IJN- The Real Way Forward.

Let me give a graphic description.

We want IJN to become a 38 storey building but the doctors are advising the PM, to accept a foundational structure that is fit only for a 3-storey building. The weight of the centre of excellence idea will collapse on such a foundation.

Only by this 4^th series on IJN do I get it. It's actually a turf war between contending parties in IJN. Those who thought they could savor victory when the Sime Darby overtures were repulsed suddenly found they have to contend with another fight within their own backyard. This time, a more insidious and ominous one. One, which could spell the end of IJN as a center of excellence institution. Doctors, despite their Hippocratic Oath don't really care about IJN being a centre of excellence.

TDM may want it to be but a group of doctors can persuade him. If the hospital is theirs, they will be more prudent with how they spend money. That, if they choose to be prudent. If they choose to be extravagant, they may want to use the money that's 'theirs' now to splash themselves with the accoutrements of wealth and power. Hell, they see Nor Yaakob's son driving a Ferrari Modena, Dr Robaayah may decide to have one too. Possible, if they apply the money that's in IJN according to their ownership status.

It's all hogwash really- people are only interested in feathering their nests and making hay while the sun shines. Doctors are not above wanting to make money out of IJN and if they have to do it by going back to a pre 2005 business entity, they will do so. This is what they represent to the meeting chaired by our economics trained PM.

There are 2 contending parties. A group of senior doctors who thought that IJN is effectively their creation and the business managers who thought IJN can turn into a possible duplicate of Mayo or Cleveland or John Hopkins by creating a group of profit centers. This group of 33 doctors is really doing whatever possible to keep wealth within the family and therefore proposes as a 'way forward', the creation of a private limited company like organization. It's back to a command centre style of managing the health care business more suitable for a general practitioners practice.

So they are 2 answers really; Doctors want IJN to be a private business entity so that profits can be privatized and cornered by 33 or so members of the doctor's cartel. If, in future business is not doing well, uncle G headed by 1 Malaysia PM can help out.

What do we want IJN to become? All of us, from the kampong people hoping they can still get subsidized fee for some debilitating illnesses to those who can afford the full fees, want IJN to remain as a centre of excellence for the right reasons. The right reasons being IJN houses the best doctors and medical specialists, provide top of the line support services, an educational and training institution etc.

Now, some one commented on my article the following:-

The doctors led by the eminent lady doctor made a presentation to the Economic Council on the 27th Nov presenting the single structure as the "way-forward". The PM, chairman of that meeting, bought the idea sold by eminent lady doctor hook, line and sinker. Therefore, the PM, has indeed agreed in that 27th Nov meeting, on the single structure, thus reverting to the pre-2005 structure. Now, surely the PM must be aware of the short and long term effect of such a reversal.

This is puzzling. The doctor must have superb persuasive powers. It's also puzzling because the PM was trained in Industrial Economics at Robin Hood's county university (Nottingham) and knows a fair bit about organizational compatibility. Plus, he is an avid reader of high end management books. He should know this:-

Many of us want to know why was Sime Darby's offer turned down before, but the proposal by a group of IJN doctors presently, becomes acceptable. Where is the logic for turning it down? Sime Darby has deeper pockets than the class of doctors now wanting to take over and certainly has the organizational capability to bring IJN to greater heights and yet, the proposal by these doctors is regarded economically better? This is very strange. IJN has better chances of retaining the 2005 structural proposals than having it vested in the hands of the doctor's cartel.

The acceptance of a proposed organizational structure to a pre-2005 reorganization flies against the cold logic of business facts. Who is a better suitor? The clinicians or the business organization?

How will the doctors finance the acquisition of IJN? Why do we need to sell IJN to the doctors yet found it justifiable to reject the offer from Sime which could have landed the government with a large amount of money? God knows, that every government department has no money to spare.

The whole idea of taking over IJN seems to be peddled by a group of specialist doctors eying the profit making IJN. IJN is really controlled by about 33 specialist forming themselves as the doctor's cartel devising plans to lay siege on the money making machine that's IJN. Yes folks, IJN is making lots of money. Its operating profit in 2007 was 15 million on revenue of about 270 million. Not much, but it's not a losing concern and it was making operating profits. It's unlike other GLC behemoths such as MAS whose strategy of making money was to carry out corporate slash and burn strategies not dissimilar to native Sarawakian agriculture we learnt in our geography lessons.

This whole idea of returning to a pre 2005 organizational structure (which was put up so that IJN can emulate Mayo and Cleveland in substance) smells like a shark smelling blood scene. It looks like it's a concerted attempt by a group of senior doctors laying claim on the spoils of war. In my previous articles, I have stated that this shadowy group consists of about 13 eminent doctors. I was wrong there. The cartel-like group consists of some 33 top physicians at IJN.

IJN actually has 89 Specialists or Clinicians out of which 33 belonged to what is loosely referred to as the 'cartel' in IJN. The remaining are Clinicians who drew up salaries of around 8k a month (about the same as in other govt. hospitals). To add glamour, they are often referred to as 'Junior Specialists' but really, what they are; is that they serve as workhorses for the specialists.

Doctors pay and remunerations make up 40% of the operating costs at IJN. This cost component is likely to increase if the 33 doctors have their way. Who wouldn't, given the frame of mind of the doctors insisting on taking back IJN to a pre 2005 management structure? Doctors pay and remunerations are likely to remain a cost centre. You can't be seen to make profit on doctors pay can you?

That leaves other avenues to be shaped into profit centres. For instance hospital support activities which account for about 16% of operating costs. IJN can turn this component into a revenue and profit making centre by forming joint ventures with others excelling in this area. It can then offer this expertise to other customers even outside Malaysia. By expanding support service businesses, IJN can reduce this cost component and turn it into a profit centre.

Similarly, IJN makes profits in pharmaceuticals. Indeed, pharmaceuticals in IJN's cash cow and the doctors have a cut in the profits there too. See? Doctors want and know how to make money. IJN Pharmacy SB can be a vehicle which IJN can use to increase the income by producing and re-selling under license the commonly used medicine by heart patients.

These two examples show that the avenues for making money are not directly related to clinicians activities per se but those indirectly related. Now, if these indirectly related or even non-related businesses are the ones making money and can make more, it reinforces our argument in order for IJN to become a centre of excellence, it must have a management structure that's amenable for turning it so. And that is not the structured proposed by the 33 doctors.

Our PM should' be aware of these scenarios as he gets reports after reports that are submitted on IJN.