MEDICAL PROFESSIONAL - Malaysia Productivity Corporation … · iv Foreword In the 10th Malaysia Plan, the Malaysia Productivity Corporation (MPC) had mandated to review all regulations

RECOMMENDATION REPORT

31 August 2016

MEDICAL PROFESSIONAL

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Contents Foreword ................................................................................................................................... iv

Boxes ......................................................................................................................................... vi

Figures ...................................................................................................................................... vii

Tables ...................................................................................................................................... viii

Abbreviation.............................................................................................................................. ix

Key Points ................................................................................................................................. xii

Overview ................................................................................................................................. xiii

1 About the Review............................................................................................................... 1

1.1 The 10th Malaysia Plan: Modernising Business Regulation ....................................... 1

1.2 What has MPC been asked to do? .............................................................................. 3

1.3 The approach and rationale of this review ................................................................. 5

1.4 Conduct of the study ……………………………………………………………………………………………..5

1.5 Other initiatives by the Governments …………………………………………………………………….8

1.6 Structure of the report …………………………………………………………………………………………..9

2 Overview of the Medical Professionals in Malaysia ........................................................ 12

2.1 History and Development of Healthcare System /Medical Professionals

in Malaysia .................................................................. Error! Bookmark not defined.

2.1.1 Malaysia Plan .................................................................................................... 14

2.1.2 The Plan and Healthcare Professionals Development Policy-Thrusts ............ 15

2.2 The Population, life expectancy and mortality rates of Malaysian .......................... 19

2.3 Health Human Resources .......................................................................................... 22

2.3.1 Healthcare Facilities ………………………………………………………………….. ................... 25

2.3.2 Trends in Health Workforce............................................................................... 31

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3 Best Practice Regulations and Regulatory Burdens ......................................................... 38

3.1 What Is Regulation? .................................................................................................. 38

3.2 Cost of regulation ...................................................................................................... 38

3.3 What are unnecessary regulatory burdens?............................................................. 40

3.4 Sources of unnecessary regulatory burdens ……………………………………...................... 41

3.5 Best practice regulation ............................................................................................ 42

3.6 Medical Professionals’ Issues/Complaints raised by various stakeholders .............. 44

4 Regulations Affecting Medical Professionals in Malaysia................................................ 48

4.1 Regulatory Overview of Medical Professionals in Malaysia ..................................... 48

4.2 Development of the Medical Professional Regulation Framework ……………………….52

4.3 Regulators and Other Related Bodies …………………………………………………………………..62

5 Regulatory Burdens at the Pre-Qualifications and Training of Medical Professionals .. 69

5.1 Inadequate quality control of private colleges providing health sciences

education …………………………………………………………………………………………………………….73

5.1.1 The issues ……………………………………………………………………………………………………..73

5.1.2 Objective of MOHE Act 1996.…………………………………………………………………………80

5.1.3 Objective of MQA Act 2007 ………………………………………………………………………..…80

5.1.4 Options to resolve the issues …………………………………………………………………………81

5.1.5 Recommended option …………………………………………………………………………………..83

5.2 Supplies of clinical training for housemen and nursing graduates in the hospitals are not

sufficient to meet the requirements of the Act ......................................................... 84

5.2.1 The Issue …………………………………………………………………………………….. .................. 83

5.2.2 Options to resolve the issues …………………………………………………………………………92

5.2.3 Recommended option …………………………………………………………………………………..95

6 Managed Care Organization (MCO)................................................................................. 96

6.1 Minimal fees paid to medical professionals ............................................……...….....102

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6.1.1 Minimal fees paid to medical professionals ……………………………………….……..…104

6.1.2 Delayed and partial reimbursement ………………………………………………………….. 108

6.1.3 Intervention on clinics operation ………………………………………………………………. 110

6.1.4 Selective Empaneling and Fee Splitting ……………………………………………………….112

6.2 Objectives of MCOs ................................................................................................. 115

6.3 Options to resolve the issues ……………………………………………………………………………..116

6.4 Recommended option …………………………………………………………………………………..…..120

7 Personal Data Protection ........................................................................................... ....122

7.1 The issues ................................................................................................................ 123

7.2 Objectives of PDPA …………………………………………………………………….……….……………126

7.3 Verification with Regulators ………………………………………………………………….…………...127

7.4 Options to resolve the issues ……………………………………………………………………….. ..... 135

7.5 Recommended option …………………………………………………………….………………………….136

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Foreword

In the 10th Malaysia Plan, the Malaysia Productivity Corporation (MPC) had mandated to

review all regulations affecting the conduct of business in Malaysia with the view to

modernize business regulations. This is crucial in order for the country to move towards its

national aspiration of becoming a high-income nation. Towards this, the MPC has

embarked on a comprehensive review of existing business regulations with the focus on

the 12 NEW Key Economic Areas (NKEA) which have been identified to have high growth

potential.

In this study, the research team led by Zatun, Zuraida and Muhammed Anuar has been

asked to examine the regulatory regimes of the healthcare sector specifically in medical

professionals with the aim of recommending options to remove unnecessary regulatory

burdens.

Through regulation governments can leverage their policy interests on businesses.

Regulation can contribute to a range of social, environmental and economic goals.

However, in practice, some regulations are not well designed and many regulations are

not implemented efficiently or cost-effectively, and some regulations do not even

adequately achieve the ends for which they are designed. Poor regulatory regimes

invariably result in unnecessary regulatory burdens which will stifle business growth.

For this particular study, the focus was on the construction phase up to its completion,

which is the most complex part of the value chain and the most regulated.

The study emulated the approach used by the Australian Government Productivi ty

Commission (AGPC) and the team was guided by a regulatory expert previously from the

AGPC, Ms. Sue Holmes. A comprehensive study of existing regulations governing the

healthcare industry and their regulators was conducted. The regulations were correlated

to the value chain. Engagements with the associations as well as with medical practitioner

that practice in clinic and private hospitals were used in the study. Issues pertaining to

regulations were selected and documented in the study report.

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From these issues and using principles of good regulatory practice, the team then

formulated feasible options for further deliberation. These issues and options are

presented in this report for public consultation with relevant stakeholders in order to

develop concrete recommendations to reduce unnecessary regulatory burdens imposed

by construction regulations.

In the course of the study, the stakeholders including MPC have benefited greatly from

discussions and interviews with various companies, government officials and industry

associations. Valuable input and feedback were received from the AGPC expert, MPC’s

Board of Directors and other interested parties. The MPC is grateful for their assistance

and contributions.

The study was conducted in the MPC Head Office by the Smart Regulation Directorate led

by Mr. Zahid Ismail and overseen by me.

Dato’ Mohd. Razali Hussien

Director General, MPC

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Boxes

Box 3.1: Six Core Principles for Assessing Regulation and its Administration ......................... 42

Box 3.2: Well-Written Regulations .......................................................................................... 43

Box 3.3: Key Indicators of good performances by regulators ................................................. 44

Box 4.1: Employment regulations that may influence HR Practices ………………….………………..48

Box 5.1: MQA Act 2007 ............................................................................................................ 73

Box 5.2: Medical Act 1971……………………………………………………………………………..…………………...85

Box 5.3: A Guidebook for House Officer ……………………………………………………………………………..85

Box 5.4: Nurses Act 1950 …………………………………………………………………………………………………….89

Box 6.1: Private Healthcare Facilities and Services (Private Medical Clinics or Private

Dental Clinics) Regulation 2006 …………………………………………………………………………….104

Box 6.2: Private Healthcare Facilities and Services (Private Hospitals and Other Private

Healthcare Facilities) (Amendment) Order 2013 …………………………………………………..105

Box 6.3: Under the Consumer Protection Act 1999 …………………………………………………………….108

Box 6.4: Competition Act ……………………………………………………………………………………………………110

Box 6.5: Code of Professionals Conduct ……………………………………………………………………………..111

Box 7.1: The Redundancy on Confidentiality of Information …………………………………………….…124

Box 7.2: Personal Data Protection Regulations 2013 ……………………..……………………………………127

Box 7.3: Personal Data Protection Regulations 2010 …………………………………………………………..132

Box 7.4: Disclosures of the information ……………………………………………………………………………...133

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Figures

Figure 1.1: Regulatory Review Framework of MPC .................. Error! Bookmark not defined.

Figure 1.2: Study of Summary Process ..................................... Error! Bookmark not defined.

Figure 1.3: Summary of the Regulatory Issues ……………………………………………………………………11

Figure 2.1: Schematic overview of the health system ............................................................. 13

Figure 2.2: Health expenditure per capita ................................ Error! Bookmark not defined.

Figure 2.3: The Distribution of Government Health Clinic in Malaysia 2013 .......................... 26

Figure 2.4: The Distribution of Private Health Clinic in Malaysia 2011 ................................... 27

Figure 2.5: The Distribution of Government Hospital (MOH) in Malaysia 2013 ………………..…28

Figure 2.6: The Distribution of Private Hospital in Malaysia 2013 ……………………………………….29

Figure 2.7: The Distribution of Public and Private Hospital for each State Malaysia2013…….30

Figure 2.8: Admissions and Outpatient Attendances, 2013…………………………...…………..……....32

Figure 2.9: Public and Private Sector Resources and Workload, 2008 ………………………………...33

Figure 3.1: Issues under review ................................................................................... ………….47

Figure 4.1: The Value Chain of Medical Professional .............................................................. 52

Figure 5.1: The Value Chain of Medical Professionals ……………………………………………………..….70

Figure 5.2: Framework of Accreditation Process …………………………………………………………………72

Figure 5.3: Summary of issues ………..…………………………………………………………………………………..79

Figure 5.4: Statutory Requirement ……………………………………………………………………………………..84

Figure 5.5: Statistics of Housemen from 2011 to 2014 ………………………………………………………..88

Figure 5.6: Summary of issues …………………………………………………………………………………………….91

Figure 6.1: Summary of the Type and Function of MCOs …………………………………………………..100

Figure 6.2: Mode of payment in primary care clinics in 2010 and 2012 ……………………………..102

Figure 6.3: Summary of issues ……………………………………………………………………………………………114

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Tables

Table 1.1: Malaysia’s Competitiveness Performance in the Doing Business Report ........ Error!

Bookmark not defined.

Table 2.1: The health professionals development policies Malaysia Plan .............................. 15

Table 2.2: Population distribution and vital statistics ............................................................ 19

Table 2.3: Health professionals in the public and private secor,2013Error! Bookmark not defined.

Table 2.4: The ratio of health professionals to population, 2008 - 2013Error! Bookmark not

defined.

Table 2.5: Primary care health facilities, 2010......................................................................... 31

Table 2.6: Attrition among Doctors and Dentists in MOH....................................................... 34

Table 2.7: Density of health workforce (per 10,000 population), 2014 .................................. 35

Table 2.8: Seventh Schedule 2006 and Thirteenth Schedule 2013……………………………………...36

Table 3.1: Issues/Complaints raised by various stakeholders ……………………………………………..45

Table 4.1: Roles and description of medical professionals...................................................... 49

Table 4.2: Medical professional and their professional boards …………………………………………..51

Table 4.3: List of Medical Professionals under MOH, Acts, Regulators and APC ………………….51

Table 4.4: Value Chain mapped against Relevant Acts / Regulations ………………………………….53

Table 4.5: Summary of Medical Act 1971 ……………………………………………………………….………….57

Table 4.6: Summary of Nurses Act 1950 (Amendment 1969) and Nurses Registration

Regulation 1985 …………………………………………………………………………………………………59

Table 4.7: Roles and Responsibilities of the Ministry of Health and related agencies

affecting the accreditation and practice of medical professionals …………………….63

Table 6.1: MCOs in Malaysia …………………………………………………………………………………………….98

Table 7.1: Comparison on data protection between Confidentiality Guidelines,

Private Healthcare Facilities and Services Act and PDPA Act……………..………….….130

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Abbreviation

AGPC Australian Government Productivity Commission

AHSP Allied Health Sciences Personnel

APC Annual Practicing Certificate

CCU Coronary Care Unit

CoP Code of Practice

CPC Codes of Professionals Conduct

CPD Continuous Professional Development

DHPCO Division of Health Plan Contracting and Oversight

CSR Corporate Social Responsibilities

DoE Department of Environment

DTF Distance to Frontier

ECFMG Educational Commission for Foreign Medical Graduates

ETP Economic Transformation Programme

EPU Economic Planning Unit

FAIMER Foundation for the Advancement of International Medical Education

and Research

GDP Gross Domestic Product

GLC Government Linked Companies

GP General Practices/ Practitioner

GST Government and Services Tax

HMO Health Maintenance Organization

HEI Higher Educational Institutions

ICU Inensive Care Unit

JCI Joint Commission International

JPA Jabatan Perkhidmatan Awam

Department of Public Services

JTC Joint Technical Committee

LAN Lembaga Akreditasi Negara

National Accreditation Board

MAEPS Malaysian Pharmaceutical Society

MCO Managed Care Organization

MDA Malaysian Dental Association

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MDC Malaysia Dental Council

MERCY Malaysian Medical Relief Society

MITI Ministry of International Trade and Industry

MMA Malaysia Medical Association

MMC Malaysia Medical Council

MOH Ministry of Health

MOHE Ministry of Higher Education

MPC Malaysia Productivity Corporation

MQA Malaysia Qualification Agency

MQF Malaysian Qualifications Framework

MQR Malaysian Qualifications Register

NBM Nursing Board Malaysia

NDPC National Development Planning Committee

NEM New Economic Model

NGO Non-governmental Organisation

NKEA National Key Economic Area

NPDIR National Policy on the Development and Implementation of

Regulations

O & G Obstetrics & Gynecology

OECD Organization for Economic Co-operation and Development

PDPA Personal Data Protection Act

PEMUDAH Pasukan Petugas Khas Pemudahcara Perniagaan

Special Rask Force to Facilitate Business

PHC Primary Health Care

PHFSA Private Healthcare and Facilities Act

PRP Provisionally Registered Pharmacist

QAD Quality Assurance Division

RIA Regulatory Impact Analysis

RIS Regulatory Impact Statement

RMP Registered Medical Practitioner

RURB Reducing of Unnecessary Regulatory Burdens

SL1M Skim Latihan 1 Malaysia

TPA Third Party Organization

WBDB World Bank’s Doing Business

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WFME World Federation for Medical Education

WHO World Health Organisation

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Key Points

1. MPC which has been mandated in Tenth Malaysia Plan to carry out regulatory review

with the aim of reducing unnecessary regulatory burdens on the healthcare sector.

2. The review focuses on five medical professionals in healthcare sector, which are:

i) Doctors

ii) Nurses

iii) Pharmacist

iv) Dentist

v) Midwives

3. For the purpose of this review, the scope will be narrowed down into two main medical

professionals servicing the health industry, which are Doctors and Nurses. Nurses shall

also cover specialised nursing areas including dental nurses and midwives

4. These medical professionals are bound by several federal Acts on matters such as

training, registration, practices, services, and termination.

5. The value chain of the study can be broken down into three major phases: pre-

qualification, general practices (GP)/Specialisation and exit/termination.

6. The Ministry of Health is the regulator that responsible for placement of houseman after

medical student’s graduates form the courses.

7. The three main issues are listed below:

i) Prequalification - quality of colleges providing medical courses and

insufficient supplies of training for medical professionals)

ii) General practices – Lack of regulatory framework on practices of Managed

Care Organisation (MCO)

iii) General practices – Discrepancies between Personal Data Protection Act

2010 and Private Healthcare Facilities and Services Act 1998.

8. Key recommendations for improving the existing regulatory arrangements include:

i) Improve the regulatory requirement for accreditation of private colleges

ii) Reduce regulatory burdens on termination of unqualified houseman

iii) Improve the regulatory framework on Managed Care Organisation (MCO)

iv) Expedite the establishment of Code of Practice (CoP) in healthcare industry.

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Overview

The 10th Malaysia Plan indicated that Malaysia has done well in extending affordable basic

healthcare services to all citizens. Malaysia healthcare system was also highlighted as one

that has been relatively successful in providing equitable healthcare in terms of targeting

public health subsidies towards the poor.

Malaysia inherited a health system from the British upon independence in 1957 but with

services based mainly in urban areas. Malaysian healthcare system had evolved from a

simple single provider system to one of multiple providers which are categorised by public

and private sector providers interacting with one another, as well as, third party financiers.

Each party interacts with each other in the process to maximise their benefits. The

government has provided the major healthcare and healthcare related facilities where all

are financed through central taxation. This situation started to change during the 1980s

due to growing demand for healthcare following rising incomes, urbanisation and the

expansion in the middle classes (Chee & Barraclough, 2007).

Public dental services prior to independence were run by British dentists in the large

hospitals assisted by locally qualified dentists who also visited districts and towns. Further,

the private dental care was provided by about 450 mainly locally trained practitioners.

Pharmacy services in Malaysia came into existence in 1951. In 1955, the numbers of

pharmacist was around 301. To enhance its role The Government Pharmaceutical

Laboratories and Stores were established in 1964 in Petaling Jaya to purchase and

manufacture pharmaceuticals for MOH services. However, the absence of dispensing right

has limited the community pharmacist’s professional roles to deliver pharmaceutical care,

optimize their clinical knowledge and utilize their skills2.

Nursing practice in the pre-war period in Malaya then was carried out by nurses who

received “on the job training”. After Independence, health services became mainly a central

government responsibility with delegation of service delivery through state and district

1 Malaysian Pharmaceutical Society (2016) History of MPS, see http://www.mps.org.my/index.cfm?&menuid=84 2 Mohd A.Hassali, Vivienne M. S. Li, Ooi G. See (2014), Pharmacy Practice in Malaysia, Journal of Pharmacy Practice and Research.

http://www.mps.org.my/index.cfm?&menuid=84

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health administrations3. The first private nursing school in Malaysia was established at

Assunta Hospital, Petaling Jaya.

Current legislative arrangement

Medical professionals being a party within the professional services industry covers the

activities of various Acts governing the professional codes of conduct. Generally, there

are about 150 Acts governing the practice of Medical Professionals.

The main Acts include:

i. Medical Act 1971 (Act 50)

ii. Dental Act 1971 (Act 51)

iii. Nurses Act 1950 (Act 14) & Nurses Registration Regulations 1985

iv. Registration of Pharmacists Act 1951 (Act 371) & Registration of

Pharmacists Regulations 2004

The main objective of the professional Acts is to govern the practise of professionals in the

interest of the public and the nation. However, there are instances where over-regulating

of these professions have led to unnecessary burdens on the practitioners and result in

higher costs or poorer service to the public. Unnecessarily demanding Acts, rules and

regulations need to be reviewed to make accreditation, career growth and practice easier

and to boost the effectiveness of medical services.

Other main Acts that involved in the study are:

a. Private Higher Education Act 555 (1996 amend 2006)

b. Education Act 550 (1996 amend 2006)

c. Malaysian Qualification Agency Act 679 (2007)

d. Malaysia Employment Act 1955

e. Private Healthcare Facilities and Services Act 1998 (Act 586)

f. Private Healthcare Facilities and Services (Private Hospitals and Other

Private Healthcare Facilities)Regulations 2006

3 2013, Western Pacific Region Nursing and Midwifery Databank, available at : http://www.wpro.who.int/hrh/about/nursing_midwifery/db_malaysia2013.pdf

http://www.wpro.who.int/hrh/about/nursing_midwifery/db_malaysia2013.pdf

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g. Private Healthcare Facilities and Services (Private Medical Clinics or

Private Dental Clinics) Regulations 2006

h. Personal Data Protection Act 2010 (Act 709)

i. Personal Data Protection (Class of Users) Order 2013

j. Personal Data Protection (Fees) Regulations 2013

k. Personal Data Protection (Registration of Data User ) Regulation 2013

l. Personal Data Protection Regulations 2013

m. Insurance Act 1996

n. Companies Act 1965

o. Competition Act 2010

p. Consumer Protection Act 1999

Reducing Unnecessary Regulatory Burdens on Business:

Medical Professional

1. What the MPC has been asked to do

The 10th Malaysia Plan has mandated Malaysia Productivity Corporation (MPC) to carry out regulatory review in order to make it easier to do business in Malaysia. Towards this end, the MPC has embarked on reviews the existing regulations which have primary impact on the 12 National Key Economic Areas (NKEA). The NKEAs were chosen on the basis of their high growth potential. One of the NKEAs is the Healthcare industry and specifically, Medical Professionals, which is the focus of this study. This review process will draw on the expertise and perspectives of the public and private sectors to help identify key issues and the appropriate solutions.

2. Conduct of the review

The study will emulate the approach used by the Australian Government

Productivity Commission (AGPC) and the team will be guided by a regulatory

expert Ms. Sue Holmes. The team will select a sample of businesses from the

Healthcare sector in Malaysia. The team will interview the Healthcare

professionals and managers in Healthcare Facilities to identify the regulatory

issues of concern. Based on the principles of good regulatory practices, the

team will formulate feasible options for further deliberation. These issues and

options will be subject to further consultation with relevant stakeholders in order

to develop concrete recommendations that will reduce unnecessary regulatory

burdens. The figure below summarizes the study process for this review.

3. Timing

This review commenced in September 2014 and has started with canvasing interested parties about concerns with written regulation and its administration.

Summary of Study Process

4. Contacts Interested parties are welcomed to participate in this review. You can contact the persons below on matters relating to this review. Cik Ilyana Norsaidah Ab Rahman (Administrative matters) Ph: 03- 79600173 Email: [email protected]

En. Mohammed Alamin Rehan (Other matters) Ph: 03- 79600173 Email: [email protected]

Conceptualize the industry

Value Chain and skill mix

List all Acts and map them onto

the Value Chain

Scoping & Target Selection

Develop a list of questions

Conduct interviews

Analyse Information gathered

Draft report (with proposed

options)

Workshops and other feedback

Final Report

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Chapter 1: About the review

1.0 About the review

The regulatory environment has a substantial effect on the behaviour and

performance of businesses. While regulation can help to serve important economic,

social and environmental objectives by addressing market failures, it is crucial that

regulatory interventions do not unnecessarily inhibit private sector participation in the

economy and its contribution to higher standards of living. This requires a regulatory

environment that promotes competition and does not inhibit innovation while also

addressing policy objectives and market failures.

To maximise the innovation and output potential of an economy, firms need clear price

signals and the flexibility to shift resources as conditions change. However, Malaysia

has accumulated many regulations over the years many of which constrain change

and growth. Some regulations also inhibit competition and innovation by creating

barriers to entry to some activities and industries.

1.1 10th Malaysia Plan: Modernising Business Regulation

In 2007, the Government took a significant step in rationalising Malaysia’s regulatory

regime by launching PEMUDAH, a special task force to facilitate business.

PEMUDAH’s substantial achievements include reducing the process of starting a

business from 9 procedures and 11 days to 3 procedures and 3 days, reducing the

time taken to register standard property titles from 41 days to 2 days, and reducing

the time taken for tax refunds to less than 30 days as compared to the previous year

which takes around 1 year.

Based on the World Bank’s Doing Business 2015: Going Beyond Efficiency report,

Malaysia’s standing in the ease of doing business ranking improved from 20 th in last

2014 report to 18th, scoring 78.8 DTF score, 10 points behind Singapore which has

retained its position as the economy with the most business-friendly regulations in the

world.

2

To make Malaysia the preferred place to do business, the Government has begun a

comprehensive review of business regulations, starting with regulations that impact

on the twelve National Key Economic Area (NKEAs). Regulations that contribute to

improved national outcomes will be maintained, while redundant and outdated

regulations will be eliminated and replaced with better ones where appropriate. This

review will be led by the Malaysia Productivity Corporation (MPC) in collaboration with

relevant experts from business and academia. This work will complement the efforts

of PEMUDAH and ensure that any reviewed regulations do not result in disincentives

to business, investment and trade.

Table 1.1: Malaysia’s Competitiveness Performance in the Doing Business Report

Rank Year

2010 2011 2012 2013 2014 2015

Ease of doing business 23 21 18 12 20 18

Starting a business 88 113 50 54 12 13

Dealing with construction

permits1 109 108 113 96 39 28

Getting electricity nil nil 59 28 28 27

Employing workers2 61 nil nil nil nil

Registering property 86 60 59 33 74 75

Getting credit 1 1 1 1 19 23

Protecting investors 4 4 4 4 5 5

Paying taxes 24 23 41 15 31 32

Trading across borders 35 37 29 11 10 11

Enforcing contracts 59 59 31 33 30 29

Resolving Insolvency

(Closing a business) 57 55 47 49 65 36

1 The time and cost related to obtaining an electricity connection were removed from the dealing with construction permits indicators and are allocated at the getting electricity indicators 2 The employing workers data are not included in the ranking on the ease of doing business starting from

2011

3

1.2 What has the MPC been asked to do?

The 10th Malaysian Plan has mandated the MPC to carry out regulatory reviews with

the goal of making it easier to do business in Malaysia. The review is in line with the

aspiration envisaged in the New Economic Model (NEM) to transform Malaysia into a

developed economy. The NEM strongly indicates the need for good regulatory

management to improve regulatory quality. The 10th Malaysia Plan in Chapter 3 on

Modernising Business states:-

“The regulatory environment has a substantial effect on the behaviour

and performance of companies. Private sector participation in the economy and innovation require a regulatory environment provides the necessary protections and guidelines, while promoting competition”.

