Globalisation and

Healthcare in Malaysia
Dr David KL Quek, KMN
MBBS (Mal), MRCP (UK), FRCP (London), FAMM (Malaysia),
FASCC (ASEAN), FAPSC (Asia-Pacific), FCCP (USA), FACC (USA)

MMA Selangor Symposium

FUTURE CHALLENGES FOR HEALTHCARE FOR
MALAYSIA, Sunway Resort Hotel & Spa
Jan 18, 2009
Globalisation… UNDP 1997
Descriptive concept: used to describe the global
proliferation of cross-border flows of trade, finance, &
information; also refers to the emergence of a single,
increasingly integrated global economy.
As prescription, usually calls for liberalization or
deregulation of national markets in the belief that the
unrestricted or free flow of trade, investments, and
profits across national boundaries will facilitate global
integration and produce the best economic, social, and
political outcomes for humanity.
Outcomes or effects of globalization: usually equated
with economic growth, increased personal incomes,
improved living conditions and liberal democracy.
Globalization – in these terms – often prescribed with air
of inevitability, moral superiority, & overwhelming
conviction (UNDP 1997).

UNITED NATIONS DEVELOPMENT PROGRAM (UNDP) 1997

“Globalization—Poor Nations, Poor People.” Pp. 82-93
in Human Development Report 1997. New York: Oxford University Press.
 Free Market Capitalism…
Key concepts: “free market” and “free trade,”
Advocates of this ideology use these concepts like a mantra.
Since 1989, belief in the triumph of capitalism over
communism and the end to the Cold War are due to the
victory of the market over the state (Korten 1999:37).
Belief that “the more you let market forces rule and the more
you open your economy to free trade and competition, the
more efficient and flourishing your economy will be”
(Friedman 1999).
In this ideology, globalization = “spread of free market
capitalism to virtually every corner of the world.”
Proponents believe they have discovered the universal
formula for economic prosperity.
The Rise of Free Market Capitalism;
The Demise of Socialism
Globalism: 1st introduced since 1970s
Free market capitalism expanded
during the Reagan and Thatcher years,
into the 1980s
Culminated with the fall of the Berlin
Wall and the crumbling of the Soviet
Union from 1989
Usually touted as Capitalism’s triumph
over Communism/Socialism
 TURBO-CAPITALISM
Luttwak (1999): this capitalist formula is “good for every
country, rich or poor.”
Formula: “PRIVATIZATION + DEREGULATION +
GLOBALIZATION = TURBO-CAPITALISM =
PROSPERITY”.
In applying this ideology, the IMF, the World Bank, the
regional development banks, and the international
development agencies of the major donor countries (led by
the United States) have insisted that the governments
receiving their loans, credits, and development assistance
adopt a series of so-called structural adjustments and
economic reforms.

LUTTWAK, EDWARD 1999

Turbo-Capitalism: Winners and Losers in the Global Economy.
New York: Harper-Collins
Globalisation
Globalisation – a
definition

The intensification of
global flows
of capital, goods, ideas
and people across
borders and the
institutions and rules
established to regulate
these flows.
 Globalism and Unfettered Trade
Globalism taken as the ultimate and inevitable pathway for
economic theory—Free Trade supervenes every other
consideration…
Borderless world (Keynes’ “Without passport or other formality”), no barriers to
investment, money flows, services, goods
National barriers such as regulations and cultural sensitivities,
some deemed ‘protectionist’ are downgraded or removed
entirely
“Crucifixion economics” advocated, “no pain, no gain” top-down
approach with capital reining supreme, corporations given
widest berth to flourish with least restrictions, hardly any
oversight; let the ‘moral right’ of the consumer take flight…
Is it an ‘experiment’ doomed to cyclical failure?
“The power to become habituated to
his surroundings is a marked
characteristic of mankind.

Very few of us realise with conviction

the intensely unusual, unstable,
complicated, unreliable, temporary
nature of the economic organisation
by which western Europe has lived
for the last century.

