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Sakmongkol ak 47

Saturday 31 October 2009

Looting through privitization- IJN, the dagger at the heart.

Looting through privatization.

When the idea of taking over of IJN was mooted by Sime Darby, it was met with a storm of various virulent protests. Some bloggers placed a symbol of a pierced heart on their blogs inviting many others to join in the common struggle against a marauding corporate giant. I too joined the bandwagon, citing whatever reasons I can think of, to strike at the encroachment by that capitalist behemoth at something we adopted as sacrosanct- the people's heart.

Almost always, the reasons include our apprehension that if SD takes over IJN, then the people's interests will be jeopardized. By the 'people' we mean the poor, the underprivileged, the underclass, the proletariat. Should big bad SD take over; these people have nowhere to go. They will die like flies because IJN which was set up as the premier cardiologic excellence has turned them down because they couldn't pay.

People will not be able to afford to pay. Yet in spite of IJN not closing its doors to poor people, it has, as of end 2008, a robust 411 million cash and liquid assets. How did it get this amount? Answer: there must have been more paying patients than not paying patients. Indeed, all those who went up to IJN were paying patients. The boy I managed to get to pay RM 1, 000 instead of RM 18,000 was given a subsidy by the government by RM17, 000. Any which way, all patients become, in the end, paying patients.

Now, if no one is turned down on account of being a man of straw, then, the argument of objecting against SD's takeover because it will turn away poor people doesn't hold water. Uncle G will always pay up in the end. So what's the real reason for the objection?

My own thinking is this: if there were 10 original reasons that justified the government's rejection of SD's advances, the 10 reasons must remain, until today, the same 10 valid reasons. They are still applicable as objecting reasons, even if another party replaced Sime Darby and proposes a takeover. A new party can only succeed, if the 10 reasons with which we rejected Sime's offer are no longer valid, or have been overcome. A new party's proposal can also succeed, if it headed and pushed along by some people deemed to be more amenable to current political masters.

Let's say, the new party is actually made up by leading cardiologists in this country, who are in the end motivated by the same desire residing in the bosoms of people such as you and I, to make more money, to be richer and to get that respect and fear that accompany people who are rich. Let's say, 12 or 13 cardiologists and clinicians pay homage to the only Malaysian who can walk on water- another doctor himself who had gone under the knife twice or thrice in IJN- Tun Dr Mahathir. From doctors to one doctor, they could persuade the eminence grise to endorse their plan saying that if technicians take over the hospital rather than a corporate behemoth, then IJN can indeed be a center of excellence.

Let's say, TDM is sympathetic to the doctors' arguments. That is sufficient to serve as a cattle prod to induce indulgence by the current political masters. Who in their right minds would want to go against the only man who can walk on water? Just by being sympathetic or at the very least, agree not to make noise is sufficient to represent approval, would lead policy makers throwing in the drain, all the reasons they put up, when rejecting Sime Darby's offer in the first place. You can't beat doctors in the upstairs department.

But why would a group of doctors prominent in their fields, want to engage in the mundane and murky world of corporate businesses? Because they want money. Probably among the dirty 13 are some wanting- to-retire doctors who want to get their golden handshakes. Hell, why shouldn't they when they hear in the hallowed recesses of drinking holes, about tales of some retiring KSU's stashing golden handshakes between RM 100-RM150 million. These people were reading story books when our cardiologists were deciphering medical holy books, losing 24 hour sleep doing horsemanship and all that. They too, deserve some golden handshakes so that they too, can go horse riding in the sunset.

What the government must do in the current going on is to lay claim on the RM 411 million. Put it up in an escrow like account withdraw-able on authorization by some powerful committee. Whoever takes over cant dip their hands in IJN's kitty.

I am troubled with the idea that eminent doctors think running IJN on the patter of Mayo Clnic or Cleveland Hospital or even John Hopkins is like running a general practitioner's clinic. There, the doctor is jack of all trades- he is clinician, peon, typists, decorator, drug dispenser, cough-mixture pusher and all that. He or she can be that because the scope of a private clinic is very unlike running a Mayo, a Cleveland or even a J. Hopkins.

Before we go analyzing the various components of the planned privatization, let's get this disturbing possibility of out the way. Let's say, the doctors manage to persuade the PM to accept the idea of merging IJN into a single entity much like a private limited company. We have a board of directors, an overall CEO( of course a doctor wants to be the CEO- after all it's a hospital), and then we have several deputy CEO's of various departments- dept of human resource, finance, research other businesses and all that. Just like any business helmed by the CEO. The danger is this, by merging into a single entity, its makes IJN an easier target for takeover. It would be better for the IJN group to operate along the lines of independent affiliates with cross holdings which make takeovers extremely difficult. What the doctors are thinking now is to create a single general practitioner's clinic.

