The development of health care system in malaysia with special reference to government health services, 1970 2000

0
THEDEVELOPMENTOFT HEHEALTHCARESYSTEMIN
MALAYSIA–WITHSPECIALREFE RENCETOGOVER NMENT
HEALTHSERVICE S
19702000
MARYWONG LAILIN
(B.A.(Hons .)UM, LLB(Hons.)London,U.K .&M.A.Manches ter,U.K.)
ATHESISSUBMITTEDFORT HEDEGREEOFDOCTOROF
PHILOSOPHY
DEPARTMENTOFCOMMUNITY,OCCUPATIONALANDFAMILY
MEDICINE
NATIONALUNIVERSITYOFSINGAPORE
2008
1
Tableofcontents
Page
Tableofcontents 1
Acknowledgements 4
Abbreviations 5
Listoftables 7
Listofcharts 11
Summary 13
ChapterOne
1. Introduction 15
1.1Researchquestions 16
1.2Analyticalframework 23
2. Literaturereview 25
2.1Healthcaresystems 25
2.2Healthsystemreform 28
2.3Healthsystemperformance 33
2.4 Healthplanning 39

2.4.1 Healthplanningaspartofdevelopmentplanning 43
2.4.2 Healthplan 47
2.5 Equityandefficiencyinthedistr ibutionofresourcesina 48
healths ystem
2.5.1 Equity 49
2.5.2 Efficiency 55
2.6 Healt hexpenditureandallocationofresources 60
3. Scopeof thestudy anddatacollectio n 67
ChapterTwo
DescriptionoftheMalaysianhealthsyst emdevelopmentpriorto1970
1.Historicalbackground 71
1.1Developmentofmedicalandhealthservicesunderthe
Britishcolonialrule 71
1.2Colonialhealthpolicyanddevelopment 82
2.Pr eIndependencedevelo pment 87
2.1DraftDevelopmentPlan19501955 89
2.2InternationalBankforReconstructionandDevelopment
Mission’sreport 93
3.Postindependencedevelo pment from19571969
3.1FirstFiveYearPlan19561960 95
3.2SecondFiveYearPlan19611965 99
3.3FirstMalaysiaPlan19661970 101
4.Coloniallegacyafter1957 103
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ChapterThree
DescriptionoftheMalaysianhealthsyst emdevelopmentfrom19702000
1.Development andhealth 110
2.Malaysianhealthplansandnationaldevelopmentplans 112
3.Anoverviewofhealthplansfromt heSecondMalaysiaPlan
19711975totheEighthMalaysiaPlan20012005. 121

3.1SecondMalaysiaPlan19711975(2MP) 121
3.2ThirdMalaysiaPlan19761980(3MP) 125
3.3FourthMalaysiaPlan19811985(4MP) 128
3.4FifthMalaysiaPlan19861990(5MP) 134
3.5SixthMalaysiaPlan19911995(6MP) 138
3.6SeventhMalaysiaPlan19962000(7MP) 142
3.7EighthMalaysiaPlan20012005(8MP) 147
4.BriefanalysisoftheproblemsfacedbytheMalaysian
healthcaresystem 149
5.Conclusion 157
ChapterFour
IssuesofMalaysian healthcaresystem
1.NewE conomicPolicy,NewDevelopmentPolicyand
Vision2020 164
2.Populationa ndeconomicstatusofMalaysia 180
3.Healthindicesanddiseasepatterns 187
4. Malaysianhealthcaresystem, financingandreforms 194
5.Conclusion 201
ChapterFive
AnalysisofMalaysiangovernmenthealthbudgetallocationand
expenditure
1.Introduction 207
2.M inist ryofHealthMalaysiabudget 212
3.M inist ryofHealthoperatingbudgetallocationande xpenditure 219
4.M inist ryofHealthdevelop mentbudgetallocationandexpenditure 235
5.Conclusion 240
ChapterSix
CriticalanalysisofMalaysianhealthsystemperformanceintermsof
equityandefficiency
1.Introduction 243

2.Equityandefficiency goalsinMalaysianhealthcaresystem 243
3.IssuesofequityandefficiencyinMalaysianhealt hcaresystem
3.1Healthfacilities 248
3.2Humanresource 276
3.3Utilisation 299
4.Conclusion 324
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ChapterSeven
OperationofMalaysianhealthcaresystem
1.Introduction 326
2.AnalysisofMalaysiangovernmenthealthcaresystem
2.1 Isthehealthsystemefficientintheprovisionof itsservices? 328
2.2Threestatescompared 363
2.3Isthehealthsystemwellplanned,organizedandmanaged
tomeetitsobjectives? 373
3.Conclusion 384
ChapterEight
1. Conclusion ReportcardontheMalaysianpublichealthsystem 387
2. Discussion –Limitationofthesystem
2.1Humanresourcesforhealth 397
2.2Planningandpolicyprocess 400
2.3 Lackofdataandresources 401
3. Recommendations 402
Appendix1 405
Bibliography 406
4
Acknowledgements
Firstandforemost,IwouldliketothankAlmightyGodforseeingmethrough these
pastfiveandhalfyearsandgrantingmestrengthtocompletet histhesis.
A “big” thank you to my supervisor, Assoc. Prof. Dr. Phua Kai Hong for his

