PPP in healthcare: Private-based, not privatisation

PPP represents the strategic synergy between the public and private sectors – that cuts across the entire spectrum of industries and supply-chain.

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Published by Astro Awani & The Sun Daily, image from Astro Awani.

Across the length and breadth of the public policy debate on healthcare, public-private partnerships (PPP) have come under severe scrutiny and criticisms, on the one side. In this country, renowned economist Dr Jomo K Sundaram has been an outspoken critic of the excesses and extremities of PPP. On the other side, the Malaysian Health Coalition (MHC) which represents both the private sector and civil society, for example, has called for a robust PPP to combat the Covid-19 epidemic as part of the whole of government and whole of society coordination.

PPP, in principle, represents the strategic synergy between the public and private sectors – that cuts across the entire spectrum of industries and supply-chain. Cooperation and collaboration between the two are meant to be a win-win situation.

The government is supposed to make (“efficiencies”) savings and private expertise is supposed to ensure that (the “effectiveness” of the) delivery system is enhanced. Savings could then be channelled towards hiring more doctors and nurses and contributing towards e.g., the sustainability of incentives and allowances such as the Critical Service Incentive Allowance – supposedly up for review by end of the year.

As for privatisation, it entails the selling off of government assets to the private sector or the transformation (full-scale or less) of public sector organisation or of its function into a private sector one. Despite coming under backlash – at least ideological and intellectual, mainly from scholars and activists – PPP is not obsolete and remains relevant.

Privatisation is not necessarily the same as PPP.

The issue, therefore, is not so much the substance but form by which a PPP should take.

One of the areas in which PPP remains applicable would be in healthcare. In Malaysia, PPP has been tried before and this has resulted in the construction of hospitals and specialist centres.

The issue is to make PPP work in a way that the State retains the ownership of the resources and of their strategic use. Hence, even as PPP should be capitalised and leveraged by the State, privatisation under certain circumstances have their limits. This is especially so when it comes to certain strategic sectors or industries (that have yet to be privatised).

The objectives of a PPP in this regard – from the government’s perspective – will enable it to continue provide healthcare as a public good whilst delivering on the best outcomes that is value for money for the taxpayer.

Therefore, given the critical importance of PPP in healthcare, there should be a PPP strategy for healthcare under the forthcoming 12th Malaysia Plan.

The incorporation of a PPP policy for healthcare would set a clear strategic direction for the Ministry of Health (MOH) to undertake in cooperation and collaboration with the other stakeholders, namely the Ministry of Finance (MOF) as well the two bodies under the Prime Minister’s Department, i.e., the Economic Planning Unit (EPU) and the Public-Private Partnership Unit (UKAS). Other stakeholders could include the Malaysian Administrative Modernisation and Management Planning Unit (MAMPU) and the Implementation Coordination Unit (ICU) – both also of the Prime Minister’s Department.

The 12th Malaysia Plan should also contain the strategic thrusts or objectives that reflect the policy intent of the government in promoting the idea of “private initiatives without privatisation” – in relation to our public healthcare system.

It is important that our public healthcare system continues to be immune against the practice of privatising profit but socialising losses.

In March last year, former Health Minister Datuk Seri Dr Dzulkefly Ahmad set up a seven-member Health Advisory Council tasked with, among other things, looking at PPP initiatives to our country’s growing healthcare needs.

The focus of PPP now is also to be geared towards the digitalisation of the healthcare – moving beyond provision of physical and ICT facilities.

One specific area involving PPP in this regard is the ambitious digitalisation project the MOH is embarking on that provides for a centralised database in the form of the electronic medical record (EMR) system – to be driven by 5G technology in the future.

With the technical expertise of the private sector, EMR is expected to integrate the national cardiovascular data analytics and Malaysia Retinal Reading Centre (MyRRC) together with existing stored data with the Malaysia Health Data Warehouse (MyHDW) which includes a patient treatment information system (SMRP) and patient registry information system (PRIS). Other pre-existing information and communication technology (ICT)-based data will also be migrated to the EMR such as the Hospital Information System (HIS) and Patient Management System (PMS) for hospitals alongside the Clinical Information System (CIS) in the form of Teleprimary Care (TPC), Oral Health Care Information System (OHCIS) and TPC-OHCIS integrated system for clinics.

Via PPP, EMR is also intended to be interoperable with private healthcare data and, therefore, extended to involve the seamless integration and inter-face and interchange of data and information management.

Currently, according to Health Minister Dr Adham Baba, EMR system will be integrated through the MyHix sharing platform, which paves the way to developing a master patient index and lifetime health records.

Ideally, EMR should be comprehensive and systematic in that it not only contains the patient data and information. But EMR should also have a matching process – based on AI algorithm and Big Data mining and predictive analytics reliant again on private sector expertise – that allows for correlation when it comes to sourcing and searching for the most suitable service and treatment offered by hospitals and clinics in terms of costs and expertise and location.

Patients would also have the choices and options to make informed decisions as to which provider offers the best and most suitable coverage.

By the same token, the streamlining of medical database of healthcare could also be further applied to insurance schemes. This is so that insurance providers (public and private) could also share a common medical database in the form of EMR – as operated by the MOH as the principal and primary “back-end user”.

The insurance packages of the providers should be incorporated into the EMR as part of PPP and streamlining measure.

In practice, this would allow insurance companies to make referrals for coverage to their counterparts in the industry or market. So, for example, if a patient is unable to be covered by one provider, then another one could offer the coverage based on shared access to the EMR.

By extension, EMR would also contribute towards reducing disparity in the quality of services provided, allow patients/insurance subscribers the option of choosing public or private hospitals, minimise the difference in end user prices between public and private hospitals, and ease the backlog of patient waiting list in public hospitals.

In short, digitalisation of medical and staging data under PPP would enable the private sector to play a critical role in reducing costs via open tender and under a turnkey scheme (where the contractor assumes the financial costs and risks) – but with a built-in mechanism (in the absence of a project delivery partner scheme) that locks-in the period of delivery – to ensure no costs overrun.

The policies and policy proposals highlighted and presented here, respectively, do not entail privatisation. And yet these offer much scope for PPP to flourish in the medium- as well as long-term. As long as we don’t purposely muddle in this fundamental and critical differentiation, funding of our healthcare system under the PPP could be sustainable in the foreseeable future.

Jason Loh Seong Wei is Head of Social, Law & Human Rights at EMIR Research, an independent think tank focussed on strategic policy recommendations based on rigorous research.

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