Too often, Malaysian firms face a tangle of regulations that have accumulated over the years and now constrain growth. At the same

time, regulations that would promote competition and innovation are absent or insufficiently powerful”. “To achieve this goal, the Government will begin with a comprehensive review of business regulations, starting

with regulations that impact the NKEAs”.

Specifically, the MPC is:

reviewing existing regulations with a view to removing unnecessary rules and

compliance costs. Priority is given to regulations affecting NKEAs

ensuring that regulators conduct regulatory impact assessment for new regulations

making recommendations to the Cabinet on policy and regulatory changes that will

remove unnecessary regulatory burdens and enhance productivity.

The reviews of existing regulation involve public consultation with stakeholders and

interested parties. The process will be implemented with the intention to improve the

quality of existing regulations. Other processes within MPC will focus on ensuring the

good quality of new regulation particularly by applying regulatory impact analysis.

This report reviews existing regulation affecting two main medical professionals

servicing the health industry, which are Doctors and Nurses. As shown in the Figure

1-1, the review process takes into account both government and business

perspectives as well as reports, data and reasoning of organisations such as the

World Bank, the World Health Organisation (WHO) and the Australian Government

Productivity Commission (AGPC).

4

Figure 1.1 Regulatory Review Framework of MPC

PEMUDAH: Special Task Force to Facilitate Business

NDPC: National Development Planning Committee

WBDB: World Bank’s Doing Business

Source: Malaysia Productivity Corporation (MPC)

The government has formalised the mandate given to the MPC with the launching of

a national regulatory policy through the policy document “National Policy on the

Development and Implementation of Regulations (NPDIR)” in July 2013. The

document has been developed to support the modernization of the regulatory regime.

The document states:

Global competition, social, economic and technological changes require the government to consider the inter-related impacts of regulatory

regimes, to ensure that their regulatory structures and processes continue to be relevant and robust, transparent, accountable and forward-looking.

Essentially, the report is targeted to promote the NEM policy objective of improving

economic efficiency through enabling fair competition. The objective of the national

policy is to ensure that Malaysia’s regulatory regime effectively supports the country’s

aspirations to be a high-income and progressive nation whose economy is

competitive, subscribes to sustainable development and inclusive growth. The policy

is to ensure a regulatory process that is effective, efficient and accountable as well as

to achieve greater coherence among policy objectives of government.

5

1.3 The approach and rationale of this review

Becoming a high-income nation requires, among other critical factors, an efficient

labour market that is able to attract, develop and retain the best talent and which does

not impede job mobility. Shortages of the required types of skills and talent will hamper

the transformation to a knowledge and innovation-based high income economy.

Efforts to reform the labour market are necessary to ensure efficient matching of

demand with supply, and to improve the retention of top talent and to enhance the

attractiveness of Malaysia to local and foreign talent as well as the Malaysian

diaspora.

During the period of the 10th Malaysia Plan, the Government had committed to

modernising the labour market, with special emphasis on improving job mobility and

upskilling the workforce, in particular those from the bottom 40% low-income earners.

The focus of the reform is on three key areas:

making the market more flexible

upgrading the skills and capabilities of Malaysia’s existing workforce

enhancing the Malaysia’s ability to attract and retain top talent.

The particular aspects which has been addressed in this review are those regulations

which impede mobility and flexibility and in other ways impose unnecessary regulatory

burdens on business. This is complementary to the 11th Malaysia Plan which calls for

the acceleration of such reforms through comprehensive and integrated governance

reforms including modernising the current regulatory regime to ensure a thriving and

competitive environment for the services sector. 3

1.4 Conduct of the study

The investigations have involved collection, review and analysis of data and information

from two sources: secondary data from literature reviews and primary data from

interviews with key stakeholders

3 11th Malaysia Plan on page 8-17

6

Secondary data are from many sources and are classified as follows:

i. The Laws of Malaysia, particularly:

a. Private Healthcare Facilities and Services Act 1998 (Act 586)

b. Private Healthcare Facilities and Services (Private Hospitals and Other

Private Healthcare Facilities)Regulations 2006

c. Private Healthcare Facilities and Services (Private Medical Clinics or

Private Dental Clinics) Regulations 2006

d. Medical Act 1971 (Act 50) amendment 2012

e. Dental Act 1971 (Act 51)

f. Registration of Pharmacists Act 1951 (Act 371)

g. Nurses Act 1950 (Act 14)

h. Personal Data Protection Act 2010 (Act 709)

i. Personal Data Protection (Class of Users) Order 2013

j. Personal Data Protection (Fees) Regulations 2013

k. Personal Data Protection (Registration of Data User ) Regulation 2013

l. Personal Data Protection Regulations 2013

ii. Research papers published by international agencies such as the World Bank

and the World Health Organisation (WHO) and other countries such as the

AGPC, and the OECD

iii. Local research papers and reports commissioned by the government such as

the Economic Planning Unit (EPU) commissioned reports and Ministry of

International Trade and Industry (MITI) commissioned reports

iv. The Malaysian Government Plans such as the 5-year plans the Industrial

Master Plan 3 and the Knowledge Economy Master Plan.

v. Statistical data relating to medical professionals from both international and

local sources primarily the World Bank, Ministry of Health publications and

Department of Statistics Malaysia publications

vi. Other information derived from federal, state and local government agencies,

quasi-government bodies, professional bodies, private businesses and

relevant associations on policy matters, news, reports and statistics. Much of

this information has been accessed from websites.

7

Figure 1.2: Summary of the process of this research.

In order to identify the problems and issues that need to be addressed, primary data

was collected through interviews with business players, associations, professional

bodies and relevant regulators. The draft report is being released to enable

stakeholders including the main parties affected by the proposal i.e. the businesses,

non-governmental organisations (NGOs), the community, regulators and other

Government agencies to comment on the findings and options presented in the report.

Conceptualize Value Chain

List all Acts and map them

onto the Value Chain

Scoping & Targets

Identification

Develop a list of questions

Conduct interviews

Analyse Information

gathered

Draft report (with proposed

options)

Public consultations (other

feedback)

Final Report

LIT

ER

AT

UR

E R

EV

IEW

IN

PU

TS

(B

oo

ks;

Art

icle

s &

Sta

tisti

cs)

EX

PE

RT

’S A

DV

ICE

Ex-A

GP

C

8

The study is being carried out in two stages: the exploratory stage to prepare the draft

report and the option stage to produce a final report which will identify the most

appropriate options for reducing identified unnecessary regulatory burdens. With the

assistance of the AGPC expert, a list of questions was prepared for the interviews with

the respondents. The list of the interview questions is included in Appendix A of the

report.

After receiving comments on the draft report, the MPC will produce a final report

containing the MPC’s assessment and comments of final recommendations. Figure 1-

2 illustrate the process of this research.

1.5 Other initiatives by the Government

1) National Policy on the Development and Implementation of Regulation

This policy document applies to all federal government ministries, departments,

statutory bodies and regulatory commissions. It is also applicable for voluntary

adoption by state government and local authorities. The policy document spells out

the objectives, operating principles, responsibilities, requirements and process for the

regulatory process management.

The national policy also specifically mandates the MPC, through its responsibility to

the National Development Planning Committee (NDPC), to implement the functions

of the national policy. MPC is to assist in the coordination for implementing this policy4.

2) Best Practice Regulation Handbook

The Best Practice Regulation Handbook provides the detail guidance on carry out best

practice regulation – the systematic process to the development of regulations.

Basically, a regulator has to carry out regulatory impact analysis (RIA) and produced

a comprehensive report, the Regulatory Impact Statement when it is introducing any

regulation that may impact upon businesses. MPC role here is to ensure that the RIS

is adequately prepared before it is submitted to NPDC for further action5.

4 Government of Malaysia, Best Practice Regulation Handbook, July 2013 5 Australian Productivity Commission, Performance Benchmarking of Australian Business Regulation:

Cost of Business Registration, Research Report, November 2008

9

3) Guideline on Public Consultation Procedures6

The Guideline on Public Consultation Procedure was launched in October 2014. The

guideline which supplements the Best Practice Regulation Handbook aims to facilitate

the implementation of the National Policy for the Development and Implementation of

Regulations. It provides overview information, guiding principles, key requirements

and case study examples for planning and implementing public consultation

exercises.

1.6 Structure of the Report

This report on the Reducing of Unnecessary Regulatory Burdens (RURB) affecting

the medical professionals has been organised into seven chapters, starting with this

introductory Chapter One. This chapter highlights the rationale of this study and the

approach of the study.

Chapter Two refers to the overview of the Medical Professional Value Chain in

Malaysia and the policy implemented throughout the years. It covers the pertinent

statistics on the performance of healthcare sector and medical professionals in

Malaysia from 1990 to 2012.

Chapter Three looks at the regulatory burdens and the potential sources of

unnecessary regulatory burdens. The chapter concludes with the main

complaints/issues raised by the stakeholders.

Chapter Four provides an overview of the regulatory regimes for medical

professionals in Malaysia. It covers the value chain and all the related regulations

which are attached to each stage of the medical professional value-chain. It also

provides a brief description of the three main medical professional regulations in

Malaysia as well as employment policy in Malaysia.

Chapters Five, Six, Seven, and Eight present the analysis and findings of the

regulatory related issues for this study. Options are proposed for the regulatory issues

6 Government of Malaysia, Guideline on Public Consultation Procedures, October 2014

10

of concern. Although the study has identified a wide list of complaints/issues, the focus

is only to elaborate on pertinent regulatory issues that could be improved to create a

more conducive working environment, particularly for the private medical

professionals, who are the subject of the study.

11

Figure 1.3: Summary of the Regulatory Issues discussed in this study

1. Inadequate quality control of private

colleges providing health sciences

education

2. Supplies of clinical training for

housemen and nursing graduates

2. Lack of Regulatory Framework for

MCO Operation

- Minimal fees paid to medical

professionals

- Intervention on clinics operation

- Delayed and partial

reimbursement

- Selective Empanelling and Fee

Splitting

3. Discrepancies between Personal

Data Protection Act 2010 and

PHFSA 1998

- The Redundancy on Confidentiality

- Difficulties to gain access of data of Information

Pre-Qualification

Exit / Termination

Specialisation

General Practices

(GP)

12

Chapter 2: Overview of the Medical Professionals in Malaysia

2.0 Brief Overview of the Medical Professionals in Malaysia

This chapter provides an overview of the healthcare system in Malaysia as well as

the medical professionals serving the general public. It also illustrates the

importance of healthcare professionals and their development plan as stated in the

8th to 11th Malaysia Plan. In addition, the chapter also provides relevant statistics of

the healthcare sector.

2.1 History and Development of Healthcare System/Medical Professionals in

Malaysia

Malaysia inherited a health system from the British upon independence in 1957 but

with services based mainly in urban areas. Malaysian healthcare system had

evolved from a simple single provider system to one of multiple providers which are

categorised by public and private sector providers interacting with one another, as

well as, third party financiers. Each party interacts with each other in the process to

maximise their benefits. The government has provided the major healthcare and

healthcare related facilities where all are financed through central taxation. This

situation started to change during the 1980s due to growing demand for healthcare

following rising incomes, urbanisation and the expansion in the middle classes

(Chee & Barraclough, 2007).

Public dental services prior to independence were run by British dentists in the large

hospitals assisted by locally qualified dentists who also visited districts and towns.

Further, the private dental care was provided by about 450 mainly locally trained

practitioners.

Pharmacy services in Malaysia came into existence in 1951. In 1955, the numbers

of pharmacist was around 301. To enhance its role The Government Pharmaceutical

Laboratories and Stores were established in 1964 in Petaling Jaya to purchase and

manufacture pharmaceuticals for MOH services. However, the absence of

1 Malaysian Pharmaceutical Society (2016) History of MPS, available at : http://www.mps.org.my/index.cfm?&menuid=84

http://www.mps.org.my/index.cfm?&menuid=84

13

dispensing right has limited the community pharmacist’s professional roles to deliver

pharmaceutical care, optimize their clinical knowledge and utilize their skills2.

Nursing practice in the pre-war period in Malaya then was carried out by nurses who

received “on the job training”. After Independence, health services became mainly a

central government responsibility with delegation of service delivery through state

and district health administrations3. The first private nursing school in Malaysia was

established at Assunta Hospital, Petaling Jaya.

Figure 2.1: Schematic Overview of the Health System

Source: Hussein RH, Asia Pacific Region Country Health Financing Profiles: Malaysia, Institute for Health Systems Research

A schematic overview of the health system is shown in Figure 2-1. The MOH offers

a comprehensive range of services, including health promotion, disease prevention,

curative and rehabilitative care delivered through clinics and hospitals, while special

institutions provide long-term care. In addition, several other government ministries

2 Mohd A.Hassali, Vivienne M. S. Li, Ooi G. See (2014), Pharmacy Practice in Malaysia, Journal of Pharmacy

Practice and Research. 3 2013, Western Pacific Region Nursing and Midwifery Databank, available at : http://www.wpro.who.int/hrh/about/nursing_midwifery/db_malaysia2013.pdf

http://www.wpro.who.int/hrh/about/nursing_midwifery/db_malaysia2013.pdf

14

provide health-related services. The private health sector provides health services,

mainly in urban areas, through physician clinics and private hospitals with a focus

on curative care. Private companies run diagnostic laboratories and some

ambulance services. Non-government organizations provide some health services

for particular groups. Traditional medicine, such as Chinese and Malay practitioners

and products, is used by large sections of the population.

2.1.1 Malaysia Plan

In the mid 1980’s, the Malaysian government initiated a program on economic

liberalisation and deregulation that included a comprehensive privatisation policy, in

connection with the concept of “Malaysia Incorporated”. This concept sees the

Government as the provider of an enabling environment - infrastructure,

deregulation, liberalisation and macroeconomic management; and the private sector

as the main engine of growth (Economic Planning Unit, 1985, 1991). Gomez and

Jomo (1999) and Chee (2006) argue that the government was influenced strongly

by advisors from the Thatcher government of United Kingdom and the World Bank

to introduce privatisation as the vehicle to reduce government expenditure.

The Mid-Term Review of the Sixth Malaysian Plan 1991-1995 stated that: While the

government will still remain a provider of basic health services, the role of the

Ministry of Health will gradually shifts towards more policymaking and regulatory

aspects, as well as, setting standards to ensure quality, affordability and

appropriateness of care. At the same time the Ministry of Health will ensure an

equitable distribution in the provision of health services and health manpower

between the public and private sectors. (Malaysia Plan 1993:244)

Hence, in the following Seventh Malaysian Plan (1996-2000) it was stated that the

Government “will gradually reduce its role in the provision of health services and

increase its regulatory and enforcement functions” (Malaysia 1996:544). Following

strong promotion by the government towards the private healthcare particularly since

the mid-1980s has resulted in the steady rise of private hospitals. A number of large

Malaysian corporations and companies were set up by medical specialists, including

through the involvement of foreign investors who invested in private hospitals. Most

15

of the services in the private hospitals are paid from out-of-pocket bills. In addition,

the government also launched Government Linked Companies (GLCs) that, inter

alia, acquired shares or started large private hospitals4.

The Government has introduced and implemented various policies and objectives in

successive Malaysian Plans. Table 2.1 describes the conditions before the

implementation of each Plan and the policies undertaken by the Government to

develop human capital in Malaysia during the period of each Plan.

2.1.2 The Plan and Healthcare Professionals Development Policy-Thrusts

Table 2.1: The Health Professionals Development Policies from various Malaysian Plan

The Plan Health Professionals’ Development Policies

8th

Malaysian

Plan

(2001-2005)

- Expansion of public sector training institutions and the

outsourcing of training. In addition, Universiti Putra Malaysia,

Universiti Malaysia Sarawak and Universiti Islam Antarabangsa

will expand their medical faculties and teaching hospital facilities.

The Universiti Sains Malaysia will also establish a faculty of

dentistry in Kubang Kerian, Kelantan. The public and private

medical schools are expected to produce 5,374 graduates in

medicine, 708 in dentistry and 1,855 in pharmacy, during the Plan

period. About 200 students a year will continue to be sent

overseas to complement training by local institutions.

- A total of five new institutions to train allied health professionals

will be established in Alor Setar, Kedah, Johor Bahru, Johor, Kota

Kinabalu, Sabah, Kuching, Sarawak and Sungai Buloh, Selangor.

Inservice training for the allied health professionals will be

enhanced at the primary, secondary and tertiary care levels as

well as in the teaching hospitals, during the Plan period. Private

sector hospitals will also be encouraged to set up their own

training facilities as well as expand existing ones to meet their

manpower requirements. Greater emphasis will be given to the

post-basic training of allied health professionals in areas such as

anaesthesiology, paediatrics, oncology and radiotherapy.

4 University of Malaya, Student’s Repository, Healthcare in Malaysia

16


- Efforts will be undertaken to encourage all categories of health

manpower to remain in the public sector. In this regard, the

Government will further increase the supply of health manpower

as well as continue to review and improve the terms and

conditions of service for health and allied health professionals. In

addition, a more conducive working environment will be provided

by improving and upgrading the facilities in the hospitals and

clinics. In addition, greater opportunities will be provided for skills

upgrading and postgraduate training, particularly in areas such as

cardiothoracic surgery, rehabilitative medicine and neurosurgery.

9th

Malaysian

Plan

(2006-2010)

- An allocation of RM1 billion will be provided. A blueprint will be

formulated to improve human resource development as well as

address issues relating to the acquisition, training, supply,

utilisation and deployment of health personnel.

- Collaboration mechanisms will be instituted with relevant

government agencies and the private sector to increase training

capacities. In this regard, selected public hospitals will also be

utilised as teaching hospitals. In addition, students will be sent

overseas to complement training undertaken by local institutions.

- The continuous professional development (CPD) programme will

be further strengthened through the provision of online facilities to

develop the skills and competencies of medical personnel. CPD

activities will be monitored to ensure enhanced quality,

professionalism and will be matched with the required

competency tests. In addition, efforts will be undertaken to

enhance the knowledge and competencies of medical personnel

in new areas of specialisation and subspecialties such as vaccine

development and health-related disaster management, through

in-service training. Priority will also be given to ensuring sufficient

supply of trained personnel to address the behavioural

component of lifestyle issues.

17


- The completion of seven training colleges for AHSP during the

Plan period will enable an additional 25,000 personnel to be

trained. To further improve and upgrade the skills and knowledge

of trained personnel, post basic training in new and priority

disciplines will be conducted. In addition, the development of soft

skills, including the inculcation of good ethics, values as well as a

caring attitude will be given greater emphasis. Measures will also

be undertaken to increase the number of tutors as well as upgrade

their skills.

10th

Malaysian

Plan (2011-

present)

Investments in human resources for health (HRH) remain a central

component of the healthcare system.

- The doctor-population ratio is expected to improve from 1:1,380

in 2005 to 1:597 in 2015, while the nurse-population ratio is also

expected to increase from 1:592 to 1:200 during the same period.

In order to cope with the increased demand for training, the

Government will increasingly utilise specialists from the private

sector for training, as 60% of total specialists available in the

country are in the private sector.

- In addition, the Government will continue to outsource and

collaborate with private training institutions for the training of allied

health personnel. Other efforts to meet the rising demand for

quality healthcare will focus on the following efforts:

• Increasing the specialist training allocation for doctors and

other healthcare professionals;

• Improving and expanding post-basic training for nurses and

allied healthcare personnel;

• Addressing personnel retention through provision of better

remuneration, promotional opportunities and steps to provide

greater job satisfaction; and

• Improving the quality of private healthcare professionals

through credentialing, privileging and structured training.

18


11th

Malaysian

Plan (2016-

2020)

Under Chapter 4, wellbeing remains a priority thrust for realising Vision

2020. The Government will accelerate efforts to achieve universal

access to quality healthcare by targeting underserved areas, and

increasing capacity of both facilities and healthcare personnel.

- Under focus area A, Achieving Universal Access to Quali ty

Healthcare, Governments remain committed to achieving

universal access to quality healthcare by continuing efforts to

improve the fundamentals of the health systems. Under this

focus area, the highlighted strategies are as follows:

Strategy A1 : Inclusiveness- Enhancing targeted support,

particularly for underserved communities. The extension of

services to poor and low-income households, Orang Asli in

Peninsular Malaysia, and rural and remote areas in Sabah

and Sarawak will include the deployment of more specialist

and skilled personnel.

Strategy A2 : Improving System Delivery for Better Health

Outcomes. The Government will implement the hospital

cluster concept in selected locations, where hospitals within

the same geographical location will work as one unit, sharing

resources such as assets, amenities and human resource.

Strategy A3 : Expanding Capacity to Increase Accessibility.

The private sector will be encouraged to collaborate and set

up more healthcare facilities that cater to the needs of low

and middle income household.

Strategy A4 : Intensifying Collaboration with Private Sector

and NGO to Increase Health Awareness. Such collaboration

will span a broad range of initiatives, from community health

and prevention programmes, to research and development

efforts between industries, universities and research

institutions.

- Doctor to population ratio is expected to improve to1:400 in the

11th Malaysia Plan instead of 1: 597 in 10th Malaysia Plan.

19


- 2.3 hospitals beds per 1000 population that includes public and

private hospitals, maternity and nursing homes, hospices and

ambulatory care centres.

2.2 The Population, life expectancy and mortality rates of Malaysian

Malaysia is classified by the World Bank as an upper middle-income country. In

2014, with the total land area is 330, 289 sq. km5 the total population in the country

is 30.3 million6. Although, the annual population growth rate over the years have

declined to around 1.6% in 2013 (refer to table 2-1), the growth rate is similar with

other neighbouring countries like Singapore (1.6%), Brunei Darussalam (1.3%),

Philippines (1.7%) and Indonesia (1.2%). Malaysia is undergoing a demographic

transition as the total fertility rate7 has fallen to 2.1 births per woman, the population

proportion below age of 15 has fallen to 26% and those aged 65 years and above

are increasing. This is consistent with the increase in life expectancy at birth over

the years.

Table 2.2: Population distribution and Vital Statistics

Indicator1 2000 2005 2010 2011 2012p 2013e 20142

Total population (millions) 23.5 26.0 28.5 29.1 29.5 29.9 30.4

Population aged 0-14 (% of

total) 33.1 32.6 27.4 26.9 26.4 26.0 25.6

Population aged 15-64 (% of

total) 62.9 63 67.6 68.0 68.3 68.5 68.7

Population aged 65 years and

above (% of total) 4.0 4.3 5.0 5.1 5.3 5.5 5.7

Average annual population

growth rate (%) 2.4 2.1 1.8 1.3 1.3 1.3

Crude birth rate (per 1000

population) 24.5 19.6 17.2 17.6 17.2 17.2 16.9

5 Department of Survey and Mapping, Malaysia 6 Department of Statistics, Malaysia 7 Total Fertility Rate refers to the average number of children which would be born if women survived to the end of their reproductive period and throughout that period are subject to the schedule of age-specific fertility rates for the given year.

20

Crude death rate (per 1000

population) 4.4 4.4 4.6 4.7 4.6 4.7 4.7

Total fertility rate 3.0 2.4 2.1

Life expectancy at birth

- Male - Female

70.2

75.0

70.6

76.4

74.08

74.32 74.54 74.72

72.5

77.2

p: preliminary data

e: estimated data

1: Data derived from Ministry of Health

2: Data derived from Department of Statistics

The 10th Malaysia Plan indicated that Malaysia has done well in extending affordable

basic healthcare services to all citizens. Malaysia healthcare system was also

highlighted as one that has been relatively successful in providing equitable

healthcare in terms of targeting public health subsidies towards the poor.

The World Bank statistics in 2012 (Chart 2-1) shows that in Malaysia, the total health

expenditure per capita was US$409.5 per person as compared to countries like

Singapore at US$2,426.1 per person and the United States at US$8,895.1.

21

Figure 2.2 : Health Expenditure per Capita (current US$)

Source: The World Bank, 2015

In relation to above, the total expenditure on health in ringgit Malaysia shows a

gradual increase over the years. In 2011, the expenditure from both public and

private healthcare are amounted to RM37,871 million as compared to RM35,148

million in 2008. The Malaysia’s public health system is financed mainly through

general revenue and taxation collected by the federal government, while private

sector is funded through private health insurance and out-of-pocket payments from

consumers (WHO, 2013)8. The health expenditure has remained predominantly

public spending, representing 52.3% and 54.7% of total health expenditure in 2011

and 2010 respectively.

Managed Care Organisation (MCO) has existed since 1995. They form as third party

payers within the healthcare industry. These MCO will be discussed in Chapter 7.

8 World Health Organisation (WHO) on behalf of Asia Pacific Observatory on Health Systems and Policies (2013) Malaysia Health System Review

2005 2006 2007 2008 2009 2010 2011 2012

Malaysia 179.2 221.7 255.5 288.2 285.2 345.1 384.2 409.5

Singapore 1058.2 1166.9 1333.1 1576.8 1703.7 1893 2144.3 2426.1

Indonesia 35.5 46.5 58 61.1 64.2 86 99.4 107.7

Thailand 95.5 109.8 133.2 161.6 163.6 182.9 213.9 215.1

Philippines 47 55.3 65.4 73.8 78.1 90.3 104.7 118.8

0

500

1000

1500

2000

2500

3000

Health Expenditure per capita (current US$)

Malaysia Singapore Indonesia Thailand Philippines

22

2.3 Health Human Resources

Human capital and health improvement programmes are of central importance

towards sustainable development and economic growth in any country. The

distribution of doctors or other healthcare resources are mostly at the public hospitals

rather than in the private sectors. Throughout the years, registered nurses are the

largest group of medical professionals. The statistics by the Ministry of Health in

2013 shown that almost 50% of medical professionals in Malaysia are represented

by nurses (including the community and dental nurses), totalling of 116, 379 nurses.

