When survival becomes the currency of healthcare

A Conversation About Survival

Not too long ago, I sat in a meeting with several clinicians in one of our hospitals to discuss a request from a major payor. They wanted close to a 30% discount.

This was not a minor account that could simply be declined on principle and forgotten the next day. The payor represented almost a quarter of the hospital’s patient volume, which meant everyone in the room immediately understood the implications. If we refused, patient volumes could fall sharply. If we agreed, both the hospital and the doctors would absorb significant financial pressure.

So the discussion that followed was unusually candid. Would it be better to earn 30% less, or potentially not earn at all?

I remember leaving that meeting with an uncomfortable realisation. Somewhere along the way, many healthcare negotiations had stopped being discussions about building sustainable care together and increasingly became discussions about endurance, about who could absorb more pressure before something finally gave way.

In the end, we decided not to proceed with the arrangement. The months that followed were difficult. Patient volumes fell, there was uncertainty across the hospital, and there were legitimate concerns about whether we had made the right decision. Eventually, we stabilised by diversifying our patient base and expanding internationally.

But many hospitals and clinics across the country do not possess the same room to manoeuvre.

That is why I believe the current debate surrounding doctors discounting their fees risks overlooking the larger issue entirely.

The recent discussion surrounding doctors’ fees has understandably focused on ethics, professional autonomy, and the concerns raised by the Malaysian Medical Association and Malaysian Medical Council. Those concerns are important. Medicine should never become a profession where clinical judgement bends to procurement mechanics and financial leverage.

But the public narrative has also become increasingly simplistic. Doctors are portrayed as resisting reform. Hospitals are portrayed as protecting margins. Payors are portrayed as villains. None of these descriptions fully captures the reality inside the system.

Malaysia’s healthcare ecosystem evolved over many years into one heavily dependent on negotiated pricing, silent cross-subsidisation, rising patient volumes, and increasing financial compression across the entire chain. As long as patient numbers continued growing, the tensions remained manageable and largely invisible to the public.

That environment no longer exists.

Hospitals today face rising staffing costs, expensive imported medical technologies, digitalisation demands, cybersecurity investments, pharmaceuticals, consumables, and increasing regulatory expectations. Doctors face years of fee stagnation while operational and indemnity costs continue rising. Insurers themselves face worsening claims inflation, while employers struggle with escalating premiums and patients grow increasingly anxious about affordability.

Every stakeholder now feels pressure simultaneously. And when pressure builds across an entire system for long enough, difficult compromises inevitably begin appearing in places they never should have.

What concerns me most is not merely the existence of discounts. Negotiation exists in every industry. What concerns me is the concentration of bargaining power within healthcare financing itself.

When a single payor controls 20%, 25%, or more of a hospital’s patient volume, negotiations stop happening between equals. The conversation changes entirely. The question quietly becomes less about what is sustainable over the long term and more about what each side can survive in the immediate term.

That is not a healthy foundation for any healthcare system.

In recent years, concerns have also emerged regarding the selective removal of doctors from insurance or managed care panels without clear evidence of ethical, professional, or clinical wrongdoing. In some situations, hospitals are placed under pressure to absorb increasingly aggressive discount structures in order to preserve existing panel participation across their specialists.

Practices like these create difficult realities across the industry.

Large healthcare groups may sometimes possess enough scale, diversification, or market presence to withstand such pressure, at least temporarily. Smaller standalone hospitals often do not. Faced with the risk of losing significant patient access almost overnight, many institutions are forced into decisions shaped less by long-term sustainability and more by immediate operational survival.

That imbalance matters because once financing networks become powerful enough to influence not just pricing, but also patient flow, specialist participation, and institutional viability, the relationship between medicine and financing fundamentally changes.

More importantly, these practices risk creating unintended clinical consequences.

Healthcare referrals should be guided solely by patient need, clinical appropriateness, and professional judgement. But when panel participation becomes uncertain or selectively altered without transparent clinical or ethical justification, referral pathways themselves may gradually become clouded by financing considerations.

