Private hospitals defend high prices

The private hospital industry’s profit margin is only 7-8% and the financial reports of companies that own them are readily available online, says an association representing them.

PETALING JAYA: The Association of Private Hospitals Malaysia (APHM) said the industry is “struggling to keep afloat” following a story, which went viral, of a private hospital in the capital reportedly overcharging for face masks.

The hospital was handed a RM200,000 compound fine by the domestic trade and consumer affairs ministry last week for charging a patient RM201.60 for 18 pieces of 3-ply face masks used by the nurses during treatment.

The hospital charged RM11.20 for each mask, almost 10 times higher than the government’s ceiling price of RM1.50.

APHM said this was the first time a private hospital had been charged under the Price Control and Anti-Profiteering Act 2011.

Speaking to FMT, APHM president Dr Kuljit Singh said the private healthcare industry had to set high prices because its costs were not subsidised by the government.

“Healthcare is costly, but government hospitals provide services which the public generally get for free.

Association of Private Hospitals Malaysia president Dr Kuljit Singh.

“Malaysian public healthcare is one of the best in the world, but if people want to go to private hospitals, there is a price to pay as it is not subsidised by anyone.”

Under Budget 2020, he said, the health ministry had been provided RM30.6 billion, a 6.6% increase from the RM28.7 billion it was allocated the previous year.

“The private hospital industry’s profit margin is only around 7-8%, but the public doesn’t understand this.

“The financial reports of companies that own these hospitals are readily available online and the public can check for themselves. We’re actually struggling to keep afloat.”

Kuljit compared the healthcare industry to the aircraft industry as both had to ensure their equipment worked “100% of the time”.

He explained that hospitals required costly equipment which could run up to RM10 million, most of which had to be imported, an issue exacerbated by Malaysia’s weakening ringgit.

Not only do these equipment have to function flawlessly, as they are used in life-or-death situations, they must be insured, maintained and have back-ups.

Kuljit said some hospitals carried out complex surgeries such as open-heart or liver transplants, and if there were complications, even from a small procedure, they had to have the personnel and equipment ready to assist.

“In the smaller hospitals, they have to pack you up and send you to another hospital.”

Insurance to protect against the high cost of medical malpractice lawsuits is another expense which private hospitals have to bear.

APHM plans to set up a meeting with Domestic Trade and Consumer Affairs Minister Alexander Nanta Linggi to seek clarification on the issue.

The hospital was found to have committed an offence under Section 11 of the Price Control and Anti-Profiteering Act 2011, which states that “any person who sells or offers to sell any price-controlled goods or provides or offers to provide any charge-controlled services or who collects deposits otherwise than in accordance with the prices or charges determined by the controller commits an offence”.

Speaking to FMT, lawyer Sachpreetraj Sohanpal said private hospitals were also bound by the act.

“A reading of section 11 makes this clear. It applies to everyone who sells price-controlled goods. A sale happens as long as goods are sold for a price.” - FMT