Table 2.3: Health professionals in the public and private sector, 2013

Health professionals Public Private Total Profession:

population ratio

Doctorsa 35,219 11,697 46,916 1:633

Dentists 3,256 1,979 5,235 1:5,676

Pharmacists 6,752 3,325 10,077 1:2,949

Opticians - 3,060 3,060 1: 9,711

Optometrists 308 1,015 1,323 1: 22,460

Asst. Medical Officers 11,089 1,428 12,517 1: 2,374

Nurses 62,514 26,653 89,167 1: 333

Pharmacy Assistant 4,294 552 4,846 -

Asst. Environmental Health Officers 4,287 n.a 4,287 -

Medical Lab. Technologists 6,108 n.a 6,108 -

Occupational Therapists 858 n.a 858 -

Physiotherapists 1,178 n.a 1,178 -

Radiographers (Diagnostic & Therapist) 2,699 n.a 2,699 -

Dental Nursesb 2,793 - 2,793 -

Community Nursesc 24,152 267 24,419 -

Dental Technologists 1,000 765 1,765 -

Dental Surgery Assistants 3,903 39 3,942 -

23

Traditional & Complementary Medical

Practitionersd - - 12,532

Source: Ministry of Health, 2014

a: Includes House Officers

b: Equivalent to Dental Therapists, provide public sector services for population under 18 years

of age

c: Includes Midwives

d: refers to registration of local and foreign practitioners

While the ratio of profession to population shows that the gap is being reduced

throughout the years many studies cited that Malaysian health system is being

seriously constrained by shortages of health professionals9. The Country Health

Plan: 10th Malaysia Plan stated that adequate workforce with the right mix of

numbers and skills remain elusive.

Table 2.4 : The ratio of health professionals to population, 2008 - 2013

Profession

Profession: Population Ratio

20081 20102 20123 20134

Doctors 1:1,105 1:859 1:758 1: 633

Dentists 1:7,618 1:7,437 1:6,436 1: 5,676

Pharmacists 1:4,335 1:3,652 1:3,039 1: 2,949

Asst. Medical Officers 1: 3,054 1:2,738 1:2,477 1: 2,374

Nurses 1:512 1:410 1:345 1: 333

Sources:

1: Health Facts 2008, Ministry of Health Malaysia





24

The country is also aligning its effort to meet the WHO 1:600 ratio between doctors

to population in addition to establishing the country as the preferred destination of

health tourism in Asia. Health Tourism contributed RM688 million revenue in 2013

and is expected to double by 2020. The services sector, in particular medical

professional services, plays an important role in supporting the growth. The Annual

Global Retirement Index for 2014 which voted Malaysia among the top five best

places to retire, also poses a potential increase in the demand for medical

professionals which spawns employment opportunities for these professionals,

(source: International Living, NST online 11/01/2015)

Table 2-3 indicates that the most favorable ratio appears in the number of nurses to

population which is 1: 333. The ratio between doctors to population has improved

significantly from 1: 1105 in 2008 to 1: 633 in 2013.

The number of medical professionals in the country is also growing with 5,000

medical graduates entering the medical workforce each year. In addition to that,

Malaysia also gets 1,000 specialised medical experts a year, being part of the

nation’s aim to provide 1 doctor for every 400 population. There are around 221,000

health professionals in Malaysia as shown in Table 2-2 above, not including the

Traditional & Complementary Medical Practitioners.

The number of private hospital is also expected to increase from 225 in 2012 to 239

in 201810. The private hospital services market in Malaysia earned revenues of

RM7.5 billion (US$2.3 billion) in 2011 and is expected to reach RM13.8 billion (US$

4.2) in 2015. The revenue for private hospitals has almost doubled in four years.

Approximately 10% of the private healthcare revenues are from medical tourists11.

In closing the gap between health professionals with the Malaysian, the Government

had established collaboration between the anchor institutions from education sector

and allied health industry (Economic Transformation Programme 2011– EPP 8:

Building a Health Sciences Education Discipline Cluster. During the first phase,

10 Frost & Sullivan (2013) Malaysian healthcare sector to reach US$3.65 billion in 2018, Malaysian Journal of Nursing Online News Portal, Available at: http://mjn-e-news.com.my/may2013/top1.html (Accessed on 24 February 2015) 11 Nadaraj, V., (2014) Malaysia’s Healthcare Tourism: The Path is Paved with Gold, The Establishment Post, Available at: http://www.establishmentpost.com/malaysias-healthcare-tourism-path-paved-gold/ (Accessed on 24 February 2015)

http://mjn-e-news.com.my/may2013/top1.html

http://www.establishmentpost.com/malaysias-healthcare-tourism-path-paved-gold/

25

these anchor institutions were responsible for building partnerships with smaller

training colleges and developing a portfolio of joint programme offerings from

diplomas to postgraduate degrees, as well as setting up joint investment vehicles to

pool private investments to develop critical infrastructure like clinical labs and

teaching hospitals.

During the second phase, from 2012 to the end of 2013, the cluster was broadened

to include any institute that meets the quality standard, including international

educational institutions to health service providers. The Ministry of Health and

Ministry of Higher Education, MOHE had envisaged to support the growth of the

cluster through a number of incentives, for example facilitating the export of health

care professionals through government-to-government agreements, allowing the

increased use of human-patient simulators as a partial (20 per cent) substitute for

clinical postings and restructuring the approval process for student quotas so that

institutions with good track records can be approved for increases in student

numbers based on planned capital expenditure instead of finished infrastructure.

2.3.1 Healthcare Facilities

The healthcare facilities are heavily offered by the public sector and are distributed

throughout the country while the facilities offered by the private sector are highly

concentrated in the urban areas due to the demand by the affluent community12.

Figure below shows that in 2010, 68% of private hospitals (173 hospitals) are located

at Selangor, Kuala Lumpur, Pulau Pinang and Johor Bharu while, the highest

locations for public hospitals are at Sabah and Sarawak.

12 S. Thomas et al., (2011) Health care delivery in Malaysia: changes, challenges and champions; Journal of Public Health in Africa 2011; 2:e23

26

Figure 2.3 : The Distribution of Government Health Clinic in Malaysia 2013

Source: MOH

359

283

258

88

144

326333

39

96

290

230

194

175

30

114

0

50

100

150

200

250

300

350

400

JHR KDH KEL MLK NS PHG PRK PS PP SBH SRWK SEL TRG KL WPL WPP

Nu

mb

ers

of

Clin

ics

States

The Distribution of Government Clinic in 2013

27

Figure 2.4 : The Distribution of Private Health Clinic in Malaysia 2011

Source : KKLW

786

324

190

272 260225

607

30

477

329 316

1628

153

983

9

0

200

400

600

800

1000

1200

1400

1600

1800

JHR KDH KEL MLK NS PHG PRK PS PP SBH SRWK SEL TRG KL WPL

Nu

mb

ers

of

Ho

spit

als

States

The Distributions of Private Health Clinic in 2011

28

Figure 2.5 : The Distribution of Government Hospital (MOH) in Malaysia 2013

Source: MOH

11

9 9

3

6

10

14

1

6

22

21

11

6

1 1 1

0

5

10

15

20

25


Nu

mb

ers

of

Ho

spit

als

States

The Distribution of Government Hospital in 2013

29

Figure 2.6 : The Distribution of Private Hospital in Malaysia 2013

Source: MOH

27

9

34

9 9

16

0

23

5

12

56

1

40

0 0

0

10

20

30

40

50

60


Nu

mb

ers

of

Ho

spit

als

States

The Distribution of Private Hospital in 2013

30

Similarly, most primary health care is offered in urban areas, while the public primary

health care facilities are mainly located in rural areas. There are 6,442 private clinics

compared to 2,833 Ministry of Health clinics (Table 2-5), although private clinics are

mainly small practices with single practitioner or few with small group

arrangements13. This is similar with the private dental clinics. Reported by the WHO

in 2013, about 80% of the private dental clinics are single-practitioner practices and

about 45% of private dental clinics are in urbanized states of Selangor and the

Federal Territories of Kuala Lumpur and Putrajaya.

Figure 2.7 : The Distribution of Public and Private Hospital for each State Malaysia2013

Source: MOH


13

9

9

9

6

10

16

1

7

23

22

13

6

4

1

1

3710

55

99

151

267

1765

345

00

0 20 40 60 80 100

JHR

KDH

KEL

MLK

NS

PHG

PRK

PS

PP

SBH

SRWK

SEL

TRG

KL

WPL

WPP

The Distribution of Public and Private Hospital for Each

State in 2013

The Number of

Public Hospital

The Number of

Private Hospital

31

Table 2.5 : Primary care health facilities, 2010

Primary care health facility 2010 2013

MoH Private MoH Private

Health clinics1 2,833 6,442 2,860 6,801

Health clinics (1 Malaysia) 53 - 254 -

Dental clinics2 1,744 1,512 1,629 1,686

Source: Health Facts 2010, Health Facts 2014, and Health Indicators 2010, Ministry of

Health

1: Health clinics include Community clinics (Klinik Desa) and Maternal & Child Health

clinics.

2: Dental clinics exclude mobile dental clinics

2.3.2 Trends in Health Workforce

The Country Health Plan: 10th Malaysia Plan emphasizes that for sustainable

services, the health professionals in the country need to have various range and

level of competencies with adequate numbers supplied. The latter is the most

challenging criteria for Primary Health Care (PHC) services to ensure equity and

accessibility to services. For secondary and tertiary services, the rise of new

technology and new type of care requires not only adequate numbers but need to

be competent with new technology and interventions. As care becomes more

complex and intensive, the probability of medical errors is higher and competency of

the workforce must be absolute.

The development of healthcare workforce in Malaysia is also attributable to the

sound deployment of technology by the medical professionals. These investments

include computer hardware and software. Online patients’ reporting systems

enable radiologists to transmit patients’ MRI or X-ray results to doctors anywhere in

the world, thus enabling more flexible medical professional services. Such facilities

provide higher competitive advantage to more established practitioners, especially

those operating in remote areas. Like other software, there are also compatibili ty

issues faced by Medical Professionals. Therefore, there often include additional

investment to upgrade existing systems and training on the usage of the new

technology, which could be burdensome to small private clinics and facilities.

Technology has also made drugs prescription easier. However, it could pose

32

danger to patients who could purchase freely from the internet and have the drugs

consumed without prescription from any doctors or certified medical professionals.

The country health system, particularly the public sector is experiencing shortages

of health professionals. In 200814, 60% of the doctors are in the public sector but

60% of the specialists are in the private healthcare services. Although the workload

per doctor in private hospitals is significantly less than in public facilities.

Figure 2.8 : Admissions and Outpatient Attendances, 2013

Source: MOH,2013


33

Figure 2. 9 : Public and Private Sector Resources and Workload, 2008

Source: MOH, 201015

On top of difficult working conditions in public hospitals, salaries and benefits offered

by the private and international sectors are more attractive than the public sector,

thus the competition in the labour market clearly favours them. The Country Health

Plan further stated that there have been existing concerns on shortage of doctors in

the public health sector, and imbalanced distribution in remote areas, certain states,

some critical areas, and difficulty in placement and retention of doctors and nurses

in these areas.

Meanwhile, the growth of the private health care sector has triggered the migration

of senior doctors, specialists and experienced allied health professionals from the

public sector to the private sector. The attrition rate in MOH from 2005-2008 is shown

in Table 2.7 below. Stated by the MOH that some of the factors affecting the increase

in attrition rate are lucrative offers from the private and international sectors, the

opportunity to join institutions of higher learning as trainers or the opportunity to

operate their own clinics.

15 MOH (2010) Country Health Plan, 10th Malaysia Plan 2011-2015

34

Table 2.6 : Attrition among Doctors and Dentists in MOH

Category 2005 2006 2007 2008

Doctors 401 248 300 478

Dentists 56 78 107 77

Total 457 326 407 555

Source: Ministry of Health, 201016

The increase in attrition rate of senior doctors, specialists and experienced health

professionals raise the uncertainty of whether the house officers and other

professional’s health residents receive adequate clinical exposure during the

residency training. In order to achieve the status of a high income country, it is vital

for Malaysia to have an increase in the density of health workforce (see the

comparison of the density of health workforce in Malaysia with the high income

country and the global rate in Table 2-7). Despite the attempt to match the

global/high income country rate (by increasing the number of medical graduates),

number of training placement in the country remain statics. In 2013, Dr Milton Lum

(MMC member and senior medical practitioner) stated that less than 50 hospitals in

the country are equipped with the necessary training facilities17. The most apparent

impact would be the increase in probabilities of unemployment of medical graduates

Oversupply of nursing students are also one of the major concerns in healthcare

sector. In 2010, 54% of the private nursing diploma graduates faced difficulties in

finding job three to four months after graduating, compared to 21.7% in 2008 while

many of the degree graduates are working in the sector with salary of less than the

norm, i.e. being paid with the salary scale of diploma holders. While the production

of graduates in healthcare sector keeps on increasing, Malaysia is still lagging

behind of the goal for a high income country (refer to the table 2-7). This might be

due to the quality of graduates produced and insufficient training placement/work

place.

16 MOH (2010) Country Health Plan, 10th Malaysia Plan 2011-2015 17 Chin, C., (2013) Too many doctors, too little training, The Star, 18 August. Available at: http://www.thestar.com.my/News/Nation/2013/08/18/Too-many-doctors-too-little-t raining/ [Accessed on 26 March 2015]

http://www.thestar.com.my/News/Nation/2013/08/18/Too-many-doctors-too-little-training/

35

Table 2.7 : Density of health workforce (per 10,000 population), 2014

Physicians

Nursing

and

Midwifery

personnel

Dentistry

personnel

Pharmaceutical

personnel

Malaysia 12.0 32.8 3.6 4.3

Upper Middle Income 15.5 25.3 … 3.1

High Income 29.4 86.9 5.8 8.4

Global 14.1 29.2 2.7 4.3

Source: WHO, 201418

Healthcare professionals are also exposed to dangerous working conditions.

Selangor Health Department director Dr S. Balachandran reported that they are

highly at risk at contracting dangerous diseases due to the nature of their work. The

recent report showed that 45 healthcare workers were infected with TB in 201419,

causing three deaths.

Healthcare professionals also face a high rate of burnout. This is due to the common

problems of inadequate staffing, high public expectations, long work hours, exposure

to infectious diseases and hazardous substances, threat of malpractice litigation and

the constant encounters with death and dying. Studies indicated that healthcare

workers have long been known to be a highly stressful group and were worryingly

associated with higher rates of psychological distress than many other workers of

different sectors.

A cross-sectional study was conducted among 376 medical & medical sciences

undergraduate in University Malaysia, 46% felt stress20. The most common stressor

was worried of future followed by financial difficulties. The Star Online reported that

one out of five doctors undergoing their houseman quits annually in Malaysia and

some are working as waiters, running pasar malam stalls and even an air

18 WHO (2014) World Health Report 19 The Sun (2015) Healthcare workers warned against TB, The Sun Daily, 8th May, p.12 20 The Malaysian Journal of Medical Sciences. Available at http://journal.usm.my/journal/mjms-full18-3.pdf

http://journal.usm.my/journal/mjms-full18-3.pdf

http://journal.usm.my/journal/mjms-full18-3.pdf

36

stewardess21. The resignation rate is alarming given that it costs up to RM500,000

to acquire a medical degree locally and up to RM1 million overseas. The portal

reported that many newly qualified doctors were also quitting because of the longer

wait to be posted as housemen. The issue will be elaborated in the Chapter 5.

Recent development has also shown that doctors operating private clinics have been

forced to closure due to capped price pressure. The fees of General Practitioners

(GPs) in private clinics as per Schedule 7th and 13th of the Private Healthcare

Facilities and Services Act 1998 are stated as follows:-

Table 2.8 : Seventh Schedule 2006 and Thirteenth Schedule 2013

Seventh Schedule 2006:

Part I-Medical Fees

A. Consultation Fees

1. General Practitioners (Non specialists)

(a) Clinic with pharmaceutical services

Consultation only

Consultation with examination

Consultation with examination and

treatment plan

Consultation after stipulated clinic hours

House calls or home visits

Revision has been made in 2013, and the new fees

schedule has been introduced:-

RM 10 - RM 35

Up to 50% above the

usual rate

Up to 100% above the usual rate

Thirteenth Schedule 2013

Consultation only

Consultation with examination

Consultation with examination and treatment plan

RM 30-125

Up to 50% above the

usual rate

Up to 100% above the

usual rate

21 The Star Online (March 30, 2015) in an article ‘Housemen do not complete training stint for various reasons’. Available at http://www.thestar.com.my/News/Nation/2015/03/30/One-in-five-quit-each-year-Housemen-do-not-complete-training-stint-for-various-reasons/

http://www.thestar.com.my/News/Nation/2015/03/30/One-in-five-quit-each-year-Housemen-do-not-complete-training-stint-for-various-reasons/


37

Consultation after stipulated clinic hours

House calls or home visits

Source: Schedule 7th and 13th of Private Healthcare Facilities and Services Act 1998 (Regulations 2006)

However MCO’s rate for panel clinics still does not reflect the change in the schedule

thirteenth as mentioned by some doctors that were interviewed. General panel

practitioners have been capped to a RM30 to RM35 claimable fees for both

consultation and medicine prescribed to patients registered under these MCOs.

Such trading practices may lead to the issues faced by private doctors as per the

situation mentioned above. More of this will be discussed in Chapter 6.

38

Chapter 3: Best Practice Regulations and Regulatory Burdens

3.0 Best Practice Regulations and Regulatory Burdens

This chapter discusses the concepts of regulation, the costs associated with

regulations and how to identify necessary and unnecessary regulatory burdens. It

complements the broad purpose of the review which is to identify unnecessary

regulatory burdens affecting businesses in Malaysia and suggest ways to reduce

them.

3.1 What is Regulation?

For the purpose of these references, regulation is defined broadly to include all

written legal and quasi-legal instruments ranging over primary legislation,

secondary instruments, guidelines, circulars, codes, standards and others. The

conditions contained in licences, permits, consents, registration requirements and

leases are also under review where they impose a compliance burden on

businesses.

As well as the content of written regulations, the way they are implemented,

administered and enforced can also significantly impact on compliance burdens for

businesses and the effectiveness of regulations. Hence, the delivery of regulation

is also under review.

The MPC is assessing both written regulation and the administration and

enforcement of the regulation. Hence, participants have been able to raise

concerns about any aspect of the regulatory framework.

3.2 Cost of Regulation

There are many different sorts of costs which may be imposed by regulation in

order to achieve policy objectives. The costs impact variously on businesses,

employees, consumers and governments. What is important is that the total

benefits accrued from achieving the regulatory objectives must be greater than the

39

total costs of the regulation. Regulations can adversely impact on businesses in

various ways. Most fall under the following four categories of costs:

administrative and operational requirements, such as:

reporting, record keeping

getting legal advice, training

requirements on the way goods are produced or services supplied, such as:

prescriptions on production methods

occupational registration requirements, requiring professionals to use

particular techniques

requirements on the characteristics of what is produced or supplied, such as:

being required to provide air bags in all motor vehicles

requiring teachers or trainers to cover particular topics

lost production and marketing opportunities due to prohibitions, such as:

when certain products or services are banned

The direct costs of complying with regulations can include the time taken to comply

with regulations, the need for additional staffing, the development and

implementation of new information technology and reporting systems, paying for

external advice, education, advertising, and accommodation and travel costs.

Compliance costs also impact indirectly on the community, by changing pricing and

distorting resource allocation, impacting on international trade and delaying the

introduction of new products or services.

In an international study in 1998, the OECD estimated from survey responses that

taxation, employment and environmental regulation imposed over $17 billion (2.9

per cent of GDP) in direct regulatory compliance costs on small and medium-sized

businesses in Australia.

The more advanced countries like Australia have taken measures to improve the

cost-effectiveness of regulations and to reduce compliance burdens and red-tape.

These measures include:

increased adoption of performance-based regulation

he consideration and adoption of implementation options that minimize red-tape

the improvement of regulatory services through the employment of new

technology

40

increased electronic publication of regulatory information

licence reform and reduction

streamlining government paperwork requirements

privatization of certification functions

business focus groups and pilot test programs

3.3 What are Unnecessary Regulatory Burdens?

Some regulatory costs are inevitable in order to achieve the benefits which the

regulation brings. High quality regulation is both effective in addressing an

identifiable problem or objective and efficient in terms of minimizing unnecessary

compliance and other costs imposed on business and the community. The best

regulations achieve their objectives and at the same time deliver the greatest net

benefit to the community. By contrast, poor quality regulation may not achieve its

objectives and can impose unnecessary costs, impede innovation, or create

unnecessary barriers to trade, investment and economic efficiency. Given the

pervasiveness of regulations, it is not surprising that regulation and red-tape

continue to impose significant compliance costs (Argy and Johnson, 2003)1.

There are sound reasons for much regulation. It can reflect and enforce the

community’s values and rights of individuals. It can reduce risks to people’s health

and safety (such as through consumer policy), address discrimination (such as an

equal opportunity laws), and protect the environment from overuse or degradation.

Regulation is also part of the institutional architecture for markets to work

efficiently, including by establishing property rights and enforcing contracts.

Much regulation is aimed at addressing market failures — asymmetric information,

monopoly power; externalities and public goods. Market failures can reduce

productivity, result in over- or under-production of particular products, services or

side-effects (such as pollution) relative to community preferences, and distort

consumption and production decisions. Regulation can also reduce social and

environmental risks. However, regulation to correct these market failures or to

1 Argy, Steven and Johnson, Matthew (2003) Mechanisms for Improving Quality of Regulations: Australia in an International Context, Staff Research Paper, Australia Government Productivity Commission

41

address risks, still needs to be efficient and effective, and the benefits of such

corrections need to outweigh the costs of implementing and complying with the

regulation. In addressing market failures, policy makers should be wary of creating

government failures.

Regulation can also be used to protect some producers at a cost to others, favour

the use of some resources relative to others, and/or benefit some consumers over

others. In some cases such changes are intentional and desirable – for example,

to look after vulnerable consumers and the environment to encourage longer-term

sustainability. However, in other cases, there may be no merit in this - the costs

imposed can be considerable and not justified by the benefits.

3.4 Sources of Unnecessary Regulatory Burden

Regulatory burdens are often necessary for government to achieve national policy

objectives. However, when regulations are poorly written or enforced or inefficiently

implemented, regulatory burdens will exceed what is necessary to achieve desired

objectives, giving rise to “unnecessary regulatory burdens”2

Unnecessary burdens might arise from:

1. excessive coverage by a regulation – where the regulation affects more

economic activity than was intended or needed to achieve its objective

(includes ‘regulatory creep’)

2. subject-specific regulation that covers much the same issues as other

generic regulation

3. prescriptive regulation that unduly limits flexibility such as preventing

businesses from:

using the best technology

making product changes to meet consumer demand meeting the underlying objectives of regulation in different ways

4. overly complex regulation

5. unwieldy licence application and approval processes, excessive time delays

in obtaining responses and decisions from regulators

6. requests to provide more information than needed

7. requests to provide the same information more than once

8. rules or enforcement approaches that inadvertently result in business

operating in less efficient ways

2 Malaysia Productivity Corporation (2014), Handbook on Reducing Unnecessary Regulatory Burdens: Core Concept, Available at: http://www.mpc.gov.my/ [Accessed on 30 March 2014]

http://www.mpc.gov.my/

42

9. unnecessarily invasive regulator behavior, such as overly frequent

inspections

10. an overlap or conflict in the activities of different regulators

11. inconsistent application or interpretation of regulation by regulators

The MPC has sought insights from businesses and other interested parties

about how the regulation of employment imposes unnecessary burdens on

business.

3.5 Best Practice Regulation

The MPC has published a set of principles that may help to assess the quality of

regulations and identify the unnecessary burdens on business as listed in box 3.1.

Box 3.1 : Six Core Principles for Assessing Regulation and its Administration

Regulations that conform to best practice design standards are characterized by the following six principles and features. Principle 1

Have a proportionate and targeted response to the risk being addressed. Principle 2

Minimize adverse side-effects to only those necessary to achieve regulatory objectives at least cost.

Principle 3

Have a responsive approach to incentivize compliance with regulation. Principle 4

Ensure all written regulations are consistent and that regulations are consistent and that regulators interpret and apply them consistently. Avoid duplication and overlap of regulations and regulators.

Principle 5

Adopt transparency criteria, so interested parties are regularly consulted, it is clear to businesses what their legal obligations are, and all regulations are easily accessed by everyone.

Principle 6

Accountability so that businesses can seek explanations of decisions made by regulators, as well as appeal them and there are probity provisions in order to reduce corruption.

Source: MPC (2014)

These principles guided the MPC’s identification of various key indicators of well -

written regulations (Box 3-2).