invaluabletimeandguidancethroughoutthecoursemystudy andforbeingsopatientwith
me.
I wouldalso like totake this opportunityto thank my children, Brien, Jason and
Annforforbear ingwithmeforthelonghoursIspentonthecomputer,especiallyduring
theirschoolholidays.
Last but not least, I am grateful to my husband, Charlie who supported me
financiallyfromtimetotime.
AspecialnoteofappreciationtotheGovernmentofMalaysiafortheconfidencein
allowingmetopursuethisPhDdegreeforwhichIdidnotapply.
TERIMAKASIH.
5
Abbreviations
1MP  FirstMalaysiaPlan19661970
2MP  SecondMalaysiaPlan19711975
3MP  ThirdMalaysiaPlan19761980
4MP  FourthMalaysiaPlan19811985
5MP  FifthMalaysiaPlan19861990
6MP  SixthMalaysiaPlan19911995
7MP  SeventhMalaysiaPlan19962000
8MP  EighthMalaysiaPlan20012005
9MP  NinethMalaysiaPlan20062010
A&E  accidentandemergencydepartment
AG  AccountantGeneral
CT  computerizedtomographyscanner
BOR  bedoccupancyrate
DEA  dataenvelo pmentanalysis
DOH  DepartmentofHealth
DPP  Dra ftDevelopmentPlan19501956
DPT  Diptheria,PertussisandTetanus
EPF  Employee’sProvidentFund

EPU  EconomicPlanningUnit
FFYP  FirstFiveYearPlan19561960
FMS  FederatedMalayStates
GDP  grossdomesticproduct
GNP  grossnationalproduct
HMIS  healthmanagementinformationsystem
HSC  healthsu bcent res
HSFS  healthservicesfinancingscheme
IBRD  InternationalBankforReconstructionandDevelopment
IDS  InformationandDocumentation System Unit
IJN  InstitutJantungNegara(NationalHeartInstitute)
IMF  InternationalMonetaryFund
IMR  infantmortalityrate
IRPA  intensificationofresearchonpriorityareas
IT  informationtechnology
MBS  modifiedbudgetingsystem
MCOs  managedcareorganisations
MCQ  midwifeclin iccumquarters
MHC  mainhealthcentres
MMR  maternalmortalityrate
MNHA  MalaysiaNatio nalHealthAccounts
MOF  MinistryofFinance
MOH  MinistryofHealth
MRI  magneticresonanceimagingscanner
NEP  NewEconomicPolicy
NDP  NewDevelo pmentPolicy
NHFA  National Health FinancingAuthority
6
NHI  nationalhealthinsurance
NHHES  NationalHouseholdHealthExpenditureS urvey1996

NHMSII  SecondNatioanlHea lthMorbiditySurvey1996
NHSF  NationalHealthSecurityFund
NIOSH  NationalInstitut eofOcupationalSafetyandHealth
NMR  neonatalmortlityrate
NVP  NewVisionPolicy
OR  optionalretirement
OPD  outpatientdepartment
OPEC  OrganisationofPetroleumExportingCountries
OPP1  FirstOutlinePerspectivePlan19711990
OPP2  SecondOutlinePerspectivePlan19912000
OPP3  ThirdOutlinePerspectivePlan20012010
PPBS  planning,programming,budgetingsystem
PMR  perinatalmortalityrate
RC  responsibilitycentre
SFYP  SecondFiveYearPlan19611965
SOCSO  SocialSecurit yOrganisation
TMR  to ddlermo rtalityrate
UFMS  UnfederatedMalayStates
WHO  WorldHealthOrganisation
NamesofStatesinMalaysia
S’gor  Selangor
N.S.  NegeriSembilan
M’cca  Malacca/Melaka
T’gganu  Terengganu
K’tan  Kelantan
F.T./W.P.  FederalTerritory/WilayahPersekutuan
K.L.  KualaLumpur
S’wak  Sarawak
P.M’sia  PeninsulaMalaysia/WestMalaysia
M’sia  Malaysia

7
Listof tables
Pages
Table2.1PublicInvestmentforSocial Services19561960 97
Table2.2Percentageof AllocationtoTotal StateandFederal Government
Expenditure inMalaya,195060 108
Table3.1Plan TargetsandActual Expenditure19501960 115
Table3.2AllocationfortheSocial SectorfromtheTotal Expenditure
19501960 116
Table3.3Summaryof2MPto8MP 153
Table3.4ProposalsbytheGovernmentofMalaysiabyPlanPeriod 162
Table4.1SocioeconomicIndicesfor1970,1990and2000 168
Table4.2 AverageAnnual GrowthandVital Rates,Malaysia19702000 188
Table4.3 Ten Principal Causesof Deathin GovernmentHospitalsin
PeninsularMalaysia 193
Table4.4 OutofPocketHealth Expenditure1996 205
Table5.1AllocationtoMOH/TrendofMOHFinancialAppropriation
19702000 213
Table5.2Annual Estimat esoftheDevelopmentandOperatingBudgetofthe
MinistryofHealth19702000 217
Table5.3 MinistryofHealth DevelopmentAllocationandExpendit ure
19702000 218
Table5.4 MOHOperatingAllocationandExpenditure19702000 222
Table5.5 Addit ional Supplement ary Allocation for OperatingExpenses
19882000. 224
Table5.6 Percentageof ProgrammeAllocationtoTotal OperatingAllocatio n
19702000 228
Table5.7 Percentageof OperatingExpenditureoverAllocation19702000 232
Table5.8 Percentageof Annual Changein OperatingExpenditureby
Programme19712000 233