That is dangerous territory for any healthcare system.

A doctor should never feel pressured to consider whether a colleague within the same hospital remains on a particular panel before making a clinically necessary referral. Once financing structures begin indirectly influencing referral behaviour, the line between healthcare management and interference with clinical ecosystems becomes increasingly blurred.

This is not an argument against accountability. Doctors who violate professional, ethical, or clinical standards must absolutely be investigated and sanctioned appropriately.

But such decisions should be evidence-based, transparent, and aligned across the healthcare system. If a practitioner is deemed unsafe or unethical, that determination should ideally involve professional regulators, hospitals, and relevant payors acting consistently rather than through fragmented or commercially driven exclusion mechanisms.

Otherwise, we risk creating a system where economic leverage begins functioning as a parallel form of professional sanction without the same standards of due process, transparency, or clinical governance.

This conversation becomes even more important because Malaysia is now entering a much larger transition involving managed care expansion, DRG-based reimbursement models, MHIT products, and increasingly structured financing systems designed around standardisation and cost control.

These reforms are necessary. Malaysia cannot continue managing healthcare inflation indefinitely without reforming how healthcare is financed and reimbursed.

But financing systems do more than pay bills. They shape behaviour.

Under traditional fee-for-service arrangements, hospitals and doctors are reimbursed according to services rendered. Under DRG-style systems, reimbursement increasingly becomes tied to fixed payments based on diagnosis categories and expected resource utilisation.

In principle, this improves efficiency and discourages unnecessary interventions. Many countries have implemented such systems with meaningful improvements in standardisation and cost management.

But fixed reimbursement systems also create new pressures.

Hospitals become increasingly focused on throughput, utilisation control, and operational efficiency. Lengths of stay come under scrutiny. Financial viability begins depending heavily on how tightly care delivery can be managed within predetermined reimbursement structures.

If implemented poorly, these pressures may gradually begin influencing clinical behaviour in subtle but important ways. Hospitals may become more selective about financially complex cases. Doctors may find themselves practising within reimbursement boundaries that increasingly shape clinical discretion.

The future debate in Malaysia will therefore not simply be about whether doctors should discount their fees by 20% or 30%.

It will be about who ultimately controls medical decision-making inside an increasingly managed healthcare system.

Malaysia absolutely needs healthcare reform. Greater transparency is necessary. Better financing discipline is necessary. More sustainable reimbursement systems are necessary.

But healthcare cannot become purely an exercise in procurement and financial optimisation.

Because healthcare systems ultimately depend on trust. Trust between doctors and patients. Trust between hospitals and clinicians. Trust between providers and payors.

Once that trust begins eroding, the consequences are not immediately visible. Hospitals continue operating. Claims continue processing. Patients continue entering clinics and wards.

But the culture inside the system slowly changes.

Clinicians become exhausted not only by medicine itself, but by constant negotiation surrounding medicine. Hospitals begin prioritising survivability over long-term vision. Care gradually risks becoming shaped less by professional judgement and more by financial architecture.

And that is what policymakers, payors, hospitals, and regulators alike must now confront carefully.

Because if the current environment continues unchecked, Malaysia risks drifting into a healthcare system where financing structures increasingly dictate clinical ecosystems, where defensive decision-making quietly replaces collaborative care, and where professional relationships become governed more by contractual leverage than shared responsibility to patients.

That trajectory may improve short-term cost containment on paper. But over time, it risks weakening the very foundations that healthcare systems depend upon: professional trust, clinical independence, long-term investment, and ultimately, patient confidence itself.

The future challenge for Malaysia will therefore not simply be controlling healthcare costs. It will be ensuring that, in the process of reforming how healthcare is financed, we do not inadvertently reshape medicine into something smaller, narrower, and far more transactional than it was ever meant to be.

Dr Kamal Amzan, Chief Executive Officer of IHH Healthcare Malaysia