43

Box 3.2 : Well-Written Regulations

According to the MPC, well-written regulations are unlikely to impose unnecessary burdens on business. Indicators of these include:

i. the requirements placed on business are proportionate to the risk being regulated, in particular low risks are not addressed by imposing onerous requirements

ii. the regulations make appropriate use of prescriptive, performance, in-principle and process-based requirements

iii. the regulatory requirements are the minimum necessary to effectively achieve the objective(s) of the regulation

iv. in line with responsive regulation, the regulations provide an adequate range of enforcement instruments to allow regulators some flexibility in addressing non-compliance

v. the regulations are consistent with other regulations and do not create conflict or duplication

vi. the regulations are transparent, communicated effectively and readily accessible by everyone

vii. the regulation place accountability requirements on the regulator such as reporting, appeal and review provisions including some that address probity.

Source: MPC 20143

Regulations that have been formulated through Regulatory Impact Assessment

(RIA) are likely to reflect the indicators listed above. However, not many of the

current regulations have undergone the RIA process. This makes it important to

have ex-post regulatory reviews of unnecessary burdens on businesses to assess

the practicality of the regulations, help to improve them and most importantly

reduce the burdens on business3.

A regulator plays an important role in regulatory regimes by encouraging

compliance through education and advice, as well as enforcing laws and

regulations through disciplinary means3. Enforcing regulations, however, with

established principles of good practices can enhance regulatory practices to

achieve policy objectives. The box below indicates the indicators of good quality

implementation of regulation. These indicators also reflect the Principles for

Assessing Regulation and its Administration (Box 3-1).

3 Ian Bickerdyke, Ralph Lattimore, Reducing Regulatory Burden: Does Firm Size matters?, Industry Commission Australia, Staff Research Paper, December 1997

44

Box 3.3 : Key Indicators of Good Performance by Regulators

Based on Parker (2000), the MPC (2014) listed 10 indicators that describe a well

performing regulator:-

i. uses risk analysis to identify areas of intrinsically potentially high adverse

impacts and/or possible low compliance (in line with principle 1)

ii. maximizes the potential for voluntary compliance (in line with principles 2 and 3)

iii. uses a range of enforcement instruments flexibly in order to respond to different

types of non-compliance – responsive regulation (in line with principle 3)

iv. applies regulations consistently across businesses and industry sectors (in line

with principle 4)

v. has no duplication and overlap of its responsibilities with those of other

regulators (in line with principle 4)

vi. has sufficient transparency to enable business to know the requirements of the

law (in line with principle 5)

vii. maintains an ongoing dialogue between government and the business

community (in line with principle 5)

viii. has sufficient accountability to enable business to question and appeal decisions

and to address possible cases of corruption (in line with principle 6)

ix. monitors compliance in order to assess the effectiveness of enforcement

activities

x. is adequately resourced and has the skills to be able to fulfill its responsibilities

Source: MPC, 20144

3.6 Medical Professionals’ Issues/Complaints raised by various stakeholders

Through letter submissions and stakeholder’s consultation, the team was advised

of various employment regulations which impose significant burdens on

businesses. These were further substantiated through the interviews with 3

associations namely Malaysian Medical Association, Malaysian Dental Association

and Malaysian Pharmaceutical Society. Primary research was extended to 4

private practices across all sectors in the country (specifically the team visited a

private clinic which has been in operations for more than 20 years in the Klang

Valley, two dentists operating two separate private practices, the Head of

Pharmaceutical Department of a large private hospital in Kuala and the Manager

of Nurses and Midwives of a small private hospital in Selangor. The team obtained

various feedbacks during the engagements. Table 3-1 below lists the

issues/complaints raised by various stakeholders

4 Malaysia Productivity Corporation (2014), Handbook on Reducing Unnecessary Regulatory Burdens: Core Concept.

45

Table 3.1 : Issues/Complaints raised by various stakeholders

Categories Issues/Complaints

Regulatory

Burdens

1) Personal Data Protection Act (PDPA) that burdens doctors to

register as data user and comply with the annual fees of the Act

2) No coordination in management of the Disposal for Clinical Wastes

3) Third party involvement that constraints doctor practice example

Department of Environment (DoE) and Local Council

4) The requirement for maternity centres to have an in-house

anaesthetist and a paediatrician

5) The specified number of official daily visits to patient by doctor

during hospitalisation

6) Inconsistencies and lack of coordination between ministries such

as MOE and MOH

7) The burdens in complying with Annual Practicing Certificate (APC)

8) The burden in renewal of licensing for private hospital

9) Inefficiencies in labelling of medicines (supplement against

medicine)

10) The lack of private colleges that have their own hospital for training

has resulted in low quality of houseman

11) The intervention of insurance companies/ Medical Care

Organization(MCO) in practice of private medical practitioner

12) The regulation for foreign specialist to practice in Malaysia

13) Restrictions for place of practice for pharmacists (only one place of

practice for pharmacist)

14) Stringent restrictions to advertisement of services

Regulations/

Policies

1) Burden to medical professional in complying with GST

2) Disparity of salary between private and public medical practitioners

Others

1) The requirement by insurance companies that forces medical

practitioners to register with certain bank as a condition to remain

as panel doctors

2) The separation of rules between doctor and pharmacist

3) The shortage in the supplies of specific specialisation of dentist to

meet the health tourism plan

4) Joint Commission International (JCI) not effective in Malaysia

5) Not enough exposure on Health Tourism in Malaysia by medical

professional

In completing this report, emphasis will only be given to issues arising from current

regulations, including by-laws, circulars, orders and guidelines related to the practice

46

of medical professionals in Malaysia. These issues will be discussed in greater length

in Chapter 5, 6 and 7. Some of the listed issues were not pursued due to the following

reasons:

i. The issue focuses entirely on policy, not on the burdens placed to achieve the

policy and nothing could be done to solve it unless there’s a change in the

policy itself. This falls out of the scope of this review which only looks into

reducing regulatory burdens (Reducing Unnecessary Regulatory Burden).

ii. Some of the issues are already under review or have been reviewed by other

Government Ministries or Agencies

iii. Some of the issues are not being pursued due to lack of information to verify

the complaints.

The issues that are being reviewed by the team are grouped under the stages of the

Employment Value-Chain (i.e. Hiring, During Employment and Separation). This

value-chain is covered thoroughly in Chapter 4. Figure 3-1 provides an overview of the

issues being pursued under the review.

47

Figure 3.1: Issues under review



education




MCO Operation


professionals



reimbursement


Splitting



PHFSA 1998



Pre-Qualification

Exit / Termination

48

Chapter 4: Regulations Affecting Medical Professionals in Malaysia

4.0 Regulations Affecting Medical Professionals in Malaysia

This chapter provides an overview of the regulations affecting the medical

professionals in Malaysia. It should be emphasized that the regulations discussed

would cut across the whole healthcare sector and occupations. While this chapter

focuses mainly on the occupational Acts in the healthcare sector, other employment

regulations that may influence HR practices are not included in the review (Box 4-1).

Box 4.1: Employment regulations that may influence HR Practices

i. Employment Act 1955 (Act 265)

ii. Sabah Labour Ordinance- [Sabah [Cap.67]

iii. Sarawak Labour Ordinance - Sarawak [Cap 76]

iv. Trade Unions Act 1959 (Revised – 1982 (Act 262)

v. Workers' Minimum Standards Of Housing And Amenities Act 1990 (Act 446)

vi. Minimum Retirement Age Act 2012 (Act 753)

vii. Employees Provident Fund Act 1991 (Act 452)

viii. Industrial Relations Act 1967 (Revised – 1976) (Act 177)

ix. Holidays Act 1951 (Revised - 1989) (Act 369)

x. Workmen's Compensation Act 1952 (Revised - 1982) (Act 273)

xi. Weekly Holidays Act 1950 (Revised 1979) (Act 220)

xii. Minimum Wages Order 2013

Source: Author

4.1 Regulatory Overview of Medical Professionals in Malaysia

A Medical Professional is someone who provides preventive, curative, promotional or

rehabilitative healthcare services in a systematic way to individuals, families or

communities. A health professional covered under this study may be within medicine,

midwifery, dentistry, nursing or pharmaceutical professions. These professionals are

persons formally certified by a professional body as belonging to a specific profession

within healthcare by virtue of having completed a required course of study and/or

practice, and whose competence can usually be measured against an established set

of standards.

http://en.wikipedia.org/wiki/Health_care

http://en.wikipedia.org/wiki/Medicine

http://en.wikipedia.org/wiki/Midwifery

http://en.wikipedia.org/wiki/Dentistry

http://en.wikipedia.org/wiki/Nursing

http://www.businessdictionary.com/definition/person.html

http://www.businessdictionary.com/definition/certified.html

http://www.businessdictionary.com/definition/professional-body.html

http://www.businessdictionary.com/definition/profession.html

http://www.businessdictionary.com/definition/completed.html

http://www.businessdictionary.com/definition/required.html

http://www.businessdictionary.com/definition/study.html

http://www.businessdictionary.com/definition/practice.html

http://www.businessdictionary.com/definition/competence.html

http://www.businessdictionary.com/definition/establish.html

49

For the purpose of this review, the scope will be narrowed down into two main medical

professionals servicing the health industry, which are Doctors and Nurses. Nurses shall

also cover specialised nursing areas including dental nurses and midwives. These

professionals are selected from a list of eight professions as they represent the majority

of the professionals within the industry. They do not only provide services to the health

industry but also other sectors such as education and tourism while also contributing

to the health of all citizens and thus the supply of healthy labour force. Hence, any

improvements in the regulation of these professionals may add value to all sectors and

to social wellbeing.

The roles and description of medical professionals under this study are both legally

and functionally defined, as follows:

Table 4.1 : Roles and description of medical professionals

Roles Descriptions

Doctors

Doctors are persons who are entitled to be provisionally

registered as a medical practitioner (Medical Act 1971, Sec 29).

Functionally, medical doctors examine, diagnose and treat

patients. They can specialise in a number of areas such as

paediatrics, anaesthesiology or cardiology, or they can work as

general practice physicians (CPC Medical Doctors Board of

Malaysia, 2014).

Dentists

Dental practitioners registered in Division II of the Register;

(Dental Act 1971). Functionally, dentists are health care

practitioners who specialize in the diagnosis, prevention, and

treatment of diseases and conditions of the oral cavity (CPC

Dentist Board of Malaysia, 2014).

Pharmacists

Licensed to carry out a business, so far as such business relates

to the keeping, retailing, dispensing, and compounding of

poisons, dangerous drugs or therapeutic substances, in

compliance with a few conditions stated in Registration of

Pharmacists Act 1951 (REVISED - 1989), Poison Act 1952 and

Dangerous Drug Act 1952. Functionally, pharmacists are drugs

experts, responsible in dispensing medications, educating

http://en.wikipedia.org/wiki/Mouth

50

Roles Descriptions

consumers on the use of over-the-counter medicines and

advising other health professionals on drug decisions (CPC

Pharmacist Board of Malaysia, 2014).

Nurses

Person registered as a nurse in accordance with any written law

relating to the registration of nurses for the sick (Midwives Act

1966 (REVISED - 1990)) Functionally, nurses contribute to the

health and welfare of society through protection, promotion and

restoration of health; the prevention of illness and the alleviation

of suffering in the care of individuals, families and communities

(CPC Nursing Board of Malaysia, 2014).

Medical professionals being a party within the professional services industry covers

the activities of various Acts governing the professional codes of conduct. Generally,

there are about 150 Acts governing the practice of Medical Professionals.

The main Acts include:

i. Medical Act 1971 (Act 50)

ii. Dental Act 1971 (Act 51)

iii. Nurses Act 1950 (Act 14) & Nurses Registration Regulations 1985

iv. Registration of Pharmacists Act 1951 (Act 371) & Registration of

Pharmacists Regulations 2004

The main objective of the professional Acts is to govern the practise of professionals

in the interest of the public and the nation. However, there are instances where over-

regulating of these professions have led to unnecessary burdens on the practitioners

and result in higher costs or poorer service to the public. Unnecessarily demanding

Acts, rules and regulations need to be reviewed to make accreditation, career growth

and practice easier and to boost the effectiveness of medical services.

51

Table 4.2 : Medical professional and their professional boards

MEDICAL PROFESSIONAL PROFESSIONAL BOARDS

Doctors Malaysian Medical Council

Dentist Malaysian Dental Council

Nurses Malaysian Nursing Board

Pharmacists Malaysia Pharmacy Board

These bodies are governed by the Ministry of Health Malaysia (MOH) and operate

under specific Codes of Professional Conduct (CPC) as specified in the Medical Act

1971 and related Acts and Licensing requirements as listed below. For this review,

please refer to Table 2.2 for the professionals listed in line no 1, 2, 3 and 5.

Table 4.3 : List of Medical Professionals under MOH, Acts, Regulators and APC.

Source: MPC, 2014

52

4.2 Development of the Medical Professional Regulation Framework

Reported by the WHO, currently, the public sector health services in Malaysia are

centrally administered by the Ministry of Health through its central, state and district

offices. Other government departments also provide health services to specific

populations. The Ministry of Higher Education runs the university teaching hospitals,

the Ministry of Defence has several military hospitals and medical centres and the

Department of Aboriginal (Orang Asli) Affairs provides health services to the

indigenous population in collaboration with the Ministry of Health. The Department of

Social Welfare provides nursing homes for the elderly, the Ministry of Home Affairs

manages the drug rehabilitation centres and the Ministry of Housing and Local

Government provides environmental health services and limited health services, such

as in the Kuala Lumpur Federal Territory. The categorization of these regulators/

government bodies can be seen below in Table 4-3: Value Chain mapped against

Relevant Acts / Regulations.

The value chain covered within the study starts from the stage of acquiring education

until the departure from professional medical practice:

Figure 4.1 : The Value Chain of Medical Professional

In this context, the scope of this review shall cover the following:

Tertiary education required to obtain the first certificate to be certified and to

practise within the field of medicine (minimum requirements, supply vs. demand,

quality);

Placement as junior practitioners (e.g. houseman ship, trainee nurse);

Delivering services (in MOH hospitals or private practices) - Annual Practicing

Certificate (APC) and other requirements;

Qualifying for specialisation (e.g. requirements based on the number of years of

service, demand for specialist and the areas of specialisation);

Pre-Qualification

General Practices &

Specialisation

Exit / Termination

53

The completion or termination of practice.

To understand the current regulations that are governing each step within the Value

Chain, herewith is the list of regulations, Acts and relevant requirements with the

Ministries and Regulators responsible. Each process is mapped against related

regulations, acts and requirements to enable respondents to examine the regulatory

issues that are encumbering each process within the chain.

Table 4.4 : Value Chain mapped against Relevant Acts / Regulations

STAGE ACTIVITIES /

PROCESSES

ACTS &

REGULATIONS REGULATORS

Pre-Qualification

Pre-

Qualifi-

cation

1. Tertiary Education

pre-requisite.

2. Entry into certified

medical schools.

3. Qualifying

Examinations.

Education Act 1996

(ammd. 2006).

MQA Act 2007

Medical Act (1971)

Private Higher

Education Act 555

(1996 amend 2006)

Ministry of Higher

Education (MOHE)

Malaysian Qualification

Agency (MQA)

Ministry of Health

(MOH)

Boards of Each

Medical Professional

General Practices & Specialisation

Service

Entry

1. Comply with

Placement /

Housemanship

requirement in

MOH Hospitals.

2. Restrictions to

overseas graduates

and foreigners.

3. Additional

Requirements for

overseas graduates

from certain

Education Act 1996

(ammd. 2006).

Medical Act (1971)

– Amend 2012

Private Higher

Education Act 555

(1996 amend 2006)

Medical Regulations

1974

Medical (Setting for

Provisional

Registration)

Regulations 2012

Ministry of Higher

Education (MOHE)

Ministry of Health

(MOH)

Ministry of Human

Resource

Malaysian Medical

Council (MMC)

Malaysia Nursing

Board.

Pharmacy Board

Malaysia Dental

Association (MDA)

54

STAGE ACTIVITIES /

PROCESSES

ACTS &


countries and

private institutions.

Nurses Act 1950

(Amend 1980)

Medical Qualifying

Exams.

Registration of

Pharmacist Act

1951

Midwives Act 1966

(Rev 1990)

Malaysia

employment Act

1955.

Midwives Board

General

Practition

-ers and

Advance

ment –

Speciali-

sation

MOH Hospitals:

1. Requirements for

entry into practice.

2. Career

advancement-

availability of

patients and cases

to improve

competencies /

Continuing

Professional

Development

(CPD)

3. Requirements to

qualify for

Specialisation.

4. Obtaining

specialisation - field

of study: Fitting

Medical Act (1971)

– Amend 2012

Medical Regulations

1974


Provisional

Registration)

Regulations 2012

Nurses Act 1950

(Amend 1980)

Registration of

Pharmacist Act

1951

Midwives Act 1966

(Rev 1990)

Private Healthcare

Facilities &

Services Act 1998.

PDPA 2013

Ministry of Higher

Education (MOHE)

Ministry of Health

(MOH)

Ministry of Human

Resource.

Ministry of Domestic

Trade, Co-operatives

and Consumerism.

Ministry of Trade and

Industry (Tourist

Development

Corporation-TDC)

Malaysian Medical

Council (MMC)

Malaysia Nursing

Board.

Pharmacy Board

Malaysia Dental

Association (MDA)

55

STAGE ACTIVITIES /

PROCESSES

ACTS &


supply with

demand.

5. Code of Conduct

6. Registration and

Licenses to

practice

Private Practices:

1. Qualification to

practice in private

practices.

2. Statutory

Registration.

3. Professional

Registration/

Licenses.

4. Sales of Drugs.

5. Codes of Conduct

:Private Healthcare

Regulations

6. Maintenance and

Administration of

practice location /

professional

license/

registration/

medical

employees.

7. Provide support for

Health Tourism

Malaysian Health

Promotion Board

Act 2006.

Fees Act 1951 –

Fees Medical Rev

1994)

Registration of

Pharmacists Act

1951 (Rev- 1989)

Medicines

(Advertisement &

Sales) Act 1956

(Rev-1983)

Dental Act 1971

Dangerous Drugs

Act 1952 (Rev 1980)

Malaysia Tourism

Board Act 1992

Malaysia

Employment Act

1955.

Medical Devices

Act.

Midwives Board

Malaysia Healthcare

Travel Council (MHTC)

Exit/Termination

56

STAGE ACTIVITIES /

PROCESSES

ACTS &


Termina-

tion/ Exit

Exit process

1. While under

contract

2. After contract

expiry

3. Natural attrition

(retirement).

4. Disciplinary – Force

to exit

Medical Regulations

1974


Provisional

Registration)

Regulations 2012

Nurses Act 1950

(Amend 1980)

Medical Qualifying

Exams.

Registration of

Pharmacist Act

1951

Midwives Act 1966

(Rev 1990)

Ministry of Health

(MOH)

Malaysian Medical

Council (MMC)

Malaysia Nursing

Board.

Pharmacy Board

Malaysia Dental

Association (MDA)

Midwives Board

Table 4-4 may not show the full process in delivering the professional services, but it

is intended to assist respondents to gauge the scope of regulatory burden imposed

on these Professionals at every stage of the profession. Professionals may encounter

numerous regulations other than those stated above such as regulations pertaining to

professional fees/ charges, rules in delivering services, contract administration,

professional risk and indemnity, etc. may also be raised. Therefore, additional

information that may be relevant from the respondents’ experience and perspective

are welcomed including suggesting any additional regulations which should be added

to this list.

57

Table 4.5 : Summary of Medical Act 1971

Value Chain Sections Summary Applicable to

Pre-

Qualifications

Section 34A.

Examination

and treatment

of patients by

students of

medicine.

Any person who is pursuing medicine or

surgery in certified institutions (University

Colleges Act 1971 or Third Schedule of

the Act), can only carry out investigation,

examination or treatment of patients in

any hospital, clinic, health centre or other

institution which is approved under the

control and supervision of a fully

registered medical practitioner who holds

a current and valid annual practising

certificate.

General

Practices &

Specialisation

12: Persons

entitled to

provisional

registration

He must hold-

(i) any of the qualifications specified in the

third column of the Second Schedule

; or

(ii) a qualification in medicine and surgery

other than the qualifications referred to

in subparagraph (i),

and

(b) he produces to the Registrar evidence

to the satisfaction of the Registrar that he

is being provisionally registered, and has

been selected-

(i) for employment under section 13(2) or

that he is eligible to be exempted

therefrom under section 13(6).

Housemen

58


13: Experience

which a

provisionally

registered

person shall be

required to

obtain

He must engage in employment in a

resident medical capacity to the

satisfaction of the Medical Qualifying

Board for a period of not less than one

year in any hospital or institution in

Malaysia which is approved by the said

Board for the purpose of such

employment; four months of such period

shall be spent in a resident surgical post,

four months in a resident medical post

and four months in a resident obstetrical

and gynaecological post;

Housemen

Section 14:

Persons

entitled to full

registration.

He has been provisionally registered

under section 12; and he furnishes proof

of having satisfied the provisions of

section13.

Medical

Officers

Section 16:

Temporary

practising

certificate.

A person who is registered as a medical

practitioner outside Malaysia must

acquire a temporary certificate to practise

but under allowable maximum period of

three months

Foreign

medical

practitioner/

specialists

Section 20.

Annual

practising

certificate

(APC)

The APC is imposed upon all medical

practitioners. It must be renewed not later

than the first day of December of that year

at prescribed fees. All place/s of practice

must be registered in the APC

For foreigners, only one place practice

is allowed

Malaysian

medical

practitioner

59


Section 26.

Privileges of

fully registered

persons and

disabilities of

unregistered

persons.

Only a fully registered medical

practitioners entitled for reasonable

charges for professional aid, advice and

visits and the value of any medicine or

any medical or surgical appliances

rendered

Medical

practitioner

Section 41.

Period of

service in

pursuance of a

notice under

section 40 (1).

A person must serve in a post in a public

service in pursuance of a notice issued

under section 40(1), for a continuous

total period of not less than three years

Medical

Officers

Table 4.6 : Summary of Nurses Act 1950 (Amendment 1969) and Nurses

Registration Regulation 1985

Value Chain Sections/

Regulations

Summary Applicable

to

Pre-

Qualifications

Section 4.

Register of

Nurses

(1) It shall be the duty of the board,

subject to and in accordance with this

Act, to form and keep a register of

nurses for the sick.

Board of

Nurses

Section 6.

Admission to

register of

persons

trained

outside

Malaysia.

(2) If any person proves to the

satisfaction of the Board that he or

she has been trained in anyplace

outside Malaysia where the standard

of training and examination is not

lower than the standard of training

and examination required under this

Nurses

60


Regulations

Summary Applicable

to

Act, either as a general nurse for the

sick or as a nurse of some special

class, and satisfies the Board as to

his or her identity and good character,

the Board may, either after

examination or without examination,

upon payment of the fee prescribed

for registration under this Act, direct

that that person shall be registered in

the appropriate part or parts of the

Register.

Regulation 13.

Training and

Examination

(1) No person shall be accepted for

training in an approved nurses

training school unless he has passed

the Malaysia Certificate of Education,

the Sijil Pelajaran Malaysia or such

other examination as may be

accepted by the Board.

(2) The nurses training course shall

not be less than three years.

(3) The Board shall hold periodical

and final examinations in subject

prescribed by the Board at such

times, in such places and subject to

such conditions as the Board may

from time to time direct.

Nurses

61


Regulations

Summary Applicable

to

Regulation 15.

Certificate of

Training

(1) No person shall be entitled to

enter for the nurses final examination

until he has passed the periodical

examinations stipulated by the

Board.

(2) A person who applies to enter for

the nurses final examination shall

deposit with the Secretary of the

Board a certificate

signed by the principal of the training

school in which his training was given

to the effect that -

(a) He has undergone the training

prescribed by the Board as is

necessary to qualify him for

admission to the part of the Register

to which the nurses final examination

relates;

(b) He has undergone systematic

instruction in each of the subject

prescribed in the syllabus of subject

for such examination as approved by

the Board; and

(c) He is of good conduct

Nurses

General

Practices &

Specialisation

Regulation 8.

Annual Nurse

Practicing

Certificate

(1) Any person in the general and

supplementary parts of the Register

who desires to practice after the 31st

December of any year shall, not later

Nurses

62


Regulations

Summary Applicable

to

than the 30th September of that year,

make an application in the form set

out in the Third Schedule and pay the

prescribed fee for a certificate to

practice as such.

(2) Upon such application and

payment, the Register shall issue a

certificate (to be styled the „annual

nurse practicing certificate‟) set out in

the Fourth Schedule authorizing the

applicant to practice during the year

for which the certificate is issued.

(3) The annual nurse practising

certificate shall be in force until the

31st December of the year in

respect of which it is issued.

(4) It shall not be necessary for a

person who is registered in more than

one part of the Register to possess a

separate annual nurse practicing

certificate for each part.

4.3 Regulators and Other Related Bodies

The regulatory regimes of Medical Professionals in Malaysia are very extensive and

complex as they involve many different ministries, departments and agencies. The

principal regulator is the Ministry of Health. The list of ministries, departments and

agencies are described together in the Employment Life Cycle Value Chain above.

Acts and regulations that are highly related to licensing and permits of professionals

in various sectors as well the safety and health regulations are also described above.

63

However, the primary focus of this report is on the regulatory aspects of occupational

regulation operated by the Ministry of Health (MOH).

Table 4.7 : Roles and Responsibilities of the Ministry of Health and related

agencies affecting the accreditation and practice of medical professionals

Ministry/Agency Roles and Responsibilities

Ministry of Health

To assist an individual in achieving and sustaining as well as

maintaining a certain level of health status to further facilitate

them in leading a productive lifestyle – economically and

socially.