Table5.9 Percentageof ProgrammeAllocationtoTotal OperatingAllocatio n
19742000 234
Table5.10 Percentageof Develo pment& AllocationtoTotal Allocation for
SomeMajorProgramme19872000 238
Table6.1Rural PopulationperHealth CareFacilities(Health Centre)Ratio
19801994 250
Table6.1A PopulationperHealth CareFacilities(Health Centresand
Polyclinics)Ratio1995 2000 250
Table6.2Total NumberofRural HealthCentreby State1980 1994 250
Table6.2ATotal Numberof Health Clinics(Hea lth CentreandPolyclinics)
by State19952000. 250
Table6.3 Rural Populat ionperRura l Health Facilities(Rural Clinic)Ratio
19752000 251
8
Table6.4 Total Numbero f Rural Clinicsby State19802000 255
Table6.5 Doctor Population Ratioby State19702000 258
Table6.6 PopulationperDental UnitRatioby State19842000 261
Table6.7 Total Numbero f Dental Unitsby State19842000 261
Table6.8 Total Numbero f DentistsinthePublicandPrivateSector&
PopulationperDentistRatio19852000 261
Table6.9 Total Numbero f TrainingSchoolsandAnnual Intakeof Health
Personnelby Type19852000 264
Table6.10Total NumberofMOHHo spitalsbyCategory19702000 265
Table6.11Total NumberofMOHHo spitalsby State19852000 266
Table6.12Total Numberof AcuteHospital Bedsby State19802000 266
Table6.13Total Numberof AcuteHospital Bedsper1000 Po pulation Ratio
19802000 267
Table6.14BedOccupancy RateinMOHHospitalsby State19852000 269
Table6.15Total Numberof PrivateHospitalsandMaternity/NursingHomes
by State19802000 270

Table6.16Total Numberof PivateBedsby State19802000 270
Table6.17DevelopmentAllocationandExpenditureforCert ain Categories
19702000 272
Table6.18Percentageof Population CoveredbySafeWaterSupplyinRural
Areasby State19852000 273
Table6.19Percentageof Population CoveredbySanitary Latrinesin Rural
Areas19852000 273
Table6.20InfantMortalit y Rate(per1000 Livebirths)by State19752000 275
Table6.21ToddlerMortality Rate(per1000 ToddlerPopulation)by State
19752000 275
Table6.22Maternal Mortality Rate(per100,000 Livebirths) by State
19752000 275
Table6.23Total NumberandPercentageof Medical Practitionersinthe
PublicandPrivateSectorinMalaysia19702000 277
Table6.24 Population perMOHHealth ManpowerRat ioby Categoryason
31
st
December1998 279
Table6.25 Total NumberandPercentageof PharmacistsPublic& Private
Mix 19802000 280
Table6.26 Total Numbero f PharmacistsinthePublicandPrivateSector&
Population perPharmacist s Ratio 281
Table6.27 Health Manpowerby Category,Public& PrivateMixand
PopulationperHealthManpowerRatio 281
Table6.28 EstimatedRuralandUrban PopulationforMalaysia19702000 284
Table6.29MOHTrainingBudget19702000 286
Table6.30TotalMOHPostsAvailableandFilledby Groupsby YearEnded
31
st
December19702000 288

Table6.31Perks andIncentivesGiventoDoctorsServing inthePublicSector 291
Table6.32Numberof DoctorsLeavingt hePublicSector19901998 292
Table6.33MOHPersonnel AllocationandExpendit ure19702000 296
Table6.34Percentageof Personnelby ProgrammetoTotalMOHPersonnel
19702000 297
9
Table6.35AverageMOHCostsper PersonnelperYear19842000 298
Table6.36Total OutpatientAttendancesinMOHHospitalsandPublicHealth
Facilities& Total AdmissionstoMOHHospitals19702000 300
Table6.37Total Numberof OutpatientAttendancesatPrivate Hospitalsby
State19852000 303
Table6.38Total Numberof AdmissionstoPrivateHospitalsandMaternity/
NursingHomesby State19851996 303
Table6.39TotalMOHandPrivateHospital Beds19842000 304
Table6.40Total Numberof PrivateHealth Facilities,Admissionsand
OutpatientAttendances19842000 305
Table6.41Total OutpatientAttendancesinMOHandPrivateHospitals
19892000 306
Table6.42GovernmentHospitalsWardChargesandDeposits 308
Table6.43WardandT reatmentChargesforGovernmentHospitals 309
Table6.44ComparativeRatesof GovernmentandPrivateHospitals(RM)–
FromtheCAPSurvey 311
Table6.45Utilisation Ratesof InpatientServicesinMOHHospitals
19802000 312
Table6.46DailyAverageNumberof OutpatientsinMOHHospitals19802000 312
Table6.47DailyAverageNumberof AdmissionstoMOHHospitalsby State
19802000 312
Table6.48Mean Lengthof Stay(indays)inMOHHospitalsby State
19852000 314
Table6.49TurnoverIntervalo f DaysforMOHHospital BedsbyState

