In common with governments around the world, issues such as rising costs, demographic shifts, technological advances in care (and the expectations that come along with them), and delivering equitable health care to both a rural and an urban population are posing challenges to Sarawak’s health authorities.
Nationally, funding levels for the public sector are high; almost 95% of patients’ cost of treatment for about 90% of the country’s population is subsidised by the public-sector delivery system, according to the country health plan outlined in the 10th Malaysia Plan (10MP). Although the state receives most of its support and funding for health care from the federal government, public provision of services falls short in some areas.
A HYBRID SYSTEM: Malaysia’s health care sector is a hybrid public-private system that offers a choice of free or paid-for care options. The country’s citizens benefit from universal health care for services delivered by government-run clinics and hospitals, or they can choose private providers for their medical needs. Those who opt for private care usually pay out of pocket: insurance coverage makes up only 18% of private spending, and patients pay for 79% of treatments received in private hospitals and clinics themselves, according to the Economist Intelligence Unit.
The federal administration has made excellence in health care a key economic priority, and as such does not shy away from undertaking to plug any existing holes in the nation’s health care system. The 2014 federal budget allocated RM22.1bn ($6.7bn) to improve the public health care system, including RM3.3bn ($1bn) to provide medical supplies to public health care institutions. Furthermore, in the budget speech, Prime Minister Najib Razak called for 50 new 1Malaysia Clinics to be built and 6000 new nurses to be trained.
The federal government’s spending on health care totalled more than 10% of the 2014 budget, and was an increase of RM2.8bn ($851.8m) over the amount allocated in the 2013 budget. However, how those funds are spent in practice, and their effectiveness, can be difficult to track and evaluate. Although Sarawak is an increasingly urban state, the rural population that remains can be very much cut off from the rest of the country, both by geography and by economics.
Of the state’s 2.57m inhabitants, 44% (1.13m) were considered rural in 2013. Yet it has only one major public hospital, Sarawak General, located in the capital Kuching. For many of those rural inhabitants, the trip to Kuching is both time-consuming and expensive. It is thus important for authorities to devise alternative modes of delivering care. Government-run clinics account for a much larger proportion of the health care system than do hospitals, yet they are too located predominantly in urban areas. Sarawak’s 221 public health clinics include only seven rural clinics. Services for the poor are also provided at 1Malaysia clinics, where assistant medical officers provide basic health care, but again, these clinics – of which the state has 18 – have historically been located mainly in urban areas.
BASICS: To close this rural-urban gap in care, a variety of schemes have been implemented by the national and state health departments over the years, such as flying doctors, with varying degrees of financial support and success. What many health care professionals believe is needed are more of the basics: hospitals and clinics, hospital beds, nurses, state-of-the-art equipment and skilled technicians. And, importantly, more doctors are required: the doctor-to-patient ratio in the state is 1:967, according to the Ministry of Health’s Informatics Centre. As recently as 2012, there was only one cardiovascular surgeon to serve the entire state. Yet these basics are costly to fund and time-consuming to implement. Further compounding the issue, especially where staffing is concerned, Sarawak suffers from brain drain, with many of it skilled medical professionals leaving the state after completing their education.
GETTING RESULTS: The drive to upgrade the state and federal health care system has been in place for several years. In addition to making steady progress on meeting many of the UN’s Millennium Development Goals, the government spelt out its intentions in the 10MP Country Health Plan (2011-15), which calls for the transformation of the entire country’s health sector as one of several preconditions for the ultimate goal of becoming an advanced nation by 2020.
The building blocks to attain this goal – key result areas (KRAs) – include ensuring provision and increasing accessibility of quality health care. Several strategies have emerged to achieve the KRAs. These consist of establishing a comprehensive health care system, encouraging healthy lifestyle activities and, perhaps most importantly, “transforming the health sector to increase the efficiency and effectiveness of the delivery system to ensure universal access” as the plan spells out. The 10MP’s health plan acknowledges how far it has to go to reach its goal of universal access. “Long queues for outpatient services, diagnostic procedures like CT-scan examinations, treatment modalities like endoscopic surgery and rationing of drugs for chronic diseases is a form of inequity. This inequity also relates to the doctor-population ratio whereby the population in urban areas such as Klang Valley has more accessibility to doctors compared to the population in Sabah and Sarawak,” the document states.
NEW FACILITIES: Helping matters somewhat is that three new hospitals – in Lawas, Sri Aman and Petra Jaya – are currently planned for Sarawak. Yet while the Lawas Hospital is under construction, the other two are still in the planning stages, according to comments made by Jerip Susil, assistant public health minister, in an August 2014 press conference. Jerip said that plans for some rural clinics were also ongoing. No firm dates for the hospital openings or the number of rural clinics have been revealed, and Jerip said that the government’s major focus was on “improving the facilities of our major hospitals” in the near term. In the meantime, private providers of care are increasingly stepping in to close the gap in health care choice and delivery.