This could be recognized by introducing or providing a

promotional and preventive approaches, other than an

efficient treatment and rehabilitation services, which is

suitable and effective, whilst priorities on the less fortunate

groups.

Malaysian Medical

Council

The core functions of the Council under the statute are as

follows:

Registers only qualified doctors;

Prescribes and promulgates good medical practice:

Promotes and maintains high standards of medical

education; and

Deals firmly and fairly with doctors whose fitness to

practise is in doubt.

To recognize registration of medical practitioners;

To maintain a Medical Register of all registered medical

practitioners in Malaysia;

64


To issue practicing certificates to registered medical

practitioners;

To promote, recognize and accredit medical education

and training programmes and institutions;

To determine and regulate the conduct and ethics of

registered medical practitioners;

To consider the cases of medical practitioners who,

because of some mental or physical condition, may be

unfit to practise medicine;

To review the competence of medical practitioner;

To advise and make recommendations to the Minister of

Health on matters relating to the practice of medicine in

Malaysia; and

To perform such other functions so as to give effect to the

Medical Act 1971 as may be prescribed in the Act or

assigned by the Minister

Malaysian Dental

Council (MDC)

The Malaysian Dental Council (MDC) has 6 primary functions

by which it serves the dental profession. The functions are:

Upholding and maintaining professional standards and

ethics in the practice of dentistry

Recognition of Dental Degrees

Registration of Dental Practitioners in Malaysia

Issuance of Annual Practising Certificates and Temporary

Practising Certificates

Maintenance of the Malaysian Dental Register

Exercising disciplinary jurisdiction over registered

practitioners

65


Malaysia Nursing

Board

Malaysia Nursing Board that oversees training and discipline

of nurses to ensure the practice of nursing in the country is

carried out as stipulated under the Nurses Act 1950 & Nurses

Registration Regulations 1985. The practice of nursing

requires specialized knowledge, skill, and independent

decision making. The core function of the Malaysia Nursing

Board is to establish and improve standards of nursing care

to protect the public:-

To keep and maintain the Register of nurses

To regulate the nursing practice

Midwife Board

Malaysia Midwifery Board that oversees training and

discipline of nurses to ensure the practice of midwives in the

country carried out as stipulated under the Midwives Act 1966

& Midwives Regulations 1990. The practice of midwives

requires specialized knowledge, skill, and independent

decision making. The core function of the Malaysia Midwifery

Board is to establish and improve standards of midwifery care

to protect the public:-

Regulate the course of training, conduct of examination,

issue of diplomas, certificate and badges

To regulate the practice of midwifery and conduct of

midwives

66


Pharmacy Board

Malaysia

Pharmacy Board Malaysia is established in aligned with

section 3, Registration of Pharmacists Act 1951.

The roles and responsibilities of the Pharmacy Board

Malaysia:-

Registration and deregistration of Pharmacists and

Bodies Corporates.

Accreditation and recognition of pharmacy

degree programmes in Higher Learning Institutions.

Approval of premises for provisional training.

Coordinating and monitoring of minimum Continuous

Professional Development (CPD) points for issuance of

Annual Retention Certificate.

Setting and conducting of Pharmacy Jurisprudence

Examination for purpose of pharmacist registration.

Setting standard and monitoring the compliance of

institutions to the Guidelines on Approval

and Recognition of Pharmacy Degree Programme to

ensure the quality of the graduates and also

the institutions offering pharmacy course.

National

Specialist

Register

(non-regulatory

body housing

medical specialist

responsible for

The National Specialist Register will ensure that doctors

designated as specialists are appropriately trained and fully

competent to practise the expected higher level of care in the

chosen specialty. With the National Specialist Register in

place, doctors will be able to identify fellow specialists in the

relevant specialties to whom they can refer either for a second

67


specialist

registration as

recognized by

MOH)

opinion or for further management. Importantly, the National

Specialist Register protects the public and will help them to

identify the relevant specialist doctors to whom they may wish

to be referred or may wish to consult. The National Specialist

Register is in fact an exercise in self-regulation by the medical

profession, striving to maintain and safeguard the high

standards of specialist practice in the country, having the

interest and safety of the public at heart.

Malaysia

Qualification

Agency (MQA)

under Ministry of

Higher Education

(MOHE)

The establishment of a new entity which merges the National

Accreditation Board (LAN) and the Quality Assurance

Division, Ministry of Higher Education (QAD) was approved

by the Government on 21 December 2005. This entity is

responsible for quality assurance of higher education for both

the public and the private sectors.

The main role of the MQA is to implement the Malaysian

Qualifications Framework (MQF) as a basis for quality

assurance of higher education and as the reference point for

the criteria and standards for national qualifications. Its

members comprises of professionals from various sectors.

The MQA is responsible for monitoring and overseeing the

quality assurance practices and accreditation of national

higher education.

As a quality assurance body, the functions of MQA are:

- To implement MQF as a reference point for Malaysian

qualifications;

68


- To develop standards and credits and all other relevant

instruments as national references for the conferment

of awards with the cooperation of stakeholders;

- To quality assure higher education institutions and

programmes;

- To accredit courses that fulfill the set criteria and

standards;

- To facilitate the recognition and articulation of

qualifications; and

- To maintain the Malaysian Qualifications Register

(MQR)

69

Chapter 5: Regulatory Burdens at the Pre-Qualifications and Training of Medical

Professionals



education




MCO Operation


professionals



reimbursement


Splitting



PHFSA 1998



Pre-Qualification

Exit / Termination

70

Chapter 5

5.0 Regulatory Burdens at the Pre-Qualifications and Training of Medical

Professionals

As shown in Chapter 4, the scope of the review includes the stage of acquiring the first

certificate to be certified and practice within the field of medicine and obtaining placement

as junior practitioners. It is important for these practitioners to have the required set of

academic qualifications and training requirements. While this chapter focuses on the early

development of medical professionals, this stage impacts on the whole value chain. The

impacts of Government policies, Acts and requirements covered in this chapter are:-

1. Questionable quality of colleges providing health sciences related education

2. Supplies of clinical training for housemen and nurses graduates in the hospitals

Figure 5.1 : The Value Chain of Medical Professionals

In 2007, there were 21 medicals schools in Malaysia, 10 public and 11 private. In 2016,

the country have 28 medical schools, 20 public and 8 private, the list by Malaysian

Medical Council1 as well as 366 other institutions from 36 different countries like United

Kingdom, Singapore, Indonesia, Saudi Arabia, United States of America, etc. In 2014,

there were 8,157 medical students in public universities and 11, 348 in private institution

while 539 others pursued their study abroad2. Most of these institutions cater for medical

doctors, dentists and pharmacists while nurses are trained locally.

1 List of Medical Institution in Malaysia by Malaysia Medical Council (MMC), available at : http://www.mmc.gov.my/v1/index.php/list-of-medical-institution 2?resetfilters=0&clearordering=0&clearfilters=0 2 TheStar (28 April 2016) Restriction on new medical courses to ensure quality of junior doctors, The Star

Online, see: http://www.thestar.com.my/news/nation/2016/04/28/ freeze-extended-by-five-years-

restriction-on-new-medical-courses-to-ensure-quality-of-junior-doctors/

Pre-Qualification

Medical Prof. Trainee

General Practices &

Specialisation

Exit / Termination

http://www.mmc.gov.my/v1/index.php/list-of-medical-institution%202?resetfilters=0&clearordering=0&clearfilters=0

http://www.mmc.gov.my/v1/index.php/list-of-medical-institution%202?resetfilters=0&clearordering=0&clearfilters=0

http://www.thestar.com.my/news/nation/2016/04/28/freeze-extended-by-five-years-restriction-on-new-medical-courses-to-ensure-quality-of-junior-doctors/


71

The rapid increase in the number of medical schools in the country has given rise to some

concern especially on the excess of doctors and the challenge of ensuring quality. The

situation has called for government to announce the moratorium to freeze new medical

courses in local institutions for the next five years effective from 1st May 2016 to 30th April

2021. This is to ensure that there is a balance between the supply offered and the industry

demand, and the marketability of graduates3. Despite the moratorium, the supply of

medical students continues to rise as students decided to seek education from affordable

medical school in other countries such as Egypt, Indonesia and Taiwan. Interviews with

students and parents have shown that the cost to study medicine in Egypt ranges

between RM200, 000 - RM300,000 for the whole duration of studies compared to over

RM500,000 for a medical degree in a private college in Malaysia, making foreign medical

education a more attractive hub. With this trend, Malaysia will continue to have a

significant addition of new doctor every year despite the moratorium.

This study is directed towards addressing the issue of quality. Therefore, more emphasis

is paid on findings related to the quality of medical professionals and the contributing

causes as discussed below:

i. Establishment of the key quality assurance agencies4

One of the causes that affect the quality of medical professionals is the compromised

quality of medical training offered by private colleges in Malaysia. To manage this

problem, the Malaysian government through the Ministry of Education has established

the Malaysian Qualifications Agency (MQA) in 2005, to replace Lembaga Akreditasi

Negara (LAN) or ‘National Accreditation Board’. Its role is to oversee the quality

assurance of universities and colleges. The universalisation of basic education gradually

increased the demand for tertiary education. Several forces served to revolutionise

access to and the provision of higher education. The policy of restructuring the economy

to shift from production-based to knowledge-based, which required skilled manpower,

also drives the growth in private higher education institutions as existing public education

system was insufficiently equipped and staffed to meet demand. The on-going university

3 TheStar (28 April 2016) Restriction on new medical courses to ensure quality of junior doctors, The Star Online, see: http://www.thestar.com.my/news/nation/2016/04/28/freeze-extended-by-five-years-restriction-on-new-medical-courses-to-ensure-quality-of-junior-doctors/

4 HC Chai (2007) in an article ‘The Business of Higher Education in Malaysia, Commonwealth Education Online’, Available at: http://www.cedol.org/wp-content/uploads/2012/02/114-118-2007.pdf (Accessed on 20 April 2015)



http://www.cedol.org/wp-content/uploads/2012/02/114-118-2007.pdf

72

academic ‘twinning’ programmes provide a perfect solution: parents and the Government

can save money, and students studying in Malaysia can gain academic and professional

qualifications conferred by prestigious universities from Europe, Australia and North

America, while the local private HEIs could profit from the increasing demand for higher

education. Hence, the relevance of MQA as a quality assurance body.

MQA5 is established to :

i. To implement MQF as a reference point for Malaysian qualifications;

ii. To develop standards and credits and all other relevant instruments as national

references for the conferment of awards with the cooperation of stakeholders;

iii. To quality assure higher education institutions and programmes;

iv. To accredit courses that fulfil the set criteria and standards;

v. To facilitate the recognition and articulation of qualifications; and

vi. To maintain the Malaysian Qualifications Register (MQR)

Despite the above, many medical professionals interviewed expressed their concerns

over the supply and quality of graduates in the Healthcare Industry particularly doctors

and nurses. Figure 5.2 summarizes the framework of the chapter which outlines the

process of accreditation of private colleges by MQA and the areas of concern. Inputs are

the main resources involved in the accreditation process. Whilst outputs are the result of

the accreditation process. Outcomes are measured based on the performance and quality

of graduates.

Figure 5.2: Framework of Accreditation Process

5 MQA’s website at : http://www.mqa.gov.my/

i. Syllabus

ii. Student

iii. Professionals iv. Expenditure

PROCESS

i. Accreditation

ii. Teaching &

Learning

OUTPUT INPUT

i. Graduates

ii. Accredited colleges

OUTCOME

Graduates not meeting

industries standards as measured by:

i. Professional Exam

results and

Assessment

ii. Potential

employers’

feedback

Management of

professionals as

accreditors of

syllabus and colleges

by MQA

Discipline of action

(implementation

process)

Lack in effective quality &

compliance measurement,

performance indicators

and enforcement

AREAS OF CONCERN

http://www.mqa.gov.my/

73

5.1 Issue 5.1 – Inadequate quality control of private colleges providing health

sciences education

5.1.1 The Issues

There are two ministries overseeing the education system of medical professions: the

Ministry of Education (MOE) through MQA and Ministry of Health (MOH). While the roles

of these two ministries differ, respected agencies from these two ministries regularly work

hand-in-hand to produce good education programmes and materials to ensure that the

supply side (MOE’s medical education system) is able to produce talented professionals

who can meet the needs of the demand side (MOH).

Examination on MOHE Act 1996 (Act 555) shows that the MOHE is responsible for the

approval or dismissal of application to establish new private institution in Malaysia. The

institution which is granted with the approval must register with MOHE within five years

from the date of approval. This provides the institution ample time to prepare itself for

registration. However, the Act does not specify any obligation by the institution to acquire

MQA accreditation prior to its registration with MOHE. Such situation may result in weak

quality control of the institution teaching, management and infrastructure maintenance as

the accreditation control is not enforced.

Box 5.1 : Private Higher Educational Institution Act 1996 Amendment 2006

Part V : Registration of Private Higher Educational Institution

Section 24

(1) Every private higher educational institution shall be registered under this Part

(2) An application for registration shall be made to the Registrar General—

(a) within five years from the date of the approval for the establishment of the private

higher educational institution granted under Part III;

(b) on the prescribed form and in the prescribed manner;

(c) accompanied by the prescribed fee; and

(d) together with a comprehensive fee structure to be imposed on students with respect

to each course of study.

74

In addition to that, the Act under section 24 subsection 7 also states that the failure to

obtain registration from the ministry does not jeopardise the applicant’s right to submit a

new application to the MOHE.

Box 5.2 : Private Higher Educational Institution Act 1996 Amendment 2006

(7) Subject to subsection (3), where additional information, particulars or documents

required under subsection (4) is or are

not provided within the time specified in the requirement or an extension thereof, the

application—

(a) shall be deemed to have been withdrawn; and

(b) shall not be further proceeded with, without prejudice to a fresh application being

made by the private higher educational institution

In general, it is the role of the Professional boards to control the quality of

courses/institutions for medical professionals, as stipulated in the professional Acts.

However, in this case, it is apparent that the boards have limited control over quality as

the MOHE Act allows institution to operate prior to accreditation form the accrediting body

namely MQA.

Further study on the MQA revealed that there are also limitation of roles by the MQA in

controlling the quality of private institution particularly those offering medical courses. This

seems to be because they have limited resources and coordination. In response, the

Government through various agencies imposes extra regulations to fill in the regulatory

gaps.

Under the MQA Act 2007, programmes of higher educational institutions (HEIs) leading

to professional qualifications require that accreditation be done by or in close

collaboration with professional bodies. These are professional bodies established under

various Acts of Parliament to regulate the profession through licensing of practitioners.

The relationship between professionals with MQA forms a Joint Technical Committee

whose scopes are as per clause 51 of the MQA Act. These programmes include medicine,

75

dentistry, pharmacy, architecture, engineering, nursing and several others. Generally, the

accreditation provided for the programme also means recognition from the professional

bodies.

Nurse training

The Professional Board of Nurses, together with the MOE (via the MQA and the Joint

Technical Committees), administers the development of training faculty curricula and

facilities for nurse training. However, many private institutions providing nursing education

are not affiliated with any hospitals even though the Department of Public Services (JPA)

expects all nurses to perform in a clinical setting, not just teaching and managing.

A local study, “Basic Nursing Competencies for Recent Diploma Graduates” by MOE

revealed that student nurses from such private institutions had difficulty getting clinical

experience. If the regulation of nurses training is not improved, candidates could be

disadvantaged from further career opportunities. To address the possible unemployment

of graduates, a scheme called SL1M (Skim Latihan 1 Malaysia) was introduced on 1st

June 2011 where the private hospital and clinics would employ graduate nurses. They

are subsidized by up to RM2000 per nurse per month to hire nursing graduates under this

scheme, in addition to double tax deduction incentives by the Government.

However, private hospitals have revealed that these graduates are unable to meet the

minimum standards established by hospitals. One hospital said that it could only employ

1 out of 80 candidates, while another hospital said that none of the candidates interviewed

was competent to be employed. These observations are consistent with information

provided by the MPC’s review of private hospitals6 in 2014, which states: “There are also

other non-public listed institutions in this business of medical education. The result is that

we have large number of nurses which the private hospitals do not want because they

found that the quality graduates are not up to their requirements.” (Chapter 6, issue no 2

of RURB Private Hospital Report).

6 Reducing Unnecessary Regulatory Burden (RURB) Private Hospitals (2014), Malaysia Productivity Corporation (MPC)

76

Box 5.3 shows and extract of MQA Act 2007 which relates to accreditation process for

institution by MQA as discussed in this chapter.

Box 5.3: MQA Act 2007

43. Provisional accreditation of professional programme or professional

qualification

In the case of provisional accreditation of a local or foreign professional programme or

professional qualification, the Agency shall cooperate and coordinate with the relevant

professional body for the purpose of—

(a) considering an application under subsection 38(1) and granting or refusing to grant

the application under section 39;

(b) conducting an institutional audit under subsection 39(3);

(c) imposing conditions under section 41; and

(d) revocation of the certificate of provisional accreditation under section 42

Chapter 2: Professional Programmes and Professional Qualifications

50. Application for accreditation

(1) An application by a higher education provider for the accreditation of its local or

foreign professional programme or professional qualification which complies with the

Framework shall be made to the Agency within the specified period in the certificate of

provisional accreditation in such form and manner as may be prescribed.

(2) Every application shall be accompanied by such documents, information and fees

as may be prescribed.

(3) The form, manner, documents and fees required under subsections (1) and (2) may

differ as between different professional programmes or professional qualifications.

(4) At any time after receiving an application for accreditation and before it is

determined, the Agency, in consultation with the Joint Technical Committee established

77

under section 51, may by written notice require the higher education provider to provide

additional documents and information within a specified period.

(5) Where the additional documents and information required under subsection (4) are

not provided by the higher education provider within the specified period or any such

extended period as may be allowed by the Agency, the application shall be deemed to

be withdrawn and shall not be further proceeded with, without prejudice to the right of

the higher education provider to submit a fresh application.

(6) The Agency shall refer an application under this section to the Joint Technical

Committee which shall then make recommendation to the relevant professional body

under subsection 52(1) for the purposes of accreditation.

51. Joint Technical Committee

(1) A Joint Technical Committee consisting of representatives of the relevant

professional body, an officer of the Agency and such other persons as may be deemed

necessary by the relevant professional body shall be established by the relevant

professional body for the purpose of—

(a) considering an application for accreditation under subsection 50(1);

(b) making recommendations to grant or refuse the application for accreditation

under subsection 52(1);

(c) making recommendations for imposing conditions under section 54;

(d) entering and conducting an institutional audit under subsection 52(3); and

(e) making recommendations for the revocation of accreditation under section

55.

(2) The representatives of the relevant professional body and the officer of the Agency

in the Joint Technical Committee established under subsection (1) may differ as

between different professional programmes or professional qualifications.

52. Power to grant or refuse accreditation

(1) After having considered the recommendation of the Joint Technical Committee

under section 51, the relevant professional body may—

78

(a) approve the granting of accreditation; or

(b) refuse the granting of accreditation, stating the grounds for refusal.

(2) Where accreditation is granted under paragraph (1) (a), the Agency shall issue a

certificate of accreditation to the higher education provider upon payment of the

prescribed fees and shall enter the particulars of the certificate into the Register.

(3) For the purpose of considering an application under subsection 50(1), any officer of

the professional body and the Agency may conduct an institutional audit.

Quality issues faced by medical graduates could be attributed to accreditation processes

and quality compliance audits by the JTC, formed by MQA. The weakness persists at the

point of coordination management between the professionals and MQA which escalates

into quality control during the pre- and post- accreditation processes.

One example of weak administration appeared in the case of Allianze University College

of Medical Sciences (AUCMS), where graduates’ grievances - on the noncompliance of

AUCMS’ facilities and some lectures, staff not being paid, students not receiving their

certificates long after completing a programme and other complaints such as misleading

advertising - were not addressed.7 The college was allowed to continue its operation

despite not meeting the quality standards until it had to cease operation due to financial

problems in 2012. By then it had implicated the education and future of over 2,000

students and 500 staff.

In Malaysia, more than 54% of the private nursing diploma graduates could not find a job

three to four months after graduating in 2010 compared to 21.7% in 2008. Government

statistics also show that despite the increase in the number of graduates who took the

Nursing Board Examinations (7,665 in 2010 compared to 4,025 in 2008) the pass

percentage had fallen from 86.5% to 70.1% during the same period. Those studying in

public institutions had a higher pass rate of between 94% and 99% as compared to

graduates from private institutions8. This phenomenon is alarming not only to the industry

7 University World News ( November 20, 2014) in an article ‘Medical College Closure after London Campus Financing Problems’. Available at : http://www.universityworldnews.com/article.php?story=20141120095240372 8 The Star Online (2012) in an article ‘Nursing job woes cut deep’, Available at : http://www.thestar.com.my/News/Nation/2012/02/03/Nursing-job-woes-cut-deep/

http://www.universityworldnews.com/article.php?story=20141120095240372

http://www.thestar.com.my/News/Nation/2012/02/03/Nursing-job-woes-cut-deep/

79

but also to the graduates and the Government who have invested an average of RM

50,000 per student in grants and loans to finance the study of nursing. Hospitals have

cited low quality of training and poor attitudes for some nurses as being unemployable.

Concerns are also being raised about the quality of young doctors in Malaysia, with the

country's biggest doctors' association raising the red flag on foreign medical colleges and

also experts’ warning of substandard local training. There is evidence that private medical

colleges impose much lower minimum entry requirements - five Bs at the equivalent of

the O levels, or one A and two Bs at the equivalent of the A levels compared to public

universities which maintain high entry requirement of four As in the Malaysian equivalent

of A levels9. The Malaysian Medical Association (MMA), the main representative body for

all doctors in the country, has called on the Government to review its list of recognized

foreign medical colleges. MMA believes that private colleges that have failed to meet the

government's mandatory standards should have their accreditation withdrawn.

Based on the information discussed, it is apparent that both Act governing the registration

and accreditation of private institution in Malaysia could be improved by examining the

following aspects :

Study a requirement for accreditation between the period of approval and

registration of the institution in MOHE Act 1996 (amendment 2009) in clause 24

subsection 2 and 7 :

Study improvements opportunities for the following in the MQA Act 2007

i. coordination among the responsible bodies

ii. management of JTC by the MQA

iii. resourcing of JTC or the MQA and professional boards

iv. consultation and other feedback mechanisms by MQA with the students, hospitals

and other stakeholders

v. management of complaints and feedbacks by public/stakeholders

9 New Straits Time ( November 26, 2013) in an article ‘Experts worry over quality of young doctors in Malaysia’. Available at: http://www.thejakartapost.com/news/2013/11/26/experts -worry-over-quality-young-doctors-malaysia.html

http://www.thejakartapost.com/news/2013/11/26/experts-worry-over-quality-young-doctors-malaysia.html

80

5.1.2 Objective of MOHE Act 1996

An Act to provide for the establishment, registration, management and supervision of,

and the control of the quality of education provided by, private higher educational

institutions and for matters connected therewith.

5.1.3 Objective of MQA Act 2007

An Act to achieve the following objectives:

(a) To establish the Malaysian Qualifications Agency as the national body to

implement the Malaysian Qualifications Framework,

(b) To accredit higher educational programmes and qualifications,

(c) To supervise and regulate the quality and standard of higher education

Providers

(d) To establish and maintain the Malaysian Qualifications Register and to

provide for related matters

81

5.1.4 Options to resolve the issues

1. Status quo

If the status quo is maintained the costs will be high to public and private

hospitals, medical students, patients and the reputation of Malaysia’s health

system with adverse consequences for health tourism.

2. Government to reexamine the MOHE Act 1996 and the enforcement of MQA

Act

This is to ensure the quality of syllabi, training facilities and consultants, and the

availability of clinical training provided by private colleges for medical

undergraduates meet the quality standards thus produces graduates who meet

the industry standards.

The Government is also suggested to review the cases of private colleges, for

example AUCMS, Masterskills and others, to discover factors of failures and

lessons that could be applied in the future. The MOHE should strengthen its

control over application from institution who have failed to comply with the

requirement set by the Ministry and accreditation body. Currently, the MOHE Act

under clause 24 subsection 7 does not address such control measure.

Concerns of the students, staffs and other stakeholders should be taken into

account from time to time in order to find out the actual satisfactory level of these

people and whether the private colleges are not abusing their power. It is

suggested here that the enforcement by MQA should not only refer to the

documentation prepared by the colleges, it should also include consultation

procedures with other stakeholders as stated in the MQA Act Section 6 Function

of the agency subsection 2 as below:

(b) To accredit programmes, qualifications and higher education providers;

(c) To conduct institutional audit and review of programmes, qualifications and

higher education providers;

(d) To establish and maintain a register to register programmes, qualifications

and higher education providers;

(e) To conduct courses, training programmes and to provide consultancy and

advisory services relating to quality assurance;

82

3. Benchmark International accreditation

This option suggests that MQA to obtain accreditation from the Programme for

Recognition of Accrediting Agency10. The programme was established in 2010 by

the World Federation for Medical Education (WFME) in collaboration with

Foundation for the Advancement of International Medical Education and

Research (FAIMER). This Recognition Programme11 is a robust and transparent

process that uses globally acceptable criteria to evaluate and recognize the

agencies worldwide that accredit medical schools.