19852000 314
Table6.50AverageOperatingCostperPatientforPublicHealth&
Medical/Hospital Patients19812000 315
Table6.51AverageCapital Costper Patient forPublicHealth& Medical/
Hospital Patients19812000 316
Table6.52BCGCoverageforInfants by State19852000 318
Table6.53PolioImmu nization Coverageof Infants(3
rd
dose)by State
19852000 318
Table6.54MeaslesImmunization Coverageof Infants(3
rd
dose)by State
19902000 318
Table6.55Immunisationof InfantsforDiptheria,PertussisandT etanus
(3
rd
dose)by State19902000 319
Table6.56HepatitisBImmunization Coverageof Infants(3
rd
dose)by State
19902000 319
Table6.57Percentageof ProgrammeExpendituretoTotalMOHOperating
Expenditure19702000 322
Table7.1AllocationofMOHOperatingBudgetby Programme2000 329
Table7.2Actual ExpenditureofMOHOperatingBudgetby Programme2000 331
Table7.3 Typeof FacilitiesforOutpatientinthePublicHealth Programme
2000 332
Table7.4 MOHDevelopment Expenditure2000 332
Table7.5 MOHDevelopment Expenditure oftheSeventhMalaysiaPlan

10
19962000 333
Table7.6 PublicHealth ProgrammeOutputsfor Year2000 334
Table7.7 CostperPatientforPublicHealth Programme2000 334
Table7.8 Actual Expendit ureandPercentagetoTotalforPublicHealth,
MedicalandTechnical SupportProgramme2000 336
Table7.9 Top FiveIncidencesof Diseases for2000 337
Table7.10MOHOperatingExpenditureBudget, Expenditure,Manpower
StrengthandWorkloadby Programmefor2000 347
Table7.11CostperPatientforMedical CareProgramme2000 350
Table7.12ComparingCostper Patientfor PublicHealthandMedical
Programme2000 350
Table7.13CostperPatientby Medical CareActivities2000 354
Table7.14EmolumentandCostper Manpo wer by Activity2000 356
Table7.15ManpowerSupplyforMOHfor2000 358
Table7.16 PopulationperPublic& PrivateHealth ManpowerMix Ratio2000 360
Table7.17ProgrammeExpenditureby Emolument & SuppliesandServices
2000 361
Table7.18ComparingThreeStates:Penang,KelantanandNegeriSembilan
2000 365
Table7.19ListofMOHProgrammesandActivities 377
Table7.20MOHHierarchical Responsibility Centres 378
11
Listof charts
Chart4.1 MidyearPopulation EstimatesofMala ysia19702000 181
Chart4.2 Total PopulationandGNP19842000 181
Chart4.3 GNPandGNPperCapita19842000 182
Chart4.4 GNPandNational Budget19832000 183
Chart4.5 Total PopulationandGNPperCapita19842000 183
Chart4.6 GNPper CapitaandHea lthAllocationperCapita1984 2000 184

Chart4.7 EstimatedPopulationofMalaysiaand Health Budget19702000 185
Chart4.8 EstimatedTotal,RuralandUrban Population19832000 186
Chart4.9 Annual Growth RateandVital Rates19702000 189
Chart4.10 LifeExpectancyatBirthby GenderinMalaysia19802000 189
Chart4.11 AverageAnnual GrowthandVital Rates19702000 190
Chart5.1 TotalMOHBudgettoTotal NationalBudget19702000 212
Chart5.2 Percentageof Healt h BudgettoNational BudgetandGNP19752000214
Chart5.3 GNPandMOHBudget19752000 214
Chart5.4 Total Health BudgetandHealthAllocationperCapita19702000 216
Chart5.5 MOHOperatingandDevelopmentBudgetandExpenditure
19702000 216
Chart5.6 MOHOperatingBudgetandExpenditure19702000 219
Chart5.7 Annual Increaseof Change inAllocatio nandExpenditureforMOH
OperatingExpenses19702000 223
Chart5.8 MOHRevisedOperatingBudgetandAllocation19882000 223
Chart5.9 MOHOperatingAllocationby Programme19702000 227
Chart5.10Percentageof ProgrammeAllocationtoTotal OperatingAllocation
19702000 230
Chart5.11MOHDevelopmentAllocationandExpenditure19702000 235
Chart5.12Percentageof ChangeinAllocatio nandExpenditureofMOH
DevelopmentExpenses19702000 237
Chart5.13Percentageof ProgrammeAllocationtoTotal Development
Allocation19872000 238
Chart5.14DevelopmentAlloc ationforSomeMajorProgrammes19872000 239
Chart5.15DevelopmentExpenditureforSomeMajor Programmes19872000 239
Chart6.1 Rural PopulationperRural Health CareFacilities(Health Centre)
Ratio19801994forWestMalaysia 252
Chart6.2 Percentageof Rural Populationby State19702000 253
Chart6.3 Percentageof Urban Populationby State19702000 253
Chart6.4 Rural PopulationperRural ClinicRatio19752000 254