What's the real idea behind a propose take over? The concept is to create a business organization that can become more profitable. How do you create such an organization?

Somehow I find it unconvincing this idea of turning IJN into a centre of excellence like Mayo or Cleveland. By their own admission, Mayo and Cleveland were established more than 100 and 80 over years. They are nonprofit organizations buy yet manage to remain profitable. How is that so? Not by privatization but by organizing the management along clear demarcated lines- clinicians concentrate on doing what they do best- doctoring and the health business managed by professionals.

We must answer this question first. Why did we oppose Sime Darby's overture yet appear to warm up to the idea of a takeover by another group? What happened to the reasons used to reject Sime's offer? Why should I trust doctors who aren't good in business as they are in their medical fields with running IJN? I would feel more comforted at the idea of having IJN run by an organization with deep pockets rather than doctors who don't have the same financial firepower.

If we accept what these doctors prescribe while we rejected the earlier richer Sime offer, we are actually doing just a judgment call. We didn't like the first person's proposal and yet can learn to like the second person's. Maybe Sime Darby should think about replacing Musa Hitam.


Pak Zawi 31 October 2009 at 14:46  

Dato' Sak,
Very logical. The new proposal seems fishy as well as dubious. Hope this post will start a wave of protest the same way it happened when SD broached the same idea.

vinnan,  31 October 2009 at 18:57  

UMNO crooks WILL rob the IJN. Then when it is nothing but a shell, they WILL sell it back to the government for a fantastic profit. The poor will be royally fu;['. as in Perak. No pun intended here. Isn't this is how Malaysia works.

So Mr AK bullshit. Tell the Malays to keep voting for UMNO. Najib just screwed the poor Malays with the NAP and he will follow up with robbing the IJN along with other acts of piracy.

United Malays National Organisation (UMNO) and the poor stupid Malays keep thinking UMNO stands for Melayu.

Ariff Sabri 31 October 2009 at 21:48  

yes vinnam shithead,

i will tell as you wish.

Donplaypuks® 31 October 2009 at 22:59  


Those doctors who chose Govt service have always had a choice:

Take the relatively easier paced life in Govt service with all its perks and pension or join the rat race and slug it out in the private hospitals and medical centres, having to meet higher and higher fee targets every year! Stress and tension leading to premature herat attack is more common in the private sector!

Even then, after retirement from Govt service at 55, these doctors can still find a lucrative job in the private sector as surgeons, consultants, etc.

Many of these doctors were also given Govt scholarships and they therefore owe a duty to serve the Govt and the People without complaint.

It would do well for many to remember that the original Cardiac Unit costing zillions at GH was closed by Dr.M due to unacceptably high rate of post operation deaths. All the doctors were sent overseas for re-training while new students were given scholarships to western nations to garner relevant experience.

As far as IJN is concerned, the Govt must resist all attempts at so-called corporatization or privatization to keep it a non-profit outfit, thereby leaving one affordable option open to Govt servants and the poorer Rakyat.

To keep it financially viable, IJN can also set up a Tax Exempt Charitable Foundation, like Mayo Clinic does, to collect donations from the general public to build up financial reservess and to maintain its independence.

There are good Govt subsidies like that for IJN and bad ones, like those for Proton, AP's and petrol! Not everything in this world has to be driven rabid capitalism and its 'nothing is sacred' profit motive!

We are all of 1 race, the Human Race

nxforget 1 November 2009 at 01:26  

Salam dato,

A very interesting post.

When the government has developed a working model complete with funding and making profit, there's always someone with the bright idea of taking it private.

I agree that those people at IJN has been working hard to make things happen but aren't they paid enough. If that's the case, when will these all ends. Do the government need let it go and setup another similar organization.

Then, the next question, what about those specialist who are serving in government hospitals. Don't they want their fair share too ?

Yes, on this is really looting in the daylight.

walla 1 November 2009 at 17:58  

The SD proposal tanked because it wasn't wrapped in a conducive communication package.

That left a residue of general suspicion the intention was to make profit by taking over a center which had saved lives of the poor.

The echo from that episode now reverberates into this new proposal.

It is thus important to communicate clearly the rationale of the new proposal so as not to make the same mistake as before if only to generate more accurate debate that will sharpen decision-making.

