Civil Society Organizations in Opposition to Healthcare Commercialization: Protecting Access for the Poor and Middle Class in Malaysia

Abstract

This article examines the role of civil society organizations (CSOs) in contesting healthcare commercialization in Malaysia. The article uses a novel framework to analyze the emergence of CSOs to protect the interests of the disadvantaged against commercialization initiatives. CSO action has expanded following the formation of social networks and election into parliament of individuals who share their views to oppose healthcare commercialization in the country. Against the odds, the evidence suggests that a significant presence of CSOs has emerged to challenge healthcare commercialization. Political changes have also given CSOs the opportunity to campaign for the protection of the interests of the disadvantaged in Malaysia’s healthcare development processes.

Keywords

civil society commercialization healthcare Malaysia public utilities

Introduction

Discourse on commercialization and privatization has continued to provoke debates among different groups over the motives and objectives that shape the governance of essential services, such as healthcare. What is alarming is the pace of healthcare that has taken place in developing countries. The commercial share of total healthcare expenditure in 2007 of Cambodia, Laos, Malaysia, Myanmar, and the Philippines was in the range of 47.2% to 88.3%. At the same time, the commensurate shares in the developed European countries of Denmark, France, Germany, Italy, Netherlands, Norway, Sweden, and the United Kingdom ranged from 15.1% to 23.5% (World Health Organization [WHO], 2010).

The commercialization of healthcare has raised questions about the role of the state in protecting poor and the middle-class interests because healthcare is a public utility with inelastic demand and an essential service that should reach everyone. What seems clear is that an inequitable distribution of healthcare services has been created by commercialization. It traps ailing patients who cannot afford it in a difficult dilemma of sometimes having to forgo treatment at poorly equipped public hospitals or compelled to pay exorbitant prices to purchase commercial healthcare services (Heeney, 1995). The commercialization of healthcare has also been found to exacerbate poverty in developing countries (Van Doorslaer et al., 2006).

This article analyzes the Malaysian experience with healthcare commercialization. Malaysia, a middle-income country, is not only undergoing rapid epidemiologic transition but also facing the commercialization of healthcare services by the government since the 1980s. While resources allocated to public hospitals have continued to dwindle, the government began to offer subsidies to selected commercial hospitals through grants and tax breaks to promote health tourism since 1997. The government has also started operating privately registered hospitals so much so that government-owned but commercially run hospital chains of Kumpulan Perubatan Johor (KPJ), and Khazanah Nasional-owned Pantai and Gleneagles Hospitals are now the largest group of commercial hospitals in the country.

Hence, this article seeks to analyze the initiatives of civil society organizations (CSOs) to challenge such government efforts to commercialize healthcare in Malaysia (Asia Pacific Observatory on Health Systems and Policies, 2013; Malaysia, 1996). The rest of the article is organized as follows: Section “Theoretical Considerations” reviews the critical arguments essential to capture the dynamics of healthcare commercialization, the state’s role and the place of CSOs in the process. Section “Method and Data” discusses the methodology and data used. Section “Healthcare Commercialization” presents the commercialization of healthcare services. Section “CSOs’ Advocacy Role” analyzes the role of CSOs in contesting healthcare commercialization.

Theoretical Considerations

Because healthcare is a public utility that is essential for everyone, it cannot be left entirely to market forces as it will exclude those below the equilibrium clearing price (Arrow, 1963; Baumol, 1980; Weisbrod, 1988). It is for this reason that the role of the state in ensuring that healthcare reaches all in need, rather than only those capable of purchasing it, is critical. In this context, not all states have played successfully the wider role of meeting societal needs when involving public utilities and public goods. The welfare states of Denmark, Norway, and Sweden are among the countries that have approached this issue better than the United States. Also, there is evidence to suggest that the provision of healthcare is not necessarily strictly associated with how developed an economy is. For example, Cuba enjoyed good healthcare (health index, 0.906; United Nations Development Programme, 2014) but its GDP per capita was only US$6,051 in 2011 (World Bank, 2014). Thus, the role of the state is crucial here as its functions should include the provision of essential utilities for those who cannot afford it at commercial rates. Where states and big businesses have allied to deliver commercial healthcare services by increasing the role of market forces, CSOs have emerged to contest such initiatives. The three key concepts important for consideration in this article are commercialization, the state, and the role of CSOs.

