Friday, December 15, 2017

Health check on the 2018 Budget

LAST Friday after prime minister and finance minister Najib Razak tabled the 2018 Budget, which he dubbed ‘the Mother of all Budgets’, my friends asked me what I thought about the budget allocation given to the Ministry of Health (MOH).
In my previous column article, I justified the reasons why the MOH should be given a larger budget allocation amounting to over RM28.5 billion (or >15% growth rate). The good news is that under the 2018 Budget, the MOH budget allocation has indeed increased to RM26.6 billion, albeit at slower growth rate of 7.2%.
As is the case with the Budget itself, this year’s Health allocation is historically largest and takes the highest share (9.5%) relative to the total Budget since 2009. In response to the announcement, both the health minister Dr S. Subramaniam and the health director-general Dr Noor Hisham Abdullah publicly expressed their satisfaction with the budget allocation. On a personal note, I was disappointed by the shortfall of about RM2 billion or half of the growth rate that I was expecting to see. As the saying goes: ‘the devil is in the details’, it is worthwhile to see if the government has genuinely put the Rakyat’s money where its mouth is. 
New development, bigger budget
From a first glance at the headlined items, it appears that the government is heeding the call to allocate more funds towards development expenditure. About half a billion ringgit, or a 37.9% increase in budget allocation, has been channelled to development, of which RM212 million was added to the budget for upgrade and expansion hospital facilities. Purchase of medical equipment and vehicles was topped up by RM244 million (Figure 1). It is certainly a welcome move and necessary action after the tragic fire incident at the Sultanah Aminah Hospital that took six lives last year.

In his Budget speech, Najib mentioned the fix for the wiring systems and even ambitiously announced plans to build new hospitals and wards (including one for the Pulau Pinang Hospital). Strangely, merely RM2.7 million in additional funding has been allocated to achieve these plans.
By right, we should be placing more emphasis on the operating budget, since it takes up 93.1% (RM 24.7 billion), a lion’s share of the total MOH budget. Over half, or 60.9%, of the operating budget is reserved for the salaries and wages for a workforce of 268,014 in total. The number of positions in the Health Ministry has increased by 30.2% from 2010-2018, while the amount paid for emoluments in 2018 has risen 144.6% compared to 2010. The health workforce is crucial in ensuring high standards of healthcare delivery, but this rise is only justifiable if the emolument rise converts to higher pay to retain quality talent.
Cut back on funding for supplies and services
Departments under the Medical Care (Perubatan) category will receive the largest amount RM13.2 billion, or a 53.4% of the total operating budget, followed by the Public Health (Kesihatan Awam) category (RM4.7 billion or 19.1%) (Figure 2). Worryingly, although the total sum of allocations for these two categories has increased compared to 2017, most of it is channelled towards emolument. Despite the functional importance of these two categories, the government has opted to cut back on funding for supplies and services for both categories (Figure 3). For Medical Care, the allocation for supplies and services shrank from RM5.17 billion in 2015 to RM3.92 billion in 2018, a difference of RM1.26 billion!

MP for Kampar Dr Ko Chung Sen rightly criticised the government on the RM65 million reduction in the allocation for the pharmacy and supplies division. It is a peculiar decision, given that many members of the public who engage the services of MOH hospitals or health clinics have long complained about the frequency of drug shortages. A reduced allocation certainly does not help to alleviate the drug demand burden. Therefore, when Najib announced that a sum of RM2.5 billion would be allocated for medical supplies and RM1.6 billion for consumable and medical support items, was he actually referring to an increased or reduced allocation?
Public health concerns
The other worrying budget reduction is related to the Disease Control and Public Health Pharmacy and Supplies divisions, which will receive RM22.4 million and RM35.6 million less respectively in 2018 for services and supplies, compared to this year.
This reduction is especially worrying for the Disease Control division, which has seen a declining share of allocations from RM402 million in 2011 to RM159 million in 2018. Unless one can prove that the services provided by this division have become substantially cost-effective, the decision to slash funding is controversial, in the backdrop of dengue and malaria outbreaks as well as the re-emerging threat of various vaccine-preventable infectious diseases.
Lastly, it is definitely timely to tackle the non-communicable diseases (NCD) via the KOSPEN programme, and the RM30 million allocation will prove useful to carry out a nationwide campaign. On the other hand, the Malaysia Health Promotion Board (MySihat) is a statutory body under the MOH that is also focused on health promotion, however it has received RM5.5 million annual budget for the past 3 years and past campaigns have been criticised for being rather ineffective.
It would make sense for KOSPEN to collaborate with MySihat for the NCD campaign and in doing so, hopefully they will be able to live up the programme name: ‘Healthy Community Empowers the Nation’. 

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