Universiti Malaysia Sarawak (UNIMAS), which houses Sarawak’s medical school, has been waiting many years for the government to construct a teaching hospital at which UNIMAS may train doctors and nurses and conduct research. Yet implementation has been slow. Until the teaching hospital is built, UNIMAS trains its medical students at Sarawak General Hospital and two private centres, Timberland Medical Centre and the newly opened, 120-bed Borneo Medical Centre.
The Malaysian Investment Development Authority has created tax incentives for private providers to encourage them to enter the market. Benefits include the granting of pioneer status, which offers tax exemptions for five to 10 years, an investment tax allowance scheme, and various import and sales tax exemptions.
FINANCING & INSURANCE: As the proportion of the federal budget going to health care continues to grow, the administration is looking for ways to control spending while ensuring access and quality. Over the years several different plans for financing the system have been mooted – most recently, 1Care for 1Malaysia – and then withdrawn after critical public or industry feedback. A new strategy appears to be in the making.
At an Asia-Pacific Economic Cooperation meeting in August 2014 Dr Subramaniam Sathasivam, Malaysia’s minister of health, announced that the government is drafting a health transformation agenda that may combine mixed-source financing and the merging of the country’s public-private health care delivery services via a single, non-profit, public third-party payer.
A year earlier, in 2013, the state government had taken a step to reduce its financial responsibilities for care coverage by implementing the Foreign Workers Health Insurance Protection Scheme (Skikpa), which requires foreign workers to purchase health insurance. However, the scheme does not apply to foreign workers in the oil palm industry, a sector which makes up a significant proportion of the state’s foreign workforce.
How these changes to health care financing will affect Sarawak in particular is therefore unclear, but as the Sarawak Corridor of Renewable Energy programme draws more skilled foreign workers into the state, Skikpa will likely constitute a welcome relief for the state’s health care budget – as well as increasing the insurance industry’s scope and market access.
SPORTS DEVELOPMENT: Promotion and development of sports science and technology are also on the state’s health agenda. “The establishment of an academy dealing with sports management and sports science would have a very positive long-term impact on sports development within Sarawak. Such an academy would bolster the management of the state’s sports associations and help to establish Sarawak as a destination for sports-related research and development,” Ong Kong Swee, the director of Sarawak Sports Corporation, said. “It must be ensured that both new and existing sports facilities and stadia with Sarawak are constructed and maintained with regional and international standards in mind to provide appropriate infrastructure for future local, regional and international events.”
ENVIRONMENTAL FACTORS: In addition to looking after the health and wellbeing of its people, the state and federal governments are tasked with looking after the health of the environment. With Sarawak’s valuable natural resources, this can at times be a difficult task, but the government, with the support of non-governmental organisations and other bodies, is aiming to strike the right balance between conservation and commodification. At a federal level, the Forest Research Institute of Malaysia and the Malaysian Agricultural Research and Development Institute are key partners in carrying out agricultural and forestry research and development. Within the state, the Sarawak Forestry Corporation is tasked with managing the forests and protected areas, as well as conducting research on rainforests and the goods that can be produced from them.
ECOTOURISM: Preserving the environment has clear economic advantages as well. For example, a central feature of Sarawak’s appeal for ecotourists is the opportunity to pay a visit to endangered orangutans. These “men of the forest” have seen their native habitat upended by human activity, and ensuring their survival is key to several research and conservation programmes such as the rehabilitation initiatives at the Matang and Semenggoh Wildlife centres, which are managed by the Sarawak Forestry Corporation.
The WWF is also active and influential on the ground in Borneo, most notably through the Heart of Borneo initiative, but also in maintaining other programmes to conserve the orangutans’ habitat, halting poaching and trading, and promoting sustainable agricultural and forestry practices. One of its most recent initiatives was announced in July 2014, when the WWF and Curtin University Sarawak signed a memorandum of understanding to collaborate on research relating to ecotourism-based projects and activities.
FORESTRY: To counter the effects of unsustainable forestry practices, including illegal logging, several laws have been passed, including a forestry act, regulations governing national parks and nature reserves and ordinances for protecting wildlife. These regulations have gone some way towards halting illegal logging and poaching in Sarawak, but many instances of illegal resource extraction continue to occur. Tackling this issue head-on, Adenan Satem, Sarawak’s chief minister, announced the introduction of new legislation that would impose heavier penalties than previously seen for timber theft and smuggling, including imprisonment. At a December 2014 press conference, the chief minister said that authorities had stepped up enforcement, seizing 65,407.83 cu metres of timber at a value of RM32.7m ($9.9m). Adenan also said that the state government would cancel the licences of any timber operators found in breach of the terms and conditions stated in their licence.
BIODISCOVERIES: The rainforest is also home to an undetermined amount and variety of biodiversity, some of which has been shown to have medical and commercial value. Scientists from around the world have been on the hunt to locate and capitalise on the animal and plant life in the Borneo rainforest for years – a practice known as “bioprospecting”. The authorities are generally supportive of these efforts.
