Costs soar after health services privatised

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Ever since health care support services in general hospitals were privatised, costs borne by taxpayers have soared.

In 1996, health care support services were privatised to three companies: Faber Medi-Serve Sdn Bhd (FMS), Radicare (M) Sdn Bhd and Pantai Medivest Sdn Bhd.

In 1997, the payments made to these companies added up to RM340 million, broken down as follows:

  • Faber RM127m
  • Radicare RM150m
  • Pantai Medivest RM63m


In 2009, costs rocketed to over RM1.0 billion, made up as follows:

  • Faber RM452m
  • Radicare RM377m
  • Pantai RM214m

For the 13 years from 1997 to 2009, the three companies were paid a total of RM8.7 billion, broken down as follows:

  • Faber RM4.0b
  • Radicare RM3.2b
  • Pantai Rm1.5b

The above information was provided by Health Minister Liow Tiong Lai in response to an oral question in Parliament on 8 April 2010 by Dr Lee Boon Chye. The MP for Gopeng had wanted to know how much was paid to these concessionaires .

Now, let’s look at Faber Medi-Serve (FMS) more closely.

In late 1996, the government awarded the company a 15-year concession “to manage, operate and provide five core support services to 71 out of the 123 MOH-owned hospitals”.  FMS has already submitted a proposal to the Health Ministry to renew its concession, which expires in October 2011.

FMS’ business centres on clinical waste management, facility engineering maintenance, linen and laundry services, biomedical engineering maintenance, and cleansing and janitorial services.

FMS currently provides such support services to 79 public hospitals in Perlis, Kedah, Penang, Perak, Sarawak and Sabah. It also serves more than 600 private hospitals and health care institutions. The firm is a subsidiary of Faber Group Berhad and a member of the UEM Group of Companies.

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The substantial shareholders of Faber Group Berhad as at 31 March 2010 are as follows:

  • UEM Group Berhad 34.29% (direct)
  • Khazanah Nasional Berhad 34.29% (indirect)#
  • Universal Trustee (Malaysia) Berhad 23.42% (direct) (who is behind this?)

# Deemed interest by virtue of its substantial interest in UEM Group Berhad

For the year ending 31 December 2009, Faber Group Berhad posted a profit before tax of RM141 million on the back of turnover of RM805 million. (FMS contributed two thirds of group profit before tax and revenue.)

According to the Annual Report 2009 of Faber Group Berhad, FMS increased its revenue by 9.6 per cent to RM536 (from RM489 million the previous year), posting a profit before tax of RM94 million (up 40 per cent from the previous year.)

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Democrat
Democrat
23 Aug 2010 1.27pm

… We can have the best system in the world like the French. But if we have crooks … running the show …then God help us.

pala richie
pala richie
23 Aug 2010 10.27am

If kangaroo stay outside the fence, the solution is simple raise the fence higher. After rising it to 10m high, you have to at least think!, Maybe the problem is not the fence, maybe someone intentionally left the gates opened!. It happened in most GLC s… and many more. When a person join these companies, their intention would eventually get crooked somehow, why?. Intertwining the politics and business is detrimental to nation building, is like double dose of evil force to satisfy the infinite human greed. M’sia cannot handle this, it takes a matured society, transparent and accountable society to… Read more »

Phua Kai Lit
Phua Kai Lit
23 Aug 2010 10.21am
1Najibnomics
1Najibnomics
23 Aug 2010 5.56am

When those selected services were privatised, aren’t they supposed to REPLACE, REDUCE existing OVERHEADS or costs in maintaining them by the Government or Private Hospitals?

One hospital cannot have 2 teams of Housekeeping, Engineering or Maintenance etc?

Anil, hope to see more research on the ‘cost of healthcare provision per person in Malaysia’ versus ASEAN region, if not versus Asian countries.

Yang
Yang
22 Aug 2010 8.42pm

wanderer, Its not to stay healthy. Its to go for CHANGE. CHANE THE GOVERNMENT, KICK OUT 52 YEARS OF UMNO CROYNISM AND najib AND YOUR HEALTH WILL IMPROVE. HEALTH OF OURSELVES AND THE COUNTRY

Francis Ngu
22 Aug 2010 5.00pm

The patients are too sick to be aware that thanks for their sickness, there are ample megacronies out there with their hands firmly in the till.

To cure the health services, send in to theatre for radical surgery for Stage 5 malady, hope it is not inoperable stage 5 !

Kuching.

Azlie
Azlie
22 Aug 2010 1.14pm

Can you tell me one privatised project that has benefit the rakyat?

Dr. Pang HC
Dr. Pang HC
22 Aug 2010 11.23am

and we have not even talked about Pharmaniaga yet..

LBJ
LBJ
22 Aug 2010 10.59am

These are the real blood sucking mosquitoes.

tunglang
tunglang
22 Aug 2010 10.16am

The name UEM stinks (sky high) of direct connections in the many privatization of Gomen projects without competency, accountability & transparency. The high cost fluctuation of health services within a few years is anybody’s guess & suspicion: not the least – beyond normal prudent, bean counting calculus. And FMS posting a profit before tax of RM94 million (up 40 per cent from the previous year!) is a ‘miracle’ during this time of severe economic downturn. Does it mean Gomen and health institutions were spending more to cope with more sick men & women cause by this downturn? I’m beginning to… Read more »

wandererAUS
wandererAUS
22 Aug 2010 8.40am

Stay healthy and do not fall sick!…there are more ‘invisible hands’ involved milking the cow, you sick suckers are made to pay dearly.

Ganesh
Ganesh
22 Aug 2010 8.22am

Anil, lets also look at the issue of lack of government hospitals. If you see most private hospitals, they are virtually owned either directly or indirectly by the Government. So, the government has absolutely no incentive to build more new government hospitals nor upgrade existing government hospitals at all. That is the biggest problems now. The private hospitals are doing so well and the government reaping so much of money from them, in my humble opinion, there is a conflict of interest here. Why should they even build or improve existing government hospitals? Has anyone gone and seen GHKL, it… Read more »