Commercialization

Hayek (1944) and Friedman (1962) were arguably the main economists who promoted individual liberty and free markets in opposition to the welfare state concept of Keynes (1936), which became a major influence over the proliferation of privatization starting from the 1970s, but especially since the 1980s. Although the concept of privatization has been around for a long time, its coverage and meaning are still disputed. Economists and sociologists differ in their interpretation of the term privatization. As Starr (1988) had pointed out, economists regard privatization to mean a shift in property rights ownership from public to private hands characterized by market-based operations that carry commercial value. The economic rationale of private property evolved from the efforts of Demsetz (1967), and Alchian and Demsetz (1973) to define property rights, which is shared by sociologists. However, they differ in the interpretation of markets as they consider all non–state-owned or controlled organizations and individuals as private—including non-commercial cooperatives, religious associations, and private individuals and families. Starr noted that privatization has taken on the broader definition of any shift of activities or functions from the state to the private sector, and, more specifically, any shift of the production of goods and services from public to private. It is for this reason we have preferred the term commercialization so that the focus of the study is on the shift in the financing of healthcare not just from public to private hands but targeted at the profiteering motive.

The major political push to commercialize public goods and public utilities began during Ronald Reagan’s presidency of the United States and Margaret Thatcher’s premiership of the United Kingdom from the late 1970s (Jones, 2012). The attack on the welfare state through commercialization and the support for market-based theories arose because of chronic government deficits arising from the failure of governments to meet economic and organizational efficiency, as well as, the unraveling of problems of centralized planning and its deleterious consequences on organizational efficiency and individual freedom (Kontorovich & Ellman, 1992). However, initiatives to commercialize public utilities, such as, telecommunications, healthcare, railways, and education in the United Kingdom did not take account of the special characteristics of public utilities, which are prone to market failure. The imposition of purely commercial property rights is a recipe for social exclusion. Nonetheless, even in the United Kingdom, the government still funds a major share of healthcare services.

The commercialization of healthcare raises the profit-making motive of the provider. Thus, even government-owned commercial healthcare providers, such as the Pantai and KPJ chains, are run as private corporations targeted at making profits (Chee, 2008). Although the use of commercial general practitioners, commercial hospitals, and foreign healthcare service providers has expanded in the developed countries, the share of expenditure borne by governments, such as, the United Kingdom and Netherlands in the financing of healthcare services is still high (WHO, 2010). Hence, out of pocket and other payments borne by individuals and organizations have remained low in most developed countries.

A commercial instrument, which is aggressively promoted in both the developed and developing economies is medical insurance. The widespread use of commercial medical insurance in countries, such as Netherlands, Singapore, and the United States has its shortcomings when implemented in poor economies as they lack the regulatory capacity in these countries. As pointed out by Buchanan (1995), a private (commercial) ownership-dominated insurance system can be expected to provide just healthcare, only if there is extensive and effective regulation to check the normal competitive behavior of private (commercial) insurers or if generous public funds are provided to fill the gaps left behind by private (commercial) insurers.

The State and Civil Society

The famous Miliband–Poulantzas debate of the early 1970s triggered intense discussions on the role of the state. Whereas Poulantzas (1973) had argued that the state plays a wide role to address the broad interests of society, Miliband (1969) regarded the state as an instrument of the capitalist class. Jessop (1990) expanded further Poulantzas’ work by arguing that state autonomy is a necessary condition for states to play the wider role of addressing fundamental issues, such as, the provision of essential utilities, and for tackling problems of poverty and inequality in society. One can add to this list public goods and utilities, such as knowledge, the environment, and healthcare. While recognizing the potential state bureaucracies have for autonomous functions, Skocpol (1979, 1995) argued that states are often dominated by powerful interest groups. It is for these reasons Evans (1995) distinguished different formations of the state.

Whereas the developmental state theory has focused on industrial transformation as the vehicle to stimulate economic development, healthcare is a utility that requires careful attention by the state owing to its fragility if left to markets. It is for these reasons CSOs have evolved to steer the role of states to protect the interest of the disadvantaged.

Before discussing the role of CSOs it is important to first define what the term means. Fukuyama (1992) referred civil society to all non-state institutions and organizations as civil society, whereas Gramsci (1971) had envisioned it as a regulated society without significant involvement of the state. Seligman (1992) considered civil society as one forged from the tension of opposites that is evolved in the resolution of contrasting (universal) ideas that are crystallized in a new set of institutions. Foucault’s (1984) strong conviction to challenge power can be viewed at the levels of (a) generation of knowledge around social and environmental determinants of health; (b) the relations of power among different civil society actors and institutions, and between civil society and the state; and (c) the relation between oneself and others. Hence, it is possible for CSOs to seek market-determined outcomes but only if they are effective in serving the interests of the poor and the middle class.