We assume some of the most peculiar

and temporary of our late
advantages as natural, permanent
and to be depended on, and we lay
our plans accordingly.”
~ John Maynard Keynes, 1919
The Promise of Globalisation
Power
Power ofof nation–state
nation–state waning,
waning, maybe
maybe even
even dying
dying
In
In future
future power
power lies
lies with
with global
global markets
markets
Economics,
Economics, notnot politics
politics or
or armies,
armies, will
will shape
shape global
global
markets
markets
Global
Global markets,
markets, freed
freed from
from narrow
narrow nationals
nationals interests/
interests/
regulations,
regulations, will
will establish
establish international
international economic
economic balances
balances
Eternal
Eternal boom-and-bust
boom-and-bust cyclescycles will
will be
be outgrown
outgrown
Markets
Markets unleash
unleash trade
trade waves,
waves, tides
tides of
of growth
growth
Rising
Rising tide
tide of
of growth
growth will
will raise
raise all
all prosperity
prosperity forfor all,
all,
converting
converting dictatorships
dictatorships into
into democracies
democracies
But
But new
new democracies
democracies will
will have
have nono absolute
absolute powers—
powers—
irresponsible
irresponsible nationalism,
nationalism, racism,
racism, political
political violence
violence will
will
shrivel
shrivel away
away
 The Promise of Globalisation
New
New market
market sizes, sizes, larger larger corporations—raise
corporations—raise beyond beyond
bankruptcy
bankruptcy risks, risks, hence hence market market stabilitystability
Transnationals
Transnationals will will be be market
market leaders leaders of
of civilisation—
civilisation—
like v it l e ?
ab dominance a n d
like virtual
virtual states,
states, their their n d aggressive
n e
aggressive
i dominance
s p e r i ty will
will
make e t r u e a t o p r o
make them them
l l t himpervious
e s
impervious to
to s local
tlocal
l e a d political
political prejudices
prejudices
?
u t a r e a f - i n t er e r s o m e
o BThus
Thus conditions
conditions
d u a l s l healthy
efor
for healthy governance,
r o n ly
governance, fo emergence
emergence of of
i n d i
iv governments r a ll ,o ar?
o C a n
debt-free
debt-free governments
i n e s s f o u s s o f m o r al
r al h p p
a accounting t a u h
gturnt o l lo a
wsocieties
Stable
ge n
Stablee public
public accounting
h i s t o r y in
in turn will
awill
l a n f
stabilise
stabilise
d societies
h a t h a s e e t h i c n c h a b l e
If so, wfreed
Theory:
Theory: freed from from t e wilful
d o
wilful
t b men,
men, following
following
u n q u eindividual
individual
o self-interests b e t r
will
s
u lead to life re e
of d fo r
prosperity, e st
general s,
self-interests
anM a n will lead
t h to
o f g
life of prosperity,
l f -i n t e r
general
C
o happiness l th e p a e r in g s e
happiness
o r w i l r p o w
p
Cyclesa t h ,of history a n
will d o
be vebroken; history will be dead!
Cycles of history
n e y / w ealth will be broken;
co n ce rns? history will be dead!
m o l l o t h er
e r se de a
su p
Recent Banking and Financial Crises put paid that
globalism & unfettered free-market capitalism is
anything but benign and self-regulatory…
“Money, gentlemen, money! The virus
That infects mankind with every sickness
We have a name for no greater scourge
Than that!” ~~ Sophocles

UNITED NATIONS DEVELOPMENT PROGRAM (UNDP)

1997 “Globalization—Poor Nations, Poor People.” Pp. 82-93 in Human
Development Report 1997. New York: Oxford University Press.
1999 Human Development Report 1999: Globalization with a Human Face.
New York: Oxford University Press. Retrieved March 9, 2003
(http://hdr.undp.org/reports/global/1999/en/default.cfm).
 Health & Globalisation
Global risks for health
Exclusion from global markets, e.g.
North Korea, Zimbabwe, Cuba (converse results)
Private ownership of knowledge:
TRIPS, drug patent laws, HIV drugs,
Migration of health professionals:
mainly to wealthier nations, OECD, Australiasia, e.g. in
one town in Canada, 2/3 doctors migrant from one
small area of South Africa
Cross border transmission of
disease: SARS, bird flu, NIPAH, MDR-TB
Environmental degradation: rise in
dengue, Nipah, SARS, West Nile disease, Chikungunya;
floods, tsunami, forest fires, tropical storms
Conflict: War, refugees, famine e.g. cholera
 Health & Globalisation
Health in globalising world

Domestic action alone

insufficient

Health achievements critical to

international development goals
 Health & Globalisation

Global opportunities for health

Inclusion/ connection
New market incentives for R&D
New resources for effective
interventions
Knowledge dissemination
New rules to control cross border
risks
Public health & Globalisation
WHO’s response
Strategic directions;
Priority for: diseases of the poor,
tobacco control/elimination;
Support for national health systems;
New: Partnerships and relationships;
Resources;
Rules;
Optimism.
 Health & Globalisation
Globalisation, trade and health
A policy, research and training
programme
Develop knowledge and skills
Promote policy coherence
Contribute to: global public goods
for health, global health funds,
international rules for
health
 Globalisation and health
Openness Cross border
flows technology

