PETALING JAYA, Dec 15 — A private hospitals’ association warned the public today that the cost for private healthcare will go up after the government rolls out the Goods and Services Tax (GST) next year, claiming the Customs Department has refused to exempt the tax for the private doctors they hire.

The group urged Putrajaya to reverse its policy on charging the consumption tax on private doctors, or instead come clean to the public that the price of private healthcare will inevitably go up by at least 5 per cent come April 1.

“We would strongly request that a clear, transparent and correct representation be made to the public to avoid the mismatch between the perception of the public, Government’s intention and implementation by the private healthcare industry,” the Association of Private Hospitals of Malaysia (APHM) told the press in a statement.

Deputy Finance Minister Datuk Ahmad Maslan and Health Minister Datuk Seri Dr S. Subramaniam has repeatedly said there will be no increase in private healthcare cost after GST as healthcare services is deemed to be an “exempt supply” sector. 

Despite that, APHM said the statements were not accurate as private doctors working in private hospitals are considered by the Customs Department as “outsourced services” and their services will be charged with the 6 per cent tax.

APHM’s president Datuk Dr Jacob Thomas said the group has explained to the Customs Department that almost all private doctors are independent consultants who have very close working relationship with the private hospitals, unlike medical officers in public hospitals who are employees of the places they work at.

APHM said in this relationship private doctors are not “outsourced services” as the services are jointly provided by both, but the Customs refused to revise its policy for private hospitals.

“Because of all this, definitely the hospital operational cost will go up. This will have to be borne by the people who are using the services, which is the patient,” Thomas told a news conference here.

He said around 45 per cent, and up to 70 per cent, of a patient’s medical bill in private hospitals is made of doctor’s fees.

This, in return, will push some of their customers to public hospitals where all services are exempted from GST, subsequently clogging up the public healthcare system, according to Thomas.

APHM said this differs from other countries which implement consumption tax, like the United Kingdom where both hospital and doctors’ services are exempted, or in Singapore where both are standard-rated.

Malaysia is slated to implement the 6 per cent GST starting April next year, which is expected to raise the prices of most items.

However, the federal government previously claimed that healthcare costs would stay low as many regularly-used medicines will be exempted from the new tax.