However, besides offering ammunition for debate, these abstract articulations of the concept confuse rather than concretize the role of interest groups contesting the power of the state and big business. For example, in spite of enjoying a sophisticated political structure, Skocpol (1994) and Annandale (1998) have argued convincingly to show how electoral democracies in the United States and United Kingdom, respectively, have compromised the interests of the disadvantaged. In providing evidence over the emergence of new social divisions from class inequalities, Annandale (1998) argued that individual choice has been compromised by the highly politicized milieu in the United Kingdom. Therefore, CSOs operate as the third force to check uncomfortable and unsafe socio-political spaces left behind by markets and the state. In doing so, the state is the prime organization that CSOs have looked upon to redress social problems, which is consistent with the functions of the state as expounded by Jessop (1990), who argued that the autonomous role of the state is critical to ensure that the disadvantaged are not missed by the processes of social change.

We use civil society in this article to refer to a wide spectrum of groups and organizations that actively shape public discourse and development by advocating their views and values based on ethical, cultural, political, scientific, religious, and philanthropic considerations. They commonly comprise community groups, non-governmental organizations (NGOs), unions, indigenous peoples’ support groups, environmental groups, philanthropic organizations, and faith-based organizations that address the broader societal concerns when attempting to prevent the occurrence of the tragedy of commons—for example, in fighting global warming and climate change.¹

Civil society comprises individuals and organizations that come together to form social networks on the basis of trust and reciprocity to help the disadvantaged to address their needs (Putnam, 1995). Also, it is the medium through which social contracts are sought, negotiated, and debated with the centers of political and economic authority (Kaldor, 2003). Being outside the machineries of state and market, CSOs address excesses, especially those faced by the disadvantaged through peaceful but non-cooperative means by providing voluntary support. CSOs play an important role to assist people displaced or suppressed by the state and powerful businesses to have their needs represented in healthcare policies. CSOs are usually an integral part of the healthcare system that draw support from the integration of a wide array of democratic bodies to seek or oppose policies in support of the poor and the middle class. The manner in which the state responds to the demands submitted and the extent to which CSOs are recognized and included in policies and programs democratically are some of the critical factors that determine the course of public policy.

Toward an Analytic Framework

Having reviewed the key concepts of commercialization, the state, and civil society, this section looks at the articulation of state policy against the contending demands from powerful interest groups that look at the state for business opportunities, and the role of CSOs to protect the interests of the disadvantaged in the provision of healthcare. Figure 1 shows the conceptual framework that will be used to examine the role of CSOs in preventing the exclusion of the disadvantaged from the provision of healthcare services in Malaysia.

Figure 1.

Analytic framework of healthcare funding and provision.

In most countries, commercial and non-commercial healthcare providers exist. Whereas government provides non-commercial healthcare services through publicly owned operators, commercial providers compliment them by meeting the gaps left by them and to service private needs in countries, such as Canada. Whereas commercial providers seek profits from the delivery of healthcare services, public providers are financed by governments. However, privately registered government providers in Malaysia also operate as commercial healthcare providers for profits. The disadvantaged are expected to use non-commercial healthcare services, but because of long waiting times they end up purchasing commercial healthcare services.

Two considerations are important to address the allocation of healthcare services. First, the development level of the country is important, as in the developing economies, the poor may not be aware or have immediate concern (owing to the focus on the most basic of needs, such as food and shelter), or the democratic space to contest freely the allocation of healthcare; and second, the strength of opposing advocacy roles of neo-liberal forces in support of market-oriented commercialization policies against the societal interests pursued by CSOs. Both groups seek to shape the functions of the state in their own direction. It is in this struggle that the success of CSOs very much depends on their ability to win the state’s support to defend the interests of the disadvantaged.

On one hand, neo-liberal forces advocate commercially run healthcare services by claiming that markets are efficient. Lucas (1978) had argued that investors have “rational expectations” so that asset prices will fully reflect all available information and marginal-utility adjusted costs. The efficient market hypothesis has been extended to include non-traded assets, such as human capital, state-dependent preferences, heterogeneous investors, asymmetric information, and transaction costs that typify healthcare services. The argument follows from the logic that individual investors form expectations rationally in markets aggregate information efficiently, and equilibrium prices incorporate all available information instantaneously. Where there are monopoly rents to be appropriated, especially when returns are guaranteed, politically connected elites may support such commercial initiatives using connected elites. An example of such support in the past in Malaysia are the guarantees the government gave to independent power plants to produce energy in the early 1990s (Rector, 2005). However, even businesses enjoying political support can fail as the demand for power fell significantly short of desired returns in Sabah that led to the acquisition of the loss-making plant owned by Yeoh Tiong Lay (YTL) Corporation by government-owned Tenaga Nasional Berhad.² Rents from the state to support a wide range of economic activities are reciprocated with political funding by the politically connected elites.