National Policies

Regional/global rules
and institutions

Level and Education

Health Health distribution Water
risks systems of Energy
household Transport
income Other sectors

Health GCP/HSD
Outcomes June 2000
 Health & Globalisation
WTO (1995) Agreements and
health
GATT
Technical barriers to trade
Intellectual property and trade :
TRIPS
Services : GATS

AFTA ASEAN Free Trade Zone: 2013

 Health & Globalisation
Globalisation and health:
policy measures

Equitable and sustainable growth

Openness: gradual, sequenced and paced
Produce global public goods, control the
bad/illegal/unexpected
Increase transfer of financial and technical resources
Strong national health policies, institutions,
regulations and programmes
Engage across sectors and borders
 Structural Reforms &
Adjustments for Globalisation
These adjustments and reforms
– make the private sector the primary engine of these
countries’ development efforts,
– give priority to servicing their foreign debts,
– deregulate their commercial and financial markets,
– reduce the size of their government budgets and
bureaucracies,
– eliminate all barriers to foreign investments and imports,
– sell off their state enterprises and public utilities to private
corporations, e.g. attempts to sell off IJN to Sime Darby
– privatize as many of their public services as possible, and
– terminate all government subsidies and most welfare
programs (Balasubramaniam2000).
BALASUBRAMANIAM, K. 2000 “Globalization and Liberalization of Healthcare Services: WTO and the
General Agreement on Trade in Services.” Paper prepared for The People’s Health Assembly,
December 4-8, Savar, Bangladesh. Retrieved December 9, 2002 (
http://phmovement.org/pubs/issuepapers/bala2.html ).
 STIGLITZ, JOSEPH
2002 Globalization and its Discontents. New York: W.W. Norton.
Joseph Stiglitz (2002), (2001 Nobel Prize in Economics and
former Chief Economist and Senior Vice President of the World
Bank) in his recent book on globalization, provides a harsh
indictment on the disastrous effects on the structural adjustment
programs and neoliberal development strategies of the IMF, the
World Bank, and the WTO.
Stiglitz claims that what he learned while he was at the World
Bank “radically changed [his] views of both globalization and
development,” because he “saw firsthand the devastating effect
that globalization can have on developing countries and
especially the poor within these countries”
The neoliberal policies that the IMF and the other international
financial and trade agencies have imposed on these countries
have been “an almost certain recipe for job destruction and
unemployment creation at the expense of the poor,” and they
have contributed to the instability of their economies
 HILARY, JOHN
2001 “The World Bank’s Private Sector Review: Does the Private Sector Development
Strategy Threaten Children’s Right to Health?” Save the Children
Position Paper. Retrieved on March 15, 2003
(http://www.challengeglobalization.org/html/tools/WB_private_sector.pdf).

The introduction of cost recovery programs in

the health sector is now widely accepted to
have been disastrous, forcing many families
and their children into a “medical poverty trap”
characterized by untreated illness and long
term impoverishment.
Even the World Bank, while it continues to
support user fees for health in national Poverty
Reduction Strategy Papers, has acknowledged
that they are responsible for denying poor
families access to health care. (Hilary 2001)
 Negative Consequences of
Globalisation… Hilary, 2001
Many countries that have followed the World Bank’s private
sector development strategy have experienced negative
consequences:
(1) commercialization has led to increased inequality in
access to health care;
(2) private investment tends to be concentrated in the more
affluent areas and in profit-maximizing activities;
(3) health maintenance organizations and health insurance
companies favor the healthy and wealthy;
(4) the private sector draws health personnel away from the
public health system (causing a “brain drain”) and
worsens the shortage of trained personnel in public
health;
 Negative Consequences of
Globalisation… Hilary, 2001
(5) many conflicts of interest between the pursuit of
commercial interests and public health goals have
arisen;
(6) profit-motivated health care gives excessive focus to
curative rather than preventive health measures;
(7) limited funds are often diverted toward nonpriority
areas;
(8) privatization schemes have restricted the access of
poor families to not only health but to water and
sanitation; and
(9) rising prices in the health care system are often
accompanied by a decline in the quality of service.
The United Nations Development Program (UNDP 2001)
has offered the following observations on this situation:

• The technology divide does not have to follow the

income divide; throughout history, technology has
been a powerful tool for human development and
poverty reduction.
• Markets are powerful engines of technological
progress, but they are not powerful enough to
create and diffuse the technologies needed to
eradicate poverty.
• Developing countries may gain especially high
rewards from new technologies, but they also face
especially severe challenges in managing the risks.
The United Nations Development Program (UNDP 2001)
has offered the following observations on this situation:
National policies—important though they be—will not
be sufficient to compensate for global market failures.
New international initiatives and the fair use of global
rules are needed to channel new technologies towards
the most urgent needs of the world’s poor people.
The challenge is for the international community to act
on these propositions, and to organize and finance
more effectively than in the past the development and
distribution of the new health-related technologies that
are needed by the populations of the developing world
“in the face of the growing pressures of globalization”
 Driving forces, facilitating factors and constraints
Technology political influences economy ideas global concerns

GLOBALISATION

World
Markets

Population Health National

Level Health Related Economy,
Influences Sectors Politics &
Society

Individual Household Health Care

Health Risks Economy System

HEALTH
 GLOBALISATION
Openness

Rules &
Institutions

Cross-border
flows

Population-level Health-related World Health Care

Health Influences Factors Markets System
 Health Care System
Regulation Inputs/costs

organisation financing

delivery

Health Health Health

service service service
access quality price
Why the Need for a Common
(ASEAN) Market?
It is the creation of an economic
association of sovereign states into a
single trading market having little or
no restriction of movement of
individuals, capital, goods, and
services among the partner states.
A Common Market further facilitates
trade by lowering regulatory and tariff
barriers.
Common Market: Advantages
The advantages gained from a Common Market
association are many:
1. It increases division of labour and productivity.
2. It allows and encourages freedom of movement for all
the factors of production.
3. The factors of production will be more efficiently
allocated.
4. It creates a greater competitive environment.
5. It generates economies of scale making goods
cheaper.
6. There is greater availability and choice of products.
7. A larger market also encourages creation of new
products
Medicine has evolved into a service industry catering to
the medical needs of the community.
With new practices in the economic and labour market,
and improved lifestyle and expectations of patients, the
practice of medicine has seen two major changes in the
medical care arena.
First, the privatization of health-care and second the role
of third party players acting between patients and health-
care providers.
Medical care and service is now regarded as a yet another
commodity to be bought and sold in the market place.
Market-Orientated Health Care
In market-orientated medical care, the patient is
the customer and the medical care and service
rendered by the doctor and hospital is the
commodity and service traded in a demand and
supply chain.
As a user and client, the patient’s main desire is
to secure the best doctor, the best medicine, the
best hospital facilities and the best attended and
related personal care services.
And the patient hopes to purchase all these at
the lowest possible medical cost.
3 Players: 3 Markets:
• the Patient/Citizen, • the Service,
• the Health Care Provider, and • the Expert, and
• the Health Care Purchaser. • the Purchaser Markets.
 Free market strives on competition
Benefits of market-orientated medicine.
For example:
1) Being consumer orientated, it is patient-centred. The result
is better health service where patients receive good value for
money.
2) There will be shorter waiting time and the patient better
informed. The end result is a satisfied customer.
3) Competition will encourage medical practice to be more
vigilant, transparent and accountable.
4) Doctors are bound to practise evidence based medicine and
hospitals strive to ensure and maintain recognised standard
of care.
(An example of a recognised standard of care is for hospitals to
be accredited to the Joint Commission International (JCI).
 Anton Petter & Gudrun Eder. European Health Management
Association (EHMA) Annual Conference in 2007, Lyon
In practice, medicine does not behave like other kinds of commodity
in market trading.
Some problems associated with market-orientated medicine that can cause market
failure or less than perfect results/outcomes, in some instances:
1) There is asymmetry of information. The Patient may not necessarily be able to
make the best decisions on the varied products and treatments that are available
to them. Often, expert knowledge is required to make decisions on complex
issues such as the type of treatment most appropriate to the illness, the standard
of safety, the level of comfort and the health cost involved.
2) Market barriers created by Health Care Purchasers not only dictate the price but
limit the types of product available to the Patients.
3) Principal-Agent problems surfaced as a result of the introduction of third party
agents who act between the Health Care Provider and the Patient.
4) Moral hazard is always present when a decision has to be made between best
available treatment and the balance sheet of the Health Care Provider.
5) Transaction cost involving additional marketing and administrative expenses has
made health care less efficient.
6) Risk selection by choosing less complicated cases can ensure greater returns to
the Health Care Provider.
AFTA: ASEAN Free Trade Area
Malaysia’s trade policy is to pursue trade
liberalisation through rule-based multilateral
trading system under WTO
One important WTO principle is to eliminate
duties and tariffs for all parties
Common Effective Tariff Scheme (CEPT) adopted
by ASEAN-6 (Brunei, Indonesia, Malaysia,
Philippines, Singapore, Thailand):
Reduced duties on 98.9% of all their products
99.6% of these products are at tariff rates 0 to
5%
In 1995, the ASEAN Economic Ministers agreed to the
establishment of an ASEAN Common Market (AEC).
Aim to allow continued growth and prosperity in the region,
enabling the region to withstand global competition.
A framework of an ASEAN Common Market was set up to
substantially eliminate barriers to trade and services; in Bali
2003, this AEC was targetted to be established by 2020
In 2007, the Economic Ministers met in Cebu, Philippines and
agreed to the following plan: -