Chart6.5 PopulationperHealth CareFacilities(Health Centresand
Polyclinics)Ratio19952000 257
Chart6.6 PopulationperDental UnitRatio by State19842000 262
Chart6.7 Total NumberofMOHAcuteBedsper1,000 Population
Ratioby Stat e19832000 268
Chart6.8 MOHHospitalsBedOccupancy Rateby State 19852000 269
Chart6.9 InfantMortality Rateby States19752000 275
12
Chart6.10 Doctor Population Ratioby State19702000 278
Chart6.11 Total NumberofMOHMidwivesandRural Nurses19832000 294
Chart6.12 MOHPersonnelAllocationandPercentagetoTotal Operating
Budget19852000 296
Chart6.13 AverageMOHcostspermanpowerperyear19852000 298
Chart6.14 Total OutpatientAttendance forMOHHospitalsandPercentage
toTotalMOHOutpatientAttendance19702000 300
Chart6.15 PublicHealth FacilitiesOutpatientAttendanceandPercentageto
TotalMOHOutpatientAttendance19812000 301
Chart6.16 MOHHospital OutpatientAttendanceby Category19862000 302
Chart6.17 Percentageof TotalM OHandPrivateHospital Beds,Admissions
andOutpatientAttendance19892000 304
Chart6.18 OperatingandDevelopmentCostper PatientforPublicHealthand
Hospital Patients19812000 317
Chart6.19 PolioImmunization Coverageof Infants(3
rd
dose)by State
19852000 319
Chart6.20 MeaslesImmunizationCoverageof Infants (3
rd
dose)by State
19902000 319

Chart6.21 Immunisatonof InfantsforDPT(3
rd
dose)19852000 320
Chart6.22 HepatitisBImmunization Coverageof Infant s (3
rd
dose)byState
19902000 320
Chart6.23 PercentageofMOHOperatingExpenditureforPublicHealthand
Medical Programme19802000 323
Chart6.24 OperatingExpendit ureforPublicHealthandMedical Programme
19702000 323
Chart7.1 MOHOperatingBudgetandExpenditureforPublicHealth
Programme2000 330
Chart7.2 PercentageofMOHOperatingAllocationandExpenditureby
Programme2000 340
Chart7.3 MOHOperatingBudgetandExpenditureforMedical Programme
2000 341
Chart7.4 MedicalCareProgrammeExpenditure2000 341
Chart7.5 MOHOperatingBudgetandExpenditureforTechnical Support/
Professional ServiceManagement2000 345
Chart7.6 Technical Support/Professional ServiceManagementProgramme
Expenditure2000 345
Chart7.7 Costper PatientforMedical Activity2000 353
Chart7.8 Costper PatientforCardiothoracicandRadiotheraphy2000 354
Chart7.9 MOHPublicHealth Expenditureby Category2000 360
Chart7.10 MOHMedical CareExpenditureby Activity2000 362
13
Summary
The development of the Malaysian health system has followed closely the
objectives of the national development plans.  When the New Economic Policy was

introducedtoeradicatepovertyirrespectiveofraceandtorestructuretheMalaysiansociety
to eliminate identification of race with economic functions, the health sector became an
important contributor.  The improved coverage through infrastructure development has
reduced social andeconomic disparities that had existed previously.  How much has the
Malaysian government health syst em achieved what was planned?  Did t he government
healthexpenditureandresourceallocationreflectnationalpriorit iesandinterests?
The findingsshow that the expend iture patterns fitted very well withthe national
develo pment objectives but fallshortonobjectiveeconomiccriteria. Theoveremphasis
onphysicalcoverageofserviceshas failed toconsider newchallengesandtherelentless
pursuit of this goal has contributed to higher costs and co mpromised allocative and
technical efficiency.  The relatively lower proportion of expenditure on provision of
servicesandmanpowerhasalsoaccentuatedtheproblem.Consequently,theinefficiencies
ofthesystemhavecontributedtogreaterinequityinotherfor ms.
The Malaysian health system has not fully achieved allocative efficiency in the
distribution of resources and has shortcomings in its performance on technical and cost
efficiency,althoughithasdonewellinitsnationaldistributiveobjectiveofequit ableaccess
tohealthresources.Fromthefindings, furtherdevelopmentofthehealthsystemwillnot
only have to be concerned with equity goals in terms of the new challenges but more
14
importantly, the efficiency goals interms of allocation of resources.  Future growth and
reformoftheMalaysianhealthsystemwillhavetoaddresstheissueofco stefficiencyand
costeffectivenessinitsperformance.
15
CHAPTERONE
1. Introduction
The development of the Malaysian health system has followed closely the
objectivesofthenationaldevelo pment plans.TheNewEconomicPolicy (NEP)isthefirst
develo pmentpolicyint roducedbythegovernmentin1970aftertheracialriotsin1969,to
promote growth with equ ity with the objective of fostering national u nity among the
variousracialgroupswhichist heultimategoalofsocialdevelopmentforthenation.The

