500 private clinics close down due to poor economy, GST

KUALA LUMPUR: The poor economy and Good and Services Tax have caused up to 500 private clinics to close down in recent years as the people opt for cheaper treatment at government clinics.

Medical Practitioners Coalition Association of Malaysia vice-president Dr M. Raj Kumar said operating costs had skyrocketed in recent years. This included the cost of medicines which increased every six months and also various licences needed for the practice.

Dr Raj said the introduction of GST and rise in wages for nurses and assistants did not help the business as well.

He said many doctors, especially solo practitioners, ended up joining emergency rooms in hospitals, taking up locum stints or joining pharmaceutical companies.

According to data compiled by the Malaysian Medical Association (MMA), about 500 clinics had closed down between 2014 and 2016 due to poor business.

MMA president Dr Ravindran R. Naidu said the closure was inevitable with the drop in number of patients and the increasing operational costs.

A study involving 1,800 general practitioners revealed widespread concern over the financial sustainability of their clinics.

The findings from “Study on the Health Economics of General Practitioners in Malaysia: Trends, Challenges and Moving Forward in 2016? showed that clinic operating costs had increased over the years due to changes in policies as well as involvement of unregulated third party administrators (TPAs).

The doctors were unable to cope with the high operating cost ranging from RM50,000 to RM60,000.

The study also showed almost 70% of clinics saw fewer than 30 patients a day.

Dr Ravindran said TPAs should share the blame as they placed restrictions on consultation fees, types of medication prescribed, while charging GPs a fee for every patient they see.