1) Develop Asean into a single market

2) Eliminate tariffs and non-tariffs barriers
3) Free movement of professionals
4) Encourage private participation
5) Harmonise custom procedures
 AFTA Mutual Recognition
Arrangements: 2015
A common market will no doubt benefit the health-care services as it
facilitates the movement of talents, capital, goods, and services across
the region.
Steps were taken in 2004 in Vientiane, Laos during the ASEAN Summit
to harmonise standards and regulations for health services.
The Economic Ministers further met in Bangkok early this year for
further co-operation on trade in health services. A roadmap was drawn
up for the integration of the health care sector by 2010.
In August 2008, the Ministers met again in Singapore to help the ASEAN
partners move closer towards economic integration.
Three Mutual Recognition Arrangements (MRAs) in the
accounting, medical and dental fields were signed by
the ASEAN members as part of a bigger goal of
realising a liberalised and integrated ASEAN economic
community by 2015.
10th ASEAN Summit (20-24 Nov 2004) Ventiane:
Priority Sectors for fast-tracking realisation of AEC
Health Services:
Healthcare service: Hospital, medical, dental
services
Social work services: nursing homes
Human helath activities
Veterinary services

Ancillary Healthcare services cover:

Manufacture of pharmaceutical products
Medical equipment and devices
Health insurance
R&D
Education and training of medical personnel
 AFTA: Aims
Health without frontiers:
– Access to affordable healthcare, (?)
– impact of trade liberalization on health sector
– Access to wider healthcare choices,
opportunities, greater flow of trade and services
exchange, overall economic growth stimulated—
GDP increase—function of global prosperity?
Formulate ASEAN food safety policy
Harmonisation of maximum residue limits
for pesticides
Sarjeet SS. Implications of AFTA for medical associations
and the medical profession.
MMA News, Dec 2008, Vol.38 (11): pgs 13-14.
 The European Union (the EU) is the best example of a
long established Common Market model.
In the EU, the practice of a common market in health services has
resulted in the following: -
1) Greater mobility of people from one member country to another to seek
better and faster health care service.
2) Also greater mobility of doctors from one member country to another for
training and practices. Little difficulty was encountered in the
standardization of educational curriculum and training among the
educational bodies. But there was much resistance from the professional
licensing bodies of the various member countries.
3) Another feature was increased migration of doctors from member countries
with lesser remuneration to member countries with higher remuneration.
4) The EU countries saw an increase in the number of private hospitals in
member countries with lower labour cost.
5) The EU had encouraged more innovations of medical products, one of which
was the invention and production of the Cypher Stents.
6) In the United Kingdom, there was an increase in complaints of long waiting
lists and the poor service of the National Health Service when compared to
some of the other EU countries.
Market-Orientated Health Care

3 Players:
• the Patient/Citizen,
• the Health Care Provider, and
• the Health Care Purchaser.

3 Markets:
• the Service,
• the Expert, and
• the Purchaser Markets.
 First Player of the Health Market -
The Patients/Citizens
a) The ASEAN population size and economics, a huge

