This article first appeared in Enterprise, The Edge Malaysia Weekly on November 13, 2017 - November 19, 2017

University of Malaya Medical Centre (UMMC) had a problem. Being a teaching university hospital, it trained the best surgeons and specialists, but it could not keep them for more than three years. The gap between what they earn in the public and private sectors was just too wide.

“It was losing expertise, senior people, hand over fist,” Professor Dr Vickneswaran Mathaneswaran, medical director at University of Malaya Specialist Centre (UMSC), tells Enterprise in an interview.

UMMC had to find a way to stem the outflow. “They decided to set up UMSC in 1998, as a little outfit entirely within UMMC so that the doctors would stay. The specialist centre allowed us to put private patients in a separate ward and charge accordingly,” he says.

UMSC was the brainchild of Professor Datuk Dr Mohd Amin Jalaludin, who was then head of the Department of Otorhinolaryngology, and Professor Datuk Dr Anuar Zaini Md Zain, the director of UMMC from August 1998 to June 2000.

The specialist centre became so successful that it outgrew its premises within the larger UMMC. In 2007, a new building was erected for it. “We became a victim of our own success,” laughs Prof Vickneswaran, who is professor of neurosurgery in the Department of Surgery.

He was one of the surgeons who had left the public sector for private practice and was attracted to return by the prospect of having a private practice within the public sector. He went on to become UMSC’s first neurosurgeon.

UMSC’s activities increased to the point where it was no longer feasible to share all the facilities with UMMC. “We were sharing all the facilities in the beginning — the theatres, clinics, lab facilities … The patient load started to increase in the mid-2000s. This building was erected to move the patient services here,” says Prof Vickneswaran.

The specialist centre grew from a single ward to one labour and four general wards. “We used to run two operating theatres every evening at five o’clock. Now, we run between six and eight theatres in the evenings and on Saturdays. We also have some operations during the day,” he says.

“We have more than 250 doctors. And while most hospitals have specialists, we have super-specialists and sub-specialists. As my CEO, Azhar Harun, likes to say, we are a hospital within a hospital.”

What does he mean by this? “Take orthopaedic surgery. In most hospitals, you see an orthopaedic surgeon. Here, you have the option of seeing a spinal surgeon, a joint replacement surgeon, a trauma orthopaedic surgeon or a paediatric orthopaedic surgeon,” says Prof Vickneswaran.

“If you come here to see a general surgeon, you will actually have the option of seeing an upper gastro-intestinal surgeon (who specialises in the oesophagus and stomach), a colorectal surgeon, a hepatobiliary surgeon (who specialises in the liver), an endocrine surgeon or a breast surgeon.”

Similarly, if a patient wants to see a neurosurgeon, he can see — depending on the problem — a paediatric neurosurgeon, a base-of-skull surgeon (who operates on complicated tumours at the bottom of the brain), a vascular neurosurgeon, a complex spinal surgeon, an epilepsy surgeon, a functional neurosurgeon for Parkinson’s disease, or a radio surgeon (who treats small brain tumours with radiation). “I could go on and on with general medicine,” says Prof Vickneswaran.

This is possible because the UMSC staff comes from UMMC, which has always had a wide range of specialities. “That is our value-added proposition,” says Prof Vickneswaran.

The specialist centre’s business model entails using the facilities of UMMC as far as possible. “We pay them rent as well as for medications, services and other things,” he says.

How does it manage to do this when the hospital’s facilities are already bursting at the seams with patients? “We use them after five o’clock and on Saturdays. So, we are buying the excess time. We ‘asset sweat’, so to speak. In a normal public hospital, or even a normal private hospital, the operating theatres start at about 9am, peak at about 11am or noon and end at about 4pm,” says Prof Vickneswaran.

“At UMMC, a second peak starts to build at 4pm and carries on until 10pm or 11pm, with the peak at about 7pm. This also applies to imaging systems — expensive MRI (magnetic resonance imaging) and CT (computed tomography) scanners. We have access to five MRI scanners, two of which are Teslas. Most hospitals only have one. We also have access to about six CT scanners.”

“UMMC uses the money it earns from us to fund medical centre activities. And 5% of every ringgit earned by doctors working at UMSC is levied. That money goes to the department they are with. In my case, it is the Department of Surgery.”

The money is used by the various departments for academic activities such as hiring researchers, participation at conferences and the publishing of papers. Those who earn a significant amount from their private practice at UMSC pay a 20% levy, which goes into a different pot.

“This 20% levy is split into two portions, half of which goes towards funding poor patients who cannot afford public hospital fees. This is known as the PPUM (Pusat Perubatan Universiti Malaya) Care Fund,” says Prof Vickneswaran.

“This year, we transferred about RM1 million to the fund. The other portion goes to the Faculty of Medicine to fund various fellowship programmes, maybe for pre-clinical doctors or pre-clinical lecturers to get more training.”

This is possible because UMSC does not have a “fat” shareholder who requires unlimited dividends, he says. The specialist centre is a subsidiary of UM Holdings Sdn Bhd which, in turn, is owned by University of Malaya. “We have our own board of directors. UM Holdings also has its own board of directors and some of them sit on our board. And the UM Holdings board is on the University of Malaya’s board of directors.”