On the other hand, CSOs often run campaigns to oppose the commercialization of healthcare to protect the interests of the majority, which include the middle class and the poor. Also, in mature democracies, state elites may seek political support (votes) by promising the allocation of healthcare to all members of society through the provision of subsidies. Such initiatives normally emerge collectively to address a wide range of issues, with healthcare being one of them. Such developments have resulted in corporations becoming sophisticated in organizing their strategies as they increasingly lobby to capture civil society, the media, and policy makers to support their interests (Miller & Harkins, 2010).

Method and Data

Three methodologies are used in this article. The first deals with the use of secondary data compiled by the Ministry of Health (MOH), which shows healthcare expenditure, hospitals, beds, and doctors by government and private bodies, and the policy instruments introduced by the government. The second source of data is collected through a survey using a stratified random sample (by size and state) procedure of hospitals with a cut-off point of more than beds to capture differences in the delivery of healthcare services in commercial and non-commercial hospitals (University of Malaya, 2010; see Note 1). Forty (40.4%) commercial and 44 (48.9%) non-commercial hospitals from a hospital population of 99 and 90, respectively, participated in the survey. The questionnaires were targeted at the management of hospitals to extract information on waiting times for use of medical resonance imaging (MRI) instruments, and to remove kidney stones by surgeons. The purpose of limiting the questions was to obtain a high response rate. The selection of MRI and kidney stones was also to compare waiting times in the provision of specialist care.

The third source of information was from purposively selected interviews with leaders of CSOs and members of parliament with CSO origins who actively support the provision of quality healthcare for the disadvantaged. In doing so, officials from Aliran, Malaysiakini, and Suara Rakyat Malaysia (SUARAM) who carried healthcare issues and civil society identified the members of parliament. In addition, we interviewed members of 13 of the 19 CSOs who have shown strong opposition to healthcare commercialization in Aliran and Malaysiakini publications. Aliran and Malaysiakini are two alternative media outlets that carry the voice of CSO members in Malaysia, whereas SUARAM functions explicitly as a CSO.

The choice of the three methods is important. As argued by Doyle (2003), meta-ethnography uses multiple empirical studies but, unlike meta-physical studies, the sample used is purposive rather than exhaustive because the objective is interpretive rather than predictive. Thus, instead of collecting a large set of data on the views of the poor and the middle class on the role played by CSOs, it is suffice to identify the key leaders who shape their roles, which will help facilitate the mapping of networks critical to capture the advocacy role of CSOs who are campaigning for the state to meet the healthcare needs of the disadvantaged.

Healthcare Commercialization

Hospitals owned by governments but seeking profits are considered commercial whereas all others that do not focus on profits are considered non-commercial. All hospitals operated on profit-based considerations are considered commercial. Thus, although Lam Wah Yee, Assunta, Adventist, and Fatima hospitals were begun without profit considerations, they have become commercial because at the time of the study, they had changed to charge exorbitant fees.³ Also, a number of services in government hospitals are supplied by commercial firms that seek profits from the government—for example, the supply of drugs by Pharmaniaga (Gomez & Jomo, 1999).

The 1980s marked the transformation of Malaysia’s healthcare system when burgeoning government expenditure deficits culminated in the government encouraging healthcare commercialization in the country (Malaysia, 1996), despite the World Bank (1993) stressing that markets can fail because of the peculiarity of healthcare. Also, in rapidly urbanizing towns where there was already a strong presence of commercial hospitals, the government neglected the construction of non-commercial hospitals. Subang is one such large town that has only commercial hospitals. Government efforts to own private hospitals started when the Johor Economic Development Corporation established KPJ in 1981. As at 2005, KPJ had grown in size and coverage, administering 17 commercial specialist hospitals across Malaysia. In addition, the government sold and commercialized the Sabah Medical Centre into Likas Maternity Hospital and Queen Elizabeth General Hospital (see Barraclough & Phua, 2011; Chee & Barraclough, 2007). The competition for expensive specialists has also forced most non-profit hospitals to charge exorbitant fees for healthcare services (Chee, 2008).