With the increase of private colleges offering medical-related programmes as well

as increase in number of foreign students in Malaysia, having international

recognition will bring added value to various stakeholders. The students from

medical schools that are recognized by accreditation bodies under the

Programme would be able to sit for the Educational Commission for Foreign

Medical Graduates (ECFMG)12 examination. ECFMG through its program of

certification assesses whether physicians graduating from these schools are

ready to enter programmes of graduate medical education for example residency

and fellowship in the United States. This is also in compliance to the requirement

set by the Commission that beginning in 2023, ECFMG will require physicians

applying for ECFMG Certification to graduate from a medical school that has

been appropriately accredited. MQA, with active collaboration at national and

international levels on accreditation and standards setting will be able to ensure

that that the country maintain its education credibility and at the same time

promotes the country as a trusted educational hub at the international level.

10 MMA (2016) Medical Education in Malaysia, see:

http://www.mma.org.my/images/pdfs/President_Message/PM-Feb-16.pdf 11 WFME (2016) FAIMER®: Foundation for Advancement of International Medical Education and Research: Programme for Recognition of Accrediting Agencies, see: http://wfme.org/about/other-wfme-

partners/faimer 12 ECFMG (2016) About ECFMG Certification, see: http://www.ecfmg.org/certification/index.html

http://www.mma.org.my/images/pdfs/President_Message/PM-Feb-16.pdf

http://wfme.org/about/other-wfme-partners/faimer

http://wfme.org/about/other-wfme-partners/faimer

83

4. Synchronising the list of approved medical school

This option suggests to synchronize the list of approved medical school (Second

Schedule) between the Ministry of Higher Education (MOHE), Ministry of Health

(MOH) and scholarship providers. By doing this, the government could prevent

the students from entering medical universities or colleges that are not up to the

required standard. The list should be reviewed form time to time in order to ensure

it reflects the current and future requirement in healthcare industry.

5.1.5 Recommended option

Option 2 & 4:

2. Government to improve the enforcement of MQA Act

4. Synchronising the list of approved medical school

84

5.2 Issue 5.2 - Supplies of clinical training for housemen and nursing graduates

in the hospitals are not sufficient to meet the requirements of the Act

5.2.1 The issues

Internship for all fields of medical practice makes an important part of every medical

professional’s training as stipulated in Section 13 of the Medical Act 1971 (Experience

which a provisionally registered person shall be required to obtain). It is based on this

spirit that the internship training is developed, to provide fresh medical graduates with

sound experience that professionalises them with appropriate knowledge, skills,

experience and attitudes before awarding them the Provisional Registration. Under the

Medical Act 1971, the Medical Qualifying Board consisting of Director General of the

Ministry of Health (MOH) and equal number of representatives from Faculty of Medicine

of the universities established under the Universities and University Colleges Act 1971

was established to look into matters pertaining to houseman training. This includes:

Evaluate and approve hospitals as housemen training centers

To decide on standards and criteria of housemen training module; and

Approve application for full registration13 based on training experience.

Figure 5.4 illustrates houseman or clinical training as the bridging avenue between a

partial registration of medical professionals and full registration with the Council.

Figure 5.4: Statutory Requirement

Houseman or clinical training has been classified as a compulsory requirement in the

Medical Act 1971 (Section 13),Which is also a standard requirement for medical

professionals in other parts of the world including in countries like Australia, UK, Ireland,

13 Fully registered means fully registered under the Medical Act 1971

Registration with the Malaysia Medical Council

(MMC)

- Provisional Registration

Pratice as house officerFullfill the training criteria

& entitled for Full Registration Certificate

85

USA and the Middle East 14. However the way the overall program of academic and

practical medical training is structured may differ in each case.

Details of clauses on houseman under the Medical Act 1971 are as exemplified below:

BOX 5.2 : Medical Act 1971

Clauses stating requirements for medical training for various medical professionals

Section 13 Experience which a provisionally registered person shall be

required to obtain

(2) The provisionally registered person shall, immediately upon being provisionally

registered, engage in employment in a resident medical capacity to the satisfaction of

the Medical Qualifying Board for a period of not less than one year in any hospital or

institution in Malaysia which is approved by the said Board for the purpose of such

employment; four months of such period shall be spent in a resident surgical post, four

months in a resident medical post and four months in a resident obstetrical and

gynaecological post; at the conclusion of satisfactory service, as certified by the

Medical Qualifying Board, under this paragraph, the provisionally registered person

shall be entitled to a certificate issued by the Council in the prescribed form as

evidence thereof.

BOX 5.3 : A Guidebook for House Officer


2.4 The Structure of Internship Training

The Medical Qualifying Board has determined that:

i. The Committee for the Houseman Training has the right to determine the houseman

discipline placement and the duration of your extension;

ii. The houseman will only be allowed to proceed to the next discipline if the supervisor

is satisfied with your knowledge, skills, competency and attitude in that particular

discipline;

14 Wikipedia, http://www.amc.org.au/accreditation/prevoc-standards, https://www.medicalcouncil.ie/Registration-Applications/First-Time-Applicants/Internship-Registration.html

http://www.amc.org.au/accreditation/prevoc-standards

https://www.medicalcouncil.ie/Registration-Applications/First-Time-Applicants/Internship-Registration.html

86


iii. There should not be a gap of more than 4 (FOUR) months between postings.

Otherwise the houseman may need to repeat the entire internship training;

The houseman to undertake four-monthly postings in medicine, paediatrics,

surgery, orthopedic, obstetrics & gynaecology and emergency medicine

The postings in the six disciplines should provide opportunities for you to

participate in:

- assessment and admission of patients with acute medical problems;

- management of in-patients with a range of general medical conditions;

- discharge planning, including preparation of a discharge summary and other

components of handover to a general practitioner or a subacute or chronic

care facility; and

- ambulatory care.

i. You are not allowed to move to another training hospital either to complete or repeat

similar discipline. Only in exceptional circumstances, you may be allowed to

continue internship in a new discipline in another training hospital.

ii. The total duration of each discipline should not exceed 12 (TWELVE) months;

iii. The total duration of your internship training should not exceed 6 (SIX) years;

iv. If you do not satisfactorily complete any or all of the internship training requirements

within the stipulated period, your training shall be discontinued and you will not be

eligible for full registration;

Despite the requirements stated under the Act, there is evidence that medical graduates

lack the experience required. Some medical professionals considered that the problem

lies with the insufficient training available to housemen in the government hospitals. This

may be because of the number of graduates looking for housemen continues to surpass

the growth of training hospitals. The numbers of graduates requiring training increased

from 3,655 in 2013 to an estimated of 5,000 graduates in 2015 - an increase of 36%,

while the number of public hospitals approved by the Medical Qualifying Board for the

purpose of houseman training remain at 44 or 30% of a total of 141 public hospitals

87

nationwide. Due to the limited number of houseman training hospitals, fresh graduates

now have to wait to up to nine months to do their houseman training in government

hospitals which includes 4 months in resident surgical post, 4 months in resident medical

post and 4 months in a resident obstetrical and gynaecoligy posts.15

Malaysian Medical Association (MMA) president, Dr. Krishna Kumar, said that with

medical graduates now being given the choice to choose the hospitals to be trained in

under the e-houseman system and the long waiting lists in some hospitals, the waiting

time could be longer. Prior to the e-houseman system, which was introduced in 2015, the

average waiting time was about six months. Dr. Krishna also added that the waiting time

is getting longer especially in the more popular urban hospitals, including the Kuala

Lumpur Hospital16. According to Health Ministry records, there were 3,564 medical

graduates reporting for duty as housemen in 2011, 3,743 (2012), 4,991 (2013) and 3,860

(2014). Additionally, 30% of housemen do not finish their training in the stipulated period

and need to extend their training between three to six months, depending on the hospital

and taking up the posts for new intake17. The bottleneck is reaching a “critical stage” as

graduates are required to sit for entrance exam, and at the current rate of 5,500 medical

students graduating each year, all 44 training hospitals in the country will face difficulties

in coping with the numbers18.

15 Section 13, Medical Act 1971 16 The Star Online ( March 30, 2015) in an article ‘New docs have to wait a year for housemanship’. Available at http://www.thestar.com.my/News/Nation/2015/03/30/New-docs-may-have-to-wait-a-year-for-

housemanship/ 17 The Malaysian Insider (July 18,2015) in an article ‘Too many medical grads, too few housemanship spots’. Available at http://www.themalaysianinsider.com/malaysia/article/too-many-medical-grads-too-few-

housemanship-spots#sthash.9HjFMU8W.dpuf 18 The Star Online (March 30, 2015)in an article ‘New docs have to wait a year for housemanship’. Available at http://www.thestar.com.my/News/Nation/2015/03/30/New-docs-may-have-to-wait-a-year-for-

housemanship/

http://www.thestar.com.my/News/Nation/2015/03/30/New-docs-may-have-to-wait-a-year-for-housemanship/


http://www.themalaysianinsider.com/malaysia/article/too-many-medical-grads-too-few-housemanship-spots#sthash.9HjFMU8W.dpuf




88

Figure 5.5 : Statistics of Housemen from 2011 to 2014

Source:MOH’s website

Deputy Health Director General, Datuk Dr S. Jeyaindran said about 1,000 of the 5,000

housemen employed each year do not complete the two-year training stint19. Among the

reasons include not being suitable for the profession as they were pressured to study

medicine by their parents, false perception of a doctor’s work life, inability to work long

hours and burnout. As the housemen are hired by JPA, the termination process must

follow Public Officer (Appointment, Promotions and Termination of Service) Regulation

2012. Table 5.1 below shows the process of termination and hiring as per the regulation.

The process flowchart indicates that the whole termination and hiring process could take

up 180 days to more than a year, resulting in a longer waiting time for new houseman to

take up the vacancy20. The longer waiting time is also due to the training period that vary

from 2 – 6 years. The housemen are allowed to extend one discipline in the event where

they are not able to satisfactorily complete the training in particular discipline (refer to Box

5.2).

19 The Star Online (March 30, 2015) in an article ‘Housemen do not complete training stint for various reasons’. Available at http://www.thestar.com.my/News/Nation/2015/03/30/One-in-five-quit-each-year-

Housemen-do-not-complete-training-stint-for-various-reasons/ 20 The Star Online (March 30, 2015) in an article ‘Housemen do not complete training stint for various reasons’. Available at http://www.thestar.com.my/News/Nation/2015/03/30/One-in-five-quit-each-year-

Housemen-do-not-complete-training-stint-for-various-reasons/

0

1000

2000

3000

4000

5000

2011 2012 2013 2014

3564 3743

4991

3860N

o o

f H

ou

se

me

n

Years

Number of Housemen from 2011 to 2014





89

In addition to the number of training hospitals, shortages also occur in the availability of

consultants, particularly specialist doctors available to provide training. The interviewed

medical practitioners expressed concerns on the ratio of consultants to housemen, which

could reach a ratio of up to 1 consultant to 50 housemen. With these housemen already

lacking in clinical skills and exposure to some procedures they ought to have obtained in

medical schools, this ratio could adversely affect the quality of medical professionals in

Malaysia. Dr. Krishna cited two examples. At the obstetrics and gynecology (O&G)

department in Seremban Hospital, 65 housemen have come under the supervision of two

consultants and five specialists, while the Kuala Pilah Hospital O&G unit only had one

obstetrician overseeing about 30 housemen21.

In addition to the shortage of training consultants, the increasing number of new

graduates also faces lack of clinical training due to limited patient number. The previous

president of Malaysian Medical Association (MMA), Datuk N.K.S Tharmaseelan,22 stated

that in the early 1980s, the ratio of housemen to patient beds was 1:20, however the ratio

had decreased to 1:3 patient beds in 2013. He also said that the ratio of housemen to

beds in developed countries such as Singapore and United Kingdom are 1:8 and 1:12

respectively. This suggests lack of medical cases for housemen to treat.

Training Placement for Nurses

BOX 5.4 : Nurses Act 1950

Student Nurses

Section 3 of Nurses Act 1950: Establishment and constitution of a Nursing Board

The Nursing Board Malaysia (NBM) is the body that regulates the nursing profession.

The main functions include:

1. Maintain a register of qualified nurses through nursing licensure.

21 The Star Online (March 30, 2015)in an article ‘New docs have to wait a year for housemanship’. Available at http://www.thestar.com.my/News/Nation/2015/03/30/New-docs-may-have-to-wait-a-year-for-

housemanship/ 22 New Straits Times (November 17, 2013) in an article ‘More Centres needed to train housemen’. Available at: http://www2.nst.com.my/nation/general/more-centres-needed-to-train-housemen-1.403124

(Accessed on 15 April 2014)



http://www2.nst.com.my/nation/general/more-centres-needed-to-train-housemen-1.403124

90

2. Set professional standards and guidelines for all levels of nursing education,

nursing practices, management and research.

3. Regulate the conduct and competency of nurses.

4. Evaluate, approve and accreditate all nursing programmes offered locally by both

Public and Private Educational Institutions.

The Guidelines on Standards & Criteria for Approval/Accreditation of Nursing

Programmes stated that the clinical practice areas should cover all required discipline

as approved to meet the learning. The required discipline for Basic Degree and Diploma

are as follow:-

i. Medical nursing

ii. Surgical nursing

iii. Orthopaedic

iv. Paediatric

v. Obstetric

vi. Gynaecology

vii. Ophthalmology

viii. Ear, Nose and Throat

ix. Psychiatry

x. Oncology

xi. Accident and Emergency

xii. Operation Theatre Unit

xiii. Urology

xiv. Geriatrics

xv. Nephrology

xvi. Community Health Nursing

xvii. Optional discipline

a. ICU

b. CCU

c. Neurology

* Note : minimum : 52 - 53 weeks of clinical placement

* Medical nursing & Surgical nursing : 60% of total disciplines

* Management practice : minimum 2 weeks

* Old folk’s home and retirement home are not to be used as clinical practice area

(except for social responsibility)

For clinical placement at hospital facilities;

91

1. At any one placement, the students: CI ratio should not exceed 1:15 and based

on the number of beds in the ward and placement must correspond to the level

of care taught.

2. Ratio of student to patients should be 1:4. Level of patient care must correspond

with the students’ required learning outcomes.

3. Number of students per shift should not be more than 10 per area/ unit/ ward at

any one time regardless of institutions.

4. There must be evidence that respective health care facilities have a planned and

coordinated clinical placement schedule from all institutions to prevent congestion

of students at any one time in any clinical area.

5. Male students must be chaperoned by a female health personnel when attending

to female clients.

For clinical placement at Community Health Centres

1. Number of students allowed per clinic should not exceed 8 at any one time.

2. Number of students per activity in the clinic should not exceed 4.

3. Staff: Student ratio must be 1:8 in clinic and 1:4 during activities.

Similarly in 2010, the Ministry of Higher Education23 put a moratorium on private nursing

colleges to prevent an oversupply of nurses. The move intended to prohibit the launch of

new diploma programmes in nursing as the ministry wants existing providers to

concentrate more on degree courses as well as to prevent the issue of nurse

unemployment. In 2012, the Ministry of Human Resource announced that about 8,000

graduates from nursing institutions especially those from private colleges, are jobless.

The same concerns were raised by the respondents24. The increasing number of nurses

does not only affect supply for employment but also the capability to train these graduates

with the required clinical skills and experience.

23 The Star Online (2010) in an article ‘No more nursing schools from July’ . Available at: http://www.thestar.com.my/story/?file=%2F2010%2F4%2F27%2Fnation%2F6134707 (Accessed on 15

April 2014) 24 The Star Online (June 8,2012)in an article ‘ About 8,000 graduates from nursing colleges are jobless’, Available at: http://www.thestar.com.my/News/Nation/2012/10/08/About-8000-graduates-from-nursing-

colleges-are-jobless/ (Accessed on 15 April 2014)

http://www.thestar.com.my/story/?file=%2F2010%2F4%2F27%2Fnation%2F6134707

http://www.thestar.com.my/News/Nation/2012/10/08/About-8000-graduates-from-nursing-colleges-are-jobless/

http://www.thestar.com.my/News/Nation/2012/10/08/About-8000-graduates-from-nursing-colleges-are-jobless/

92

5.2.2 Options to resolve the issues

1. Status quo

As the number of medical graduates increase, the longer it takes for the graduates

to enter houseman programme thereby slowing their career development and limit

their opportunities for specialisation. They are also at risk of losing their medical

knowledge that they have learned in previous years.

2. New system for doctor registration

Introduce a new system for doctor registration before qualifying them for

housemanship, by introducing a national registration exam. This is similar with the

requirement imposed by advanced country like US and Japan where medical

graduates must show evidence of medical qualification from accredited

universities, sit and pass the national qualifying exam before being placed for

housemanship. This option will help to

I. Ensure that only qualified and capable medical graduates are being

placed in houseman programme hence putting some control

measure into the quality of medical practitioner treating patient in the

country;

II. Control the number of houseman per hospital or being placed under

supervision of specialist doctors to enhance quality of training,

exposure to patient and case treatment and enable specialist doctors

to better manage or supervise houseman under their care.

3. Houseman be hired based on contract basis

To improve quality and content of houseman training, the MOH and JPA should

revise the employment scheme of trainee doctors. In this option, it is recommended

that houseman be hired on contract basis and will only be absorbed into the

permanent JPA employment scheme upon successfully completing housemanship

or upon registration as medical practitioner (RMP). This approach will ease the

hiring and termination process of houseman. Thus, reducing the waiting time for

hiring new trainee and providing replacement for those who failed to undergo

93

housemanship. In addition, 30% of housemen do not finish their training in the

stipulated period and need to extend their training between three to six months,

depending on the hospital and taking up the posts for new intake25.

In Healthcare Consultative Panel dated 26th July 2016, it was mentioned that

almost 50% of housemen failed to complete their training due to lack of

competencies.

The option could also reduce the problem of termination. From a consultation with

medical practitioner in public hospital, it has been found that there’s a delay in

terminating underperformed housemen. The delay may be from 6 months to up to

2 years, thus resulting to increase in backlog in the new housemen hiring pipe line.

If trainees are put under temporary or contract basis, the process of termination for

those who do not comply with any discipline matter should be shorten and the

responsibilities should fall under the housemen training hospital.

4. Increase the availability of clinical training for houseman.

In order to resolve the shortages of houseman training facilities, MOH should look

into increasing the number of houseman facilities from 44 currently to 52 by 2017

(increase by 20%). This research would like to recommend that houseman

numbers be based on the number of specialist per hospital. This includes placing

trainee in district or smaller hospital with qualified specialist. To manage the level

of exposure to different medical cases and patient numbers, the Ministry could

introduce a rotation system where houseman can be rotated among houseman

centre or hospital in different facility areas. This is further supported because the

size of number of patient can not reflect load of the hospital. Loading also depend

on processes, speed of discharge, patient administration and staff efficiency.

Moreover, the government could also benchmark the guideline of Commonwealth

Medical Internships Programme Guidelines by the Department of Health,

25 The Malaysian Insider (July 18,2015) in an article ‘Too many medical grads, too few housemanship spots’. Available at http://www.themalaysianinsider.com/malaysia/article/too-many-medical-grads-too-few-

housemanship-spots#sthash.9HjFMU8W.dpuf



94

Australian Government26. The programme was initiated in August 2013 with the

intention to assist private hospitals to provide internships and ultimately resolve the

bottlenecks and shortages of placement in the country. The guideline covers the

following aspects:-

Background and requirement of the programme

Roles and Responsibilities of the parties involved i.e. Department of Health,

Private Hospitals and the interns

Eligibility of both the private hospitals and interns

Processing of applications, and

Assessment of interns and the private hospitals.

This practice has been implemented by the Pharmacist Board Malaysia27. In

addition to the 69 public hospitals, the Pharmacist Board Malaysia has recognized

96 private premises as training placement for the provisionally registered

pharmacist (PRP) under the private programme.

5. Getting credit for voluntary participation with medical services

Qualifying students to obtain credit for participation with medical services

organization such as Malaysian Medical Relief Society (MERCY Malaysia),

Malaysian Medical Fellowship and etc. This would help to prevent graduates from

losing medical skills and knowledge while waiting for housemen placement at a

recognized hospitals which could take up to 6 months.

26 Department of Health (2016) Commonwealth Medical Internships Programme Guidelines, Australian

Government, see: http://www.health.gov.au/internet/main/publishing.nsf/Content/work -commonwealth-medical-internships-programme-guidelines 27Pharmaceutical Services Division (2016) Guidelines on Liberalisation of Provisionally Registered

Pharmacist training on private sector for graduates of pharmacy degree programme, MOH

95

5.2.2 Recommended option

Option 2: New system for doctor registration

Option 3: Houseman be hired based on contract basis

96

Chapter 6: Managed Care Organization (MCO)



education




MCO Operation


professionals



reimbursement


Splitting



PHFSA 1998



Pre-Qualification

Exit / Termination

97

6.0 Managed Care Organization (MCO)/ Third Party Administrator (TPA)

In Private Healthcare Facilities and Services Act 1998 Part XV, the Managed Care

Organization (also known as Third Party Organization (TPA) and Health Maintenance

Organization (HMO)) is defined as any organization or body, with which a private

healthcare facility or service has a contract or an arrangement (or intends to have a

contract or an arrangement) to provide specified types or quality or quantity of

healthcare within a specified financing system through one or a combination of the

following mechanisms:

a) delivering or giving healthcare to consumers through the organization or

the body's own healthcare provider or a third party healthcare provider in

accordance with the contract or arrangement between all parties

concerned;

b) administering healthcare services to employees or enrollees on behalf of

payers including individuals, employers or financiers in accordance with

contractual agreements between all parties concerned

The United States National Library of Medicine defined Managed Care as

programmes or organisations “intended to reduce unnecessary health care costs

through a variety of mechanisms, including: economic incentives for physicians and

patients to select less costly forms of care; programmes for reviewing the medical

necessity of specific services; increased beneficiary cost sharing; controls on inpatient

admissions and lengths of stay; the establishment of cost-sharing incentives for

outpatient surgery; selective contracting with health care providers; and the intensive

management of high-cost health care cases.

The first MCO in Malaysia was established in 1995 which is Pantai Medical Care1.

As at 2016, there are 29 registered MCOs in Malaysia (as per Table 6.1) with the

intention to assist in reducing costs which include monitoring, receiving, auditing and

consolidating all medical bills from panel clinics, specialist clinics, hospitals or insurance

company prior to billing the company (payer). MCO will monitor medical benefits usage

1 PM Care (2014) MCO in Malaysia; see: http://www.pmcare4u.com.my/html/whyus.htm

http://www.pmcare4u.com.my/html/whyus.htm

98

to ensure that employees receive the required medical service from their panel clinics

and hospitals2.

Table 6.1: MCOs in Malaysia

No MCO No MCO

1 American International Assurance

Bhd 16 Mediscreen Sdn. Bhd.

2 ASIA Assistance Network (M) Sdn

Bhd 17 MiCare Sdn. Bhd.

3 ASP Medical Clinic Sdn Bhd 18 P.C.S. Rakyat Sdn. Bhd.

4 Cresent Solutions 19 PMCare Sdn. Bhd.

5 Compumed Services Sdn. Bhd. 20 PR Aassist Medical Network Sdn.

Bhd.

6 Cynergy Care Sdn. Bhd. 21 Prudential Assurance Malaysia

Berhad

7 Datalink Healthcard Network Sdn.

Bhd. 22 Red Alert Online Sdn Bhd

8 Eximus Medical Administration

Solutions (E-MAS) 23 Tele Assist Sdn. Bhd.

9 FWHS Medik Sdn Bhd 24 Tejani Emergency Assistance (M)

Sdn. Bhd.

10 Great Eastern Life Assurance

(Malaysia Berhad) 25 Mondial Assistance

11 Health Connect Sdn Bhd 26 IA Assistance

12 International Medicare Group Sdn.

Bhd. 27 MCO Care

13 International SSOS (Malaysia) Sdn.

Bhd. 28

FOMEMA (UNITAB MEDIC SDN

BHD)

2 National Human Resource Centre (NHRC) (2012), Health Maintenance Organisation (HMO) (Also known as Managed Care Organisation (MCO)/Third Party Administrator (TPA)), see: http://www.nhrc.com.my/health-maintenance-organisation-hmo-also-known-as-managed-care-organisation-mco-/third-party-administrator-tpa- )

http://www.nhrc.com.my/health-maintenance-organisation-hmo-also-known-as-managed-care-organisation-mco-/third-party-administrator-tpa-

http://www.nhrc.com.my/health-maintenance-organisation-hmo-also-known-as-managed-care-organisation-mco-/third-party-administrator-tpa-

99

14 Integrated Healthcare Management

(IHM) 29

E-Clinic Online Technology Sdn.

Bhd. (Klinik Alam Medic)

15 MediExpress (M) Sdn. Bhd.

Source: MOH, 2016

In 1997, Malaysian MCOs had a total enrolment of approximately 300,000 or about

1.5% of an estimated population of 20 million. These MCOs covered about 10% of the

private labour force (Pilus, 1999) (Bakar, 1999). However by 2014, the number had

increased significantly, marking an increasing role of MCOs in the country. It is

estimated that over 16.36 million (2014) population are covered under MCOs operations

(10% of private sector employees who are under the TPA and 15 million personal

insurance policy subscribers3 in 2014). Figure 6.1 summarizes the type and functions

of MCOs in Malaysia.

