The expansion of dual practice within public hospitals has been a strategic response to the increasing attrition of senior specialist physicians to the private sector. This phenomenon, termed Full Paying Patient (FPP) services, was initiated by the Malaysian Ministry of Health in 2007. The primary aim is to retain senior specialists by allowing them to generate supplementary income while also alleviating the government’s financial burden of subsidizing healthcare for those who can afford to pay.
A research team, supervised by Professor Sharifa Puteh from University Kebangsaan Malaysia, has developed a study protocol to assess the impact of FPP inpatient services on the financial performance of selected Malaysian hospitals. The study is primarily conducted by PhD researcher Dr. Malindawati Fadzil, alongside contributions from Dr. Azimatun Aizuddin from University Kebangsaan Malaysia, Dr. Zafar Ahmed from Northumbria University, and Dr. Nor Muhamad and Dr. Abdul Harith from the Ministry of Health of Malaysia. Their work, which aims to determine whether the revenues from FPP services can cover the costs and potentially generate profit, is published in the journal PLOS ONE.
The study focuses on four hospitals: Serdang Hospital, Pulau Pinang Hospital, Sultanah Aminah Hospital, and Sarawak Heart Centre. It analyzes data from recent years, including service volume, revenue, and cost to perform a cost volume profit (CVP) analysis. This analysis calculates the break-even point, which indicates the volume of services needed to cover costs without generating a loss or profit.
Professor Puteh explained the significance of the study: “The effectiveness of FPP services in recouping service delivery costs and yielding a profit is still uncertain after many years of implementation. This study is designed to evaluate the impact of Full Paying Patient inpatient services volume, revenue, and cost on profit versus loss at selected hospitals.”
The researchers used a comprehensive approach to gather and analyze the necessary data. They employed the Malaysian Diagnosis-Related Groups (MalaysianDRG) Casemix system, which helps classify diseases and calculate costs based on actual clinical data. This system provides a detailed breakdown of the costs associated with different medical conditions and treatments, enabling a thorough analysis of the financial aspects of FPP services.
To understand the financial viability of FPP services, the researchers examined both fixed and variable costs. Fixed costs are those that remain constant regardless of the number of patients treated, such as salaries and utilities. Variable costs, on the other hand, fluctuate with the volume of services provided, like medical supplies and medications. By distinguishing between these two types of costs, the team could more accurately assess the profitability of the services.
One critical aspect of the study is its focus on understanding how variations in service volume, cost, and pricing impact healthcare providers’ profitability. This information is crucial for making informed decisions to ensure the sustainability of FPP services. The researchers also explored the trends in service volumes, revenues, and costs to identify patterns and potential areas for improvement.
“The results of this study may not accurately reflect the profitability of FPP services, and it may be necessary to conduct further research in this area,” noted Professor Puteh. The study also examined the potential for cross-subsidization, where revenues from private patient services might be used to support public healthcare services.
In summary, this comprehensive evaluation of FPP services in Malaysian hospitals by Professor Puteh and her colleagues aims to determine whether these services can achieve financial sustainability. The findings will guide policymakers and healthcare managers in making strategic decisions to enhance the effectiveness and efficiency of healthcare delivery in Malaysia.
Journal Reference
Malindawati Mohd Fadzil, Sharifa Ezat Wan Puteh, Azimatun Noor Aizuddin, Zafar Ahmed, Nor Asiah Muhamad, Abdul Aziz Harith. “Cost volume profit analysis for full paying patient services in Malaysia: A study protocol.” PLOS ONE (2023). DOI: https://doi.org/10.1371/journal.pone.0294623
About the Authors
Prof. Dr. Sharifa Ezat Wan Puteh main interests are in the areas of health policy, health inequality and health economics. She has been appointed as a casemix consultant, coding specialist (with UNU-IIGH and ITCC UKM) to conduct research & capacity building in Health System in developing country. She has sat on previous posts, as the Deputy Dean, as the Honorary Fellow to Tun Fatimah Hashim Women’s Leadership Center UKM and Chairman to Technical Advisory Committee for Health Technologies, Economic Evaluation (TACHTEE), MoH. She was appointed as a consultant to the Ministry of Human Resource on Burden of Occupational Related Diseases; Grant reviewers with the Ministry of Education (MoE), consultation with MoE on the issue of vape use among university’s candidates, a panel auditor for local universities with SETARA Ministry of Education, the Ministry of Health on Cluster Hospital efficiency study and Prime Minister’s Department on Prevalence of Autism among children in Malaysia. She is a reviewer of other journals, locally and abroad and published papers locally and abroad, regularly writes in newspapers, chapters, books and has appeared on the media for issues relating the care of community, health financing and Alternative nicotine products. She is ardent advocate on harm reduction in Malaysia and is part of the regional harm reduction experts in Asia Pacific.