As a consequence, the non-commercial share of healthcare expenditure, which was stable at around 94% over the period 1977 to 1981, began to fall gradually from then on to reach 52% in 1997 as private hospitals increased sharply thereafter (see Figure 2; Malaysia, 1996; MOH, 2013). However, when the financial crisis struck in the second half of 1997 to weaken the capacity of people to purchase commercial healthcare services, the government started promoting health tourism to offset the loss in demand (Latifa, 2013). The non-commercial share of healthcare expenditure rose in trend terms to 58% in 2003, which has since fluctuated to leave a sizable commercial sector accounting for 46% of healthcare expenditure in 2011. Thus, commercial hospital beds increased from 1,171 in 1980 to 10,405 in 2003, raising the share of commercial ownership of beds from 3.9% in 1980 to 26.7% in 2003 (MOH, 2004).

Figure 2.

Healthcare expenditure by hospital category, Malaysia, 1977 to 2011 (%).

The government began promoting the commercialization of hospitals through the introduction of health tourism with incentives and grants in 1997 (MOH, 2002). As a consequence, 35 members of the Association of Private Hospitals Malaysia (APHM)⁴ were granted by the government health tourism status by 2001, which qualified them for industrial building allowances, tax holidays, and tax rebates for expenses incurred on pre-employment training (MOH, 2002). The total number of private hospitals classified as health tourist hospitals rose to 41 in 2015 (APHM, 2015). While Malaysian investors can benefit from tax incentives and capital allowances from the acquisition of high-tech equipment and expansion of domestic clients through claimable medical tax allowance and insurance, the promotion of health tourism was also targeted at attracting foreign patients on a large scale (Malaysia, 1996).

However, the promotion of tourist commercial hospitals by politically connected elites did not materialize as the financial crisis caused a sharp fall in paying patients (Chee, 2008; Latifa, 2013). Interviews suggest that the acquisition and development of private hospitals by Khazanah Holdings, which is a sovereign wealth fund, is a consequence of losses made by a number of private hospitals since the Asian financial crisis struck in 1997.⁵ The government’s focus on commercial hospitals was driven by the successful experience of Thailand and Singapore (Malaysia, 1996). Hence, like the experience of the Independent power plants (IPP) in the power industry, healthcare commercialization did not go by the scripted plan (Rector, 2005).

The aggressive promotion of commercialization has created a two-tier healthcare system, which as our survey showed, is reflected in the unequal waiting times in public and commercial hospitals (Table 1). The shortest waiting time among the 16 non-commercial hospitals that had MRI instruments was 4 months and the longest was 7 months. Among the 25 commercial hospitals that reported having MRI instruments, the commensurate range was between 2 and 7 days. Meanwhile, 27 non-commercial hospitals reported that their surgeons can remove kidney stones through surgery or the use of laser beams with a waiting time of 6 to 9 months when the 31 commercial hospitals that had such a service reported being able do it in 5 to 15 days. Non-commercial hospitals also reported that when such a service was not available, they would send patients to other non-commercial or commercial hospitals. In addition, Chee (2008) had reported that more than 70% of specialist services and 23 of 29 clinical oncologists in Malaysia were in the private (commercial) sector in 2003.

Table 1.

Waiting Times by Hospital Category, Malaysia, 2010.

	n	MRI		Kidney stone removal
	n	Yes	No	Yes	No
Non-commercial	44	16 (4-7 months)	28	27 (6-9 months)	17
Commercial	40	25 (2-7 days)	15	31 (5-15 days)	9

Source. University of Malaya (2010).

Note. MRI = medical resonance imaging.

Thus, not only have commercial hospitals enjoyed greater promotion and expansion than non-commercial hospitals, the waiting times among these hospitals are also highly unequal. It is this contrast in the provision of healthcare services that has attracted CSOs to, among other things, contest the policy direction of government in Malaysia.