3 Star Online, Tan Kay How (2014) ,Malaysian Grossly Underinsured, see : http://www.thestar.com.my/news/community/2014/12/05/msians-grossly-underinsured-only-half-of-population-have-some-form-of-life-insurance/

http://www.thestar.com.my/news/community/2014/12/05/msians-grossly-underinsured-only-half-of-population-have-some-form-of-life-insurance/


100

Figure 6.1: Summary of the Type and Function of MCOs.

While the MCOs can be recognized under various forms (for example, the HMOs, TPAs,

Preferred Provider Organisations, Exclusive Provider Organisations, Primary Care

Preferred Provider Organisations), the HMOs and TPAs are the most common type of

MCO in Malaysia positioning themselves as one of the notable players in healthcare

industry.

Employer (Organisation

Companies)

Managed Care

Organisation

Health Maintenance Organisation

(HMO) - It’s an organized health care

systems that are responsible for both

the financing and the delivery of a

broad range of comprehensive health

services to an enrolled population.

HMO can be viewed as a combination

of a health insurer and a healthcare

delivery management system

Third Party Administrator

(TPA) – a person who directly or

indirectly underwrites, collect

charges, collateral or premiums

from, or adjusts or settles claims

of the population, in connection

with life, annuity, health, stop-loss

or worker’s compensation

coverage.

Inpatient Providers Primary Care Providers

Specialists/Other

providers

Type & Function Type & Function

101

Subsequently in 20134, the Ministry of Health (MOH) identified four categories of MCOs

in the Guidelines for MCOs and Private Healthcare Facilities and Services:-

i. Any organisation including insurance companies (via letter of guarantee) or their

subsidiaries having a contract or an arrangement with any private healthcare

facilities or services to provide healthcare services to enrollees or employees

ii. Any third party or agent for local or overseas-based insurance companies having

a contract or an arrangement with any private healthcare facility or services to

provide healthcare services to enrollees or employees

iii. Any third party administrator managing the medical benefits of personnel in a

company and having contract or an arrangement with any private healthcare

facility or services to provide healthcare services to the employees

iv. Any organisation selling membership for clients to take part in any wellness

package and enters into a contract or makes an arrangement with selected PHFS

to provide healthcare to these members.

The market segmentation of MCO is reflected below in Figure 6.2 which indicates the

mode of payment used by the patients in primary care clinics. It can be seen from Figure

6.2, the percentage of Third Party Payers increases with the decrease of Out-of Pocket

Payment mode which also indicates that the market segmentation for MCO is getting

larger as the Insurance users increase over the years. As such, this chapter would

highlights the regulatory concerns of the healthcare professionals concerning the

Managed Care Organisations in the country.

4 Ministry of Health (2013) The Guidelines for Managed Care Organisations and Private Healthcare Facilities and Services

102

Figure 6.2: Mode of payment in primary care clinics in 2010 and 2012

Source: Clinical Research Centre, MOH 20155

Despite the information on various types of MCOs presented earlier, it is important to

establish that this study focuses on the MCO operating on the TPA model. This is

because insurance companies or the HMOs are governed by the Federal Bank Act,

whilst this study pays a bigger emphasis on the medical and PHFSA Acts governing the

practice of medical professionals.

6.1 Issue 6.1 - Minimal fees paid to medical professionals

The encumbrance of being a panel clinic for private organization under a third party

administrator is significant and does impose burdens to Medical Professionals.

The operation of MCO is currently regulated under the Private Healthcare Facilities and

Services Act 1998. Section 82 to 86 clearly address all relevant matters. Section 83 of

the Act addresses contracts between private healthcare facilities or services and

managed care organisations and the penalties if either party commits an offence whilst

5 Clinical Research Centre (2015) National Medical Care Statistics Primary Care, 2010 & 2012, Ministry of Health (MOH) see: http://www.crc.gov.my/nhsi/category/medical-care-statistics/

57

36

20

32

2232

0.21

2010 2012

Perc

enta

ge

Mode of Payment

Out of Pocket Government Subsidy Third Party Payer Out of Pocket & Third Party Payer Others

http://www.crc.gov.my/nhsi/category/medical-care-statistics/

103

Sections 84 and 85 covers the need to furnish information to the Director General and

penalties if either party fails to provide such information.

Deep diving into the regulation, the study discovers that there is no clear control over

the practice of MCOs. Section 83 of the PHFSA only emphasizes on the accountability

of RMPs to ensure that the contract they sign with MCOs does not interfere with their

roles as imposed by the respective Board. In addition, Section 86 of the same Act,

merely explained the contractual relationship between MCOs and registered medical

professionals, without mentioning any specific responsibilities of MCOs in delivering

services to the medical professionals, their focus on ethical conduct and the importance

of safeguarding patients’ interest. The MCO Guideline 2013 (Clause 5) again

emphasizes on RMPs’ responsibilities in ensuring that the contract they enter must

safeguard their professional rights and is not conflicting with their Code of Professional

Conduct.

It is only in Clause 6: Guidelines for MCOs that the responsibility of MCO is written in a

bigger perspective. However, the Guideline has no legal influence over the subject,

which is the MCO. Such situation results in a weak control over MCOs operations and

their emphasis over cost savings and profits rather than looking after the welfare of the

patients. This is supported by various statements which raised their concerns over the

regulatory arrangements of MCOs6. Many believe that the regulatory framework on

MCO practice in Malaysia is weak and does not impose adequate control over its

implementation.

61- Dr. Steven Chow, the President of the Federation of Private Medical Practitioners’ Associations, Malaysia ,2013 in a statement (http://fpmpam.org/p_007.html) 2- See the PPS Column by the Malaysian Medical Association (MMA) in March, 2011 (http://www.mma.org.my/Portals/0/March-pps.pdf) 3- See the slides presentation on Investments in Healthcare – Insurance Implications by Frost & Sullivan in June 2010

http://fpmpam.org/p_007.html

http://www.mma.org.my/Portals/0/March-pps.pdf

104

6.1.1 Minimal fees paid to medical professionals

The biggest effects of weak regulation over MCO is the fee structure imposed by MCOs

to medical professionals especially private panel clinic doctors. Consultation and

medication fees are capped at RM30 although medical providers are eligible to charge

more based on the Seventh Fee Schedule of the Private Healthcare Facilities and

Services Act 1998, which is the fee structure established for private clinic. A newspaper

report indicated that an average allowable consultation fee paid by MCOs to Registered

Medical Practitioners (RMPs) in private clinics is only RM15, which is 50% less than the

maximum consultation fee in schedule Seventh. The same report further stated that

there are MCOs which impose a service fee of 10% from each patient’s treatment

charged by RMPs7.

Box 6.1 : Private Healthcare Facilities and Services (Private Medical Clinics or Private Dental Clinics) Regulation 2006

Seventh Schedule A. Consultation Fees 1. General Practitioners (Non specialists) (a) Clinic with pharmaceutical services

Item Fee (RM)

Consultation only

10 - 35 Consultation with examination


Consultation after stipulated clinic hours Up to 50% above the usual rate

House call or home visit Up to 100% above the usual rate

b) Clinic without pharmaceutical services

Item Fee (RM)

Consultation only





2) Specialist Fees a) First Visit/ Initial Consultation

Item Fee (RM)

Consultation only



7 Utusan Malaysia, 22 September 2015

105



b) Follow-up visit/follow-up consultation

Item Fee (RM)

Consultation only





Despite the issue faces by private clinics operator, there is no evidence of minimum fee structure

imposed upon private hospital panel doctors and specialists. For the record, private hospital fee

are regulated by Thirteenth Schedule of the PHFSA 1998. The schedule as below:

Box 6.2: Private Healthcare Facilities and Services (Private Hospitals and Other Private

Healthcare Facilities) (Amendment) Order 2013

Thirteenth Schedule

A. Consultation Fees

1. General Practitioners (Non specialists)

(a) First Visit /Initial consultation

Item Fee (RM)

Consultation only





b) Clinic without pharmaceutical services

Item Fee (RM)

Consultation only


Consultation with examination and treatment

plan



106

2) Specialist Fees

a) First Visit/ Initial Consultation

Item Fee (RM)

Consultation only



treatment plan



b) Follow-up visit/follow-up consultation

Item Fee (RM)

Consultation only



treatment plan



As seen in both schedules there is big difference between the allowable fees for

RMP in clinics compares to RMP in private hospitals. Interview with CKPAS of the MOH

on 26 April 2016, revealed that the difference occur because of Seventh fee schedule

was not revised when Schedule Thirteenth was revised in 2013. Medical professionals

have raised that the current Seventh fee schedule is too low and does not meet the

industry standard. The fact of the matter is that doctors’ professional fees are capped

and this has only been increased by 14.4% since the year 2000 working out to be a

mere 1% per annum. RMPs have been quietly absorbing the yearly increase in cost of

running a clinic8.

Over the years, the situation is worsened as the number of cash paying patient

decreases as almost 15 million or 50% of Malaysian population become insurance

8 Federation of Private Medical Practitioner’s Associations, Malaysia (FPMPAM) (2014) Message from President: Doctors’ Fees and Fee-Splitting, Suara FPMPAM, see: http://fpmpam.org/newsletter/SUARA_FPMPAM_Issue%201_2014.pdf

http://fpmpam.org/newsletter/SUARA_FPMPAM_Issue%201_2014.pdf

107

policy subscribers9. Whilst over 1 million others are private sector employees covered

under the TPA facility. In order for RMPs to obtain patient flow and sustain their clinic

set ups, they have to enter into agreement with MCO. However, this leads to MCOs

high bargaining power and results in low fee structure imposes upon the RMPs which

is between RM10 - RM15. Based on Seventh Schedule, the MCOs have not violated

the Act. However, the fee is far too low compared to the maximum of RM35 and RM65

allowable as consultation fees (refer to Box 6.1).

The low fee structure imposes upon the RMPs by the MCOs could be driven by the

promise to provide a more efficient medical fees management and reduced cost to their

clients (payors). Despite the positive intention, study and interviews with owners of

panel clinics disclosed that this is done at the expense of the RMPs, which has led to

inefficient patient’s services including the practice of treatment unbundling, prescription

of generic / low cost medicine and prescription of medicine in reduced quantity which in

the end would discriminate the patient’s rights to the most fitting medical services.

The ripple effect of MCO’s cost cutting measure could be the nonconformity of Section

12 of the Consumer Act 1999, as recorded in Box 6.3. Nevertheless, despite the cost

cutting promised by the MCOs as the value proposition of their service, there has been

no study conducted on the actual savings by businesses after the existence of MCO.

9 Star Online, Tan Kay How (2014) ,Malaysian Grossly Underinsured, see : http://www.thestar.com.my/news/community/2014/12/05/msians-grossly-underinsured-only-half-of-population-have-some-form-of-life-insurance/



108

2) Consumer Protection Act 1999

Box 6.3: Under the Consumer Protection Act 1999

Section 12 : Misleading indication as to price

(1) A person commits an offence –

(a) if he gives to a consumer an indication which is misleading as to the price at

which any goods or services are available; or

(b) if an indication given by him to a consumer as to the price at which any

goods or services are available becomes misleading and he fails to take

reasonable steps to prevent the consumer from relying on the indication

Looking at this issue, it is believed that there is an opportunity for the revision of the fee

Schedules and regulation over MCOs’ practice. The fee schedule could be revised by

increasing the minimum fee and reducing the range between minimum and the ceiling

fee. Such a revision could provide a more competitive fee for RMPs. This could help the

RMPs to better manage their clinical operations as well as reduce/eliminate the practice

of treatment unbundling, prescription of generic / low cost medicine and prescription of

medicine in reduced quantity.

6.1.2 Delayed and partial reimbursement

On top of the minimum pay structure, MCOs have also reportedly delayed payment

reimbursement to panel hospitals and clinics. On average, a report has cited that this

delay has ranged from 90 days to 365 days from the date of invoice from RMP. In

addition to that, payments are also made partially (piecemeal) not as per total invoice

amount. A report has cited that MCO being a third party administrator for healthcare

currently owes 35 doctors in Malaysia an amount of over RM1,000,000 for the medical

services rendered to patients registered under their medical panel. Interviews with

medical professionals further confirms this and unpublished report also stated that the

amount due may have reached a few millions. RMPs are also exposed to the risk of

non-payment as there have been cases where MCOs revoked their operations or

involved in merger and acquisition process without transferring their liabilities (money

owed to RMPs) to the new establishments. For the record the number of MCOs has

reduced from 49 in 2000 to 29 in 2016, source by MOH information.

109

Under the Private Healthcare Facilities & Services Act 1998 (Part XV: Managed Care

Organisation), Section 82 to 86 do not mention MCO’s responsibilities with regards to

their financial commitments, obligations and reimbursement timeframe to their panels.

The only indication to this commitment is mentioned in the Guidelines for Managed Care

Organisations and Private Healthcare Facilities and Services (2013) (sections 5.1(vii)

and 6.11) where both the RMPs and MCOs are eligible to establish a grievance

mechanism plan and grievance procedure for addressing any grievance on monetary

arrangement or payment or reimbursement of professional or healthcare facility or

services’ charges in the contract or arrangement. However, the guideline has no legal

influence on the subject as discussed above.

Current practice indicates that the MCO guidelines has not been implemented

effectively by the industry players, nor has it been regulated efficiently by the Regulators

concerned. RMPs are still operating under the domineering administrative structure of

MCOs especially on fee and reimbursement. RMPs find it challenging to negotiate on

new terms with MCOs due to MCOs position within the healthcare industry where a

large number of patients (estimated at 16.36 million in 2014)10 are the enrollees of

MCOs. This indicates that the MCO controls a large market share of patients in a

monopoly structure. The event suggests that the MCOs have an unjust position of

market monopoly that is significantly preventing, restricting and distorting competition

for goods or services, as stated in Chapter 1 of the Competition Act 2010 illustrated in

Box 6.4.

10 Calculated based on article from Star Online, Tan Kay How (2014) ,Malaysian Grossly Underinsured, see : http://www.thestar.com.my/news/community/2014/12/05/msians-grossly-underinsured-only-half-of-population-have-some-form-of-life-insurance/ (50% of total population) and Daniel Simonet (2009), Managed Care Expansion to Asia :A Critical Review (10% of subsribers from private company) MCO enrollees : 10% from total EPF subsribers + total population



110

Box 6.4 : Competition Act 2010

Chapter 1: Anti-competitive agreement

4. Prohibited horizontal and vertical agreement

(1) A horizontal or vertical agreement between enterprises is prohibited insofar as the

agreement has the object or effect of significantly preventing, restricting or distorting

competition in any market for goods or services.

Chapter 2: Abuse of dominant position

10. Abuse of dominant position is prohibited

(1) An enterprise is prohibited from engaging, whether independently or collectively,

in any conduct which amounts to an abuse of a dominant position in any market for

goods or services.

The position enables the MCOs to impose biased terms on the RMPs and leave the

RMP with a limited opportunity to negotiate. Many RMPs operating small clinics

highlighted that their protest against the low fee structure and reimbursement delay has

resulted in losing of a large market share of patients. This is an indication of a

noncompliance to Clause 6.2 of MCO guideline where all MCOs shall not remove any

RMP from the “cashless” benefits without establishing and adhering to an orderly and

adequate procedure that is applicable uniformly in all cases which shall include reminder

and opportunity for his defence.

6.1.3 Intervention on clinics operation

MCOs have also reportedly tried to intervene into patients’ confidential information,

determining the type of medicines and degree of treatment to patients. It is doubtful that

this practice would provide adequate service for patients. That is because MCOs usually

hire nurses and medical assistant to make final decision regarding patient’s treatment.

In this case, the public who expects that an RMP will provide and maintain a good

standard of medical care maybe misled by decision made often remotely by the MCO

representatives. This could lead to a breach of Section 83 of PHFSA (Contracts

between Private Healthcare Facility or Service and managed care organization). The

section specifically stated that:-

111

(1) The licensee of a private healthcare facility or service or the holder of a certificate of

registration shall not enter into a contract or make any arrangement with any managed

care organization that results in -

(a) a change in the powers of the registered medical practitioner or dental

practitioner over the medical or dental management of patients as vested in

paragraph 78(a), and a change in the powers of the registered medical practitioner

or visiting registered medical practitioner over the medical care management of

patients as vested in paragraphs 79(a) and 80(a);

(d) the contravention of the code of ethics of any professional regulatory body of the

medical, dental, nursing or midwifery profession or any other healthcare

professional regulatory body; as shown below:-

Box 6.5: Code of Professionals Conduct

1.1. Responsibility for Standards of Medical Care to Patients

In pursuance of its primary duty to protect the public, the Council may institute

disciplinary proceedings when a practitioner appears seriously to have disregarded

or neglected his professional duties to his patients. The public is entitled to expect

that a registered medical practitioner will provide and maintain a good standard of

medical care. This includes:-

a. conscientious assessment of the history, symptoms and signs of a patient's

condition;

b. sufficiently thorough professional attention, examination and where necessary,

diagnostic investigation;

c. competent and considerate professional management;

d. appropriate and prompt action upon evidence suggesting the existence of

condition requiring urgent medical intervention; and

e. readiness, where the circumstances so warrant, to consult appropriate

professional colleagues

Similarly, such a breach is also prohibited under the Guidelines for Managed Care

Organisations and Private Healthcare Facilities and Services, as mentioned in clause

5.2 (d): RMP shall:

112

(i) not participate in schemes that encourage or require him to practice below his

professional standards or beyond his competence;

(vi) at all times, in any contract or arrangement with MCOs, comply with the MMC’s

Code of Professional Conduct, its guidelines “Good Medical Practice” and

“Confidentiality” and other directives or guidelines issued out by MMC.

6.1.4 Selective Empaneling and Fee Splitting

The monopoly position of MCO also enables them to practice selective empanelling of

hospitals and clinics. This possesses the following effects:

(1) may limit the access of enrollees or policy holders to seek treatment from

preferred or more reputable RMPs and

(2) fee-splitting11

In Malaysia, it is estimated that over 16.36 million (2014) or 50% population are covered

under MCOs operations. 10% of this is private sector employees who are under the

TPA and the remaining 90% or 14.7 million are personal insurance policy subscribers12.

These enrollees or policy holders are eligible to seek treatment from private clinics and

hospitals under their panel listing. However, this does not reflect real access to medical

treatment as some MCOs may have limitations in term of number of panel clinics,

geographical location and expertise of RMPs. The situation causes burdens to RMPs

as they can only refer patients to panel specialist under the same MCOs. This also leads

to a noncompliance of Clause 6.7 of MCO guidelines which stated that all MCOs shall

not, at all times, interfere with the management of any patient by the RMP which include

the rights to refer a patient to any other suitable RMP to assist in the provision of

healthcare to the patient.

Preferred referral also encourages the act of fee-splitting (the payment of a commission

for referral or co-management of a patient). Fee splitting occurs where there is an

11 The practice of sharing fees with professional colleagues in return for referrals. It also involves the arrangement by a doctor or a group of doctors to co-manage a patient with another doctor or allied health professional, in return for some financial gain, which is not paid directly by the patient as a professional fee. 12 based on 50% of total population in 2014

113

agreement between an MCO with the payer which result in a capped fees structure

imposed by MCO to medical practitioners or panel clinics/hospitals. In return, these

panels gain an upper hand over patients care. For TPA, patients who are the employees

of the payers are only allowed to seek treatment from the panel clinics. Similarly, the

said medical practitioners can only refer patients for extended care to the TPA’s panel

hospitals, indicating a possible breach of Section 3.2.2. Dishonesty: Improper Financial

Transactions of the Code of Professional Conduct which stated that fee splitting is

prohibited if it compromises the quality of healthcare. In particular a Registered Medical

Practitioner (RMP) shall not engage in any fee-splitting or kick back arrangement when

referring patients to another colleague. This is also reiterated in the Guidelines for

Managed Care Organisations and Private Healthcare Facilities and Services Act

199813, Section 5.2 (a), stated that irrespective of whichever health care delivery

system a RMP practises in, he shall always place the best interests of the patients first.

Feedbacks gathered during interviews with medical professionals, particularly owners

of private clinics revealed that attempt to defy such practice has resulted in the removal

of a number of clinics from TPA’s panels, thus affecting their revenues. To date almost

2 million private sector employees are registered under TPA 14. To protect their market

share, panel clinics resume to adherence to TPA’s terms whilst, exposing patients to

the rippling effect of compromised healthcare.

Dr. Milton Lum in his article published by the Star in 2008, reported that there is an issue

of discounts given by hospitals to MCOs due to the volume of patients’ referrals.

Healthcare is being treated as a commodity where discounts are given when bulk

purchases of goods are made. Such principle is against the Code of Professional

Conduct and may subject the practitioner to disciplinary punishment under the Medical

Act 1971. This is supported by a statement from the then Director General of Health

that any form of discount on professional fees can be construed as intention to induce

that doctor to compromise his professional judgement for financial gain much to the

detriment of his patient 15.

13 Guidelines for Managed Care Organisations and Private Healthcare Facilities and Services (2013) 14 Daniel Simonet (2009), Managed Care Expansion to Asia :A Critical Review 15 Dr. Milton Lum (18 May 2008) Hospital charges and fee splitting, The Star Online: Available at: http://www.thestar.com.my/story/?file=%2f2008%2f5%2f18%2fhealth%2f21269252&sec=health

http://www.thestar.com.my/story/?file=%2f2008%2f5%2f18%2fhealth%2f21269252&sec=health

114

Figure 6.1 summarizes the chain reaction driven by the weak regulatory framework

particularly with regard to the fee structure

Figure 6.3: Summary of the Chain Reaction Driven by Weak Regulatory

Framework

MCO

Impact

Doctors

i) Creates a conflict of interest

ii) Exposure to breaching the Code of Professional Conduct

iii) Breach of Guidelines for Managed Care Organisations and Private

Healthcare Facilities and Services

iii) Creates unfair competition

Patients

i) Higher medical costs (possibly , doctor will pass down the cost to Cash payer

patient)

ii) Affect patient welfare

Payer

i) Higher medical costs

ii) Exposure to unnecessary charge

Relevant Acts/Regulations/Guidelines/Codes

According to the doctor's Code of Professional Conduct (1986)

Section 1.1. Responsibility for Standards of Medical Care to Patients

a. conscientious assessment of the history, symptoms and signs of a patient's condition;

b. sufficiently through professional attention, examination and where necessary, diagnostic investigations;

c. Competent and considerate professional management;

d. Appropriate and prompt action upon evidence suggesting the existence of condition requiring urgent medical intervention

3.2.2. Dishonesty: Improper Financial Transactions

The Council also regards fee-splitting or any form of kick back arrangement as an inducement to refer a patient to another practitioner as unethical. The premise for

referral must be quality of care. Violation of this will be considered by the Council as infamous conduct in a professional respect.

Section 3.4 The Practitioner and Commercial Undertakings

The practitioner is the trustee for the patient and accordingly must avoid any situation in which there is a conflict of interest with the patient

According to the Guidelines for Managed Care Organisationa and Private Healthcare Facilities and Services (2013)

5.1 Licensee or holder of certificate of registration of priate healthcare facility or service

(b)A licensee or a holder of certificate of registration of a private healthcare facility or service shall ensure any monetary arrangement or payment or reimbursement of

professional or healthcare facility or services' charges in the contract or arrangment shall not -

(i) compromise professional healthcare; or

(ii) breach any professional code of ethics.

5.2. RMPs engaged or privileged to practice

(d) A RMP shall –

(iii) not engage in any fee-splitting or kick-back arrangement when referring patients to another colleague;

6.2. All MCOs shall not remove any RMP from the “cashless” benefits without establishing and adhering to an orderly and adequate procedure that is applicable uniformly in all cases which shall include reminder and opportunity for his defence.

6.3. All MCOs shall ensure that their actions shall not allow for or cause or compel any RMP to breach the MMC’s Code of Professional Conduct and other directives or

guidelines issued out by MMC.

6.7. All MCOs shall not, at all times, interfere with the management of any patient by the RMP which include the rights to refer a patient to any other suitable RMP

115

6.2 Objectives of MCOs

In summary, the objective of MCO includes:

1) Helping to control the escalating cost of healthcare for the consumer while

respecting the provider’s ultimate authority in the treatment of patient (USA MCO,

2015)

2) Delivering or giving healthcare to consumers through a third party healthcare

provider in accordance with the contract or arrangement between all parties

concerned; and administering healthcare services to employees or enrollees on

behalf of payers in accordance with contractual agreements between all parties

concerned (Section 82 in PHFSA, 1998)

116

6.3 Options to resolve the issues

1. Status quo

The situation remains the same without any changes to the Act or Regulation. If

this option is chosen, the RMP will continue to face the same issue resulting from

the weak enforcement and regulation over the operation of MCOs.

2. Revise Seventh Fee Schedule under the PHFSA (2006)

This has its significance because Schedule Seven has not been revised since its

establishment in 2006. Therefore, it is important that the fee matches the cost of

living in current years. However, it is not recommended that the regulator

increases the ceiling fee of RM35 for clinics for clinics with pharmaceutical

services and RM65 for clinic without pharmaceutical services. This option

recommends that the fee schedule be revised by increasing the minimum

consultation fee from RM10 for clinics with pharmaceutical services and RM30

for clinic without pharmaceutical services to a more appropriate amount. This will

then reduce the range between the minimum and the ceiling fee. Such a revision

could provide a more competitive fee for RMPs. This could help the RMPs to

better manage their clinical operations as well as reduce/eliminate the practice

of treatment unbundling, prescription of generic / low cost medicine and

prescription of medicine in reduced quantity. This option also promotes a fairer

fee structure for RMPs which can avoid them from transferring their current

financial burden to the cash-paying patients hence benefitting the general public.