twopronged strategy was to reduce and eventually eradicate poverty by ra ising income
levels andincreasingemploymentopportunitiesforallMalaysians,irrespectiveofrace,and
thesecondbeingtoacceleratetheprocessofrestructuringMalaysiansocietytocorrectthe
economic imbalances so as to reduce and eventually eliminate the identification of race
with economic function. When the NEP was intr oduced, the health sector became an
important contributor.
TheNewDevelopmentPolicy(NDP)providesabroaderframewor k forachieving
thesesocioeconomicobjectiveswithinthecontextofarapidlyexpandingeconomy,hence
settingthepacetoenableMalaysiatobecomeafullydevelopednationbytheyear2020not
only economically but also in all other aspects.  Und er these two national policies, the
government implementedsixnationaldevelopment plans fromtheSecondMalaysiaPlan
(19711975) totheSeventhMalaysiaPlan(19962000). Eachofthesedevelopmentplans
containsachapterrepresentingthehealthsector,whichwastakenasthehealthpolicyfor
thenat ion.
16
Since1970,theMinist ryofHea lthhasplacedmuchemphasisontheimprovement
andexpansionoftheruralhealthservices.Thepurposeforthisexpansionwastoincrease
thecoverageofhealthservicesforthepopulationatlargeandtoreducetheimbalancesand
disparitiesthatexistedinthehealthsectorbetweentheruralandtheurbanpopulationand
amongst t he different states and regions.  Improved coverage o f healt h services as
envisagedbytheMalaysiangovernmentimpliedthatservicesaretobemadea vailablefor
everyone so that every Malaysian has equal access and entitlement to available care.
Provisionofpublichealthcarewasseenasatooltoreducetheseimbalancesandtherefore
ensureapolicyof fairdistributionof healthcare  resourcesthroughout theco untrywhere
the more deprived geographical areas were supposed to be given greater attention, for
example,thepoorerstatesortheruralareasinorderthatbarrierstoaccesstohealthcare,
suchaspoverty,shortageofhealthfacilitiesandhealthmanpowercouldbere moved.
Thepurposeof thisstudy is to examinethe development of health care policy in
Malaysiaandto evaluatehow muchtheMalaysianhealthcaresystem hasreflectedwhat
wasplanned. Whatisconsideredaspr iority,ur gentandimportantintheseventiesmaybe

verydifferentthirtyyearslaterintheyear2000.Whatwerethechangingneedsthenand
nowwill beclearlydistinguishedthroughtheprioritiesandobjectiveslaidoutintheplans.
1.1 Researchquestions
ThisresearchwillfocusonthedevelopmentofthehealthcaresysteminMalaysia
through the planning framework. This will be an evaluat ion of the policy planning
processesoftheMalaysianpublichealthsystemandtheoutcomeoftheseprocesses.The
17
analysiswillprimar ilybeadescriptivestudyofthedevelopmentofthepublic healthcare
system in Malaysia over a longitudinal timeseries and a comparative analysis for the
different  time perio ds from the start of the First Outline Perspective Plan (OPP1) 1971
1990,andtheNE PtotheSecondOutlinePerspectivePlan(OPP2)19912000,embodying
theNDPwhichcoversaperiodofthirtyyears. Fromthehistoricalandtimeseriesstudies
ofallthenationaldevelopmentplansandhealthchapterswithintheplans,eachoft heplan
periodwill becriticallyreviewedagainsttheobjectivesandtargetsproposedforeachplan.
During the midseventies, t here were a few studies done by the World Bank on
publicexpenditureinMalaysia.In1975,theWor ldBa nkfinancedaprojecttoevaluatethe
characteristicsofpublicexpenditureinMalaysia,one ofw hichwastoanalysetheissuesin
thecostofthepublichealthsect oroutputs:thehealthandmedicalservicesofMalaysia,led
by Peter S. Heller.
1
The findings showed that the provision of health care in Malaysia
benefitedthepopulationat largeandthere was nosignofvigoroustargeting tothepoor
specifically or to any specific groups but ratheremphasis was given to expand the rural
healths ystem.In1970,accesstohealthcarewithin5kilometrestothenearesthealthclinic
for PeninsularMalaysiawas 71percent whereasfor SabahandSarawak,only20 percent
and35percentofthepopulationrespectively. Thisshowedanobviousinequalityinterms
of access t o health care for the East Malaysia p opulation.  The Government being fully
awareoftheproblemhaschanneledalotofexpendituretowardsexpandingtheruralhealth
systemtoimprovecoveragetothepopulationandthisobjectivehasbeenthepriorityofthe
MinistryofHealthMalaysiasincethen.

1
ThiswasaspecialcoststudywheredatawascollectedoverasevenweekperiodinMalaysiaandit
involvedvisittosixStateMedicalDepartments;12generalanddistricthospitals;andto19mainand
subhealthcentresthroughoutPeninsularMalaysia.
18
Another study which was part of the World Bank research project on the
distributive effects of public expenditure in meeting the basic needs in Malaysia,
2
concludedthatincomeasmeasuredbypopulation quintileswasnotastrongdeterminantof
theconsumptionofgovernmenthealthcareservices.Thestudyalsoshowedthattherewas
a relatively high demand for public health care regardless of income. However, it also
showedthatruralclinicvisit sandbirthsassistedbygovernmentmidwiveswerenegatively
associated with income. Yet, at the same time private outpatient visits were positively
associated wit h income. The results indicat ed that as far as public health care was
concerned,generally consumptionwas high irregardlessof income, but onacloser look,
publicprimaryhealthcarebenefitedthelowerincomeruralpopulationwhereasthehigher
incomeurbanpopulationco nsumedmorepr ivatehealthcare.
Another interesting finding fromthestudy wasthat households fromthenorthern
states with majority of Malays had t he highest frequency of hospitalisation in public
hospitals whereas households in Selangor had an extr emely low frequency of
hospitalisation.Thisresultshowedthatmetropolitanareasandthelargerpopulationsdid
notnecessarymeanmoreconsumptionofpublichealthcare.Althoughinsuchdeveloped
areas there was more availability o f public inpatient care, there were equally more
availabilityofprivatehealthcareaswell. Thefindingthattheruralareasincludingsmall
urban towns were above average in consumption in public health care was due to the
availabilityofsuchservicescomparedtothelimitedprivate healthcareintheseplaces.
2
PreparedbyJacobMeermanin1977asWorldBankStaffWorkingPaperNo.260.
19
BoththeHellerandMeermanstudiesconcludedthattheMalaysiangovernmenthas