CSOs’ Advocacy Role

CSOs have emerged in Malaysia to correct the imbalances created by the two-tier system that the government has created through commercialization despite draconian laws enacted to suppress civil dissent. Examples of laws targeted at CSOs include the Sedition Act of 1948, the Internal Security Act (ISA) of 1960, the Societies Act of 1966, the Official Secrets Act (OSA) of 1972, the Universities and Universities Colleges Act of 1971, and the Printing Presses and Publications Act of 1984 (Malaysia, 2006). Although these legislations are used to protect a wider range of interests, opposition to government policy on healthcare has also been dealt by these instruments. The ISA had been the most powerful and widely used deterrent instrument that permits indefinite detention without legal recourse. Also, amendments in 1981 to the Societies Act of 1966 were targeted at curbing the democratic space for dissent. Nevertheless, CSOs have continued to contest healthcare issues in the country (Malaysia, 2006). For example, academics who protested over the health ailments faced by residents of Papan community from the dumping of radioactive materials by the Japanese firm, Asia Rare Earth (ARE), were arrested and jailed without trial during Operasi Lalang under the ISA in 1987 (Operasi Lalang Revisited,” 2008).⁶ Also, the special branch of the government’s police has often intimidated CSOs, obstructing their activities by confiscating computers and vital documents (“Moving Forward or Backwards?,” 2010).

The Consumers Association of Penang (CAP) and the Federation of Malaysian Consumers Association (FOMCA) are among the organizations that champion the cause of the disadvantaged in Malaysia. SUARAM (2014) joined the struggle after the government used the ISA to detain without trial 106 civil society members and opposition politicians in 1987. The Malaysian Medical Association (MMA) took a strong position during the presidencies of Rajakumar and Mark McCoy against healthcare commercialization (Chee & Barraclough, 2007). The Citizens Health Initiative (CHI), Alaigal, Community Development Centre, and Suara Warga Pertiwi have also opposed healthcare commercialization on the grounds that it will undermine access for the disadvantaged (Coalition Against Health Care Privatisation [CAHP], 2005).

CSOs have also contested the government’s neglect of public hospitals with restrictive constraints on resources and remuneration schemes, and incentive packages that offer commercial providers indirect subsidies (e.g., tax breaks). The alignment of the state with commercial agents has reduced much of the policy focus to generating profits, leaving the disadvantaged poor vulnerable. It is this shift by the government’s role to promote commercialization that has attracted strong civil society reaction (Chan, 2003). For example, Dato’ Paul Selvaraj of FOMCA had the following to say on the two-tier healthcare system:

The consequence of this dual system has been a brain drain of specialists from the non-commercial to the commercial sector. Thus, the non-commercial healthcare system suffers from problems, such as, long waiting times, overcrowding, and shortage of trained medical personnel. We are of the view that the government should increase investment in non-commercial healthcare to improve the quality of services especially when Malaysia still spends less than the World Health Organization’s recommended expenditure on healthcare. FOMCA opposes any form of privatization or fundamental changes to the financial structure of healthcare in Malaysia as incomes of most Malaysians are low, which makes accessibility and affordability a critical issue. What we need is an improvement in the current healthcare system, not a change in its fundamental structure.⁷

Similarly Mohanarani Rasiah of Alaigal reported why her organization is opposed to healthcare commercialization:

I see the creation of a two-tier healthcare system as the commercialization efforts by the government have caused a brain drain from government hospitals to commercial hospitals—commercial healthcare for the rich and public healthcare for the poor. Government hospitals have little advanced equipment and qualified medical personnel so poor patients needing specialized care have to wait a long time or travel out of town to the one or two hospitals that have them. Poor people who are forced to seek specialist treatment not available at government hospitals have to take loans to pay the exorbitant costs. In addition, public hospitals are not supplied some critical medicines. Alaigal’s experience in the Coalition Against Healthcare Privatisation (CAHP) shows that the poor strongly opposed healthcare commercialization by the government.⁸

In addition, Dr. Zulkifly Ahmad, who was the member of parliament of Kuala Selangor over the term 2008 to 2013, is against the healthcare commercialization for the following reasons:

The commercialization of healthcare has not benefited the susceptible groups of people, that is the poor, the young and babies, the geriatric and also many from the middle class as queues have remained long in government public hospitals located in urban areas, while publicly-run government hospitals in the rural areas lack the critical equipment and specialists to deal with life threatening illnesses.⁹

The clampdown on CSOs, including members of the press who share such views, has led to the expansion of the alternative media. Aliran and Malaysiakini are some of these alternative media instruments that have emerged to represent CSOs to ensure that issues critical to society are discussed in the public domain. Premesh Chandran, one of the two founding members of Malaysiakini, had the following to say over his opposition to the commercialization of healthcare services in the country:

