More worries about liberalisation of services


It is disconcerting to see neoliberals in both Pakatan and the BN whole-heartedly welcoming Najib’s liberalisation of services. The DAP, MCA and Gerakan want liberalisation to be extended to other sectors; the MCA even mentioned national security and defence.

No one is saying there shouldn’t be competition in certain sectors. But we are proceeding with liberalisation when some of the regulatory mechanisms are not in place. For instance, health care regulatory mechanisms to cover areas such as laboratory services that were promised a long time ago are not in place.

What has happened to one of the biggest issues of them all – health care financing? The Coalition against Health Care Privatisation had demanded universal health care accessibility and greater allocations for the public health care system. If at all an insurance scheme was implemented, the coalition wanted it to be a universal national health insurance scheme.

But now with the liberalisation of services drive, are progressive reforms to national health care financing going to take a back seat? Will we now see privatisation by stealth – so that by the time people wake up, it might be too late to do anything about it?

Health care is critical as this is one sector subject to market failures and huge information asymmetries. We can see how imperfect the market is in the United States, where spending, including private expenditure, is so huge – and yet so many people fall outside the scope of adequate coverage.

Foreign and private domestic investments in health care are not made out of concern for the health of the ordinary people. They are made out of concern for the health of the bottom line of corporations. Issues like accessibility for rural Malaysians and affordability are not considered. Instead the focus turns to medical tourism rather than the health care concerns of the lower-income group. The mismatch in resources between the public and private sectors grows wider as resources – subsidies, land, skilled staff – that could have gone to the public health care system are now shifted to the private hospitals.

Although the government has invited the medical profession for a dialogue on the liberalisation of health care services, this dialogue has not yet taken place. Yet the government is already going ahead with liberalisation of health services. This is not reform.

We sometimes talk about emulating East Asian countries like Taiwan; yet our approach to health care lags far behind. The Natural News reports:

…Taiwan also has an extremely efficient, affordable health care system that covers everyone for just a few dollars a month. Using high-tech hospital equipment and U.S.-trained doctors, the Taiwan health care system still manages to cover virtually all medical needs (pregnancy, dental and vision included) for about US$30/month through your employer — which includes coverage of your entire family, including children. Your employer pays about $25 /month in addition to what you pay, so it’s roughly $50 / month for full coverage of you and your entire family. Not bad, huh? Why can’t America do this?

For those citizens who don’t have employment, they can purchase full coverage for about $20/month. Yep, that’s twenty bucks a month for full health care, even if you don’t have a job.

This isn’t for shoddy, low-tech health services, by the way. This is for state-of-the-art specialist coverage, including cardiology, reproductive health, internal medicine, urgent care, pediatrics, cancer treatments, surgery and just about every area of medicine you can think of. That an Asian nation can provide these high-tech services at such an affordable cost is astonishing to most Americans who are used to paying the highest prices in the world for not-so-great health care services.

Providing affordable, state-of-the-art (westernized) health care is something that seemingly can never be accomplished in the U.S. due to all the powerful, profitable corporations making money off disease. The health insurance companies, pharmaceutical companies and health service providers are all making too much money off sickness and disease to give up those profits for the common good. In America, health care is a for-profit industry, not a benefit to its citizens. And legislators in Washington repeatedly favor the profits of corporations over the health care needs of Americans. (This stance, as I’ve explained before, will spell the doom of America. You cannot have a strong nation if your people are all diseased and medicated…)

Princeton economist Uwe Reinhardt writes in BMJ about a humbling visit to see “Taiwan’s highly efficient system of national health insurance”:

Taiwan introduced its national health insurance system on 1 March 1995, after less than a decade of planning that went ahead in textbook fashion. After visiting the health systems of numerous other nations, Taiwan’s policy planners used the insights gained to develop what has been described as “a car made from many parts produced abroad but assembled in Taiwan.” It took only 18 months for the plan to make its way through the legislative chambers in 1993-4. At the behest of Taiwan’s then president, Lee Teng-hui, it was implemented in less than a year. Overnight, health insurance coverage in Taiwan jumped from roughly 57% of the population before 1 March 1995 to virtually the entire population. For US policy makers and presidential contenders—who for half a century now have engaged in a perpetual “national conversation” on universal health insurance, only to see the number of uninsured people grow apace over the years—the speed of Taiwan’s move to a national health insurance system seems downright surreal. …

In the absence of national health insurance Taiwan would today probably have a highly stratified healthcare system, with top tier, US style care for the rich funded by private insurance, a social insurance system for the employed middle class with highly variable quality of care, and much less or nothing for millions of uninsured poorer citizens. …

Loss of health insurance and fear of bankruptcy over medical bills is a growing fear among millions of Americans; it has not been in Taiwan since 1995. In a globalised economy that subjects Taiwan’s low skilled workers to ever fiercer foreign competition from low cost labour elsewhere in Asia, the safety net of the national health insurance system represents one of Taiwan’s major public assets.

Another area where the market will worsen inequalities is childcare and early education, where it is virtually a free-for-all. Parents are understandably eager to give their children a headstart in life. But without an adequate regulatory infrastructure, without any system of financing to ensure equal opportunities for all, liberalisation is just going to create a class system, further worsening inequality in the country which is already amongst the worst in the world.

It is alarming that certain Pakatan politicians, instead of looking at the long-term implications of the (neo?) liberalisation of services, have simply joined their MCA and Gerakan counterparts in welcoming services liberalisation simply because of the elimination of bumiputera equity quotas.

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2 May 2009 1.46pm

Abuses under NEP have to end. The hitherto much abused New Economic Policy must now be reformed and transformed into a better more equal policy called the New Equality Policy. Under this new policy, state assistance is given to all those who are needy and poor irrespective of their race or religion. After all, there are poor Chinese, Indians and Bumiputeras who have NEVER benefited from the NEP. As well, it is important to maintain national sovereignty over our necessary public services. Public services like health, utilities, education, emergency services, banks, etc.. must NOT be opened up to foreign ownership… Read more »

Sivin Kit
2 May 2009 8.32am

Charles Santiago raised your concern at the CCM organized Ecumenical Social Forum at SFX Loyola Hall yesterday when the subject of economy came up.