Malaysian tax is not for public healthcare but public healthcare is for tax

Health care is something that I believe, should not be privatized. A sick, weak and severely threatened person is in no position to negotiate. 

By Lee Wee Tak

strongly believe that a democratically elected government has a moral responsibility to enable its citizens to live with dignity and comfort. In their time of desperation and need, there is no extortion imposed upon them and their love ones.

Health care is something that I believe, should not be privatized. A sick, weak and severely threatened person is in no position to negotiate.

Do consult all our religious teaching and conscience – is holding the sick, terrified and weak, and his or her loved one to ransom the right thing to do?

Let’s take KPJ Healthcare Berhad as a sample and examine the additional costs that we have to bear in privatized healthcare

In financial year ended 31 December 2010, it earned revenue of RM1.6 billion with a profit after tax of RM126million. Now that is a lot of extra cash for sick persons to dish out.

By letting the private profiteers/capitalists running the show, the following additional burden is imposed on the sick and needy:

1. Private doctors charge a lot (how many rich specialists stories you have heard) and the environment as such is that public hospitals are losing talents to the private sector (for a lot of other non-financial reasons too). Note 8 to the accounts revealed that in 2010 alone, RM438 million were paid to medical consultants.

2. Additional cost for running private companies: samples of unnecessary expenses include RM68.9mil rental of land and building, RM7.6 mil for advertising, RM2mil for directors’ remuneration and RM0.8 mil for auditors. (Refer to Note 8 again). No such necessity for public hospitals.

Mahathirnomics drove the medical cost up as well. Do you know that in October 1996, Faber Group, a hotel business was suddenly given a 15 year concession to provide cleaning services to 15 government hospitals and today, it has made enough money to publicly gloat about the huge amount of profit made as a result of having a monopoly of cleaning jobs that civil servants could have done at no profit at all.

3.    In the balance sheets of KPJ, total investments in shares of subsidiaries and associated companies were RM762.6 mil and RM307.4 mil respectively. These are mostly money spent on buying shares of companies and nothing to do with providing medical services.

The RM56.6 mil above was spent on buying shares of SMC Healthcare Sdn Bhd (RM51mil) and Sri Kota Refractive & Eye Centre Sdn Bhd (RM5.6 mil) so made some shareholders happy and leave patients to foot the cost of these acquisitions.
4.    Being a business conglomerate, it is normal to borrow money from banks to buy assets to operate the business, and also buy into other companies as mentioned above. Of course, the banks will charge interest which the business would build into their invoices to customers/patients. A public hospital would not need bank loans as tax money is interest free. The profit and loss accounts show interest expense of RM6 mil and RM14 mil for 2 years running.
5.    KPJ paid dividends of RM41mil and RM77 mil for 2010 and 2009 respectively. Would you like to pay for some dividend income to so rich entrepreneurs as you are suffering from pain and feeling extreme discomfort and vulnerable?

6.    We are suppose to pay taxes to the government so that we can get good public service in return, for example competent medical service. However, in privatized healthcare, we see a reversal whereby government tax is a “mark-up” on an already inflated medical bill.