Commercial healthcare is too expensive for the poor. Some think that insurance is the solution but insurers find many reasons not to cover several costs, such as pre-existing conditions. We had a case where a staff was hospitalized, only later to discover that the symptoms were related to a pre-existing condition and the insurers refused the medical claim. I know many friends who are in debt this way despite having health insurance. Also, no public hospitals were built in urban areas like Subang, allowing commercial healthcare providers, such as Subang Jaya Medical Centre and Sunway Medical Centre to become the main healthcare providers. It is a major drain on the lower and upper middle class who are often forced to seek commercial healthcare either because the waiting times are too long in public hospitals or simply because the reliable specialists have moved to commercial hospitals.¹⁰

Although, legislations recognize CSOs as partners in development (Malaysia, 2004), they are labeled as politically motivated when their struggle conflicts with government policy. During his premiership, Dr. Mahathir often called on CSO leaders to contest in elections if they did not agree with government policy (Mahathir, 1998). In fact, Tian Chua, a member of parliament following the 2008 and 2013 General Elections, reported that he chose to enter politics because of Dr. Mahathir’s challenge for civil society members to contest in elections.¹¹

Officials of CAP and FOMCA reported their uneasiness over the monopoly enjoyed by Pharmaniaga as the sole distributor of drugs to public hospitals,¹² which won the award for the highest growth in profits before tax over 3 years in trading/services in 2010.¹³ The vice president of CAP in 2012 explained that CAP is opposed not only to the expansion of large commercial hospitals and in the provision of incentives to promote health tourism but also to the proliferation of poorly regulated medical colleges and unregulated health insurance services.¹⁴

Aware that the fight against healthcare commercialization is a daunting one, CSOs in Malaysia consolidated their efforts with the formation of the CAHP in 2004 (CAHP, 2005). The CAHP, which is still active,¹⁵ comprised of 81 NGOs and trade unions, has held demonstrations to inform the public of government plans to commercialize healthcare services (CAHP, 2005; “81 Organisations Say No to Privatisation,” 2004). Examples of people’s support of CAHP’s efforts against healthcare commercialization include the Putrajaya demonstration staged by 400 protesters outside the MOH in 2004 demanding a halt to the corporatization of government hospitals and commercialization of dispensaries in solidarity with the CAHP president, who led a 10-member delegation to meet the minister of health to express their opposition to healthcare commercialization in Malaysia. Similarly, on February 13, 2006, the coalition embarked on a campaign in which 20,000 leaflets were distributed to patients, hospital staff, visitors, and passers-by in nine government hospitals, with the slogan “do not destroy government hospitals” (“CAHP,” 2006). It was an awareness campaign for the public and an attempt to deter the government from future plans to expand healthcare commercialization. On March 1, 2010, the CAHP criticized the full patient-paying scheme (FPPS) introduced in 2007, arguing that it will hurt the already lopsided “two-tier” healthcare system that commercialization has created, which was aimed at increasing doctors’ income so that they will not be lost to the commercial sector (“Full-Paying Patients,” 2010b). CSOs have also become increasingly concerned with the government’s direct role in the commercialization process following the construction and acquisition of commercial hospitals (“Full-Paying Patients,” 2010b).

The CAHP carried out simultaneous pickets outside four public hospitals nationwide demanding an end to the FPPS on March 1, 2010, which they alleged will disadvantage poor patients (“Full-Paying Patients,” 2010b). The CAHP argued that several government specialists would end up spending time and energy treating commercial patients in search of additional income so as to neglect their responsibility to patients registered at public hospitals. This picket came as a response to the health minister’s claim that specialists and patients are satisfied with the FPPS, which the MOH had decided to introduce in public hospitals (“Full-Paying Patient,” 2010a).

Increasing agitation by CSOs against healthcare privatization led the government to conceal its commercialization initiatives under the OSA (“Full-Paying Patients,” 2010b). Despite such authoritarian moves by the government, the CAHP has successfully exposed several new healthcare privatization initiatives (Chee & Barraclough, 2007; Lîfgren, Leeuw, & Leahy, 2011). For example, the CAHP discovered that the National Health Financing Scheme (NHFS), which sought to corporatize public hospitals was going to introduce fees for all medical services through a value added tax to finance healthcare by setting up a system in which there will be penalties on primary care doctors if they approved specialist care beyond the allowable limit, and illnesses not covered by health insurance (“Strengthen the Public,” 2007).

The tightly controlled mainstream media has been used by the government to defend healthcare commercialization, which has forced CSOs to take to the non-mainstream media. The Internet has become a major channel through which the CAHP and other opponents of healthcare commercialization have managed to successfully reach a significant mass of people to gain support for their activities. The change has been dramatic as it has taken place in just a few years since Loh and Saravanamuttu (1999) described that Malaysians lacked the democratic impulse to seek political change.