When it comes to leveraging the state’s unique environmental assets, one organisation stands out. With a mandate to initiate and encourage biotech-based research and development in the state’s forests and with an emphasis on documenting indigenous communities’ traditional knowledge of biological resources, the Sarawak Biodiversity Centre (SBC) has undertaken a programme of collecting, propagating and documenting a wide variety of indigenous plants with various uses including food and medicinal and cosmetic applications.
“Sarawak has a high level of forest conservation and is well protected, which provides plentiful natural resources that are conducive to success in this industry,” Yeo Tiong Chia, acting CEO of SBC, told OBG. SBC’s flagship product, Silvestrol, derived from the Aglaia stellatopilosa tree, has been shown to have anti-cancer properties. SBC has partnered with Ohio State University, which is conducting pre-clinical trials and research and development on Silvestrol.
In addition to discovering new pharmaceuticals compounds and products, companies are also looking into the potential of curating new sources of renewable energy from Sarawak’s forests and micro-organisms. SBC has established a research partnership with US-based firm Glucan Biorenewables to commercialise a biomass conversion platform using Sarawak-sourced biomass materials such as nipa palm, sago pith, palm oil and wood chips to produce inexpensive renewable chemicals. Another partner is Mitsubishi, with which SBC has a research collaboration agreement to investigate Sarawak’s microalgae products with a view to determining their potential as a source of new biofuels.
PROTECTING COMMUNITIES: In many cases, it has been Sarawak’s indigenous communities that have preserved the knowledge and traditions required to identify and make use of the state’s biological resources. To ensure these communities are fairly compensated for documenting and sharing their knowledge and practices, a section of the Sarawak Biodiversity Centre (Amendment) Bill, which was passed in 2014, provides for the implementation of acquiring prior and informed consent from indigenous communities before the traditional knowledge associated with a biological resource is collected or retrieved. The SBC is also tasked with ensuring that the communities mutually agree on terms to enter into agreements for benefit sharing for research or any other development of their traditional knowledge into associated products.
As of the end of 2013, indigenous communities in 47 villages had collected 4185 useful indigenous flora under SBC’s Traditional Knowledge Documentation Programme, according to the centre’s 2013 annual report. The SBC also has a propagation facility to conduct experiments and conserve the useful plants, and a Biodiversity Garden that acts as a nursery for indigenous flora and supports the documentation programme and other research and development projects.
BIOECONOMY: Other agencies involved in biotechnology development in Sarawak include UNIMAS and the Malaysian Biotechnology Corporation ( BiotechCorp), an institution under the Ministry of Science, Technology and Innovation, whose remit includes supporting research and development and commerce projects with financial assistance like tax incentives, and offering funding support and developmental services.
BiotechCorp was established in 2005 to implement the objectives outlined in the National Biotechnology Policy (NBP). The NBP is intended to support and enhance the Bioeconomy Transformation Programme (BTP), which in turn makes up part of the wide-reaching Economic Transformation Programme (ETP). The BTP is expected to propel the bioeconomy’s contribution to the country’s GDP to 8-10% by 2020.
In the 2011-14 period, total approved investments in the country’s bio-based industries had reached RM18.98bn ($5.8bn), double the target of RM9bn ($2.7bn) that had been set for the 2011-15 period, according to BiotechCorp CEO Mohd Nazlee Kamal. Investment targets for the third phase of the NBP, which runs from 2016-20, will be revised upward accordingly from the original target of RM15bn ($4.6bn). Investment sources have so far been split equally between international and domestic sources, according to Mohd Nazlee. In 2015 BiotechCorp is looking for biotechnology-based investments of at least RM5bn ($5bn) to fund high-impact projects.
INCENTIVES: As part of its mission to assist with funding and development, BiotechCorp offers financial incentives and capacity-building support to biotech start-ups. These firms are able to access assistance by applying for BioNexus Status, a special status awarded to biotech companies embarking on value-added biotechnology or life sciences projects. BioNexus Status comes with a long list of benefits, ranging from intellectual property rights to the ability to source funds and knowledge workers globally.
BiotechCorp also operates an accelerator programme in partnership with the Larta Institute, a US-based nonprofit, to assist biotech firms in reaching the global market. In 2015 the programme is offering professional services to 20 BioNexus and university spinoff companies, assisting in commercialising their products via personalised coaching, mentoring and making introductions to investors and venture capitalists.
BiotechCorp’s existing cadre of 248 BioNexus companies had generated more than RM4.6bn ($1.4bn) of approved investments and RM1.7bn ($517.1m) in revenue as of 2013. These revenue streams are expected to combine with those of current and future start-ups to help realise the country’s ETP goals by 2020.
OUTLOOK: Within the health care industry, the need to address the persistent urban-rural divide and create incentives to both attract and retain qualified medical practitioners is likely to be prioritised. As the costs of services and medical care rise, the requirement for health care insurance for some workers should energise the state’s insurance industry.
There is much promise for bioprospectors and their backers in discovering more compounds in the Sarawak’s rainforests, which will without doubt act as an accelerator to the state’s bioeconomy. Newly energised attempts to stamp out illegal timber practices bode well for this growing sector as well as for the environment.
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