market potential consisting of 589 million people with

GDP of 2.6 trillion US dollars.
However the economic characteristics vary greatly among the
ASEAN member countries, ranging from a GDP of 710 US
dollars per capita to 51,000 US dollars per capita.
b) Expect greater mobility of people among the ASEAN countries
—follows from waiver of visa among the ASEAN govts,
—introduction of budget air fares
—migration of workers among ASEAN member countries for
better employment opportunities and greater remunerations.
 First Player of the Health Market -
The Patients/Citizens
c) With improved living standards and exposure to different
lifestyles in the various ASEAN countries, healthcare
expectation of patients is expected to rise.
Patients now have better knowledge and understanding on
diseases, and the treatments available.
More importantly, patients are now presented with a wider
range of treatment options available to them.
These options differ not just in terms of therapy offered,
but in quality of care, and cost. At the same time, they
have greater expectations of the service provided.
d) With improved living and educational standards of the
people in ASEAN, the pattern of diseases also changes,
more heart or chronic ailments.
Second Player of the Health Market –
The Health Care Providers
 a) Physicians: GPs and Specialists
 In an ASEAN Common Market setup, we expect a greater
mobility of doctors among the ASEAN countries . Doctors
move from one country to another for training, consultation and
better remuneration and job opportunities.
 Government health authorities will/should meet to standardize
the education curriculum and training of the medical
practitioners, including that of specialists and surgeons, the
various subspecialty bodies would have to help in giving relevant
inputs and recommendations to the Government authorities.
 There is a large variation in density of specialists in relation to
population. Patients from areas with low density of specialists will
seek treatment in places where the specialists are more
accessible.
 Second Player of the Health Market –
The Health Care Providers
b) The Hospitals.
b) The Hospitals.
1) Privatization over public ownership will be more common in market-
orientated medicine. We expect increase in the number of private hospitals
in the ASEAN countries. Presently with the exception of Cambodia and
Laos, highly specialised care/surgery services are available in many of the
private hospitals in the ASEAN countries. With greater mobility of health
workers there may be a shift of private hospitals to countries with lower
labour cost.
2) Private expected to bring in foreign exchange to member ASEAN. Medical
tourism is greatly encouraged by the Governments of the Philippines,
Thailand, Malaysia and Singapore. In the Philippines incentives such as tax
relief are offered to encourage the development an construction of private
hospitals. Indonesia too is building new, well equipped private hospitals for
its well-to-do patients.
3) Another good outcome that can be expected will be hospitals striving to
attain recognised standard of health care as a result of keen competition
among the private hospitals. Many hospitals now seek accreditation from
the Joint Commission International for quality management and health-
care service. To-date, there are 21 private hospitals in the ASEAN member
countries with JCI certification.
 Second Player of the Health Market –
The Health Care Providers
b) The Hospitals.
4) Large growing market for health care will lead to segmentation of various
kinds of private hospital catering to the different needs/sectors of patients.
Some private hospitals thrive on offering top-class quality medical care to
patients who are able and willing to pay higher cost. E.g. Parkway Group
Healthcare Pte Ltd is building a US 1.5 billion-dollar luxurious state-of-the-
art hospital in Singapore.
5) With more private hospitals being set up, there will be an increase in job
opportunities for the doctors and health-care workers , in the region with
no border restraints.
6) A large market base will also enable some hospitals to go into more
specialized disciplines and services for example, neonatal surgery and
robotic surgery.
7) The market will also encourage greater innovations and use of new
devices, for example, new biotech/genomic and stem cell therapy.
 Third Player of the Health Market –
The Health Care Purchaser
1. Patients in public hospitals of all ASEAN countries are now receiving free or
heavily subsidized medical treatments. Vietnam and Singapore have co-
insurance payment by employers and employees so that more citizens can
seek treatment in private hospitals.
2. Private health insurance coverage among ASEAN countries at present is still
very low, ranging from 0 to 20%.
There is great opportunity for private investors to invest in this area; but
would for-profit motives drive up health care costs?
The insurance planners can design and provide different health packages
