The IJN disembowelment, part II

bloody-slimy

Late last year, bloggers carried stories about the national heart institute (IJN) was supposed to be privatised as a fully-fledged private heart hospital and conglomerate Sime Darby Bhd. was to take over and run the operations completely as private entity, just like the SJMC. The privatisation effort was stunted as bloggers went to town with the story, and creating a public concern. Even former Prime Minister Tun Dr. Mahathir Mohamad vehemently rejected the proposed privatisation of IJN. Federal Government abruptly reversed the decision of the IJN BOD.

IJN was created during Fourth Prime Minister (then Dato’ Seri) Tun Dr. Mahathir Mohamad’s time to have a purpose built heart institute for the Malaysian public. Since then, IJN which already served 1.5 million patients, has successfully carried out over 41,700 coronary artery by-pass (CABG) surgeries and 95,500 angiograms and angioplasties to all walks of Malaysian lives, is by far the most successful government-purpose-built-heart-hospital in the world. IJN was run as a corporatised body (wholly owned by MOF Inc.) for maximum efficiency, on behalf of the Government and worked in full tandem with Ministry of Health (MOH). It has won acclaimed validation from respected heart hospital such as the renowned Mayo Clinic and John Hopkins hospitals of the United States. The most famous patient is Tun Dr. Mahathir, whose second CABG in September 2007 drew world wide attention as he was 82 then.

It seems the IJN BOD and management did not stop there. There is a fresh proposal to privatise the government facility. Management managed to obtain the full resolution of the BOD and full blessing of the Economic Planning Unit (EPU) to do a Widespread Asset Unbundling (WAU) scheme to separate the operations within IJN and created new subsidiaries. WAU was first introduced by the Economic Adviser Tan Sri Nor Mohamad Yaackop for the asset restructuring of heavily geared Malaysia Airlines (MAS) and creation of Penerbangan Malaysian Bhd. as the SPV to undertake the holding and ownership of all MAS assets, especially aircrafts. Today, former MOF II Nor Mohamad is now Cabinet Minister in charge of EPU.

Currently, IJN as a corporate body exist in the form where IJN Holdings Sdn. Bhd. wholly owned IJN Hospital (which owned and operate the national heart instutute  in Jalan Tun Razak, Kuala Lumpur), IJN Capital (an SPV to issue syariah compliant commercial papers such as Sukuk), IJN College (for the training of heartcare professionals, which is actually paid by IJN Hospital) and IJN International (to spearhead overseas operations). Recently, Ernst and Young did an operational study and review the limitations (dated 13 October 2009)  and eventually someone came up with a restructuring proposal. The E & Y report showed that IJN Holdings is managed by a BOD and a CEO is appointed to run the corporate affairs where else a Medical Director runs the hospital.

Initially sixteen years ago, there was only IJN Sdn. Bhd. IJN was restructured to the current form when funds was raised for the on going expansion RM 300 million (initial proposal) 157 beds, 2 operation theatres and 2 cardiology laboratories  new wing, which then the newly formed parent company IJN Holdings Sdn. Bhd. (via IJN Capital Sdn. Bhd.) raised partly from RMK 9 budget and remaining RM 209 million from Sukuk Musyawarah raised by RHB Sakura Merchant Bank on 29 July 2005.

  IJN V

The new proposal is to decentralise and fragmentise IJN even further. New subsidiaries such as IJN Services (JV Co for hospital suppor services), IJN Assets (holds buildings and equipments and maintains the facilities) and IJN Pharmacy (Pharmacy business). It is apparent that IJN will emerge as a full fledged business entity with each subsidiaries’ KPI apart from improved effeciency is to make money.

The role of the pyhsicians, anaesthetists, surgeons and paeditrician cardiologists of IJN would be completely limited to the IJN Hospital, which is deemed just an operator within the group. The current Medical Director emminent cardiologist Dato’ Seri Dr. Robaayah Zambahari is expected to be appointed as IJN  Hospital CEO for a contract of one year. It is expected that the soon to be appointed as IJN Hospital Deputy CEO is emminent cardio thoracic surgeon Dato’ Mr. Azhari Yakub, who will succeed her then after. Cardio thoracic surgeon Dato’ Mr Rozali Watooth of SJMC is expected to be appointed as the Chairman of IJN Hospital. Many believed the honour should go to Tan Sri Dato’ Mr. Yahya Awang, a renowned cardio thoracic  surgery veteran and former Medical Director of IJN.

If making money is the objective of this corporate exercise, then it will defy the spirit and intention of the inception of IJN when Tun Dr. Mahathir envisaged to provide Malaysians with better health care twenty years ago. The dedication of IJN healthcare professionals is unsurpassed, which include the success of having a heavily subsidised cardio thoracic transplant unit, for the purpose of life preservation.

The end game of this corporate exercise is unclear. If IJN Holdings Sdn. Bhd. intended to make money from the operations and subsidiaries (deemed to be full profit centres), then one could only speculate that an IPO would not be too far in the future since the 41,000 successful CABGs track record is a very good testament for a private hospital. On the other hand if this corporate exercise fails, then it would justify to eventually hive of part or the whole group to business entities, such as the Sime Darby group. Naturally, some people would benefit from such activities, which include all the corporate advisory work. Either way, the disembowelment of the IJN with the intention to make profit could not be viewed as anything else but short changing the rakyat.

Regardless, the Medical Director has been invited by EPU to present the proposed restructuring plan to Prime Minister Najib on 27 October. It expected that an announcement will follow suit. We at BigDogDotCom pray that Prime Minister Najib do the right thing to live up to ‘Rakyat didahulukan’ 1 Malaysia slogan, since IJN in the past sixteen years have proven themselves to be ‘Pencapaian diutamakan’.

*Footnote
The title ‘Mr.’ is used to define these fine cardio thoracic surgeons. Since they are fellows of the illustrious colleges of surgeons (FRCS) either Edinburgh, Glasgow and/or Australia, then we should honour their membership within the surgery fratenity.

 

Published in: on October 20, 2009 at 23:10  Comments (50)