WHY ARE DOCTORS SUING CUSTOMS?
This letter was send for publication. Lets see if it appears.
Doctors
threaten to sue Customs on GST.
It is all
over the social media, that poorly
advised private doctors are mulling taking legal action against the
government. Having participated in
meetings with the MOH on Regulations of the PHCFS Regulations and having
participated in discussions with Custom’s on healthcare GST, please allow me to
help clarify on this issue of GST on Healthcare with particular reference on Private
Hospital Consultant. I believe that I am in the know, and would like the facts
to be known.
Perhaps the only wrong doing of the
government, in this case the Prime Minister, is to promise that the coming GST will see no
increase in private healthcare cost as healthcare will be GST exempt. Besides
that, the government ( in my opinion ) is not to blame for the controversy of
private hospital doctors charges when GST is imposed on the 1st
April 2015.
When we met
with the Director of GST, Datuk Dr Sobramaniam in late Nov 2014, he made it
very clear to us that all private doctors, who are registered with the Ministry
of Health under the PHCFS Act is GST exempt. That was clearly spelt out. In
November 2006, when the PHCFS Regulations were being enforced, private doctors
were asked to register. GPs and solo practitioners paid their dues and
registered. They subjected themselves to inspection by Ministry of Health
Officials and were okayed. Private
Hospital Specialists were advised by their hospitals not to register
individually but that the hospital will register them under their healthcare facility. This was obviously
because the private hospitals wanted to control the doctors. Doctors were
labeled “independent contractors” by the hospitals and treated as such, which
included the right to hire and fire, like other contractors are subjected to,
with little regard to their medical duties and responsibilities. This
independent contractor status had been accepted from the very beginning by all
the private doctors for the last 30 years. When private hospitals labeled
doctors as contractors, they had no qualms that this was a noble profession dealing with patients health.
The “Goods
and Services Tax ( GST ) is a tax on goods and services. Since the doctors are
providing a service to the hospital, the hospital should duly pay them the 6%
GST. The private medical
consultants should therefore have no
issue with the Custom’s Department. Their duty then is to remit this 6% to the
Custom’s Department. The issue is the
private hospital is unhappy as this may affect their profit margin. So they are
using the doctors to fight their battle. And the doctors, without understanding
the issue have fallen into the trap and allow themselves to be used. I have
tried my best to explain to the doctors, but to no avail.
So the
doctors are wrong to argue that Custom’s Department are wrong. This issue has
nothing to do with private practice doctors. They are being made used off by
private hospitals. Of course, what is not said is that should private doctors
not “play ball” with private hospitals, they face the possibility of
disciplinary action, not excluding termination.
What then is
the solution?
Well, on the doctors end, do nothing. Let the
hospital solve the 6% issue through creative accounting, and price
manipulation. Obviously the private hospital will increase cost of care, to
allow for the 6% increase to be passed on to doctors. I hear that they will
probably round of to at least 10% or maybe even 15%, to include their annual fees
increase. I hear that some private hospitals have also asked doctors to raise
their charges by 6 % and share the 6% with
the hospital. This is called
“fees splitting” which is against the PHCFS Act. The private hospitals may also
allow doctors to be fully independent, amend their contract and make doctors medical
service providers with rented premises in the private hospitals. This will
allow doctors to collect their own fees. Then doctors will register with the
MOH under the PHCFS Act.Then their services will be GST exempt. The hospital is
unlikely to allow that as that would mean that they cannot hire and fire the
doctor at will..
So there
are solutions. But the private hospitals do not like these solutions as it
would mean less profit, or less control over their doctors.
Basically,
private hospitals want their cake and eat it. In the meantime, get the doctors
to do their dirty work and sue Customs.
Doctors, wake up please.
Doctors, wake up please.
2 comments:
Doc, I really don't understand your article.
I understand that the healthcare practitioners have always objected to the GST in the case of all healthcare services.
Now, it appeared that this is acceptable.
Can you please clarify?
FPMPAM objects because it will increase healthcare cost. Also the list of drugs exempted is small and inadequate. The bigger giants who object are Private Hospital Owners. If each Private Hospital have 100 doctors and each doctor earns about RM 50K a year, private hospitals will have to pay each doctor RM 36K AND SO 100 Doctors equals RM 3.6 million. This amount is significant. So private hospitals are trying to make doctors sue Customs. Individual doctors should have no issue except more paperwork.
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