and market them according to the needs of the patient.
Insurance agencies can tailor and organise different kinds of
health/medical packages for their clients. They range from budget to an
exquisite care, from mass to private luxuries, etc.
Problem: what about the uninsured or those unable to insure?
3. Can emergence of insurance planners & international referring agencies help
lower the cost of medical treatment?
May be tendency to dictate and limit the types of treatment available;
case and risk selection worries are real…
 ASEAN Common Market on
Health Services: Benefit
The most immediate benefits would likely be:
1. An ASEAN Common Market on Health Services will mean greater access
to better quality healthcare to the people of ASEAN.
2. An ASEAN Common Market on Health Services encourages the setting
up of specialised medical centres that focus on the use of sophisticated
medical equipment and advance state of the art treatment; but cost is
likely to escalate…
3. As the healthcare expectations of people increase, public hospitals will
be motivated to improve, thereby further raising the general standard
of health care in ASEAN.
4. Richer, more developed nations such as Singapore may benefit more
than poorer countries such as Laos and Cambodia, as freer movement
of its specialists or large physician or hospital groups (more established
and experienced) can tap into the larger population of the wealthier
citizens of other ASEAN nations.
 ASEAN Common Market on
Health Services: Challenges
1. Inequity/disparity of healthcare access is a real threat: The care
treatment extended to the rich and the poor will vary; the very
poor or uninsured/uninsurable will very likely be left out.
2. Outward migration of already short-staffed expertise: Easy
mobility enhanced by attractive job opportunity and prospect
may result in shortage of doctors in the outlying areas and
poorer regions where patients desperately need specialised care.
3. Market forces may encourage popularisation of specialist
treatments, interventional rather than simpler treatment
strategies that are more profitable to the Health Care Providers.
4. Information Asymmetry and Difficult Patient Choices: Patients
face difficulty in making informed choices in treatment arising
from unequal relationship between the Patient and the Health
Care Provider.
 AFTA/WTO: Current status of
Liberalisation
Legal Profession: only Malaysian citizens or permanent
residents admitted to the Bar. Foreign lawyers can
appear before Malaysian court with sepcial Admission
certificates from AG’s office. Admission regulated under
Legal Profession Act, slightly dfferent for Sabah/Sarawak
Medical Services:
– Right now, only recognised medical colleges and their graduates
who must be citizens/permanent residents, allowed to practice in
the country.
– Foreigners allowed on temporary licenses depending on
application from employing or contracting institutions; usually
for medical post-graduate training/research, but still must be
registered with MMC and given temporary or limited
registrations;
– Such registrations are not available for family or general
practitioners, great difficulties even with foreign spouses of
Malaysian citizens
 AFTA 2013/GATS/WTO
What does this mean for Malaysia?
 Beginning with ASEAN countries, there will be free exchange
of good and services in the health care sector by 2013, and
extended to WTO signatory members latest by 2015
 Hospital groups can set up in any ASEAN country, from any
country, as long as they are set up based on local laws and
regulations, as for any local/national group—no
discriminatory regulations allowed (this includes no language
discrimination)
 It also includes multinational insurers, large GP groups,
Physician Provider Organisations, other health maintenance
organisations/MCOs
 No specialist group will be exempted, and medical and
specialist degrees will be recognised automatically as long as
these degrees and training have been granted by the local
medical boards/councils as acceptable for their own
nationals. National licensing rules should be uniform for
locals as for foreigners from ASEAN
 Not sure if this means automatic recognition of every
national medical degree in ASEAN—MMC is looking into this
to see if this contravenes the AFTA charter vis-à-vis our
Medical Act.
 Will there be Flood of Migrant Medical
Professionals into Malaysia?
 Possibly. 2 sources:
– one from many of our less developed (lower GDP) neighbouring countries who
oversupply their medical professionals and whose income is still relatively low
(economic professional migrants)
– Another even from Singapore with their small population and more advanced
systematic approach to healthcare, large number of highly skilled and trained
experts;
– Richer and large group practices may invade our shores with not just specialist
hospitals, but possibly general practice consortia
– Solo GP practices may become swallowed by these larger group practices, e.g.
as already seen with the Qualitas group.

