Price Controls

The prices of many goods and services in Malaysia which fall within the category of "necessities" are controlled by the government. In some cases, the government controls the prices via subsidies. For example, if the true market price of an item is RM10, the government may subsidize say RM5, so that the consumers will only have to pay RM5. Alternatively, the government can also control prices via statutes, i.e. by imposing ceiling prices for goods and services.

It was reported in The Star that the Health Ministry will review private hospitals' charges for room, equipment and medicine, which many have said are excessive. I have every reason to support this government effort because sooner or later I will become old and sick, and will inevitably require medical help whether I like it or not. But actually I don't really agree that the government should intervene in this case.

Of course medicare is a necessity—everyone falls sick every now and then. But I'm more inclined to support price control on necessities in cases where the consumers have no choice. But in the case of hospitals, we do have government hospitals in Malaysia. Sick people can go there to seek medical help. There is no necessity for them to go to the private hospitals. There is no necessity, therefore, to pay for the expensive medical bills of the private hospitals.

However, in spite of the more expensive bills, people in general prefer to go to the private hospitals, even if they can barely afford it. What is it about the private hospitals—in spite of the "excessive medical bills"—that would lure the sick people, rich and poor, to go there and not the government hospitals?

Firstly, I think it has a lot to do with psychology. People in general have the impression that the doctors and supporting staff in private hospitals provide better services to their patients, because otherwise there is no repeat business from those sick people. From my own experience, I have to say that there is some truth in this.

Secondly, I see private hospitals as a kind of luxury. The rooms may be more comfortable, lobbies larger and common areas more pleasing to the eye. But of course one may argue that when one is sick, the main focus is to stay alive and not so much about seeing something pleasant!

Thirdly, I can say that generally the government hospitals are almost always over-crowded. When one goes to the out-patient section of the government hospitals in the morning to get a number to see the doctor, he can expect to wait several hours, if not the whole day. Perhaps the scenario is different for emergency cases.

Finally, there is the general impression that government hospitals are training grounds for new doctors. This I don't believe to be true. It is true that many new doctors who took up the profession via government scholarship are obligated to work in government hospitals for some years before they can (and usually do) work in private hospitals, or set up their own clinics. But I know of some experienced doctors in government hospitals too.

But the bottom line is still that private hospitals should be allowed to charge based on market rate. I think if there is profit in it, that can be attractive for other private hospitals to be set up. And more people can benefit. Besides, when there are more private hospitals around, then competition will come into play. Yes, sick people will need medical help one way or another. But if there are many private hospitals, they have choices, and the competition will control the prices somehow. I don't think it is fair to compare a bed & breakfast with a budget hotel or with a 5 star hotel. Obviously the 5 star hotel should be allowed to charge higher for their rooms and services. If the public has a negative impression of the government hospitals, then perhaps it's time that the government do something about it.

The only exception, I think, is when we're dealing with specialist areas of the medical field where choices are limited. For example, when talking about heart surgeries. I know in KK, until recently, heart patients had to be flown to west Malaysia for surgeries. So in that case, I would agree to government intervention on pricing for the interest of the public.

When and if I fall sick, I think I would much prefer to be in a comfortable air-conditioned room, if possible all to myself, with TV and perhaps a nurse on standby round the clock. But I think I can expect to pay heftily for such services too. That's why I'm paying good money to the insurers to prepare for this possibility. And if I can't afford such luxury, then I guess I will have to settle with whatever I can get at the government hospitals. Maybe the environment there won't be as pleasant, but I'm sure that the doctors there are also capable people. If they're not, my insurers will have something to worry about.