Only a few people would have seen that proposal. Perhaps it contains the following (which is now spun by pure thought):

- analysis of paying patients contribution and government subsidy for sub-paying patients;

- analysis of cost of running the institute broken down into doctors fees, and others;

- comparison of pull factors for the doctors at present and those in the future based on a new vision for the institute;

- projection of cost increases to maintain standards and performance at all times;

- projection of patient number increases as more people come down with heart diseases, increasingly from reading political matters;

- estimation of capital needed to invest into new activities to keep up with cardiovascular developments.

In the earlier proposal, there appeared to be a joint statement in reaction made by the majority of the doctors that they were not too concerned about the money and they knew nothing about the whole matter.

However, altruism aside, it would only be fair on the part of the government and the rakyat to make sure the doctors of IJN are paid commensurate as much as possible with private sector rates. It is understood that currently they have a special scale but it would not be equal to what their counterparts in the private sector are enjoying even with the other perks thrown in.

On this, there are three solutions. One, increase all patient rates. Because many of the patients are poor, this is immediately shot down using a kalashnikov. Second, the government continues to subsidize patients and top-up the doctors' compensations. This can be considered but it implies a precedent is being set which adds pressure to the government to do the same in other similar centres. Three, the institute reassetizes itself in such a way that new departments are devolved which can then be made profit subcentres with view to creating investibility for going public later with shares and dividends to the doctors, and private funds for expansion and development.

The third option looks interesting. But right now the word 'profit' has been mentioned without qualifier. That should be rectified.

walla 1 November 2009 at 17:58  

Meanwhile you will have formed a question before this full-stop is made. You ask, these new spun-out subcentres...what sort of services they provide and to who? If the services pertain to healthcare services, then wouldn't one day the poor will also need them and if they need them but the investors only see profits, how are the subcentres to remain viable? Would it mean the government will have to come in again to maintain them in which case isn't it tantamount to continuous bailout? Clever question, there.

Someone favorable to the proposal will however retort. Yes, that might be true but without those private funds, there will be no new expansion and development. There is a risk it may come to the situation you have painted but it's just a risk. No risk, no progress. But with it, there can be multiple benefits.

Clarifications such as this need to be made in advance of any decision. Today it may be IJN. Tomorrow it may be something else. That tension between what the rakyat want and what the government tries to do in concert with vested parties. It is important because it was only yesterday the government had muddled through an entire series of privatization projects which the rakyat are still belaboring and will continue to be burdened with until the end of time. That sensitization to the rakyats' anguish seems to be missing in thinking about this and other projects soon to come about.

So the bottomline seems to be those new profit subcentres. What are they? If they are to conduct paying courses to visiting heart doctors from overseas, will there be a big enough market to make it worthwhile to investors?

Heart surgery is not a run-of-the-mill service. The rub of it is that it is capital-intensive. Which brings to mind the institute does receive donations. Maybe it's a bad time now but perhaps they can think of augmenting it as a nationwide project, replacing or in addition to this new proposal - increase donations by setting a target..say to the RM200 million already committed by the institute under islamic financing for the new wing. Turn negative to positive.

Meanwhile the government should pull out the three project reports todate for a national healthcare financing scheme and after clarifying the market size sans self-medication (which can be sizable), see if something can be done to alleviate the financial burden of the rakyat for medical costs without imposing too much on the goodwill of underpaid doctors and other health personnel. Some of the BRIC countries may also have expertise to share on generics as a cost-effective alternative to pricey medicine these days.

And while those are assayed, look into new types of cross-bred diseases; our population have been hit by some in the past forty years. Today bats, tomorrow birds, next day swine. There should be a tactical force constantly working in the background like a cyber-monitoring centre so that in the event of sudden new rashes, faster preventive and remedial measures can be taken with clearer communication to the rakyat.

... back to ironing clothes..

Anonymous,  3 November 2009 at 04:03  

"United Malays National Organisation (UMNO) and the poor stupid Malays keep thinking UMNO stands for Melayu."


Malays as the whole never really thought UMNO only stands for Melayu but it also stand for the bukan Melayu. Only blind person like you see otherwise.

What the smart Melayu always keep in mind is that the stupid non Malay political party such as DAP would not stand for anybody else except those stupid Malays who are prone to screwing his own half blood brother not for nothing but for personal gain and glory. Sooner or later, if that stupid Melayu could not get what he wanted to have, don't get surprise bro as he might turn on DAP and shit their pants. He, he.


Anonymous,  5 November 2009 at 13:26  


Please don't call yourself that. It's a misnomer.

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