ahighdegreeofsuccessinprovidingmedicalcareforall,atzeroornearzerocosttothe
users
3
irrespect ive of income.  But at a closer analysis, the lowest  income quintile
householdsseemedtobenefitfromthehighlysubsidisedhealthservices. However,Heller
did not endorse the effectiveness of reaching the most disadvantaged groups and that
incomewasredistributed effectively. Thiswasthe scenario inthe1970sduringthefirst
decadeoftheimplementationoftheNEP.In1970,almostallthestatesinMalaysiahada
ruralpopulationofmorethan70percent exceptSelangorandPenang.Malaysiawasthen
primarilyatypicalthirdworldcountrywiththemajorityofthepopulationintheruralareas.
The World Bank study in 1992,
4
comparing cost and financing amo ng Asian
countries, ind icated thatMalaysia haddonewellinthe healthsectoralthoughtherewere
someshortfallsinhealthspending.Itachievedgoodhealthindicatorswithamuchsmaller
proportion of spendingcomparedtoother countries and Ma laysia wasconsidered oneof
thebestperformersintheregion.Itsbiggestachievementwastheabilitytotargetitspublic
healthspendingtothepoorwithitshighlysubsidizedpublichealthcareserviceacrossall
incomeand mortalitygroups.  This finding somehow contradicts theearlierWorldBank
studybyMeermanandHeller
5
thatsubsidiesprovidedbythegovernmentweredistributed
equallyonapercapitabasisandtherewasnoeffectivetargetingforthepoor.
TheMinistryofHealthMalaysiahasitsowninterpretationofequitywhichmeans
eachindividualregardlessofsocioeconomicstatus,age,race,religionorgender,shallbe
3
Meerman,1979,pg.162.
4
GriffinC.,1992,pgs.61152.
5

Meerman,1979,pg.162.
20
providedwithbasichealthcareofanacceptablestandard. Theconceptofequityinhealth
intheMalaysiancont extimpliesthateveryoneshouldhaveafairandequalopportunityto
attain his/her full healthpotent ial, and is concer ned withcreating equal opportunities for
health by narrowing health differentials to a minimum.  The development of the health
services has given priority to equity considerations of access to these ser vices in two
important dimensions,namelygeographicalaccessandcostaccess.
6
Theaimofthispolicy
ofequityinhealth wasnottoeliminateall healthdifferencessothateveryonehadthesame
level and quality of health but rather to reduce or eliminate those elements which arose
from factors which were considered to be both avoidable and unfa ir. It implied that
everyone should have a fair opportunity to attain their full health potential and more
pragmatically, that no one should be disadva ntaged from ac hieving this potential.
Barraclo ughcallsthisawelfareorientatedapproachtopublichealthcare.
7
TheMalaysian
interpretation emphasizes equal opportunity to care through equal accessibility, which is
narrowerthanWHO’sinterpretationwhichincludesfairnessinfinancing.
Since Independence, the health policy in Malaysia has put a lot of emphasis on
equitybuttherewasnomentio naboutefficiencyasagoalforthepublichealthsector,not
until the later fiveyear development plans.  The Ministry of Health of Malaysia’s
interpretation of efficiency emp hasized that the health services are to be effective,
appropriateandshouldresultingoodoutcomes.
8
Theconcepto fefficiencywasindicated
indirectlyintheFifthMalaysiaPlan(19861990)(5MP),thatallhealthprogrammesshould
take into account the escalating costs of hea lth services amongst other factors to be
6

PoliciesinHealth,MOH,July1999pg.13.
7
BarracloughS.,HealthPolicy,April1999;47(1):5367.
8
HealthinMalaysia–AchievementsandChallenges,pg.12.
21
considered.Itwassuggestedalsointhe5MPthataNationalHealth Planwouldbeworked
outwhichwasexpectedtoconsolidatehealthserviceresourcesinordertoensureoptimum
utilisationandcosteffectiveness.Whethertheequityandtheefficiencygoalsaslaiddown
bythepolicymakershavebeenachievedwillbeexaminedinthisthesis.
ManyhaveacclaimedthatthedevelopmentoftheMalaysianhealthcare systemisa
successstory,
9
commendable,
10
oritsperformancehas beenver yimpressive
11
becauseat
minimum cost, it has achieved accessible and equitable health care for the entire
population.However,therearesomewhodo notagreewiththis,amongwhom isCheeHL
who concludes that the accessibility to health care services is neither equitable nor
necessarily according to need,
12
especially for the poor people in the urban areas.
13
Accor ding to Wee and Jomo, the poor have not enjoyed subsidies comparable to higher
income groups as they sho uld, due to high traveling costs and manpower shortages.
14
Thesecontradictionsarethesubjectofthethesisanditsaimisnottorefutethearguments
here but to examine the Malaysian public health system performance from a policy