117

Example:

Current Fee Proposed Fee

Clinics with

pharmaceutical

services

Consultation fee RM10 - RM35 RM22.5 - RM35

RM22.5 = minimum fee

calculated based on the

median of RM10 – RM35.

Range RM25 RM12.5

Clinics without

pharmaceutical

services

Consultation fee RM30 – RM65 RM47.5 – RM65

RM47.5 = minimum fee

calculated based on the

median of RM30 – RM65.

Range RM35 RM17.5

Based on the proposed fee revision of Schedule Seven, it is estimated that RMPs

will receive a minimum increase of 83% of consultation fee, which will help to

ease the financial burden faced by RMPs in clinical operation as well as improve

the fee structure imposed by MCOs upon RMPs.

The 48% increased of minimum consultation fee should make up to the 10 years

increment of approximately 5% per annum. This also coincide with the Aon

Hewitt’s new salary survey which stated that the salary increment for employees

in Malaysia is at 5.8% in 2016 – up from 5.6% in 201516. The survey supports the

viability of the option to revise the Seventh fee Schedule.

In addition to that, it is also suggested that a regulation be established to enable

RMPs to negotiate with MCOs over the fee structure based on their own practice

costs without exceeding the ceiling fee of the schedule. This include the cost of

running medical practices which varies across the country, includes employing

practice staff, RMPs years of experience and operating expenses such as

16 Aon Hewitt (2015) Aon Hewitt’s View on Transforming the HR Landscape, Latest Insights on Attracting, Rewarding and Retaining Talent in Malaysia’s Current Economic Situation, see: http://aon.mediaroom.com/Aon-Hewitt-s-View-on-Transforming-the-HR-Landsape

http://aon.mediaroom.com/Aon-Hewitt-s-View-on-Transforming-the-HR-Landsape

118

computers, rent, and electricity. This is as benchmarked against the Australian

Medical Association17.

3. Regulate MCO under the MCO Bill

MOH as a regulator should regulate the MCO’s practice in Malaysia by drafting

the MCO Bill. The new Bill should emphasize on the following areas:

i) All items stated in MCO Guideline so that the accountabilities of MCOs

are regulated (currently the guidelines does not have legal influence over

MCOs)

ii) The new fee schedule to ensure it is enforced effectively.

iii) Cover items on financial commitment by MCOs towards RMPs. This

includes the obligation by MCOs to reimburse all costs due to RMPs within

an agreed timeframe. MCOs should also be liable towards all liabilities as

stated in the Companies Act 1965 and Insurance Act 1996. Failure to

comply should subject MCOs to legal action as deemed fit by the law.

iv) Registered MCOs are accountable to hire certified primary care

practitioner (PCP), who will be responsible for coordinating subscribers’

health care18. PCP will then refer the patients to specialists or other health

care providers or procedures as necessary. This has been implemented

in other country such as the United States as an initiative to maintain the

quality of healthcare and management of patient through MCO.

v) Review of contracts between the MCO, health providers and subscribers.

This is to benchmark the practice of the Department of Health, New York

that requires the Division of Health Plan Contracting and Oversight

(DHPCO)19 to review and approve the HMO/MCO and IPA provider

contracts to ensure that applicable laws and regulations are adhered to

(for example, the fee schedules for medical professionals)

17 Australian Medical Association (2016) Fees Lists, see: http://ama.com.au/resources/fees-list 18 Department of Health (Feb 2016) Managed Care: Provider Contract Guidelines for MCOs and IPAs, see: https://www.health.ny.gov/health_care/managed_care/hmoipa/hmo_ipa.htm 19 Department of Health (Feb 2016) Managed Care: Provider Contract Guidelines for MCOs and IPAs, see: https://www.health.ny.gov/health_care/managed_care/hmoipa/hmo_ipa.htm

http://ama.com.au/resources/fees-list

119

vi) The responsibilities of MCOs to ensure that the list of panel clinics is

revised annually based on quality of service, independence and patients’

feedback.

vii) MCOs to declare annual financial status, and risk of insolvency to the

Department. In the event where the MCOs are not able to fulfill the

reimbursement schedule with the healthcare providers, early declaration

to the both the Department and providers are also required, so that early

measures could take place.

viii) Introduce stringent penalty clauses that regulate the practice of MCO in

Malaysia

2. Promote Competition and allow Open Market - Third Party Administrator (Not

including Insurance Companies).

Promote open market whereby clinics could register as panel directly under

companies (payer). To ease the management of payment by payer to individual

clinics, each RMP and payer must employ an electronic system for claim and

payment. However, details on responsibility for system installation and cost

involved must be discussed between both parties involved.

This is relevant because:

The role of TPA in helping companies reduce medical cost has not been

proven with any official studies and statistics.

However, there are many weaknesses in the implementation of TPAs

practices against relevant Acts and Guidelines.

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6.4 Recommended Option

Based on the options discussed above, the research party would like to

recommend Option 2 and 3. Option 2 could provide a higher consultation fee for

RMPs which will ease the financial burden faced by RMPs in clinical operations.

This option also promotes a fairer fee structure for RMPs which can avoid them

from transferring their current financial burden to the cash-paying patients hence

benefitting the general public. The 48% increased of minimum consultation fee

should make up to the 10 years increment at approximately 5% per annum. This

also coincide with the Aon Hewitt’s new salary survey which stated that the salary

increment for employees in Malaysia is at 5.8% in 2016 – up from 5.6% in 201520.

This recommendation also provides flexibility as it enables RMPs to negotiate

with MCOs over the fee structure based on their own practice costs without

exceeding the ceiling fee of the schedule. This restriction will protect the public's

interest as the ceiling fee is capped at RM35 and RM65, the same amount as

when it was established in 2006.

Option 3 is essential because it provides legal weightage to the existing MCO

Guideline. This is important in establishing control over MCO’s operation as well

as providing a fair contractual binding between MCOs and RMPs, which will lead

to enhance protection for patients. The new bill would also include the obligation

by MCOs to reimburse all costs due to RMPs within an agreed timeframe thus

improving business cash flow. RMPs will also be protected against non-payment

by MCOs as stated in the Company Act 1965 which was established to provide

a mechanism to protect creditors and those found guilty of mismanagement are

punished and where appropriate deprived of their right through disqualification,

from being involved in the management of other companies21. In addition to that

the bill should also refer to the Insurance Act 1996 where it covers the whole

process of winding up until the responsibilities to fulfill all liabilities to policy

20 Aon Hewitt (2015) Aon Hewitt’s View on Transforming the HR Landscape, Latest Insights on Attracting, Rewarding and Retaining Talent in Malaysia’s Current Economic Situation, see: http://aon.mediaroom.com/Aon-Hewitt-s-View-on-Transforming-the-HR-Landsape 21 Aishah Bidin (2004), Liabilities of Directors under Malaysian Insolvency Laws and Recovery of Assets During Corporate Insolvency

http://aon.mediaroom.com/Aon-Hewitt-s-View-on-Transforming-the-HR-Landsape

121

owners and debtors which includes RMPs22. All these would help to protect both

RMPs and MCOs as well as providing a more effective MCO operations for the

country.

22 Insurance Act 1996, Section 112

122

Chapter 7: Personal Data Protection Act 2010 (PDPA)

1. Inadequate quality control of

private colleges providing health

sciences education


housemen and nursing

graduates

2. Lack of Regulatory Framework for MCO Operation - Minimal fees paid to medical

professionals

- Intervention on clinics

operation


reimbursement


Splitting

3. Discrepancies between Personal Data Protection Act 2010 and PHFSA 1998 - The Redundancy on

Confidentiality - Difficulties to gain access of

data of Information

Pre-Qualification

Exit / Termination

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7.0 Personal Data Protection

7.1 Discrepancies between Personal Data Protection Act 2010 and PHFSA

1998

a) The Redundancy on Confidentiality of Information

Personal Data Protection Act (PDPA) 2010 regulates the collection, recording, holding

or storing of personal data, and carrying out of any operation on personal data for

commercial transactions. The Act, however, does not restrain a party from processing

data if the processing is done legitimately, in accordance with its principles. The Act

does not apply to Federal and State Governments; non-commercial transactions;

personal, family and household affairs; credit reference agencies; personal data

processed outside of Malaysia (unless the data is intended to be further processed in

Malaysia).

The PDPA categorizes data as follows:-

1) Personal data: means any information in respect of commercial transactions,

which—

(a) is being processed wholly or partly by means of equipment operating

automatically in response to instructions given for that purpose;

(b) is recorded with the intention that it should wholly or partly be processed by

means of such equipment; or

(c) is recorded as part of a relevant filing system or with the intention that it

should form part of a relevant filing system,

that relates directly or indirectly to a data subject, who is identified or identifiable

from that information or from that and other information in the possession of a

data user, including any sensitive personal data and expression of opinion

about the data subject; but does not include any information that is processed

124

for the purpose of a credit reporting business carried on by a credit reporting

agency under the Credit Reporting Agencies Act 2010;

2) Sensitive personal data: means any personal data consisting of information as

to the physical or mental health or condition of a data subject, his political

opinions, his religious beliefs or other beliefs of a similar nature, the

commission or alleged commission by him of any offence or any other personal

data as the Minister may determine by order published in the Gazette;

PDPA is seen by practitioners as an additional burden and redundant as it has

already been addressed under the Private Healthcare Facilities and Services Act

(PHFSA) 1998. In addition to PDPA, registered medical practitioners have to abide by

the Malaysia Medical Council (MMC) guidelines which are the code of professional

conduct and the confidentiality guidelines for medical practice. The medical

practitioners, especially those operating small clinics, are concerned that the need to

apply with to the PDPA will involve more documentation and application fees.

One of the redundancies between PDPA with PHFSA and The Confidentiality

Guidelines is the method used to safeguard the confidentiality of information. Box 7.1

highlights the data protection clauses that guide data user on how to secure

information of the data subject.

BOX 7.1 : The Redundancy on Confidentiality of Information

1) Private Healthcare Facility Services Act 1998

Section 115

(1) Every person employed, retained or appointed for the purpose of the

administration or enforcement of this Act shall preserve secrecy with respect to

all information that comes to his knowledge in the course of his duties and

shall not communicate any information to any other person

(a) to the extent that the information is to be made available to the public

under this Act;

125

(b) in connection with the administration or enforcement of this Act or any

proceedings under this Act;

(c) in connection with any matter relating to professional disciplinary

proceedings, to a body established under any law regulating a health

profession;

(d) to the person's counsel, upon the person's request where the information

relates to any healthcare service provided to him; or

(e) with the consent of the patient or legal guardian to whom the information

relates.

(2) Any person who contravenes subsection (1) commits an offence and shall be

liable on conviction to a fine not exceeding one thousand ringgit.

2) Personal Data Protection Act 2010

Section 9

A data user shall, when processing personal data, take practical steps to protect

the personal data from any loss, misuse, modification, unauthorized or

accidental access or disclosure, alteration or destruction

3) The Confidentiality Guidelines by MMC

Paragraphs 10

When a practitioner is responsible for personal information about patients, the

practitioner shall ensure that the information and any documentation about it

are effectively protected against improper disclosures at all times

126

b) Difficulties to gain access of data

Consent is considered as a major factor of the PDPA 2010. The medical professionals

brought up their concern on the stringent data control in the PDPA where only the data

subject has access to his/her information or could give consent to other data user

requiring the information. This is as per Section 39 of the Act:

Personal Data Protection 2010

Section 39

Personal data of a data subject may be disclosed by a data user for any purpose other

than the purpose for which the personal data was to be disclosed at the time of its

collection or any other purpose directly related to that purpose, only under the

following circumstances:

(a) the data subject has given his consent to the disclosure

7.2 The objective of the Act

Through the enforcement of PDPA 2010 (Security Principle), the data user believed

that they have to change the way they handle customers’ personal data. Security

Principle in PDPA is considered as the most challenging principle in processing

personal data since the businesses have to take practical steps to protect the

personal data from any loss, misuse, modification, unauthorised or accidental access

or disclosure , alteration or destruction1. Despite of that, the implementation of PDPA

will increase the cost in protecting the data since businesses have to use effective

security measures and proper tools to protect the personal data from being disclosed

to an unauthorised party unwillingly2. The relevant information of the Act is illustrated

in Box 8.8 below.

1 See article from Taylor Wessing (May 2014) (http://www.taylorwessing.com/globaldatahub/article_malaysia_dp.html) 2 See the article in The Star Online (2 February, 2014) (http://www.thestar.com.my/News/Nation/2014/02/02/Businesses-in-the-dark-over-the-PDPA/)

http://www.taylorwessing.com/globaldatahub/article_malaysia_dp.html

http://www.thestar.com.my/News/Nation/2014/02/02/Businesses-in-the-dark-over-the-PDPA/

127

Box 7.2 : Personal Data Protection Regulations 2013

7.3 Verification with Regulators

Based on the issues discussed, a verification session was conducted with regulators,

Personal Data Protection Department (PDP) team. It was made to understand that the

department has provided a robust and dynamic approach to the PDPA where

industries are consulted in the development of Code of Practice that meets the

customised requirements of individual industry. To date, four industries have

established their code of practice under the PDPA, namely Banking, Utility, Insurance

and Communication.

According to the regulator, PDPA can be designed to ease the process of data

protection for business owner despite the issues raised by Medical Professionals with

regards to unnecessary burdens cause by it. PDPA is an industry driven Act and it

promotes self-regulation that can be customised based on industry requirement as

stated under Section 23 of PDPA: Code of Practice. The PDPA also stated that the

data user shall develop and implement a security policy for the purpose as long as it

complies with the security standard set out from time to time by the Commissioner.

The PDPA emphasizes on the accountability of medical professionals over data

subject information, however, it does not dictate the process of storing

data/file/patients’ record as mentioned in Section 9 of PDPA: Security Principle. In

summary, the section stated that a data user shall, when processing personal data,

Part II : Personal Data Protection Principles Security policy 6. (1) The data user shall develop and implement a security policy for the purposes

of section 9 of the Act. (2) The data user shall ensure the security policy referred to in sub-regulation

(1) complies with the security standard set out from time to time by the Commissioner.

(3) The data user shall ensure that the security standard on the processing of personal data be compiled with by any data processor that carry out the processing of the personal data on behalf of the data user.

128

take practical steps to protect the personal data from any loss, misuse, modification,

unauthorized or accidental access or disclosure, alteration or destruction. The PDPA

addresses the limitation faced by industry player’s especially small clinics with limited

resources. Therefore, PDPA allows any form of unique treatment to data as long as

the information is safely maintained and the data processer provides sufficient

guarantees and security measures.

According to the PDP department, most private hospitals are keen to register with

PDPA and to date, over 3000 private hospitals have registered as data user and/or

processor. However, the number of small clinics registering with the PDPA remains

minimal. Most established private hospitals see PDPA as a good assurance of

protecting customer’s data thus strengthening the marketability of their services,

especially to international patients seeking medical treatment in Malaysia. The PDPA

is also relevant with the government’s initiative to double the revenue of medical

tourism from RM 688 million to over RM1 billion in 2020.

The Personal Data Protection Department however faces challenges in developing

the code of practice for healthcare industry. The meeting set on 12 December 2015

has been postponed to January 2016, delaying the process much further. The PDP

department believes that the PDPA is very much relevant to the healthcare industry

based on the high level of data sensitivity. They also believe that the code of practice

would ease the registration and PDPA implementation of over 8000 private clinics as

it provides guidelines that cater specifically to the industry’s environment.

Redundancy on disclosures of the information

The investigation revealed that there is a misunderstanding with regards to the

requirements of PDPA against the medical professionals Act and PHFSA and that the

issue of redundancy of protection of information is not valid. That is because, although

the Medical Act 1971 states the necessity to protect patient’s data, it however does

not outline detail aspects of personal data protection as recognised by international

129

industry players. The Medical Industry practitioner may design their own

methodology of data protection including storage and administration of patient’s data

to specific suitability of the industry players, including private hospitals and small

private clinics.

The customised guideline could be incorporated into the Code of Practice for the

Healthcare Industry of the PDPA, as established by the Banking, Utilities, Insurance

and Communication Industries. It could be designed to ease the way of doing

business, enhance patient’s confidence in clinics and private hospitals data

administration thus strengthening the marketability of practices. Therefore, the

Medical Industry players should adopt a far-sighted approach and act fast to initiate

the development of the Code of Practice under the PDPA.

The PDPA also helps to establish greater confidence to the international industry

players as the clauses weighs down the impact of non-conformance to the Act. The

PHFSA stated that any person who contravenes the Act (Section 115 (2)(1)) commits

an offence and shall be liable on conviction to a fine not exceeding one thousand

ringgit while under the PDPA a person who contravenes the Act (Section 40 (3)(1))

commits an offence and shall, on conviction, be liable to a fine not exceeding two

hundred thousand ringgit or to imprisonment for a term not exceeding two years or to

both. That provides bigger protection to data subject and the confidentiality of his/her

medical information.

The principles of data treatment and security are well covered under the PDPA as it

also conceals a bigger spectrum of the industry. On the other hand, the Medical Act

and PHFSA did not emphasize on such. The revised guidelines on Confidentiality

Guidelines published by the MMC on October 2011 meanwhile focuses only on the

liability of Doctors who are registered with MMC in protecting and sharing patient’s

information. It does not cover other employees or data processors who are not

registered with the MMC. Moreover the guideline which is tied to the Medical Act 1971

imposes only minimum penalty to non-compliance and may not pose as a good

measure to deter noncompliance.

130

Table 7.1 illustrates the Comparison on data protection clauses stated in the

Confidentiality Guidelines by the MMC, Private Healthcare Facilities and Services Act

1998 (PHFSA) and the Personal Data Protection Act 2010 (PDPA) :

Table 7.1: Comparison on data protection between Confidentiality Guidelines, Private

Healthcare Facilities and Services Act and PDPA Act.

Confidentiality Guidelines

- MMC

PHFSA

(Ministry of Health, MOH)

PDPA

(PDP Department)

Overall Guidelines

mention about how

doctors registered with

MMC are liable to data

protection

Clause stating all medical

practitioners registered

with MMC :

automatically refer to

doctors only

Data protection: electronic

etc.

Sharing patients’ info:

Consent, How to share,

with whom can share.

Section 115.

Confidentiality of

Information

(1) Every person

employed, retained or

appointed for the purpose

of the administration or

enforcement of this Act

shall preserve secrecy

with respect to all

information that comes to

his knowledge in the

course of his duties and

shall not communicate

any information to any

other person except -

(a) to the extent that the

information is to be made

available to the public

under this Act;

(b) in connection with the

administration or

Section 40. Processing

of sensitive personal

data

(1) Subject to subsection

(2) and section 5, a data

user shall not process any

sensitive personal data of

a data subject except in

accordance with the

following conditions:

(a) the data subject has

given his explicit

consent to the

processing of the

personal data;

(b) the processing is

necessary –

(iv) for medical purposes

and is undertaken by—

(A) a healthcare

professional; or (B) a

person who in the

131

Confidentiality Guidelines

- MMC

PHFSA

(Ministry of Health, MOH)

PDPA

(PDP Department)

enforcement of this Act or

any proceedings under

this Act;

(c) in connection with any

matter relating to

professional disciplinary

proceedings, to a body

established under any law

regulating a health

profession;

(d) to the person's

counsel, upon the

person's request where

the information relates to

any healthcare service

provided to him; or

(e) with the consent of

the patient or legal

guardian to whom the

information relates.

(2) Any person who

contravenes subsection

(1) commits an offence

and shall be liable on

conviction to a fine not

exceeding one thousand

ringgit.

circumstances owes a

duty of confidentiality

which is equivalent to that

which would arise if that

person were a healthcare

professional;

(3) A person who

contravenes subsection

(1) commits an offence

and shall, on conviction,

be liable to a fine not

exceeding two hundred

thousand ringgit or to

imprisonment for a term

not exceeding two years

or to both.

132

In addition, the Act also governs the practice of third party data processor acting on

behalf of data user (medical professional) as stated in Section 9 of the Act “The data

user shall ensure that the security standard on the processing of personal data be

compiled with by any data processor that carry out the processing of the personal data

on behalf of the data user”. That provides better protection to data subject whist

increasing patients’ confidence to seek treatment in PDPA registered clinics and

hospitals. Such a clause however does not exist in the PHFSA nor the other existing

guidelines on the administration of patients’ data.

Restriction in Accessing Patient’s Data

The verification session with the regulator and further studies on the PDPA Act has

confirmed that there is an element of serious restriction where only data subject

could give consent to data release.

One medical practitioner shared that parents of a deceased child has not been given

the permission to access their child’s medical history record as there was no consent

given by the deceased, who died at the age of above 18. Data however could only

be released under the court order as stated in Section 39 of the Act. However, the

“Extend of Disclosure of Personal Data” but would involve lengthy legal processes

and high cost.

Box 7.3 : Personal Data Protection Regulations 2010

Section 39 : Extend of Disclosure of Personal Data

Notwithstanding section 8, personal data of a data subject may be disclosed by a

data user for any purpose other than the purpose for which the personal data was

to be disclosed at the time of its collection or any other purpose directly related to

that

purpose, only under the following circumstances:

(a) the data subject has given his consent to the disclosure;

(b) the disclosure —

133

(i) is necessary for the purpose of preventing or detecting a crime, or for the

purpose of investigations;

or

(ii) was required or authorized by or under any law or by the order of a court;

(c) the data user acted in the reasonable belief that he had in law the right to

disclose the personal data to the other person;

(d) the data user acted in the reasonable belief that he would have had the

consent of the data subject if the data subject had known of the disclosing of the

personal data and the circumstances of such disclosure; or

(e) the disclosure was justified as being in the public interest in circumstances as

determined by the Minister

This restrictions have caused a regulatory and administrative burden to medical

professionals as whether to comply to the PHFSA 1998 and Code of Professionals

Conduct, which provides better flexibility where the data user could request the

consent from the data subject or a person authorized to Act on the patient’s behalf

for any disclosure of information, or comply to the PDPA’s restriction.

The related clauses under the relevant Acts and guidelines are highlighted in Box

7.4.

BOX 7.4 : Disclosures of the information

1) Private Healthcare Facility Services Act 1998

Section 115, Subsection 1(e)

With the consent of the patient or legal guardian to whom the information relates.

2) The Confidentiality Guidelines

Paragraph 21

A practitioner may release confidential information in strict accordance with the

patient’s consent or the consent of a person authorized to act on the patient’s

behalf. Seeking patient’s consent to disclosure of information is part of good

medical practice.

134

The Code of Professional Conduct 1986 however does not specify the role of any

authorised person to act on behalf of the data subject as stated in the Code of

Professionals Conduct Subsection 2, which stated that “A practitioner may not

improperly disclose information which he obtained in confidence from or about a

patient”. This gives flexibility to medical practitioners to obtain consent for patient’s

data release from the legal guardian or other authorised person. This is especially

relevant for patients under 18, as stated in Section 24 of the Child Act 2001 as

illustrated in Box 8.7.

135

7.4 Options to resolve the issues

The following options are put forward to resolve the issues of redundancy in the PDPA

implementation:

1. Status quo

PDPA remains in action without any changes to the principles of the Act. That is

because there is no redundancy in the manner of protection data in the PDPA

against the PHFSA. The issue was raised mainly due to lack of understandings

by businesses on the purpose of the Act or what they are required to do.

2. Expedite the development/establishment of Code of Practice

o Benefit: PDPA that supports the industry

o Addresses concerns & limitations

o Managing business compliance costs across the board

3. Strengthen communication to establish better understanding of PDPA among

medical professionals. This must be done after the establishment of code of

practice.

136

7.5 Recommended options

It is recommended that all options be implemented due to the followings:

Option 1: There is clearly no redundancy in the PDPA against the existing PHFSA Act.

The PDPA was developed to provide a holistic guideline to data protection involving

data subject, data user and data processor. However the PHFSA only addresses

specific areas of data protection which does not include the manner to process, secure

and store data. The PHFSA also does not mention of any liability of third party data

processor acting on behalf of data user. Hence, the PDPA does not contradict of pose

redundant to the PHFSA.

Option 2 is also recommended to complement Option 1. That is because the

development/establishment of Code of Practice would provide medical professionals

with a specific guideline on data protection that is customised to the Healthcare

Industry. The Code of Practice would address needs and limitations of medical

practitioners in processing, storing and securing patients’ data especially for those

operating small clinics. The Code of Practice will also provide every party (data

subject, data user, processor) a clear picture in determining the objective of secrecy

of the data. With this in mind, the appropriate policies and procedures regarding the

collection, processing, retention and disclosure of personal data can be implemented3.

To compliments options 1 and 2, the PDP Department is recommended to strengthen

communication with industry players, particularly medical practitioners operating small

clinics. Apart from communication, the Department could take a proactive role by

developing independent data processors who are able to process data in accordance

to the PDPA requirements. These trained data processors could support the

administrative data management function for small clinics based on outsourcing

services. This would ease the transition for small clinics into PDPA. This approach

has been successful based on the experience of the Custom Department in easing

the implementation of the Goods and Services Tax (GST) throughout 2014 to 2015.

3 See article form HG.org (http://www.hg.org/article.asp?id=33273)

http://www.hg.org/article.asp?id=33273

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