Prof Vickneswaran says whatever profit it makes stays within the university and helps to expand its services. “We are supposed to declare a dividend, but all this money, which is quite a large amount, goes to the various departments, hospitals and faculties. And that is over and above what we pay the hospital. So our return on investment is not that tight. It is not like at a private hospital where if I buy a machine, I have to use it or else I lose money.”

UMSC has started to buy its own equipment in cases where usage is very high and it cannot afford to share the public facilities. “We have ultrasound and dialysis machines. We have two minor operating theatres that are fully equipped,” says Prof Vickneswaran.

The profit that the specialist centre has made is a side effect. The main purpose of setting up the centre was to retain senior staff. Has it been successful?

“Yes,” says Prof Vickneswaran. “If you take the average lifespan of a neurosurgeon at a public hospital, a university hospital, before 1995, it was three years. And much of the time, the most we had were two surgeons.

“Today, we have a department of seven consultants and the average lifespan of a surgeon here is close to 10 years. If you look at departments such as orthopaedic surgery and general medicine, they are huge. They have a large number of professors compared with before.”

Although the university has been able to retain a great number of its senior staff, some will leave anyway, he says. “We are also limited in how much private practice we are allowed to do. We can only do three clinical sessions a week during the day, meaning either a clinic, operation or procedure.

“There is no limit to how many sessions we can do after hours or on Saturdays, but we are naturally limited by family life and these kinds of things. So, most people do between two and four sessions.”

The university monitors how many sessions the doctors take on in the public hospital and the dean’s office monitors their publications. After all, it a university hospital. “To be allowed to earn more than RM50,000 a year, you are supposed to publish more than twice a year,” says Prof Vickneswaran.

He adds that the doctors at USMC earn 60% to 80% of what their colleagues at private hospitals are getting, but there are other benefits. “Here, they call you professor. You get to do research. There are people who are dedicated to research and teaching who are not entirely motivated by money. Because once you are on the outside, you are pretty much a single dimension.

“So, a lot of people who work at UMSC are not just in it for the money. The money is required so you can keep up with the Joneses without getting into debt. But at the same time, being here allows you to do things you are passionate about such as your research.”

One shortcoming of private hospitals is the money motive and how treatments are recommended because they are income-generating rather than actually necessary. How does UMSC circumvent this?

“We cannot control it 100% because there are too many doctors and patients. We see close to 600 patients in the clinics every day. The difference is, because we are so intimately linked to the public hospital, everybody knows what everybody else is doing,” says Prof Vickneswaran.

“In a private hospital, you are a little standalone silo — you work for yourself — and sometimes, the hospital itself has its own profit motives. Here, we don’t have a big shareholder, so UMSC does not have that kind of profit motive.”

Also, because the doctors operate in the same premises as the public hospital, there are a lot of internal checks and balances. “If more than one death occurs, there will be a query at your department level, even though it is a private patient. We have a strong Medical Dental Advisory Committee, which includes all the heads of department and issues such as these are discussed,” he says.

“We also have multidisciplinary team meetings. Some people call it the Tumour Board, which means we cannot simply do a treatment. Things have to be discussed by a whole bunch of experts before we can prescribe what we think is the best treatment. For example, when a tumour is removed, the treatment that follows has to be discussed by not only those who practise at UMSC but also by those who do not. They will put forward their reasons as to why they think such and such is the best treatment.”

If a specialist goes against what has been suggested, it is frowned upon. But there are no definite barriers. “There is no policeman to go after you. But all your procedures are done in the same operating room, the same treatment rooms as the public hospital, using the same staff. If you do something wrong, people will talk. So, that itself is a pretty significant check and balance,” says Prof Vickneswaran.

In terms of facilities and specialists, UMSC is second to none, he adds. “We have more facilities than most private hospitals on an average basis. We have more specialists than most private hospitals.”

But there are challenges. “Sometimes, you have to look past the carpet thickness because we do use the facilities of a public hospital. If you go to a private hospital, you go from your nice room to nice lifts to nice corridors to other nice rooms,” says Prof Vickneswaran.

“Here, you have a fairly decent room. You share a lift with public patients and the corridors may be a little like a public hospital. The waiting room in your investigation room may not be the nicest in the world; no fancy pictures on the wall or stuff like that. But the machines are second to none. The people running the machines and the doctors managing them are second to none.”

In his experience, the more expensive or complicated a procedure is, the more cost-efficient UMSC is. “For low-end simple procedures, we are probably the same as any other private hospital, occasionally even a bit more expensive. But if things get more and more complicated, it becomes more cost-efficient.”

Now, UMSC is looking to put up a new building. “In the plot of land between our present building and the main hospital, there is an old derelict house where they used to run experiments on animals. We are looking at tearing it down and erecting a new building there,” says Prof Vickneswaran.

How much will this cost? “We are looking at RM60 million to RM80 million,” he says.

The idea had been mooted earlier, he adds. “We were involved with the Performance Management and Delivery Unit (Pemandu) and we were supposed to build a huge complex called the Health Metropolis across the road in Jalan University, where all the bungalows are. But we had a lot of issues with licensing.”

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