planningperspective.
WHO
15
ranked Malaysia in the 49
th
position in terms of overa ll health system
performance out of 191 member countries.  Among the attainment of goals, Malaysia
scored itshighestat the33
rd
positionforlevelofresponsiveness butscoredtheworstfor
9
MericanMI,RohaizatY,HanizaS.,MedicalJournalMalaysia,2004March,59(1):8493.
10
KananatuK.“HealthcarefinancinginMalaysia.” AsiaPacificJournalofPublicHealth,2002:14(1):238.
11
BinJuniMH.,SocialScienceandMedicine,1996September;43(5):75968.
12
CheeHL.,1990,pg.89.
13
CheeHL.,1995,pg.104.
14
Wee CH,JomoKS.,WorkshoponHealthCareinMalaysia,911September2004.
15
WHO,200,pg.153.
22
fairnessinfinancialcontributionat between122
nd
and123
rd
position.Theattainmentofthe

restofthe othergoalsrestedinbetweenthesetwo.
BeforeathoroughanalysisofthedevelopmentoftheMalaysianpublichealthcare
systemcanbedone,itisimportant toknowwherethesituationwasbeforeandwhatwer e
theproblemsinthepublichealthcaresystemthatinitiat edtheequ ityandefficiencygoals
asmentio nedabove.Unlessitisknownwheretheimbalanceslieandwhatpolicymakers
aretryingtocorrect,itwouldnotbepossibletoevaluatetheperformanceofthesystemvis
àvistheintentionofthepolicymakers.
Thebasicresearchquestionis:howmuchhastheMalaysiangovernmenthealthcare
systemachievedover the period of thirty years with regards to what wasplanned?  The
analysis will examine how much of the health policy was dictated by the economic
develo pment policyand whetherthe government isableto  matchor reconcilethe health
policywith theoveralldevelopment policy andvice versa.  Anyhealth carepolicy must
haveaclear directionandit spoliciestranslatedintoaction.Havingadocumentcontaining
astatementofpoliciesdoesnotnecessarilymeanthatthepo licyagendawillbemet.
The next research question is how much does the government health expenditure
and resource allocation reflect priorities and interests?  The amount of allocation given
should ideallycorrespondwiththeamountspenttoachievethedesiredresultsfromwhat
was invested in terms of expenditure. Therefore, the research will critically look at the
problems, failuresandsho rt falls inthe implementationof its healthpolicy. Theanalysis
23
willbebasedonappliedhealtheconomicframeworkbylookinginto theissuespertinentto
healthcarefrom broadpr inciplessuchasequityandefficiency.
1.2 AnalyticalFramework
Theanalytical framework for  the initialpart of thethesiswill bea review of the
historicalbackgroundpriorto1970followedbyadescriptivestudyonallthehealthplans
inMalaysiafrom1970u ntilyear2000. Theoverallapproachisahistor icalapproachanda
timeseriesanalysis.AnoverviewofthehistoricalbackgroundpriortoIndependencewill
bepr ovided to give an understandingto the rationale behind the st ructure of the present
healthcaresystemandwhythegovernmenthasupholdcertainpoliciesandprioritiesvery
consistentlyoveraconsiderableperiodoftime.

The later part ofthe thesis will bethe indepthstudy of how the healthpolicy is
reflectedint heallocationofresourcesthroughthebreakdownofhealthexpenditure.  For
thepurposeofthisthesis,theanalysis of health expenditurewillonlybeconfinedtothe
expenditureincurredbytheMinistryofHealthofMalaysia,whichisthemainproviderof
healthcare for the country.  Therefore, this study will focus o nly on the public health
expenditure under the control of t he Ministry of Health.  According to the Malaysian
NationalHealthAccounts,MOHexpenditureonhealthinthepublichealths ectoramounts
to86percentofthegovernmenthealthexpenditureandcontributes48percentto thetotal
expenditureonhealthin2002.
16
16
MNHA, 2006,pgs.1213.
24
The purpose of this detailed public health expenditure analysis is to get a clear
pictureoftheuseoffinancial,physicalandmanpowerresources,identifyingallocationsto
the different states in the country, to urban and rural areas and to the different healt h
programmes.Theanalysisofhealthexpenditurewillbedonebycategorizingthedifferent
components of expenditure by progr ammes and activities and observing the trend of
develo pmentthroughatimeseriesstudy.Theapproachistocollateallthehealthbudgets
and expenditures a nd do simple analyses of variances to analyse what percentage of
changes have occurred over the years in terms of allocation, distribution and actual
spending.
Thegovernmenthasplacedalotofemphasisonequitybothinitsnationalpolicies
aswellassectoralpolicies likehealth.Theprioritygiventoachievingthisobjectivehas
movedpolicymakerstochannela lotofresourcestowardsthisend.Thequestio ntobe
answered is how much has equity been achieved in the health care system within the
Malaysiancont ext.
From the efficiency perspective, the analysis examine the expenditure trends of
howt hesupplyofhealthfacilities,servicesandmanpowerhaveincreasedoverthelastfew
decades and whether the increases are justified in terms of utilization rates and service

outputs.Forout comemeasurementssuchasmacrohealthind icators,itwouldbedifficult
to justify the contribution from the health sector alone, as there are multifactorial
interrelationshipswithotherdeterminants.