 Health maintenance organisations and insurers from abroad may also

make entry into our shores to tap the growing number of middle class
citizens who are more health-conscious as well as more informed for
choices
 What about our public health sector? Will these be corporatised?
Privatised? Who will look after primary care practices and public health
issues
 What about the NHIS or National Health Insurance Scheme (SIKK)? Will
this be permanently put on the back-burner, and if so, how can we
improve our health care economics and plans?
 Will AEC go the way of EU?
ASEAN Secretary-General One Keng Meng:
 “The EU has a common currency. They have free movement
of people. We don’t think SEA countries are ready to do this.
 “What we care seeing in ASEAN is more the movement of
professional people, skilled people. We cannot be like the EU
which allows free movement of people.
 “Many of our countries are still relatively insecure, and if you
have complete free movement of people, you can see
thousands more coming into a small country or thousands
more going where the market is good.
 “The local population may not be ready to welcome the
competition from the guy next door.”

 Will Malaysians be so ready to welcome our ASEAN brethren?

 Will our doctors be prepared for the challenges and
competition?

Source: http://english.vietnamnet.vn/2006/10/625580/
Malaysia scored above world average
in 8 of the 10 economic freedoms:
• fiscal freedom (83.0),
• government size (81.4),
• monetary freedom (79.9),
• trade freedom (78.2),
• labour freedom (71.5),
• business freedom (70.8),
• freedom from corruption (51.0), and
• property rights (50.0)
2 economic freedoms that
Malaysia fared below world
average:
• investment freedom (40.0)
• financial freedom (40.0)
Heritage Foundation ranking:
Hong Kong, Singapore,
Australia, Ireland, New Zealand,
United States, Canada,
Denmark, Switzerland United
“There is a canker corroding the soul of society.
Economic rationalism: the all-pervasive nature of
competition; anti-social behaviour in many aspects of
life and across all levels of society; the unrestrained
consumerism of a surging global population, together
with the consequent deterioration of our natural
environment; and the dizzying rate of escalating
social and technological change are, for many people,
signs of cultural disengagement illuminating
industrialism’s final convulsions. These convulsions
are reflected in increasing corruption, crime rates and
levels of stress, soaring public investment costs,
disenchantment with our institutions and a growing
mistrust of authority.”
Richard David Hames. Burying the 20th Century,
1997, Business and Professional Publishing,
Australia
People’s
Health
Movement
People’s Charter for Health
Health as a Human Right;
Is a Human Right?
Health worker density – Global Discrepancy / Inequity
Health workers migrate
toward richer countries;
loss from poorer lower-
income country esp.
public sector
Migrant health workers from poorer nations usually drift
toward richer nations
 So, what do I feel about
globalisation, AFTA, and health?
 I’m cautiously optimistic
 I don’t favour unrestrained free trade which can impact
significantly on weaker institutions and societies, often creating
more pain and hardship
 Globalisation is not inevitable or unstoppable, there are viable
alternative models (not TINA i.e. ‘there is no alternative’) where
trade/capital is not the centre of civilisational or human progress
 Cultural, traditional and humane activities, local meaningful
betterment of individuals or groups are perhaps a more desired
goal
 There might still be time enough to modify or help reshape the
not invariable postures of free trade and globalisation excesses.
 Do we all have a collective will to think and act differently?
Myths of Globalisation and the Free-trade Paradigm
~ Graham Dunkley (Free Trade—Myth, reality and alternatives, 2004,
Zed Books
3 false assumptions:
– Globalisation is now well advanced
– It is inevitable and unstoppable
– It is overwhelmingly good for virtually everybody
Adverse impacts include:
– Integrative effects (homogenisation of legal or
administrative practices)
– Displacement effects (destruction of one culture
by another)
– Disruption effects (social or other dislocation)
 Myths of the Free-trade Paradigm
~ Graham Dunkley (Free Trade—Myth, reality and
alternatives, 2004, Zed Books
5 false assumptions:
– Trading is anciently integral to human nature
– Free trade, free markets and private initiative
are best for most exchange
– ‘comparative advantage’ is the best basis for all
goods and services
– Trading and free trade have, on balance,
overwhelmingly net positive benefits for all
concerned
– Amount of trading has gradually increased over
time, indicating inevitable globalism
 4 Alternative Models
Free Market Economic Rationalist
(Smith/Ricardo) approach
Market Interventionist
(Keynes/Kaldor) approach
Human Development (Marx/Sen)
approach
Community Sovereignty
(Gandhi/Schumacher) approach
 Human Development (Marx/Sen)
approach
Amartya Sen (Nobel laureate) accepts general
market principles, current forms of globalisation,
reasonably free trade and longer-term growth-
oriented goods
But believe in ‘human capacity development’ i.e.
capacity expansion which implies collective benefit
provisions such as infrastructure, health,
education, literacy, training, female employment,
general social development; also people
sustenances through collective security and
market-derived income; some public
redistribution which leads to social justice.
 Gandhian Principles…
Ahimsa (Non-violence)
Satyagraha (non-violent recitification of wrongs,
restrained political action)
Sarvodarya (respect and justice for all)
Swadeshi (sovereignty and self-reliance for
communities and nations)

 Gandhi regarded & opposed rampant economic growth as morally

corrupting, free trade as socially destructive and copying of the west as
degrading...
 He advocated national self-reliance and self-restraints to consumption
(Satya Sai Baba’s “ceiling on desires”), simple technologies and lifestyles
 Schumacher (1973)
Heavily influenced by Gandhi, Buddhist
precept of “right livelihood”
Individuals should do what is morally right
and environmentally requisite
Economic policies should be ethical,
ecological, people-centred and spiritual
Appropriate and intermediate technology and
development, without creating too much
unnecessary mobility, structural instability,
community decay and general ‘footlooseness’