Dr. Malindawati Mohd Fadzil is a medical professional with a background in both clinical practice and healthcare management. She received her medical degree from Trinity College of Dublin, Ireland, and later pursued her Master of Science in International Health Services and Hospital Management from London South Bank University, United Kingdom, in 2016. Her professional interests encompass a broad range of topics, including hospital and health management, health planning and policy, and health financing. Transitioning from clinical practice to healthcare management, Dr. Malindawati assumed key leadership roles within the Ministry of Health Malaysia (MOH). As a Senior Principal Assistant Director and subsequently as Principal Assistant Director at the Hospital Management & Services Unit, Medical Development Division, from 2013 to 2019, she spearheaded numerous initiatives aimed at enhancing the quality and accessibility of specialist services in public hospitals. Her strategic oversight was pivotal in the development and implementation of the Specialty and Subspecialty Services Development plans and MOH hospitals’ infrastructure plans, which were designed to improve access to specialist care and elevate the standard of healthcare services available to the population. DR. Malindawati was responsible for overseeing the Full Paying Patient (FPP) Services in MOH hospitals, where her leadership was instrumental in conducting cost-volume-profit analyses and formulating policies and guidelines that have shaped the FPP Services framework. Additionally, she has a keen interest in Lean Healthcare and played a crucial role in introducing and implementing Lean methodologies in MOH’s pioneer improvement initiatives. She is also an alumna of the MOH Talent Grooming Programme, a structured talent development programme for technical healthcare professionals in the MOH. Currently, Dr. Malindawati serves as the Deputy Director Medical II at the National Cancer Institute of Malaysia under the Ministry of Health Malaysia. In this role, she continues to apply her extensive experience and strategic insight to advance public health initiatives and optimize healthcare delivery across the nation. She recently completed her PhD in Public Health at Universiti Kebangsaan Malaysia, further solidifying her commitment to advancing the field of public health.
Associate Professor Dr. Azimatun Noor Aizuddin is a trained Medical Doctor, earned Masters and PhD in Community Medicine. She is a Public Health Consultant and currently the Head of International Centre for Casemix and Clinical Coding, Hospital Canselor Tuanku Muhriz besides as a Senior Lecturer at Department of Public Health Medicine in Faculty of Medicine, UKM. She is also a former assistant editor of International Journal of Public Health Research and reviewer of a few journals locally and internationally. She has published and presented more than 80 papers locally and abroad as well as a books’ chapter. In addition, she is a member of Technical Advisory Committee for Health Technologies Economic Evaluation; Technical Advisory Committee for Casemix; Technical Committee Members for ICD11 Implementation, External Reviewer for Scientific Review Board (SRB), Institute for Health System Research, MOH; Honorary Secretary of the Health Economics Association Malaysia; EXCO and Life Member of the Malaysian Pharmacoeconomics and Outcome Research (MySPOR), Life Member of the Malaysian Public Health Physicians Association, and Honorary Treasurer of Malaysian One Health Network University (MyOHUN), Pro-team Committee.
Dr. Zafar Ahmed is a medical doctor, decided early in his professional life to pursue a career in public health. After MBBS and training, Dr. Zafar completed his Master in Business Administration, followed by Master in Economics, and he finished his PhD in Public Health concentrating on Health Management and Health Economics from National University of Malaysia / United Nations University International Institute for Global Health (UNU IIGH), Kuala Lumpur Malaysia. He is currently working as an Assistant Professor, at the Department of Social Work, Education and Community Wellbeing (SWECW), Faculty of Health and Life Sciences, Northumbria University, United Kingdom. Dr. Zafar has worked extensively for Health Sector Reforms in Malaysia and other countries. In Health Sector Reforms, he specializes in Economic analysis of health strategies, Healthcare Financing. He has worked with international organizations such as Asian Development Bank (ADB), World Bank (WB), GTZ, AUSAID, and World Health Organization (WHO). Countries he has worked with include Malaysia, Indonesia, Philippines, Mongolia, Vietnam, Lao PDR, Cambodia, Uruguay, Pakistan and United Kingdom. His research interest includes Disease burden and economic burden of disease, economic evaluation/analysis of health interventions, and disease and economic modeling. He has special interest in Health Informatics and Data management and analysis. Dr. Zafar have extensive teaching experience and has been involved in graduate level teaching within and outside United Kingdom; this include Northumbria University, UK, Universiti Kebangsaan Malaysia (UKM), University Malaysia Sarawak (UNIMAS), University Malaysia Sabah (UMS) and Universiti Teknologi Malaysia (UTM) as well as in Aga Khan University, Karachi, Dow University of Health Sciences, Karachi Pakistan and University Science and Technology, Sanaa, Yemen. He is also involved regularly with various ministries and international organizations, for training & capacity building and consultations. Majority of his publications and research papers are Economic Evaluation in healthcare, Casemix implementation and Efficiency of Health Care Systems.
