Friday, June 04, 2010


I would like to seek your help in giving me some suggestions as to -
1. Can we regulate private hospital bills?
2. How can we regulate private hospital bills?

The ministry of Health say that they are keen to look into this. They would like very much to contain private healthcare cost. They notice that cost has escalated tremendously.

A meeting is coming and I have been asked to make reasonable suggestions.

Please help by giving me some suggestions. Please use the comments section to do so. I will read and collate.

Thank you.


MBI said...

1. Can we regulate private hospital bills?

Of course we can and should.

2. How can we regulate private hospital bills?

As with any cost control implementation, the first thing is to classify the cost into its components. For private hospital bill, as with others, the components are (a) the variable charges and (b) the fixed charges (its administrative and other establishment charges similar to a bank's base lending rate BLR, except this can be expressed as a percentage of the variable charges subject to a minimum amount).

The variable charges can be further sub-divided to (a) medication (b) medical professional fees (c) ward charges if any and (d) relevant specific charges (e.g. operating theatre, x-ray, lab tests, ultra sound, stents, etc). Each of these variable charges can actually be standardised within appropriate cost range and reviewed periodically say once in two years.

MBI said...

Further to my earlier comment, it may be of interest that I have raised and supported this issue citing personal experience as far back as in a letter published in The Star around April 17, 2008 (if I am not mistaken). Reproduced below is the letter:

I whole-heartily support the Health Ministry's review of private hospitals' charges (The Star, April 16). If in other arguably less critical services such as private taxis and buses the fares are periodically monitored and regularised by the authorities, it is hard to imagine why private hospitals are allowed to charge at will. Closer home, since charges by private clinics have now been largely standardised, charges by private hospitals could and should be likewise. Health care is too critical a commodity to be unilaterally priced by the provider alone.

To cite personal experience, I went through a coronary angioplasty in May 2007 at a private hospital owned by a large medical group. The angioplasty with a coated stent and one-night stay at the hospital cost me about RM 27,000. There was nothing I could do with the charges other than to pay them. It was not as if before the angioplasty I could shop around different private hospitals comparing prices and finally deciding on the one I like, as with conventional transaction.

In January this year I had another coronary angioplasty, by coincidence at the private wing of a university hospital. The cost, including three-day single room stay, was to my pleasant surprise much less, about RM 11,000 albeit for a non-coated stent. Examining and comparing the billing particulars, I notice the big difference was not due to cardiologist's fees but due to the establishment's administrative and equipment charges.

I submit that in public interest private hospitals' charges should be reviewed and regularised from time to time. Benefits to individual payers aside, such move will lighten the overheads and operating costs of employers and insurers that will in turn improve their operating efficiency. It will also help towards making the country a preferred health tourist destination.

Muhamad Ibrahim

Note that in my above letter, I mention that the distinguishing feature of the vast difference in cost was not due to "the cardiologist's fees but due to the establishment's administrative and equipment charges".