Can Private Hospitals be Efficient, Compassionate, and Profitable?
The public perception of private hospitals, at least by those who have access to them, is often that of a necessary evil when ill health strikes. Yet, the Malaysian national health service is hailed as exemplary for providing universal health coverage. Why, then, have private hospitals flourished in Malaysia? It’s because patients get to choose their doctors and don’t have to wait as long for operations, procedures, or drug treatment compared with overburdened public hospitals.
The Altruistic Argument
The altruistic argument often used to justify the existence of private hospitals is that it frees up public hospitals for those of lesser means. On the other hand, entrepreneurs argue that private hospitals generate revenue for the nation by serving the large numbers of medical tourists who flood private hospitals. Clearly, there is merit in sustaining the private hospital sector. The greater question is whether this sector can evolve into one that provides quality care that is accessible to a larger segment of the population or whether it will deteriorate into one that only services a small affluent elite.
The Value-Based Approach
The health ministry recently made a tentative suggestion for a value-based approach, which essentially rewards providers based on patient outcomes, in contrast to the existing system that remunerates providers for services irrespective of outcomes. A value-based remuneration model requires the existence of a sophisticated information system; the infrastructure for this in Malaysia is at best on the distant horizon and has not quite reached prime time status.
A Compromise: Diagnostic-Related Groups
A compromise of sorts is remuneration based on diagnostic-related groups (DRGs), a system that pays private hospitals fixed amounts based on the diagnosis of the condition. This system has not surprisingly been embraced by insurers. No sooner had the government signalled its intention to introduce this system than there was an outcry from private hospitals and specialists denouncing this. The counter argument was that introduction of the DRG-based payment model would effectively result in private hospitals cherry-picking less complex, lower-risk cases that would result in these patients migrating to and further straining already overburdened public hospitals.
Non-Regulatory Tools for Improving Efficiency
However, there are non-regulatory tools to help healthcare providers improve efficiency, including the value-driven outcome (VDO) concept. The advantage of this concept is its pragmatic applicability on a modular basis in individual units, departments, hospitals, and hospital groups. It empowers clinicians with the ability to change clinical management practices to optimize the value of healthcare based on data that is continuously fed to them.
The Future of Private Hospitals
So, can private hospitals in Malaysia be efficient, compassionate, and profitable all at the same time? It must be so, as the nation can ill afford to allow the private hospital sector to collapse. The transformation to the utopian system is unlikely to lie in broad brush regulatory measures but in tweaking several knobs in a complex grid. VDO practices should be universally implemented as should effective quality assurance measures in general.
Conclusion
To avoid lawsuits, victims of negligence must be reasonably compensated without instilling fear among doctors that inevitably result in the escalating practice of cost-guzzling defensive medicine. Unscrupulous healthcare providers should be weeded out by an efficient monitoring system. Naive and idealistic as it may sound, this requires constructive, transparent, and sincere engagement between all stakeholders, including doctors, private hospitals, insurers, and the government.
FAQs
Q: Can private hospitals be efficient, compassionate, and profitable?
A: Yes, with the right approach and tools.
Q: How can private hospitals improve efficiency?
A: By implementing value-driven outcomes (VDO) and diagnostic-related groups (DRGs) payment models.
Q: What is the key to success for private hospitals?
A: Constructive, transparent, and sincere engagement between all stakeholders.
Q: Can private hospitals balance compassion with profitability?
A: Yes, by focusing on patient outcomes and providing quality care.