therefore, we are already practicing DRG in our HSOP, although scaling it up to encompass a wider aspect of medical practice would require more work down the line. In terms of expanding strategic purchasing, we are including drugs and medical device procurement soon,” says Dzulkefly.

At the same time, the ministry is working with MoF on setting up the National Health Trust Fund, which aims to pool various funding sources to create a larger and more diversified funding pool. Apart from general tax revenue, it will draw from sin taxes such as those on tobacco and sugary drinks.

When Dzulkefly mooted the fund in 2022, he proposed that it also draw funds from insurance companies, individuals, zakat and even wakaf and endowments.

Will we be able to see the trust fund materialise this year? “I promise you that I will come back to you on this as soon as I get to form the task force for it,” he says. 

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