Liew Chin Tong, the member of parliament of Kluang, described the impact of healthcare commercialization in Malaysia as follows:

The promotion of commercialization is targeted at helping private hospitals to make profits. This has not only led to government neglect of public healthcare, but has also caused the concentration of experienced specialists in commercially driven hospitals located in urban locations. Yet, the government has been the prime promoter of healthcare commercialization as ironically, most of the largest “commercial” healthcare providers are government-owned one way or the other. The negative impact of such commercialization forays is among the reasons why the urban poor and the middle class are increasingly supporting our cause by voting us to correct such problems.¹⁶

The public’s increasing recognition of the importance of social welfare translated inter alia, into the election victories of six parliamentarians who entered politics primarily to redress social inequities and the rights of the poor in the 2008 general elections. The electorate in the parliamentary constituencies of Batu, Bukit Bendera, Seputih, Subang, Klang, and Sungai Siput voted for individuals with affiliation to CSOs.¹⁷ In addition, the opposition-ruled state government of Selangor has given democratic space to CSOs to question federal government policies on healthcare commercialization (Selangor State Government, 2010). Even if the federal government does not take these developments in its stride, the seeds have already been sown for a serious struggle to reform the healthcare sector. The momentum of change in this direction grew further as of the 11 parliamentary by-elections conducted in the period 2008-2009, the opposition won eight, which is unprecedented given the massive resources and media advantage enjoyed by the federal government over the opposition parties.¹⁸ At least 14 of the parliamentarians who got elected in the 2013 general elections are affiliated to CSOs in Malaysia.¹⁹ One of them, Tian Chua, had this to say:

I am confident that Malaysia’s civil society movement’s quest to force the government to reconsider its policy to promote the commercialization of healthcare activities and to focus instead on the health of all rather than profits for big business can no longer be stopped. Healthcare commercialization is one of our key election weapon that my political party used at the last two general elections.²⁰

Hence, although the rural poor largely voted the government in power in the 2008 and 2013 general elections, important issues that are pertinent to the livelihoods of the poor and the middle class, such as healthcare, has become important in attracting particular urban votes in Malaysia. Therefore, whichever government that holds power over the next decade cannot overlook the need to strengthen the regulatory instruments facing healthcare to safeguard the social needs of the poor and the middle class. Steps in this direction will also open up more democratic space for CSOs to act in the interests of the disadvantaged against powerful commercial interests to ensure that healthcare services reaches all.

Conclusion

This article examined changes in healthcare financing in Malaysia. Instead of reforming and improving public healthcare, the government has promoted commercial healthcare through legislation, and provision of generous incentives and grants. As a consequence, commercial healthcare expenditure in total healthcare expenditure reached its peak of 50.3% in 2005 (MOH, 2013). The surge in the promotion of commercial healthcare and the growing neglect of public healthcare has attracted growing opposition from CSOs. The public’s support for such human action to protect public healthcare, inter alia, resulted in the election of several parliamentarians with civil society roots in 2008 and in 2013. The strongly networked CAHP, which has managed to reach a wide spectrum of Malaysian society, has managed to expose many government healthcare commercialization initiatives.

Hence, if the processes of democratization that took a new turn in 2008 are to leave an indelible mark in the social health history of Malaysia, one can expect either the existing government to embrace more the role of CSOs or face further erosion of support from the voters. Although Chee (2008) had argued that CSOs only enjoy a small opening against the powerful forces of government and the commercial sector, the struggle against the promotion of healthcare commercialization cannot be underestimated. The Malaysian experience should serve as an example for other developing countries that are also promoting commercialization. The role of CSOs can be an important third force that could check the predatory powers of the state, as well as its alliance with big businesses as it can play what Jessop (1990) and Skocpol (1994) refer to as the developmental role to protect the interests of the disadvantaged.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This study was financed by the University of Malaya, Ministry of Higher Education of Malaysia (MOHE) High Impact Research Grant (Project No. UM C/625/1/HIR/MOHE/ASH/05).

Notes

Author Biographies

Rajah Rasiah is professor of international development at University of Malaya. He is the recipient of the 2014 Celso Furtado Prize awarded by the World Academy of Sciences.

Makmor Tumin is an associate professor at University of Malaya.

Latifa Musafar Hameed is director of International Research Centre of Islamic Economics and Finance senior lecturer at International Islamic University College Selangor.

Ibrahim Ndoma is a doctoral student at the Department of Development Studies, University of Malaya.

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